The international bank raised the alarm about suspicious transactions in a case threatening to further sour US-Chinese relations, a situation that's already hit markets.

The arrest of China’s Huawei Technologies Co finance chief Meng Wanzhou, aka Sabrina Meng, was helped by a federally appointed overseer at global banking group HSBC, a media report said.

The Hong Kong/London-listed group, which provides private banking services among its offerings, has been involved in flagging suspicious transactions in the accounts of Huawei Technologies, the Wall Street Journal reported. 

The arrest in Canada this week of the senior executive, who is the daughter of the company’s founder, has stoked fears that already tense US-China relations could worsen. A few days ago, markets were cheered when US President Trump and his Chinese counterpart agreed that proposed US tariffs on Chinese goods, due to start in January, should be delayed pending further talks. But the arrest has spooked investors.

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 WSJ reported, citing unnamed sources.

Canadian authorities on Dec 1 arrested Huawei chief financial officer Meng Wanzhou in Vancouver at the request of the US for alleged violations of Iran sanctions, the latest move by Washington against the Chinese cellular-technology giant. 

HSBC, which is a prominent bank in Asia and internationally, is one of several banks that did business with Huawei and is cooperating with investigators and isn’t a target in the Huawei probe, the report said.