Documents from a case brought by U.S. authorities against Chinese tech giant Huawei suggest that the company was using front companies in Iran and Syria to circumvent U.S. sanctions against those countries.
What's the story?
For the past two years, U.S. prosecutors have been investigating whether Huawei had been shipping U.S. goods to Iran, in violation of sanctions.
In December, Canadian authorities arrested Meng Wanzhou, the CFO of Huawei and the daughter of its founder. She was released on $7.5 million bail, but has remained in Vancouver. The United States has been trying to have her extradited.
As part of their case against her, U.S. prosecutors have accused Meng of using two companies to clear transactions with Iran. These companies, Skycom Tech Co. Ltd. and Canicula Holdings Ltd., were allegedly controlled by Huawei, even though the tech giant claims that they are independent business partners. Skycom was a telecom equipment seller, while Canicula is a shell company that owned Skycom. Skycom was liquidated in June 2017.
Documents obtained by Reuters appear to back up prosecutors' allegations. According to Reuters, a "high-level Huawei executive" appointed the manager of Skycom in Iran. Additionally, three people had signing rights for bank accounts associated with both Huawei and Skycom in Iran, and a Middle Eastern lawyer claimed that Huawei used Canicula to operate in Syria.
Meng has served on the board of Skycom between February 2008 and April 2009. Following that, Huawei claimed to have sold its shares in Skycom, but other corporate records contradict this.
A document seen by Reuters and filed by the U.S. for Meng's bail hearing in Canada asserts that "[d]ocuments and email records show that persons listed as 'Managing Directors' for Skycom were Huawei employees."
In addition to Iran, Canicula also operated in Syria as recently as October 2017, after U.S. sanctions against that country were put in place. While the Canicula branch in Syria may have closed down, the shell company is still registered in Mauritius.