Sure, but I find it difficult to justify that this should be tried in a US court under control of the US government, for a crime between two non-American actors outside the United States.

The fact that it was about selling US equipment seems to be completely orthogonal to the crime (which is fraud), as it is not illegal for a non-US citizen outside the US to sell American goods bought to another non-US actor.

The fact that Huawei would have to lie to the US government also seems orthogonal as Huawei did not lie to the US government, and if it did then Huawei would be liable.

This simply seems to me like the US trying to impose it's power over foreign transactions.

HSBC has a United States banking license, employs tens of thousands of Americans (in America) and is traded on the New York Stock exchange. Thus it (a) has to abide by US finance laws and (b) is afforded some US protections.

If having ones head office overseas would provide immunity from US laws it wouldn't be a very effective system would it? :-)

>Huawei did not lie to the US government

That remains to be seen (as I understand it - maybe you have evidence to the contrary?), but I can't imagine how they would export so much equipment without doing so.

>This simply seems to me like the US trying to impose it's power over foreign transactions.

I agree to an extent. But since everyone (especially banks) need to do business in the United States it's unavoidable.

In that case, HSBC should be held liable for damages and should sue the party in order to recover them. If they cannot recover damages in that jurisdiction then they should either stop operating there or stop operating in the US.

It's pretty much indefensible to me that someone that has nothing to do with the US operating outside the US would be tried in the US for a crime they allegedly commited elsewhere.

FWIW HSBC has also 'actively circumvented rules designed to “block transactions involving terrorists, drug lords, and rogue regimes.”'. I don't see their CFOs arrested.

Then there's the question of Banco do Brasil, Bank of America, Bank of Guam, Bank of Moscow, Bank of Tokyo-Mitsubishi, Barclays, BNP Paribas, Clearstream Banking, Commerzbank, Compass, Crédit Agricole, Deutsche Bank, HSBC, ING, Intesa Sanpaolo, JP Morgan Chase, National Bank of Abu Dhabi, National Bank of Pakistan, PayPal, RBS (ABN Amro), Société Générale, Toronto-Dominion Bank, Trans-Pacific National Bank, Standard Chartered, and Wells Fargo all transacting with Iran (https://archive.is/kyKGf) and not having their CFOs arrested.

>In that case, HSBC should be held liable for damages

I've no love for HSBC (at all) but in this instance it appears they are the victim of fraudulent representations made by Huawei.

Your "solution" proposes prosecuting not only an innocent party, but one of the victims? That's an ... ummm ... interesting take.

Well no, that is not my solution. That is the only ethical way the US could enforce sanctions. The solution would be to put the Iran deal back up, but I digress.

Yes, there is absolutely no way of enforcing sanctions without prosecuting innocent parties. The only way that the US can get foreign banks not to deal with Iran is by punishing them, even if they were the victims of fraud, the bank would then have to decide if they want to continue operating in the US and try to recoup their losses by going after the fraudster, not operate in the jurisdiction of the fraudster if that is impossible, or not deal with Iran at all (in which case a competitor will). Otherwise, they can also stop dealing with the US.

>even if they were the victims of fraud, the bank would then have to decide if they want to continue operating in the US and try to recoup their losses by going after the fraudster

So you're proposing that the government shouldn't prosecute fraud criminally, and it should be up to the banks go after the perpetrators in civil court instead?

No, I think that the local government where the fraud happened should pursue criminal charges if appropriate, not the US government.

You can be suef in civil and criminal court at the same time.

How does this square with jurisdictions that don't enforce those laws because the crimes benefit them? Should russian cybercriminals who victimize americans be allowed go to whatever country they please, knowing that they won't be prosecuted in their home country (because the government turns a blind eye to their activities), and can't be prosecuted/extradited in whatever country they travel to?

In this case neither perpetrator nor victim of the fraud appear to be US entities, so your example of Russian cybercriminals victimizing Americans doesn't exactly apply. Unless the country requesting the extradition of said Russian from Canada is, dunno, Australia, for some unrelated beef they have, using the crime against Americans as a convenient excuse.

But in this case, the US entity is being victimized. Specifically, they were tricked into violating US sanctions, which can carry criminal penalties for them. I guess you argue that we can simply decriminalize this for the US entity, but that opens a huge loophole for bypassing sanctions. Say you're china and you want to buy some American semiconductors (which are currently banned from being sold into china). All you need to do is set up a company in Russia, buy the semiconductors, promise that they won't be later transferred into china (wink wink), then import it into china.

Bank may not be an US entity is what it appears. Also the bank is supposed to do due diligence. Careful reading of the judgement, indicate that none of the liabilities from the transaction are possibly active, ie, all payments have been made and the matter closed, with no issue of defaults, etc. The question being considered is the 'risk of reputational damage to the bank', which does it sound like a criminal matter?

In that case you stop doing business in that jurisdiction.

But they have everything to do with the US, that is the problem. They have multiple divisions with multiple agreements. Phone components, systems, software, all under export controls and they aren't abiding by the agreements they have signed. I'm not sure where you're going with this. How do they have nothing to do with the US?

Then go after Huawei, which is an entity operating in the US? But that is not what happened; Huawei is not being sued, an individual that never dealt with a US entity is being sued for an alleged crime between non-US entities outside the US.

>Then go after Huawei, which is an entity operating in the US? But that is not what happened; Huawei is not being sued

They're not being sued, but they are being charged with:

> Conspiracy to Defraud the United States, Bank Fraud, and Theft of Trade Secrets Among Nearly Two Dozen Charges

https://www.fbi.gov/news/stories/chinese-telecom-firm-huawei...

Good, then you can leave the individual non-US citizen that is outside of the US and did not commit a crime in the United States outside of US Court.

When someone commits fraud remotely, it is often recognized in the location where the fraud occurred, not where it originated from. It doesn't matter if you're hacking a bank computer, lying through misrepresented paperwork, or any other form of fraud or remote crime. And when businesses do business internationally, their execs can be held accountable for crimes their businesses do.

Here's a different but similar example:

https://www.nytimes.com/2017/01/09/business/volkswagen-diese...

This is completely different. Volkswagen directly lied to the US government. And even then, Germany refused extradition for very good reasons, they had to wait for him to go to the US.

This was someone allegedly defrauding an entity that is not American, let alone the US Government, outside of US jurisdiction, being deported to a jurisdiction in which they committed no crime. It is entirely ridiculous to equivocate the two cases.

Branches of HSBC inside of the US definitely operate under US law. It is illegal to defraud banks in the US. It is also illegal to defraud banks in Canada.

She did not commit a crime in the US, correct.

What she did do was come to Canada after committing what is certainly a crime in both Canada and the US. If you commit a crime elsewhere and then come to Canada, you can, and should be held accountable. Many, many criminals have been prosecuted here, or extradited from here, for crimes that weren't committed here.

We're not just talking about bank fraud (that just happened to be the easiest thing to pin on her for the purpose of extradition). Huawei has long been known in intelligence circles for stealing Canadian IP as well. At the very, very least, she is complicit in such crimes. I'm glad the US is doing something about it, since we (Canada) don't have the international clout needed to stand up to Chinese bullying.

Yes, she committed a crime against the US outside its' jurisdiction. She then made the mistake of coming to Canada, after having committed what would be considered a crime in Canada. Make no mistake. Aside from the sanctions violations, most of the allegations Huawei is facing also apply to Canada. She shouldn't have come here. Now she needs to face the music.

You're equivocating the word "in". She allegedly committed something that is a crime in Canadian and US law, but she did not commit it in US jurisdiction, nor against a US entity. As such, there is no reason for her to be extradited to the US. I don't care that it was against the US, if it was outside of US jurisdiction then the US has no business prosecuting anyone.

Just because what she did is against US interests doesn't mean that the US has the right to judge her according to their own laws. That is entirely ridiculous.

As a Canadian citizen, I would feel that it would be 100% justified for her to be extradited to the jurisdiction in which she committed the alleged crime. But we aren't talking about this.

>nor against a US entity

Sigh. You didn't read the link I provided you over three hours ago, did you?

C'mon, be honest :)

> The Eastern District of New York charged Huawei, two of its affiliates, and Chief Financial Officer Meng Wanzou with 13 counts surrounding the company’s misrepresentations to the U.S. government and four financial institutions regarding its business in Iran. The indictment charges that the company used financial institutions operating in the United States to process transactions involving millions of dollars in furtherance of Huawei’s Iran-based business.

Emphasis is mine. Quote is from the link I previously provided you -

https://www.fbi.gov/news/stories/chinese-telecom-firm-huawei...

That page has other interesting links at the bottom you should also read. Here's a quote from one (again, all emphasis is mine).

> According to the indictment, Huawei relied on its global banking relationships for banking services that included processing U.S.-dollar transactions through the United States. U.S. laws and regulations generally prohibited these banks from processing transactions related to Iran through the United States. The banks could have faced civil or criminal penalties for processing transactions that violated U.S. laws or regulations. Relying on the repeated misrepresentations by Huawei, these banks continued their banking relationships with Huawei. One bank cleared more than $100 million worth of Skycom-related transactions through the United States between 2010 and 2014.

Here's the best part:

> In furtherance of this scheme to defraud, and as alleged in the indictment, Huawei and its principals repeatedly lied to U.S. government authorities about Huawei’s business in Iran in submissions to the U.S. government, and in responses to government inquiries. For example, Huawei provided false information to the U.S. Congress regarding whether Huawei’s business in Iran violated any U.S. law. Similarly, as indicated in the indictment, in 2007 — months before Huawei orchestrated the purported sale of Skycom to another Huawei-controlled entity — Huawei’s founder falsely stated to FBI agents that Huawei did not have any direct dealings with Iranian companies and that Huawei operated in compliance with all U.S. export laws.

And this is a series of crimes actually committed on U.S. soil:

> In 2017, when Huawei became aware of the government’s investigation, Huawei and its subsidiary Huawei USA allegedly tried to obstruct the investigation by making efforts to move witnesses with knowledge about Huawei’s Iran-based business to the PRC, and beyond the jurisdiction of the U.S. government, and by concealing and destroying evidence of Huawei’s Iran-based business that was located in the United States.

The above three blockquotes are from: https://www.justice.gov/opa/pr/chinese-telecommunications-co...

That just covers the Iran related part. Do you want me to go through the stolen trade secrets part? Okay sure, here goes. Once again, emphasis is mine:

> According to the indictment, in 2012 Huawei began a concerted effort to steal information on a T-Mobile phone-testing robot dubbed “Tappy.” In an effort to build their own robot to test phones before they were shipped to T-Mobile and other wireless carriers, Huawei engineers violated confidentiality and non-disclosure agreements with T-Mobile by secretly taking photos of “Tappy,” taking measurements of parts of the robot, and in one instance, stealing a piece of the robot so that the Huawei engineers in China could try to replicate it. After T-Mobile discovered and interrupted these criminal activities, and then threatened to sue, Huawei produced a report falsely claiming that the theft was the work of rogue actors within the company and not a concerted effort by Huawei corporate entities in the United States and China. As emails obtained in the course of the investigation reveal, the conspiracy to steal secrets from T-Mobile was a company-wide effort involving many engineers and employees within the two charged companies.

> As part of its investigation, FBI obtained emails revealing that in July 2013, Huawei offered bonuses to employees based on the value of information they stole from other companies around the world, and provided to Huawei via an encrypted email address.

So, tell me again how Meng, as CFO of this wonderful company, didn't do anything against a US entity?

She's an elected officer of the company, and thus under US Law and most countries for the matter. She as an individual was a part of and oversaw the actions and complaints alleged. There's no ambiguity at all.

Then prosecute her under the country where she allegedly committed fraud.

> I find it difficult to justify

The U.S. is the hegemon. It's going to use its weight to push people around, especially if it has a chance to push China around. It did.

When the 2008 financial crisis happened, some Swiss banks were in crisis and the FBI managed to finally break through Swiss bank secrecy in exchange for bailout funds (for U.S. operations). Suddenly tons of Americans hiding money in Switzerland had to make "voluntary disclosures" and pay tax. That's what being a hegemon allows you to do.

>>> As I understand it, it follows because HSBC and has a major US presence and is therefore subject to US banking restrictions.

HSBC operates in many countries and is notably the market leader in Hong Kong and China to facilitate transfer of grey money to the West. It has little regards to US laws.

Local companies only submit to their local jurisdictions (consider an international company as a lose agglomerate of local branches scattered across the world). The US can try to show off but it has little influence over what happens in the rest of the world.

If any government wanted to shut down its local HSBC, they'd have done it long ago (and the officials would lose their primary ways to clear money).

I'm not sure I understand your point.

Rightly or wrongly, HSBC is bound to certain US laws if it wants to maintain its US presence (including its listing on the NYSE). HSBC has made a choice to abide by that, and so they are co-operating in this matter.

Sure, HSBC could choose not to abide/co-operate and face the consequences. But that's not what's happening.

So, again, I'm not sure what point you're making.

HSBC USA and HSBC in other countries aren't the same company. They are separate legal entities, that might be owned by a company in foreign country.

Sure. But the reality is that, for one, HSBC Holdings (the parent entity) trades on the NYSE and secondly, HSBC USA accounts for roughly 10% of HSBC Holdings revenue.

While 10% doesn't seem like much, that's direct revenue[0] only. I'm willing to bet that withdrawal from the US market would have a negative effect on their revenue equal to many multiples that amount. After all, who would do business with a commercial bank that can't access the worlds wealthiest market?

And what would not being able to sell your stock in the worlds wealthiest market have on its' price? I'm not an economist (IANAE?) but I wouldn't be surprised if total withdrawal from the US resulted in a 30-60% collapse in their stock price. Yes, that's a totally made up number :) but I think you get my point:

Legal entities aside, HSBC Holdings is duty-bound to comply with US regulations as much as possible in order to satisfy it's investors.

[0] https://www.hsbc.com/-/files/hsbc/investors/hsbc-results/201...

>>> who would do business with a commercial bank that can't access the worlds wealthiest market?

How about every regional and national banks? You realize thousands of banks provide their local markets and have little dealings with the US? The fact that HSBC only does 10% revenues in the US shows how negligible that market is to them.

US stock is mostly an investment hold by US pension funds. If the company is ruined or kicked out of the stock exchange, it's by far and large the US population who will take the hit. I doubt the US government would attempt that because it's a self defeating move and they've repeatedly shown they want to bail pensions not destroy them.

>How about every regional and national banks? You realize thousands of banks provide their local markets and have little dealings with the US?

When I wrote "who would do business with a commercial bank that can't access the worlds wealthiest market?" it was obviously done to illustrate what a massive effect withdrawal from the US market would be. Of course there are alternatives. Of course there are many entities that don't need access to the US market. Don't be ridiculous. You know what I meant.

How about I rephrase it as "which of HSBC largest, most profitable customers would stick with it, without access to the US market". Happy now?

>The fact that HSBC only does 10% revenues in the US shows how negligible that market is to them.

I strongly disagree, based on the reasons I already mentioned, and for the additional reason is that it presents a massive untapped market opportunity.

Oh and, HSBC's actual slogan is "The World's Local Bank". Being "global" is literally part of their value proposition.

But again, I'll humor you. Let's says their stock would "only" take a 10-20% hit. The point I'm making still stands:

Legal entities aside, HSBC Holdings is duty-bound to comply with US regulations as much as possible in order to satisfy it's investors.

>US stock is mostly an investment hold by US pension funds. If the company is ruined or kicked out of the stock exchange, it's by far and large the US population who will take the hit. I doubt the US government would attempt that because it's a self defeating move and they've repeatedly shown they want to bail pensions not destroy them.

That seems to support my point. What point (in the context of the thread you joined), are you making exactly?

You seem to be suggesting that the legality of actions (as perceived by the U.S.) of HSBC elsewhere in the world have little to no effect on HSBC USA. The facts suggest otherwise:

https://en.wikipedia.org/wiki/HSBC#Controversies

US extraterritorial laws are far reaching and used as way to promote US interested. Two foreign entities can be subject to them if the transaction is done in USD for exemple.

https://www.natlawreview.com/article/aggressive-extraterrito...

I always wondered why for example the FIFA corruption matters are being dealt with through the US justice system, while it appears hardly to have any link with the US, such that US authorities have any jurisdiction on it.

That time too there was much concern over the territorial overreach of the US judicial system, esp in Europe.