Huawei CFO Meng Wanzhou, who was arrested on an extradition warrant, appears at her B.C. Supreme Court bail hearing along with a translator, in a drawing in Vancouver, British Columbia, Canada December 7, 2018.

British banks Standard Chartered and HSBC were reportedly among financial institutions misled by Chinese technology giant Huawei into funneling illicit payments from Iran, The Wall Street Journal reported on Sunday, citing sources familiar with the matter.

According to the Journal, Huawei allegedly used a third-party intermediary — a small Hong Kong-based technology firm called Skycom — to channel payments between the company and Iran. The Journal reported that a spokesman for Huawei declined to comment.

Huawei's chief financial officer Meng Wanzhou was arrested during a layover in Vancouver, Canada on Dec. 1 at the request of U.S. authorities. Beijing has threatened unspecified "severe consequences" if Canadian courts don't release Meng, the daughter of Huawei founder Ren Zhengfei. Meng returns to court for a bail hearing Monday.

Both HSBC and Standard Chartered are based in the U.K., and both have been under scrutiny from global regulators for past money-laundering violations. The two banks also have had federal monitors in place to watch for the types of transactions described in the Huawei filings — but neither bank has been accused of any wrongdoing as part of this case.

Responding to CNBC, Standard Chartered declined to comment but clarified that the bank was not a target of investigations related to Huawei. HSBC also declined to comment on the WSJ story.

"The US Department of Justice has confirmed that HSBC is not under investigation in this case," said Stuart Levey, Chief Legal Officer at HSBC in a response to an email from CNBC.

Huawei has also been under U.S. government scrutiny since 2012 for a wide range of purported issues, such as alleged government-supported cyber espionage, intellectual property theft and violations of sanctions, including those related to Iran.

According to the court case outlined on Friday, Huawei executives allegedly knew of an investigation into sanctions violations as early as 2017, and had been "altering their travel patterns to avoid any travel to or through the United States." Meng's attorney has countered that trade-war tensions were responsible for the travel changes.