After blogging about involvement in USA/China dynamics yesterday, I thought it pertinent to share a timeline of activities today that place context around the whole case. I could add more, but don't want to bore you ...
2007.2: Huaying (Huawei) bought Skycom.
Ms. Meng was the Corporate Secretary of Huaying.
2007.11: Huaying sold Skycom
Source:
https://www.wsj.com/articles/arrest-of-huawei-cfo-hinges-on-an-offshore-puzzle-1544466378
2008.2-2009.4:
Ms. Meng was on the board of Skycom, later she quit the Board.
Source:
2010: US agents begin investigations
Counterintelligence agents and federal prosecutors began exploring possible cases against Huawei’s leadership in 2010, according to a former federal law enforcement official. The effort was led by United States attorney’s offices in places where Huawei has facilities, including Massachusetts, Alabama, California, New York and Texas. According to a news report, the reason is Huawei's overseas business grew to surpass its domestic business from 2001 to 2010 and started to compete with US companies. A Rand report in 2005 thinks Huawei is related with the Chinese government and militaries.
Source:
https://www.nytimes.com/2018/12/14/business/huawei-Ms. Meng-hsbc-canada
https://qz.com/1627149/huaweis-journey-to-becoming-us-tech-enemy-no-1/
2012.7: US senate releases a report
The report states that HSBC is suspected of money-laundering for Mexican drug dealers and helping them to move the money.
Source:
https://www.hsgac.senate.gov/imo/media/doc/PSI%20REPORT-HSBC%20CASE%20HISTORY%20(9.6).pdf
2012.12.11 HSBC signs an agreement with the DoJ
HSBC entered a five-year Deferred Prosecution Agreement (“DPA”) with the US Department of Justice, for letting the Mexican and Colombian cartels to move $881 million in drug proceeds through the bank.
Source:
HSBC's statement on the settlement with the US gov
DPA details:
https://www.justice.gov/sites/default/files/opa/legacy/2012/12/11/dpa-attachment-a.pdf
2012.12.31 and 2013.1: Reuters shines light on Huawei
Reuters publishes two reports in Dec 2012 and Jan 2013. Reuters reports that a Hong Kong-based company that tried to sell US computer equipment to Iran’s largest cellphone carrier, in violation of US trade sanctions, is closely linked to Huawei. The story says that Ren Zhengfei’s daughter Ms. Meng Wanzhou, "a rising star" at Huawei, served on the board of the Hong Kong firm, among other links.
HSBC asked Huawei if the Reuters report was true. China’s Huawei, the world’s second largest telecommunications equipment maker, says neither it nor its partner, a private company registered in Hong Kong, ultimately provided the HP products to the telecom. Huawei called it a "bidding document". "Huawei’s business in Iran is in full compliance with all applicable laws and regulations including those of the U.N., U.S. and E.U. This commitment has been carried out and followed strictly by our company. Further, we also require our partners to follow the same commitment and strictly abide by the relevant laws and regulations.”
Source:
2013.2. HSBC shut down Skycom account at HSBC
HSBC knew the relationship between Huawei and Skycom and thought Skycom was risky
Source:
https://www.reuters.com/article/us-huawei-hsbc-exclusive/exclusive-hsbc-probe-helped-lead-to-u-s-charges-against-huawei-cfo-idUSKCN1QF1IA
2013.6.3: Michael Cherkasky, a former New York prosecutor, assigned as HSBC’s compliance monitor
Source:
https://blogs.thomsonreuters.com/answerson/former-prosecutor-hsbc-compliance-monitor/
2013.8.22 Ms. Meng meets with HSBC’s Deputy Head of Global Banking for Asia Pacific, Alan Thomas
Ms. Meng meets with HSBC’s then deputy head of global banking for the Asia Pacific region, Alan Thomas, at a teahouse in Hong Kong, where a PowerPoint presentation was made.
In the presentation, Ms. Meng told HSBC “Huawei’s engagement with Skycom is normal and controllable business operation” and that “As a business partner of Huawei, Skycom works with Huawei in sales and service in Iran.” To comply with sanctions laws, HSBC have known what it needed to know.
Source:
2013.9.3: A copy of the English version of the PPT was hand-delivered to HSBC.
Early 2014: Ms. Meng’s devices checked at JFK
Ms. Meng arrived in the United States via John F. Kennedy International Airport in early 2014, where her electronic devices were examined. It is reported that FBI found “talking points” in her phone. (The US has adopted the airport evidence grabbing many times )
Source:
https://www.cnbc.com/2019/01/28/us-seeks-extradition-of-huawei-cfo-Ms. Meng-wanzhou
2014.3: America is spying on Huawei
The US is revealed to be spying on Huawei, according to documents leaked by former National Security Agency contractor Edward Snowden. The New York Times reports (paywall) that the NSA infiltrated the servers in Huawei’s Shenzhen headquarters, obtaining sensitive information about its giant routers and complex digital switches, and monitoring the communications of top executives.
Source:
https://www.reuters.com/article/us-usa-security-china-nsa/nsa-infiltrates-servers-of-china-telecom-giant-huawei-report-idUSBREA2L0PD20140322
2014.9.12: America identifies Huawei as F7
ZTE’s CFO at the time was stopped at Boston’s Logan Airport after flying in from London with an assistant. The assistant was carrying a Lenovo laptop containing a confidential ZTE document, dated August 25, 2011 and signed by four top executives, about the need to establish front companies to supply U.S. procured items needed for projects in embargoed countries. It also identified a company as “F7” and how it used a front company to serve as its agent for contracts in sanctioned countries. F7 was Huawei, according to the individuals familiar with the ZTE and Huawei investigations.
Source:
2014.10: The US Commerce Department sends a subpoena to Huawei
The US Commerce Department sent a subpoena to Huawei in the United States demanding information on the company’s exporting American technology to Iran, according to a court document and one of the people familiar with the Huawei probe.
Source:
2015.4.15: HSBC decides to dump Huawei
HSBC appeared to have a change of heart about doing business with Huawei. The bank’s reputational risk committee met in New York on April 15 and decided not to do business with Huawei’s American subsidiary.
Source:
https://www.nytimes.com/2018/12/14/business/huawei-Ms. Meng-hsbc-canada
Before 2016, Huawei had received no warnings or reminders on compliance from the US. Huawei regularly communicated with the US Dept of Commerce on technical details of compliance. After US started the investigations on Huawei, such communication terminated.
Source:
2016.3: US adds ZTE to the entity list
As part of that case, American officials released internal ZTE documents in which executives had described creating “cutoff companies” that would do business in places like Iran and North Korea. In the documents, the executives said ZTE should follow the example of a rival company, called F7. American officials concluded that was a reference to Huawei, prompting them to intensify their scrutiny of the company, according to a senior Obama administration official.
Source:
2016.5: The United States Commerce Department subpoenas Huawei
The United States Commerce Department is demanding Huawei to turn over all information regarding the export or re-export of American technology to Cuba, Iran, North Korea, Sudan and Syria, according to a subpoena sent to Huawei and viewed by The New York Times. The subpoena is part of an investigation into whether Huawei broke United States export controls.
Source:
https://www.nytimes.com/2016/06/03/technology/huawei-technologies-subpoena-iran-north-korea
2016.9: The US targets HSBC
It was reported that US considered new charges against HSBC. U.S. Considers HSBC Charge That Could Upend 2012 Settlement.
Source:
Late 2016: HSBC began to conduct an internal bank probe of Huawei
The probe found Ms. Meng met in 2013 with a HSBC banker. She later gave him a copy of the PowerPoint presentation, which the U.S. indictment says misrepresented Huawei’s control of Skycom.
Source:
2016.12 US adds more pressure to Huawei
Subpoena was issued by the United States Treasury Department’s Office of Foreign Assets Control, which oversees compliance with a number of American sanctions programs.
Source:
https://www.nytimes.com/2017/04/26/business/huawei-investigation-sanctions-subpoena
2017.2.14: The evidence before US
With the case against ZTE wrapping up, more than a dozen people from Departments of Treasury, Commerce, Homeland Security and Justice, gathered in Washington and talked about how they were moving forward against Huawei, according to a person familiar with matter.
Source:
2017: HSBC working with US authorities?
HSBC and the court-appointed monitor inside the bank had disclosed the Iran transactions to federal prosecutors in Brooklyn, according to a person briefed on aspects of the federal investigation.
April 2017: USA accuses Huawei of criminal activity
A grand jury subpoena was issued to the U.S subsidiary of Huawei in April 2017, the first clear sign to Huawei that the probe had turned criminal.
Source:
According to the Wall Street Journal report, a monitor charged with evaluating HSBC’s anti-money-laundering and sanctions controls in recent years relayed information about the Huawei transactions to federal prosecutors in the Eastern District of New York, the people said.
Source:
2017.8 HSBC terminated its 20-year relationship with Huawei
Source:
http://bbs.chinadaily.com.cn/forum/topics/5f1e3832e4b0167ab6310a2c
2017.8: US Attorney General pursue bank fraud charges against Huawei
Two of the sources said a critical point took place in August 2017, when deputy U.S. Attorney General Rod Rosenstein - best known for his oversight of special counsel Robert Mueller’s probe of Russian interference in the U.S. election – handed a lead role to Brooklyn prosecutors to pursue possible bank fraud charges against Huawei.
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Dec. 2017: Charges against HSBC were dismissed by US DOJ.
Source:
April 2018: Huawei’s relationship with Iran investigated by US authorities
The Wall Street Journal reported that the Justice Department is investigating whether Huawei Technologies Co. violated U.S. sanctions related to Iran, according to people familiar with the matter, a move that opens a new avenue of scrutiny of the Chinese cellular-electronics giant on national security grounds.
Source:
2018.8.22: America goes for Weng Wanzhou
A New York court issues an arrest warrant for Ms. Meng, so that she could be detained to stand trial in the United States.
Source:
In the three months after the warrant was issued, and before her fateful stopover in Vancouver on Dec. 1, Ms. Meng visited six countries that have extradition treaties with the U.S., including Britain, Ireland, Japan, France, Poland and Belgium. She had also travelled through Canada on Oct. 8, 2018.
Source:
2018.11.1: US attorney general claims they will charge wrongdoers over actions, not politics
Then-U.S. attorney-general Jeff Sessions unveiled what the Trump administration called the “China Initiative.” Mr. Sessions said the U.S. Justice Department was going to step up law-enforcement actions against Chinese companies that break the law while competing with U.S. companies. Sessions also said that “We will continue to charge wrongdoers based on carefully conducted investigations done with integrity and professionalism, not politics, and we will seek extradition of criminals.” The remarks were later interpreted as DOJ’s move against Ms. Meng Wanzhou.
Source:
2018.11.29: The United States learns that Ms. Meng will be passing through Vancouver International Airport on her way to Mexico.
2018.12.1 Ms. Meng is arrested by Canadian police in Vancouver
Ms. Meng is arrested by Canadian police in Vancouver as she changes planes. At the G20 summit in Bueno Aires in Argentina, President Trump was heading into a 21/2-hour private dinner with Mr. Xi at the conclusion of the meetings. At that dinner, the two leaders agreed to a 90-day truce in the U.S.-China trade war. The arrest is not made public until Dec. 5. The Chinese embassy in Canada demands her release.
Source:
2018.12.6: John Bolton knew about the arrest of Ms. Meng Wanzhou “in advance”
Source:
2018.12.10: Two Canadians are detained in China
A former Canadian diplomat, Michael Kovrig, and businessman Michael Spavor are ‘arbitrarily detained’. China denies their arrests are related to Ms. Meng’s case.
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2018.12.11: Ms. Meng is released on bail
Ms. Meng is released on bail by a British Columbian court. U.S. President Donald Trump says he will intervene in the case if it would serve national interests.
Source:
2019.1.22: The U.S. Justice Department announces it will formally seek the extradition of Ms. Meng to the United States.
2019.1.23: Canada’s ambassador tells media Huawei can make a good case against extradition
John McCallum, Canada’s ambassador to China, tells Chinese-language media that Huawei can make a good case against extradition, thanks in part to Trump’s comments about his willingness to get involved.
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2019.1.26: Canada’s PM fires ambassador
Trudeau fires McCallum after his comments to the press, marking the first time a Canadian ambassador had ever been fired.
Source:
2019.9.3: Huawei responds to the Wall Street Journal's report on US's investigations on Huawei.
Huawei make multiple claims of issues with the investigation:
Unlawfully searching, detaining, and even arresting Huawei employees and Huawei partners
Attempting entrapment, or pretending to be Huawei employees to establish legal pretense for unfounded accusations against the company
Launching cyber attacks to infiltrate Huawei's intranet and internal information systems
Sending FBI agents to the homes of Huawei employees and pressuring them to collect information on the company
Mobilizing and conspiring with companies that work with Huawei, or have a business conflict with Huawei, to bring unsubstantiated accusations against the company
Launching investigations based on false media reports that target the company
Digging up old civil cases that have already been settled, and selectively launching criminal investigations or filing criminal charges against Huawei based on claims of technology theft
Obstructing normal business activities and technical communications through intimidation, denying visas, detaining shipment, etc
Source:
2019.9.23: Canada denies any impropriety
Canada’s attorney general said there was no evidence that Canadian border officials or police acted improperly when Ms. Meng was detained and arrested at Vancouver’s airport.
2019.9.24: Ms. Meng back in court
Ms. Meng returned to a Vancouver court as her lawyers argued that Canadian authorities abused their powers and violated her rights to gather evidence against her, a claim the government denies.
2019.10.2: Any errors in the arrest of Ms. Meng were technical
Any errors in the arrest of Ms. Meng in Canada last December were technical in nature and do not meet the requirements to suspend her extradition proceedings to the United States, government lawyers said in court on Wednesday.
Source:
2020.5.27 Canadian judge approves extradition case
A Canadian judge ruled against Ms. Meng in the so-called double criminality test, paving way for the continuation of the extradition case.
Source:
2020.6.12 Canada was coordinating with America
Lawyers for Ms. Meng Wanzhou are alleging that Canada's national spy agency was in on a plan for border officers to detain the Huawei executive for hours before her arrest at Vancouver's airport and was mindful of the political implications of her arrest.
Source:
2020.6.22: President Trump saw Huawei as “an opportunity to make personal gestures to" Chinese President Xi Jinping
Bolton book The Room Where It Happened could factor into Huawei exec's extradition case. Bolton writes in the book that Trump viewed concerns raised by his advisers about Huawei and the ZTE telecom firm being national security threats as “an opportunity to make personal gestures to" Chinese President Xi Jinping. "In 2019, he offered to reverse criminal prosecution against Huawei if it would help in the trade deal — which, of course, was primarily about getting Trump re-elected in 2020."
Source:
https://www.politico.com/news/2020/06/22/bolton-book-huawei-extradition-case-333628
2020.6.23: The federal government has the “unequivocal” authority to intervene in the extradition case of a Chinese executive, even if it doesn’t want to exercise it, says a prominent defense lawyer. "The process itself is initiated by the minister of justice, initiated with an authority to proceed, and during that first phase of extradition, which is the judicial process, there's express language which permits the withdrawal of that authority to proceed at any time," Greenspan said.
Source:
2020.7.17: The US Record of the Case (ROC) omits vital information
Huawei’s lawyers contend that the U.S. record of the case against Ms. Meng omits “highly relevant information” from two slides and, in doing so, leaves the impression that the tech executive never told HSBC that Skycom did business with Huawei in Iran or that Huawei and Skycom had an ongoing business relationship.
The legal team says slide No. 6 and slide No. 16 show that Ms. Meng was far more transparent with HSBC than suggested. The omitted statements include “As a business partner of Huawei, Skycom works with Huawei in sales and service in Iran” and Huawei “has a normal and controllable business co-operation with Skycom,” meaning it controlled Skycom.
Ms. Meng’s lawyers say these omissions and misrepresentations are serious. The U.S. “conduct fell so far below the expected standard of diligence, candour and accuracy to constitute a serious breach of process,” they say.
The new court filings also contend that because this August, 2013 presentation informed HSBC that Huawei and Skycom were operating together in Iran, the financial institution would have been aware that it could not clear Skycom funds through U.S. banks without risking a violation of U.S. sanctions law. “[Ms. Meng’s] PowerPoint presentation gave HSBC the material information it needed to assess the risk of clearing U.S. dollar transactions related to Skycom’s business in Iran.”
Furthermore, Ms. Meng’s legal team says, there was no need to clear U.S. dollar transactions through U.S. banks. It provides evidence, including an affidavit, that HSBC had the option of clearing U.S. funds through Clearing House Automated Transfer System (CHATS), an alternative transaction-clearing system based in Hong Kong “which involves no U.S. sanctions risk.”
“In summary – on the facts not disclosed by the [United States]: No deception. No material omission. No conduct by [Ms. Meng] placing HSBC at risk. No fraud,” her legal team said in the latest court filings.
Source:
2020.7.23 A US Federal Judge blocks sharing documents that may help Huawei’s case
A Federal Judge in New York Denies Request to Share Documents With Huawei CFO in Canada (evidence good for Ms. Meng cannot be used in the extradition case)
Source:
2020.10.2 A Canadian Judge supports sharing documents that may help Huawei’s case
Huawei Technologies Co.’s chief financial officer achieved a small victory in her fight against extradition to the U.S., when a Canadian judge ruled that she can introduce additional evidence to buttress her argument that the U.S. handover request is so deeply flawed it should be thrown out. Ms. Meng Wanzhou will be permitted to bring forward “some, but not all” of the evidence she had requested, Supreme Court of British Columbia Associate Chief Justice Heather Holmes said in a written decision released Thursday. Some of that evidence “is realistically capable of challenging the reliability” of the U.S. extradition request, Holmes said.
[Huawei CFO Wins Small Court Victory in Canada Extradition Case]
Source:
https://www.bnnbloomberg.ca/huawei-cfo-wins-small-court-victory-in-canada-extradition-case-1.1515141
2020.12.9: Canadian customs officer compromised
At the court hearing, a Canadian border officer “went white” during a meeting a few days after the arrest of Ms. Meng Wanzhou, when he realised his note of the Huawei Technologies executive’s electronic passwords had gone missing, the officer’s superior has testified.
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21/12/2020 Canada accused of abuse of process
Lawyers for Huawei Technologies executive Ms. Meng Wanzhou have argued that Canada would be violating international law if she is sent to the United States to face charges, and they assert that she was subjected to an abuse of process and should be released.
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2021.1.29: Canadian court refuses to relax Ms. Meng's bail terms
Source: https://www.reuters.com/article/us-usa-huawei-tech-canada-idUSKBN29Y2QZ
2021.2.12: Huawei takes HSBC to UK court as it tries to stop extradition
Source: https://www.bbc.com/news/business-56031321
2021.2.25: Huawei takes HSBC to HK court as it tries to stop extradition
Huawei CFO Ms. Meng Wanzhou takes HSBC to Hong Kong to access banking records she says will help her battle extradition from Canada to the US.
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2021.3.1: Huawei lawyer presents evidence against HSBC
Defense lawyer Frank Addario asked the court to admit evidence he says shows officials with HSBC were aware of Huawei’s connection to Skycom and another company called Canicula Holdings Inc.
Source:
https://www.reuters.com/article/usa-huawei-tech-canada-idCNL2N2KZ2HP
For the latest on the story see:
Why did HSBC dump their biggest corporate client?
... and click on the embedded links in this blog entry.
The extradition case begins in August 2021. Let's see what HSBC will offer then.
Chris M Skinner
Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal's Financial News. To learn more click here...
