In a court trial where Huawei is accused of defrauding American banks and causing banks to violate US sanctions against Iran, former Standard Chartered Bank executive Alex Manson testified last Thursday that Huawei had made false statements to him about the reasons for terminating its partnership with another major bank partner, HSBC.
Manson detailed the interactions between the two parties in court, revealing that Huawei claimed to have left HSBC due to its “inefficiency” and “differences in compliance understanding.” However, Manson expressed deep suspicion towards this explanation, finding it “incredible.”
Prosecutors in the Eastern District of New York, on the other hand, indicated that it was HSBC Bank that had proactively decided to terminate the partnership due to concerns about the risks of Huawei’s involvement in Iran-related activities. The prosecution accuses Huawei of secretly controlling its Hong Kong subsidiary, Skycom, to conduct business in Iran, while falsely claiming to banks that it had severed ties with Skycom and promised not to use bank services for Iran-related activities – a concealment at the core of the fraud charges.
Huawei allegedly conducted transactions through Skycom clearing hundreds of millions to a billion dollars in Iran-related deals through the New York financial system, putting unwitting international banks at significant legal risks of violating US sanctions (IEEPA) and money laundering charges.
As the executive responsible for Standard Chartered’s global partnership with Huawei, Manson testified that from 2012 to 2013, Standard Chartered and HSBC were among the few core multinational banking partners enabling Huawei’s entry into the international financial system, global operations, and cash management.
Manson often interacted with top Huawei executives at that time, including CFO Meng Wanzhou and several senior managers. Standard Chartered provided Huawei with services such as cash management, supply chain financing, and trade financing. When Huawei expanded its business in Asia, Africa, and the Middle East, Standard Chartered assisted in cross-border fund arrangements.
In a leaked internal email, Manson mentioned that Meng Wanzhou was frustrated by the lack of capabilities of Chinese domestic banks to provide specific financial services outside China. Huawei relied mainly on HSBC and Standard Chartered for its overseas banking business.
Towards the end of 2012 and the beginning of 2013, Reuters reported that Huawei’s partner Skycom had proposed selling HP equipment of US origin to the state-owned telecommunications company in Iran (MCI), with Meng Wanzhou serving as a director at Skycom between 2008 and 2009. These reports quickly triggered compliance reviews and risk alerts among major multinational banks.
According to an internal document from Standard Chartered in November 2012, the bank took note of the media reports. Internal assessments in the following months indicated the significant financial crime and reputation risks associated with business involving sanctioned countries, recommending that the risks of Huawei’s related business be submitted for review by the China Regional Risk Management Committee (RRRC).
During December 2012, when compliance concerns escalated, Meng Wanzhou led a high-level Huawei team to meet Manson and the Standard Chartered team in London. During the meeting, Meng Wanzhou expressed the desire to position Standard Chartered as a “trusted advisor,” deepen cooperation beyond traditional financing, and extend into areas such as optimizing balance sheets, shortening operational cycles, and improving risk management.
Manson testified that in 2017, upon learning of the termination of the partnership between HSBC and Huawei, he found the situation “very unusual” and proactively sought reasons from Huawei’s top management.
According to a call report within Standard Chartered Bank on November 7, 2017, Steven Tien and others from Huawei’s Overseas Financing Center informed Standard Chartered that pausing global cash business cooperation with HSBC was Huawei’s management decision, citing HSBC’s “sluggish business and inefficiency,” as well as “differences in compliance thinking.”
Huawei emphasized that this decision was “not due to any sanction violation issues” and expressed hopes to further strengthen its collaboration with Standard Chartered.
However, Manson expressed high skepticism towards Huawei’s claims, finding them one-sided. With his banking intuition, he found the explanation “incredible.”
He suspected HSBC to be the party actively cutting off relations and believed that if HSBC indeed initiated the termination, “they must have discovered something that I did not know but should have known.”
Following HSBC’s termination of the partnership in 2017, Standard Chartered Bank also assessed the high business risks associated with Huawei in 2018, subsequently announcing it would no longer provide any new funding and chose to end the business relationship. At that time, the US Department of Justice was investigating whether Huawei violated US sanctions against Iran.