New Documents on Huawei's Relations with Iran and Syria

Reuters reports that allegations and cases against Meng Wanzhou, Huawei's Chief Financial Officer detained in Canada, focus on the "suspicious relations" between the Chinese company and two obscure firms: a telecommunications equipment vendor operating in Tehran and a company registered in Mauritius. U.S. officials claim Meng Wanzhou deceived international banks into conducting financial transactions with Iran by asserting that these two companies had no ties to Huawei, while in reality, they were fully controlled by Huawei. The two companies named are "Skycom Tech" and "Canicula Holding," the latter being a shell company. Skycom had been active in Iran for years, and reports of its activities have previously appeared in Iranian media. For instance, representatives from Skycom attended the graduation of students from an institute that provided specialized courses and official Huawei certifications. Reuters states that documents obtained from Iran and Syria indicate that Huawei has much closer ties with Skycom and Canicula than it has publicly acknowledged. Neither Meng nor Huawei has yet responded to Reuters' report. According to available documents, U.S. officials assert that Huawei has "lied multiple times" about its relationship with Skycom and has not disclosed that "Skycom is entirely controlled by Huawei." This company was engaged in transferring money to Iran and supplying equipment to Iranian companies. Court documents indicate that Huawei told the bank it sold its stake in Skycom in 2009, the same year Meng Wanzhou stepped down from managing Skycom. However, documents in Hong Kong, where Skycom is registered, show that its shares were transferred to "Canicula Holding" in 2007, and Canicula, a shell company registered in Mauritius, owned these shares for about a decade. Among the allegations made against Meng Wanzhou in recent weeks is "lying" to the "Hong Kong and Shanghai Banking Corporation" (HSBC) regarding the use of a hidden subsidiary for "illegal" transactions with Iran. A month ago, Hong Kong publications reported that Washington had asked the region's leaders to take "further actions" to prevent violations of sanctions against Iran and North Korea. The U.S. consulate in Hong Kong and Macau also stated that a U.S. delegation proposed to these two regions to "improve the flow of information and cooperation and increase their efforts to enforce sanctions." The American delegation's visit to Hong Kong followed Meng Wanzhou's arrest. However, a Hong Kong official told the South China Morning Post that the meetings were unrelated to Meng's detention. From China to Iran, from Syria to South Africa, Reuters reports that "Canicula Holding" had an office in Syria until two years ago and was operating on behalf of Huawei. Syria, a close ally of Tehran, is also under U.S. and European sanctions. According to Reuters, one of Canicula's main telecommunications clients is MTN Syria, which is controlled by MTN South Africa; MTN owns part of Irancell's shares. Reuters reported in 2012 that the South African company "MTN" had bribed officials to obtain contracts with Iran. At that time, Reuters also reported that Irancell had managed to purchase some of its required equipment from American companies like Hewlett-Packard (HP) despite U.S. sanctions. Investigations into Chinese companies regarding the purchase of this equipment for Iran have been ongoing for a long time. Huawei previously stated that neither it nor Skycom provided American equipment to Iran. An MTN official told Reuters that currently, no one at the company is available to respond to the news agency's report. MTN had previously stated in response to an earlier Reuters report that it is "committed to enforcing U.S. sanctions against Iran." In December 2017, a note from Canicula was published in Syrian publications stating that the company had ceased its activities in Syria. Meng Wanzhou's arrest in Canada was carried out at the request of the U.S. Although Beijing has recently taken severe actions against Canada, with several of its citizens detained in China, the People's Republic's responses to the United States have, at least outwardly, been much softer. Meng Wanzhou, the daughter of Ren Zhengfei, the founder of Huawei, is effectively the CFO of the company and is expected to play a key role in guiding Huawei. Ren Zhengfei, a former technician in the People's Liberation Army, founded a company in 1987 that sold telephone switch equipment manufactured in Hong Kong. Today, this company is a well-known brand in telecommunications technology, with revenues exceeding $92 billion in 2017. However, some Western countries and their allies in Asia have limited government transactions with this company due to concerns about the intertwined relationships between Huawei and the political, military, and security mechanisms of the People's Republic of China. Huawei has denied these allegations.