Huawei exec set to return to China after nearly three-year detention in Canada

The finance chief of Chinese telecom giant Huawei, who has been stuck in Canada since she was arrested three years ago, is set to head back home to China after striking a deal with the US Department of Justice on Friday.

Huawei Chief Financial Officer Meng Wanzhou appeared virtually in Brooklyn federal court on Friday afternoon, where she admitted to lying about Huawei’s business operations. In exchange for her admission, US prosecutors agreed to drop wire and bank fraud charges against her.

The news comes after Meng — the 49-year-old daughter of Huawei founder Ren Zhengfei and a powerful member of Chinese high society —  was detained in Vancouver, Canada, on behalf of US authorities in December 2018. She was later released from jail but forbidden from leaving the country, enraging the Chinese government

In a 2019 indictment, US prosecutors accused Meng and Huawei of violating US sanctions by misleading the bank HSBC about the extent of the company’s ties to Iran, which is on a US sanctions list. Meng and Huawei denied the accusations. Meng was facing several counts of bank fraud and wire fraud.

A tearful Meng Wanzhou, Huawei’s CFO, appeared virtually in Brooklyn court on Friday.
REUTERS

Under the deal between Meng and the Department of Justice, she will be released on personal recognizance, and the US plans to drop an extradition request it had filed in Canada. That is expected to pave the way for her to fly back to China. 

The US said it would officially drop the charges against Meng on Dec. 1, 2022, as long as she complies with the terms of the agreement. The US is still pursuing charges against Huawei itself.

“Meng has taken responsibility for her principal role in perpetrating a scheme to defraud a global financial institution,” Acting US Attorney Nicole Boeckmann said in a statement. “Meng’s admissions confirm the crux of the government’s allegations in the prosecution of this financial fraud — that Meng and her fellow Huawei employees engaged in a concerted effort to deceive global financial institutions, the US government, and the public about Huawei’s activities in Iran.”

Meng Wanzhou
Acting US Attorney Nicole Boeckmann said Meng has “taken responsibility for her principal role in perpetrating a scheme to defraud a global financial institution.” She appeared over a virtual connection with a Brooklyn judge on Friday.
AP

Meng is usually expressionless in public appearances, but she smiled broadly in front of photographers when she left her house on Friday to attend a court hearing conducted virtually between Vancouver and Brooklyn. 

A Vancouver court still has to decide when Meng will be free to fly back to China. The court was expected to make that decision late Friday. 

Meng’s expected release could help cool tensions between the US and China, which has accused American authorities of an “unreasonable crackdown” that targeted a Chinese tech leader “in an attempt to strangle fair and just operations” for political reasons.

Meng Wanzhou leaving virtual appearance
Meng Wanzhou leaves her virtual court appearance on Friday and lets out a smile after typically being seen without expression. Although she’s in Canada, she appeared virtually in a Brooklyn courtroom.
REUTERS

Her arrest also put Canada in an awkward position, as China accused the country of unfairly detaining Meng while the US pushed to have her extradited to stand trial in New York.

In apparent retaliation for Meng’s arrest, China arrested two Canadians in 2018 on what Ottawa said were politically motivated charges. 

One of the men who was arrested, entrepreneur Michael Spavor, was sentenced this August to 11 years behind bars on espionage charges

Canadian Prime Minister Justin Trudeau slammed China’s treatment of Spavor — who is known for having orchestrated a meeting between North Korean dictator Kim Jong Un and ex-NBA star Dennis Rodman — as not satisfying “even the minimum standards required by international law.” 

The Huawei logo
US prosecutors accused Meng and Huawei of violating US sanctions by misleading the bank HSBC about the extent of the company’s ties to Iran.
VCG via Getty Images

The other Canadian, diplomat Michael Kovrig, is also still behind bars. 

Guy Saint-Jacques, who served as Canada’s ambassador to China from 2012 to 2016, told the Toronto Star that he expects Meng’s release to lead to renewed negotiations for Spavor and Kovrig to return home.

“I hope [Beijing is] not asking too much from Canada and all this can be concluded in a few weeks,” said Saint-Jacques. “Otherwise, there will be lots of criticism from other countries.”

Huawei spokesman Glenn Schloss said the company declined to comment; Meng’s lawyers said they were “very pleased” about the Friday agreement they said should allow her to return home. 

With Post wires

Huawei Chief Financial Officer Meng Wanzhou
Huawei Chief Financial Officer Meng Wanzhou could be headed back to China after her plea on Friday
REUTERS



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Kremlin says more U.S. sanctions would undermine dialogue hopes

FILE PHOTO: Russian and U.S. state flags fly near a factory in Vsevolozhsk, Leningrad Region, Russia March 27, 2019. REUTERS/Anton Vaganov/File Photo/File Photo/File Photo

September 24, 2021

MOSCOW (Reuters) – Imposing fresh sanctions against Russia would undermine hopes for the restoration of Moscow-Washington dialogue, the Kremlin said on Friday, commenting on potential moves against its sovereign debt.

U.S. lawmakers are considering proposals to expand measures targeting Russian debt to secondary market trading. Some Russian debt is already under U.S. sanctions.

(Reporting by Dmitry Antonov; Writing by Alexander Marrow; Editing by Katya Golubkova)





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Biden administration sanctions cryptocurrency market to fight ransomware

The Biden administration cracked down on a cryptocurrency exchange on Tuesday to disrupt ransomware attackers using digital payments to facilitate the cyberattacks on America’s critical infrastructure.

The Treasury Department announced sanctions against SUEX, a cryptocurrency exchange operating in Russia, for allegedly facilitating payments to cyber gangs. A cryptocurrency exchange is a digital marketplace where users buy and sell digital assets.

Ransomware attackers hold data and systems hostage until victims pay up, often through digital currencies.

“As cyber criminals use increasingly sophisticated methods and technology, we are committed to using the full range of measures, to include sanctions and regulatory tools, to disrupt, deter, and prevent ransomware attacks,” said Treasury Secretary Janet Yellen in a statement.  

More than 40% of SUEX’s transactions are associated with “illicit actors,” according to Treasury, which targeted the exchange for providing material support to ransomware attackers.

“Virtual currency exchanges such as SUEX are critical to the profitability of ransomware attacks, which help fund additional cybercriminal activity,” Treasury said in a statement. “Treasury will continue to disrupt and hold accountable these entities to reduce the incentive for cyber criminals to continue to conduct these attacks.”

Monitoring ransomware attackers’ use of cryptocurrency has proven to be a fruitful tool in the federal government’s hunt for cyber criminals. For example, the U.S. government recovered approximately $2.3 million of the cryptocurrency paid by major U.S. fuel supplier Colonial Pipeline to its attackers affiliated with the ransomware gang DarkSide, which President Biden has linked to Russia.

Mr. Biden previously sought to stymie Russian crime gangs by admonishing Russian President Vladimir Putin to act against cyberattackers within his country’s borders. Mr. Biden warned Mr. Putin multiple times this summer that there would be consequences for cyberattacks affecting America’s critical infrastructure, according to the White House.

In September, the U.S. met with allies about how to effectively fight back. Treasury said it met multiple times earlier this month with the Bank of England and other members of the G-7 Cyber Expert Group to discuss ransomware and its effects on the financial services sector.

Alongside its new sanctions on SUEX, the administration also issued guidance warning Americans against paying ransomware attackers or encouraging others to make such payments.

“Companies that facilitate ransomware payments to cyber actors on behalf of victims, including financial institutions, cyber insurance firms, and companies involved in digital forensics and incident response, not only encourage future ransomware payment demands but also may risk violating [Office of Foreign Assets Control] regulations,” read a Treasury Department advisory. “The U.S. government strongly discourages all private companies and citizens from paying ransom or extortion demands and recommends focusing on strengthening defensive and resilience measures to prevent and protect against ransomware attacks.”

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PDVSA begins U.S. trial over claim sanctions prevented debt payments

FILE PHOTO: he corporate logo of the state oil company PDVSA is seen at a gas station in Caracas, Venezuela November 16, 2017. REUTERS/Marco Bello/File Photo

September 21, 2021

By Luc Cohen

NEW YORK (Reuters) – Venezuelan state oil company PDVSA will make its case at a U.S. trial beginning on Tuesday that it is not liable for nearly $150 million in debts owed to a unit of Siemens Energy because U.S. sanctions prevented it from making payments.

In January 2017, cash-strapped PDVSA issued a promissory note to oilfield equipment provider Dresser-Rand for some $120 million, plus interest. PDVSA made the first two payments of around $4 million, but defaulted after Washington in August 2017 https://www.reuters.com/article/us-usa-venezuela-sanctions/trump-slaps-sanctions-on-venezuela-maduro-sees-effort-to-force-default-idUSKCN1B5216 issued sanctions preventing trade in the company’s new debt.

The U.S. District Court for the Southern District of New York in May 2020 entered a $149.5 million judgment in Dresser-Rand’s favor.

PDVSA, in a bench trial before U.S. District Judge Louis Stanton, will present evidence it says shows attempts to pay were blocked by banks wary of sanctions. It wants the judge to find it is no longer obligated for the debt.

“Sanctions imposed by the U.S. government on PDVSA … made it impossible or objectively impracticable for PDVSA to make the requisite payments,” attorneys for PDVSA wrote in a pre-trial brief filed on March 29.

The case shows how the PDVSA sanctions, which Washington says are meant to press socialist President Nicolas Maduro to restore democracy, have had far-reaching unintended consequences. Companies often decline to engage in even U.S.-approved transactions with PDVSA out of an abundance of caution.

Dresser-Rand will try to show that an exemption to the sanctions meant PDVSA’s payments would have been allowed, and that the company offered alternative options after a Citigroup Inc unit declined to process the payments, its pre-trial brief shows.

PDVSA has sought to compel Dresser-Rand to hand over communications with the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC), which enforces sanctions, to try to prove the exemption did not apply.

(Reporting by Luc Cohen in New York; editing by Richard Pullin)





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Trump Admin Sanctions on Iran Decimated Regime’s Global Trade, Report Says

Non-public report to Congress shows sanctions drained nearly $18 billion from Iran’s coffers

An Iranian flag / Reuters

Adam Kredo • September 20, 2021 4:00 pm

Trump administration sanctions on Iran decimated the hardline regime’s trade with the world’s largest economies, knocking it from $46 billion in 2019 to $28 billion in 2020, according to a non-public report sent by the Biden administration to Congress earlier this month.

The roughly $18 billion decrease in trade was a significant blow to Iran’s attempts to gain access to hard currency amid an ongoing cash crunch that has ruined the country’s economy and sparked nationwide protests. All told, the reimposition of sanctions, which began in 2018, decreased Iran’s trade by more than $70 billion.

The extent of damage caused by the Trump administration’s “maximum pressure” campaign on Iran was disclosed this month to Congress in an unclassified but non-public mandatory report, a copy of which was reviewed by the Washington Free Beacon. It demonstrates that sanctions on Iran leveled by the former administration prevented the Iranian regime from making profits, even as critics of the GOP-led sanctions claimed such measures were ineffective.

The disclosure comes as the Biden administration pursues negotiations with Iran and aims to ink a revamped version of the 2015 nuclear accord, which provided Iran with billions of dollars in sanctions relief. Iran is pushing U.S. officials to dismantle the former administration’s bevy of sanctions, which would provide the hardline regime with a cash lifeline. The Biden administration has signaled that it is willing to waive the most crushing economic sanctions on Tehran, drawing criticism from GOP hawks in Congress and others who say the United States is giving up its leverage on the regime.

The latest report was submitted to Congress under the Iran Sanctions Act of 1996, which requires the president to inform lawmakers about the dollar value of Iran’s trade with leading global countries known as the Group of 20. The significant decrease in trade occurred after the Trump administration invoked in August 2020 a mechanism known as “snapback,” in which all international sanctions that were lifted on Iran as part of the nuclear deal were reapplied.

The report also outlines U.S. trade with Iran, which dropped from $34.5 million in 2019 to $26.5 million in 2020. The majority of America’s exports to Iran are permitted by humanitarian waivers on sanctions and include agricultural goods, medicine, and medical devices. This trade continued with Iran as the coronavirus pandemic stormed the globe and ravaged Iran’s population.

Iran’s top trading partner is China, which in 2019 conducted more than $19 billion in trade with Iran. That number dropped to $12 billion in 2020. China has skirted American sanction measures to do business with Iran. This includes Iran’s lucrative and heavily sanctioned oil trade, which takes place under the radar.

The European Union in 2019 conducted $4.7 billion in trade with Iran, according to the report. That number dropped to $4.3 billion in 2020. Europe remains committed to trade with Iran, even in the face of U.S. sanctions, and has worked to facilitate America’s return to the nuclear accord, which it views as advantageous to this business relationship.

Behnam Ben Taleblu, an Iran expert at the Foundation for Defense of Democracies, said the figures “put more meat on the bone of the macroeconomic markers of success of the Trump administration’s maximum pressure policy against Iran.”

“Put simply,” he said, “maximum pressure was working, and reversing course will only have the opposite effect. These figures also serve as one footnote to support the larger claim that if economic pressure was enforced and compounded, the question of negotiating from a position of strength with the Islamic Republic of Iran would be a matter of when, not if.”

Morgan Ortagus, the former State Department spokeswoman under Trump, told the Free Beacon that the report shows the Trump administration sanctions against Iran worked.

“Our campaign of maximum pressure against Iran was succeeding—their economy was crumbling, their military was shattered by the death of Qassem Soleimani, and their people were revolting against the daily oppression of the clerics,” she said. “Instead of taking advantage of the leverage we handed the Biden administration to get a better deal, his team relaxed the economic and diplomatic pressure, and the Iranians have predictably given them nothing in return. This regime only understands the language of pressure.”





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Can India Upgrade its Air Force While Avoiding Sanctions?

Here’s What You Need to Remember: U.S. officials have refused to back down from threats to level CAATSA sanctions on India for the deal.

As we enter the 2020s, the Indian Air Force will continue to shrink in size to twenty-six out of a required forty-two squadrons due to retirements of aging Cold War Russian MiG-21 and MiG-27 jets

While the IAF is mulling purchases of additional advanced Western jet fighter like the Dassault Rafale, Saab JAS 39 Gripen, the Lockheed F-21 or Boeing Super Hornet, it’s meanwhile turning to its long-running relationship with Moscow to patch up the growing gap in its air defenses—even if that means it risks running afoul of U.S. CAATSA sanctions imposed on countries that import Russian weapons..

While a companion article looks at major new arms purchases by the Indian Army and Navy from Russia, this piece will survey three different buys the Indian Air Force is making entering the 2020s to stem the bleeding away of its combat strength.

S-400 Surface-to-Air Missile Systems

India is proceeding with the purchase of five regiments of S-400 surface-to-air missiles in a $5.43 billion, paid in Euros in order to bypass CAATSA sanctions. In 2019, New Delhi made a down payment worth $800 million, and initial deliveries will arrive in October 2020, with the order completed between in 2023 and 2025.

This come even after the U.S. kicked Turkey out of the F-35 program in the summer of 2019 for procuring S-400s from Russia—and has voiced its objections to the new deal. But real U.S. sanctions on India as building a closer defense relationship with New Delhi remains a priority in Washington.

India was more interested in the S-400 than the U.S. Patriot or THAADS systems because it can threaten aircraft up to 250 miles away due to its powerful radar radars and missiles designed to engage different targets. By contrast, the U.S. systems are effective across a smaller radius.

Thus, the S-400 will free up IAF fighters from performing routine air defense patrols—especially following a Pakistani incursion into Indian airspace that ended with the loss of an Indian fighter.

U.S. officials have refused to back down from threats to level CAATSA sanctions on India for the deal. But when the same official tells The Diplomat that there is “no blanket application” of CAATSA sanctions, one can sense the threat may have no teeth due to Washington’s eagerness to court Indian support in strategic competition with China. 

Time will tell if that changes—particularly if Modi’s controversial policies threaten to cause India to lose support in U.S. Congress.

Su-30MKI Flankers

Arguably the chief striking power of the Indian Air Forces comes from its force of over 250 twin-engine Su-30MKI Flanker jets, tailored to support Indian weapons and avionics. (India’s new Rafale jets are more advanced, but much fewer in number.) 

India’s Flankers are fast, extremely maneuverable due to their thrust-vector engines, and can carry formidable sensors and weapons, including the Brahmos supersonic cruise missile which can threaten both maritime and land targets from standoff distances.

However, Indian Su-30s have also suffered a fair number of technical problems and accidents in Indian service. Thus a new order to license-build twelve more Su-30MKIs is not about expanding the fleet, but replacing losses from accidents to maintain a total force of 272 aircraft.

MiG-29UPG Fulcrum

India also operates three squadrons of lighter-weight MiG-29UPG Fulcrum tactical fighters, upgraded with additional fuel stores, new radars, and modernized avionics and air-to-ground capabilities. The MiG-29 is highly agile but hasn’t been as successful abroad as the Flanker.

Nonetheless, India is following a lead on a Fulcrum bargain: twenty-one Soviet-era MiG-29 airframes that reportedly were never flown. India has reportedly verified the condition of the MiG-29, a wise move given a prior failed attempt to sell dilapidated MiG-29s to Algeria.

In a reportedly $847 million deal in order to fulfill an “urgent” operational requirement, MiG will upgrade the jets to the MiG-29 UPG standard and deliver them to India for $847 million over the next 18 months.

Though the MiG-29UPG is longer exactly a cutting-edge aircraft, the offer around $40 million per aircraft is about half the price of a new 4.5-generation jet, and thus represents a relatively cheap way for the IAF to quickly field an additional fighter squadron.

After all, twenty-six squadrons does not compare that well with to Pakistan’s twenty squadrons given the disparity between the two country’s populations—let alone China’s 1,700 combat aircraft

Sébastien Roblin writes on the technical, historical and political aspects of international security and conflict for publications including The National InterestNBC NewsForbes.com and War is Boring. He holds a Master’s degree from Georgetown University and served with the Peace Corps in China. You can follow his articles on Twitter. This article is being republished due to reader interest.

Image: Reuters.





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US sanctions Chinese entities, individuals for allegedly financing Iran-related terror activities

The Treasury Department has sanctioned several Chinese entities and individuals for allegedly financing Iran-related terrorist activities.

The agency’s Office of Foreign Assets Control said Friday it is imposing sanctions on members of the networks that finance the terrorist organization Hezbollah in Lebanon and Kuwait, according to the Epoch Times.

Several of the sanctioned companies are based in Hong Kong including PCA Xiang Gang Ltd.; Damineh Optic Ltd.; China 49 Group Co. Ltd.; Taiwan Be Charm Trading Co., Ltd.; and Black Drop Intl Co., Ltd., the news outlet also reports.

The companies are either directly or indirectly owned, controlled or directed by Morteza Minaye Hashemi, an Iranian businessman living in China who’s also on the sanctions list.

Hashemi is accused by the U.S. government of funding the Islamic Revolutionary Guard Corps-Quds Force, the Epoch Times also reports.



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Guinea junta brushes off impact of ECOWAS sanctions

FILE PHOTO: Ghana’s President Nana Akufo-Addo speaks to members of the media as Ivory Coast’s President Alassane Ouattara, and Guinea’s Special forces commander Mamady Doumbouya, who ousted President Alpha Conde, stand next to him after their meeting to discuss ways to return Guinea to constitutional order, in Conakry, Guinea, September 17, 2021. REUTERS/ Souleymane Camara

September 18, 2021

CONAKRY (Reuters) – The leader of Guinea’s recent coup told a delegation of West African leaders he was not concerned about new sanctions imposed by the regional bloc to pressure a swift transition to constitutional rule, the junta’s spokesman said on Saturday.

The Economic Community of West African States (ECOWAS) agreed on Thursday to freeze the financial assets of the junta and their relatives and bar them from travelling in response to the Sept. 5 ouster of President Alpha Conde.

Coup leader Mamady Doumbouya has shrugged off the move, telling high-level ECOWAS envoys that “as soldiers, their work is in Guinea and there is nothing to freeze in their accounts,” junta spokesman Amara Camara said at a briefing.

The comment was made at talks between Doumbouya and the Ivorian and Ghanaian presidents, Alassane Ouattara and Nana Akufo-Addo, who visited Conakry on Friday in an unsuccessful effort to secure Conde’s release.

The bloc’s decision to impose sanctions reflects members’ desire to deter a further democratic backslide in the region after four military-led coups in West and Central Africa since last year.

They have demanded a six-month transition in Guinea. In response, Doumbouya told the delegation the will of the Guinean people should be taken into account, Camara said.

Over the past week the junta has held consultations with public figures and business leaders to map out a framework for a transitional government. It has not yet commented on the results of these talks or said what timeline it has in mind for the transition.

ECOWAS’s credibility in Guinea has been strained since 2018, when the bloc failed to condemn Conde for running for a third term in office last year, despite a law declaring that presidents must step down after two.

Doumbouya and other soldiers behind the coup have said they ousted Conde because of concerns about poverty and corruption.

(Reporting by Saliou Samb; Writing by Alessandra Prentice; Editing by Edmund Blair)





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Treasury Sanctions Chinese, Lebanese Terror Financiers

Terror backers boosted Hezbollah and Iran

The U.S. Treasury Department / Getty Images

Jack Beyrer • September 17, 2021 3:00 pm

The Department of the Treasury sanctioned Chinese, Lebanese, and Kuwaiti nationals responsible for financing global terror networks that bolster Hezbollah and Iran.

The Treasury’s Office of Foreign Assets Control (OFAC) on Friday identified individuals and companies that aided Hezbollah and the Iranian Quds Force by transferring millions in funds to the groups. The entities circumvented U.S. sanctions by facilitating the sale of Iranian oil to foreign buyers. Two Chinese nationals under the direction of one of the network’s ringleaders, Morteza Minaye Hashemi, are accused of shipping American military products to Iran.

OFAC director Andrea Gacki said Iran-backed Hezbollah and the Quds Force exploit vulnerabilities in international finance to fund terror.

“[Hezbollah] and the [Quds Force] continue to exploit the international financial system to finance acts of terrorism,” Gacki said. “The United States will not hesitate to take action to disrupt networks that provide financial support to [those groups.]”

The presence of Chinese nationals on the sanctions list is evidence of growing cooperation between Tehran and Beijing. The two regimes announced they will conduct a series of war drills alongside Russia, a move experts say shows their ambitions to challenge American military power, the Washington Free Beacon reported in August.





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Joe Biden signs order authorizing Ethiopian sanctions as humanitarian crisis worsens

President Biden signed an executive order Friday authorizing the Treasury and State departments to sanction government officials involved in the ongoing conflict in Ethiopia amid reports of atrocities in the country’s Tigray region.

The executive order does not immediately sanction any person or government entity but rather grants U.S. agencies the ability to quickly impose penalties. Mr. Biden is hopeful that the threat of sanctions will cause Ethiopian leaders to reverse course and seek a peaceful political solution to the conflict devastating the region.

The executive order enables the U.S. to act swiftly if the parties don’t seek a diplomatic solution and a cease-fire. Steps the parties could take to avoid sanctions include accepting the African-union negotiation efforts, designating a negotiation team to resolve the dispute, allowing humanitarian aid convoys into the region, or restoring electricity and other basic needs in Tigray.

Also on Friday, the Treasury Department issued new rules to make it easier for humanitarian assistance including food, medicine and medical devices to arrive in Tigray.

The Ethiopian government and Eritrean government forces have been battling the Tigray’s People’s Liberation Front since last November in the North Ethiopia region.

The Tigray region borders Eritrea.

It is estimated that more than 52,000 people have died in the conflict with thousands more suffering.

“The ongoing conflict in northern Ethiopia is a tragedy causing immense human suffering and threatens the unity of the Ethiopian state,” Mr. Biden said in a statement.

“Nearly one million people are living in famine-like conditions, and millions more face acute food insecurity as a direct consequence of the violence. Humanitarian workers have been blocked, harassed, and killed. I am appalled by the reports of mass murder, rape, and other sexual violence to terrorize civilian populations.”

Mr. Biden also emphasized that the sanctions were not directed against the people of Ethiopia but rather individuals perpetrating the violence and humanitarian crisis. He said the U.S. will continue to provide Ethiopia with humanitarian assistance.

“The United States remains committed to supporting the people of Ethiopia and to strengthening the historic ties between our countries,” the statement continued.

More than 5 million Ethiopians need humanitarian aid, and 900,000 are living in famine conditions in the Tigray region, the White House said. Less than 10% of humanitarian supplies have reached those impacted by the conflict, while the rest has been diverted.

A human rights report accused Eritrea forces and Tigray rebels of killing and raping refugees in the Tigray.

In May, the Biden administration restricted visas on current Ethiopian and Eritrean officials in an effort to encourage a political solution to the violence.

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