The arrest of China telecom giant Huawei’s chief financial officer arose from an investigation into an alleged scheme to use HSBC to evade U.S. sanctions on Iran, according to reports.
The Wall Street Journal reported that the investigation stemmed from allegedly suspicious transactions noticed by a monitor evaluating the British bank’s compliance with anti-money-laundering and sanctions controls put in place as part of a 2012 deferred prosecution agreement with the U.S. attorney in Brooklyn. The bank paid $1.92 billion to settle accusations that it had violated Iran sanctions and money-laundering rules.
As part of the 2012 deal, the bank was required to hire consulting firm Exiger to monitor the bank’s compliance with the rules. Exiger reports its findings to federal prosecutors in the Eastern District of New York.
The monitor brought the transactions to federal prosecutors, who launched the investigation that led to the arrest of Huawei CFO Meng Wanzhou, who also has been known by the names Sabrina and Cathy.
Reuters also reported that the investigation began with a referral from the HSBC monitor.
HSBC is cooperating with investigators and isn’t a target in the Huawei probe, according to the Wall Street Journal, which cited “some people” familiar with the probe.
The Wall Street Journal reported in April that the U.S government had launched an investigation into Huawei’s dealings with Iran. In addition to the Justice Department’s criminal probe, the Commerce Department and the Treasury Department have reportedly issued administrative subpoenas inquiring into the matter.
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