ReutersFeb 19, 2020 02:15:55 IST
By Karen Freifeld
(Reuters) - U.S. prosecutors overlooked apparent violations of U.S. sanctions against Iran by HSBC Holdings
"The government agreed to overlook HSBC's continued misconduct, electing not to punish the bank, prosecute its executives or even extend the monitorship," Huawei's lawyers wrote in a Feb. 10, 2020 letter filed in U.S. District Court in Brooklyn, New York. The letter was seen by Reuters on Tuesday.
In return, "HSBC agreed to cooperate with the government's efforts to depict Huawei as the mastermind of HSBC's sanctions violations and supply witnesses to the government's stalled investigation of Huawei," the lawyers wrote.
In an indictment unsealed last year, Huawei was charged by the United States with bank fraud and violating sanctions against Iran. Federal prosecutors added more charges to the case this month.
The indictment accuses Huawei and its chief financial officer, Meng Wanzhou, of conspiring to defraud HSBC and other banks by misrepresenting Huawei’s relationship with Skycom Tech Co Ltd, a suspected front company that operated in Iran.
The new claims by Huawei relate to a five-year deferred prosecution agreement HSBC agreed to in 2012 for disregarding rules designed to prevent money laundering and processing transactions that violated sanctions.
Huawei's lawyers say that, after HSBC obtained the deferred prosecution agreement, the bank continued to process Iran transactions through its New York branch and concealed the conduct from a court-appointed monitor. It also failed as late as 2017 to implement compliance measures it had promised in order to secure the agreement.
"The Justice Department determined that HSBC met all of its obligations, including its sanctions obligations, under its 2012 Deferred Prosecution Agreement," the bank said in a statement.
Huawei has pleaded not guilty. Meng, the daughter of Huawei's founder, was arrested in Canada on a U.S. warrant in connection with the case. She has said she is innocent and is fighting extradition.
Reuters exclusively reported last February that HSBC conducted an investigation into Huawei's connections with Skycom that helped lead to the charges against the Chinese company.
Huawei is seeking documents from the HSBC investigation of the company and reports from the monitor, which it says "appear certain" to contradict the allegations in the indictment.
A spokesman for federal prosecutors in Brooklyn declined to comment.
(Reporting by Karen Freifeld; Editing by Tom Brown)
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