US arrests CFO of China's largest telecom equipment provider

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Earlier in the week Canadian officials based on a US warrant, arrested the CFO of Huawei the largest telecom equipment provider in the world, larger than Apple. CFO Meng Wanzhou also happens to be the daughter of the owner of Huawei. While the charges haven't been made public, it's believed that Huawei sold US technology to Iran in violation of US sanctions. In 2017 heads of US intelligence agencies warned in congressional testimony that Huawei and ZTE are closely connected to the Chinese government and their equipment and devices should not be used for government or sensitive commercial business.
Markets can be erratic beasts, as indicative of collective neuroses as collective wisdom. But it is not surprising that they reacted to Wednesday’s thunderbolt. Much remains unclear about Canada’s arrest of a powerful executive from Chinese telecoms behemoth Huawei at the request of the US. Whatever precisely happened, and however this plays out, it is a dramatic course of action against a company at the heart of Chinese technology ambitions – and the pushback against them. It comes in the midst of a trade war with the US and broader security fears about Chinese firms.

Huawei is the world’s largest telecoms equipment provider, and its second largest mobile phone manufacturer: it is a pillar of the Chinese economy. Its founder Ren Zhengfei is a former military officer; the arrested executive, Meng Wanzhou, is his daughter. Note also the timing. She was arrested on 1 December: the day Xi Jinping and Donald Trump sat down to dinner in Buenos Aires. No one in China will see this as anything other than intensely political, whatever the truth of the matter. Diplomats have demanded her release and say she has broken no laws. Reports say the arrest relates to allegations that Huawei has breached US sanctions on exports to Iran; US prosecutors began an investigation two years ago. Last year, ZTE, another Chinese telecoms firm, pleaded guilty to sanctions violations. A devastating US ban on the sale of parts and software to the firm was downgraded to an $892m fine and monitoring after Mr Trump’s intervention. No one was detained that time. So why an arrest, why her and why now?

In the background is intense and growing suspicion towards Huawei and other Chinese firms, which they say is unmerited. Western intelligence officials have repeatedly raised concerns about Huawei’s involvement in infrastructure. Now New Zealand and Australia have joined the US in barring Chinese equipment in the rollout of 5G networks, and Washington is lobbying other allies to do the same. The issue is especially pointed for the remaining members of the “Five Eyes” intelligence alliance [US, UK, Canada, Australia and New Zealand], Canada and the UK. The day before the arrest became public, Canada’s top spy warned of the risks of state-sponsored espionage in areas such as 5G mobile networks. Earlier this week, MI6 chief Alex Younger said the UK needed to decide how comfortable it was with Chinese ownership of technologies being used. Foreign firms will not be involved in China’s 5G network.

Market nerves were driven by the assumption that this arrest could rattle the current, fragile trade truce – though China wants a deal and has now said it will immediately implement agreed measures. Whatever the fallout and longer-term outcomes, Huawei’s travails and the trade dispute reflect broad and growing western concerns about China’s increasing international might, and how it does and will exercise it.
https://www.theguardian.com/commentisfr ... gger-story
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: US arrests CFO of China's largest telecom equipment provider

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First the Chinese foreign minister summoned the Canadian ambassador and threatened retaliation if Canada didn't release the Huawei CFO. Now the foreign minister has summoned the US ambassador.
China’s Vice Foreign Minister Le Yucheng has summoned the U.S. Ambassador to China, Terry Branstad, in a protest over the arrest of Huawei Technologies Co. Chief Financial Officer Meng Wanzhou, and said it will take “further action” if needed.

Meng was arrested in Vancouver on Dec. 1 on the orders of U.S. authorities for allegedly violating American sanctions on selling technology to Iran. Canada’s ambassador to China was summoned to the ministry on Saturday. The minister said U.S. actions have violated the “legitimate rights and interests of Chinese citizens and are extremely bad in nature,” according to a posting on the ministry website. “China will take further action based on the U.S. actions.”

The move comes after a week in which both China and the U.S. seemed to struggle with how to react to an arrest with potentially broad reverberations. The two nations are, at the same time, trying to ratchet back a damaging trade dispute. It’s unclear how much the summons, China’s most public display of anger over the arrest, will mark a heightening of tensions over the arrest and Huawei more generally. China regularly calls in foreign diplomats to register complaints.
The U.S. on Friday began a case against the Chinese telecoms giant in a Vancouver courtroom, alleging that Meng had hidden ties between Huawei and a company called Skycom that did business in Iran, said a lawyer representing Canada during the court hearing. Canada’s presenting the case on behalf of the U.S., which wants to extradite Meng.

Meng, 46, daughter of Huawei’s founder, is spending the weekend in jail after a decision on whether to grant bail was not reached. The case will continue on Monday.
https://www.bloomberg.com/news/articles ... ver-huawei

One report says that this arrest has shaken up the Chinese ruling class and unsettled President Xi.
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: US arrests CFO of China's largest telecom equipment provider

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Not the smartest play the Americans could do unless they really had an ace up their sleeves for achieving something else. Arresting foreign nationals, especially the daughter of a (virtual) oligarch, is usually the “nucular option”. It’s not likely you will actually get a prosecution in any case. Things just don’t work that way when power of money is involved (unless you are inside China of course, the rare country where the rich still fear the government).
"It is better to be violent, if there is violence in our hearts, than to put on the cloak of non-violence to cover impotence. There is hope for a violent man to become non-violent. There is no such hope for the impotent." -Gandhi

Re: US arrests CFO of China's largest telecom equipment provider

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Bisbee wrote: Sun Dec 09, 2018 2:44 pm Not the smartest play the Americans could do unless they really had an ace up their sleeves for achieving something else. Arresting foreign nationals, especially the daughter of a (virtual) oligarch, is usually the “nucular option”. It’s not likely you will actually get a prosecution in any case. Things just don’t work that way when power of money is involved (unless you are inside China of course, the rare country where the rich still fear the government).
Trump "supposedly" knew nothing about the warrant when he sat down with Xi in Argentina, but it looks coordinated. Why the US District Court in the Eastern District of NY, maybe a Trump loyalist is US Attorney. Instead of the US Dept of Commerce sanctioning Huawei, having the courts deal with it makes it seem more objective. Trump blocked Broadcom's attempt to buy Qualcomm, that I think was good. The only two Chinese smartphone makers US intelligence seems concerned with are Huawei and ZTE and the US is monitoring ZTE closely after almost putting them out of business. Huawei is the biggie, the arrest is definitely shaking up Xi and his supporters.
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: US arrests CFO of China's largest telecom equipment provider

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TrueTexan wrote: Mon Dec 10, 2018 12:04 pm It has shaken up other Chinese Corporations, Foxcom has mentioned moving their Apple Manufacturing to Vietnam due to political actions.
That would be a huge loss for China, but Foxconn is a Taiwan corporation so has no allegiance to China. There have always been rumors about Chinese intelligence dropping spyware in iPhones assembled in China, though Apple and the Chinese deny it. One Chinese manufacturer Xiaomi was found with spyware and this 2016 article has details. The Chinese do spy on their own citizens and one way is through smartphones and internet.
https://www.cyberscoop.com/android-malw ... -products/
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: US arrests CFO of China's largest telecom equipment provider

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It’s like watching two people in a donkey costume, front end and back end, trying to walk in different directions: That’s the current dynamic between Canada and the United States. On Dec. 1, Canada arrested Meng Wanzhou, Huawei Technologies' chief financial officer and the daughter of the Chinese tech giant’s founder, Ren Zhengfei. The arrest was carried out at the request of the United States, whose government alleges Meng committed fraud and violated sanctions prohibitions on doing business with Iran.

The arrest in Canada was conducted in accordance with the rule of law and the country’s international obligations. On Tuesday, Meng was granted bail in Vancouver, under tight conditions, including $10 million (CAD) in bail underwritten by five guarantors, the surrendering of her passports, agreement to remain at home between 11 p.m. and 6 a.m., and 24-hour surveillance (some of which she is paying for).

The Canadian end of the donkey is walking on the side of line that respects due process and the rule of law, domestic and international. The other end, President Trump’s end — let’s call it the rear end — is walking back toward the years of centuries prior in which royalty and other notables were captured and held for ransom by kingdoms and other polities.

This week, Kelly Craft, the U.S. ambassador to Canada, assured us that Meng’s arrest wasn’t political. This isn’t about trade or retribution, she said. Hours later, Trump undermined Craft by suggesting he could intervene in the case. To ensure the rule of law is respected? To ensure that Canada doesn’t face reprisals for doing the right thing — which may have already begun with the detention in China of former diplomat and current nongovernmental organization employee Michael Kovrig?

No, of course not. Trump jumped in to say that he would use Meng as a bargaining chip as the United States and China sort out their trade and national security relationships. In an interview with Reuters, Trump politicized the Meng affair in a few sentences: “If I think it’s good for what will be certainly the largest trade deal ever made — which is a very important thing — what’s good for national security, I would certainly intervene if I thought it was necessary.”

Trump’s recklessness puts Canada in an awkward position. As Justin Trudeau’s government tries to act in good faith in an effort to play this high-profile, politically sensitive case by the books, the American president is a wild card — a threat to legal proceedings and to the delicate geopolitical balance that must be maintained lest the Meng affair becomes a crisis.

Decades, indeed, centuries of legal, political and social evolution have been necessary to establish domestic and international laws, protocols and institutions. These have been years of careful construction, of moving away from the renegade, ad hoc power politics of whimsy and caprice. With the arrest of Meng, Canada has shown its commitment to maintaining that delicate order. Some in the Trump administration have, too. Unfortunately, the head of that administration has not.

Regrettably, in this instance, the president has the power to both botch the Meng case and undermine domestic and international processes. Not a bad day’s work for him. Canada, meanwhile, which is reviewing Huawei’s technology against its own national security concerns, is caught between China and the United States as the two play hardball with baseball bats wrapped in barbed wire.

The case against Meng could take years to unfold, and her extradition to the United States won’t happen overnight. Today, a year is a very long time. A lot can happen. As Canada, the United States and China face their own political uncertainties, this affair is likely to remain a scorching-hot potato that threatens to burn anyone who touches it — including Canadian officials who are just trying to handle it with care.
https://www.washingtonpost.com/opinions ... 5473972c3c

Donnie the Dunce has made a legal incident look political. China has now detained two Canadian citizens which look like hostages while the Huawei CFO is held in Canada on a US warrant. The Canadian government will be looking very closely at future US warrants because we've burned an ally.
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: US arrests CFO of China's largest telecom equipment provider

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The Trump administration announced criminal charges against one of China's largest telecommunications companies Monday, a dramatic move that promises to ratchet up tensions on the eve of trade talks this week between the two countries. Acting Attorney General Matthew Whitaker told reporters in Washington a pair of indictments had been unsealed in two separate cases. A Brooklyn grand jury charged Huawei as a company, and its chief financial officer, Wanzhou Meng, with money laundering, bank fraud, wire fraud and conspiracy. Huawei also was charged with conspiracy to obstruct justice. A separate indictment accuses Huawei of stealing trade secrets from U.S. telecom firm T-Mobile. Those charges stem from a civil lawsuit filed by T-Mobile in 2014 over a robot called "Tappy," which was used in testing smartphones.

“Huawei intentionally conspired to steal intellectual property from an American company in an attempt to undermine the free and fair marketplace,” the Justice Department said in a statement. Meng, who was arrested in Canada in December, is accused of orchestrating a scheme to violate U.S. sanctions on Iran. She is a daughter of Huawei's founder, Ren Zhengfei, who served as an engineer in the People's Liberation Army from 1974 to 1983. The U.S. is seeking her extradition. "For over a decade, Huawei employed a strategy of lies and deceit to conduct and grow its business," said Richard Donoghue, U.S. attorney for the Eastern District of New York.

FBI Director Christopher Wray said the charges "lay bare Huawei's alleged blatant disregard for the laws of our country and standard global business practices." Huawei (pronounced "Wah-way") is second only to Samsung as the world's largest supplier of smartphones and has been heavily involved around the world in building the next generation of cellphone networks, known as 5G. The Trump administration has been pushing other countries to exclude the firm from that work, citing security risks. Last year, six different U.S. intelligence agencies urged Americans not to buy Huawei phones — which are virtually unavailable in the U.S. And President Donald Trump signed a law blocking federal government agencies from using most of the company's products. The indictment against a leading Chinese company — and the harsh language senior Trump administration officials used to characterize its conduct — mark a sea change from the Obama administration, which was careful in how it characterized Chinese behavior, even as it secretly saw Chinese hackers siphoning U.S. intellectual property.

Separately, The Wall Street Journal reported on Jan. 16 that federal prosecutors are pursuing a criminal investigation of Huawei for allegedly stealing trade secrets from U.S. business partners, including technology used by T-Mobile to test smartphones. The investigation grew in part out of civil lawsuits against Huawei, the Journal reported, including one in which a Seattle jury found Huawei liable for misappropriating robotic technology from T-Mobile's lab in Bellevue, Washington. In 2012, the House intelligence committee published an investigation concluding that Huawei and another Chinese telecom giant, ZTE, posed a threat to U.S. national security. The firms are essentially arms of the Chinese government, the House concluded, which aid and abet Chinese espionage and could implant spyware that could allow the Chinese government to easily intercept communications or mount cyberattacks on critical infrastructure, such as nuclear plants and power grids. The companies deny spying for China.

American intelligence officials have long been concerned that Chinese firms insert "back doors" in telecommunications equipment that facilitates eavesdropping. If Chinese companies dominate the construction of 5G networks worldwide, officials fear Chinese spies won't need back doors — they will have direct access to global telecommunications. Still, U.S. officials have not put forward hard evidence linking Huawei to spying, and critics have pointed out that American spy agencies vacuum large swaths of private information — with court orders — from U.S. technology companies. Talks aimed at resolving disputes over Chinese technology and trade policies are due to resume in Washington on Wednesday, led by the U.S. Trade Representative Robert Lighthizer and Chinese Vice Premier Liu He.
https://www.nbcnews.com/politics/nation ... ng-n963646

Wanzhou Meng was freed on $10 million dollars bond and now that the US has filed the charges, is expected to be transferred to the US. As retaliation, China arrested two Canadian citizens working in China and sentenced a Canadian convicted of drug smuggling to death. Telcomm companies are announcing that they won't use Huawei equipment because of suspected "back doors": Vadafone; BT (British Telecomm); Deutsche Telekom (parent of US T-Mobile) besides banns in other "five eyes" countries - US, UK, Canada, Australia,New Zealand and in Japan.
No Chinese company is fully independent of its government, which reserves the right to require companies to assist with intelligence gathering. Huawei is even more closely tied to the government than many Chinese firms: Its founder, Ren Zhengfei, is a former technologist in the People’s Liberation Army. As his company grew, so did international concerns about whether Huawei equipment could be used to spy on companies and governments around the world.

As far back as 2003, the company was accused of stealing intellectual property, including from U.S.-based network hardware maker Cisco. The companies settled out of court, but Huawei has been accused of stealing other firms’ intellectual property and violating international economic sanctions. Throughout 2018, a flurry of activity has signaled the level of concern in the international intelligence community, and pressure on the company – and other Chinese technology firms – has mounted.
http://theconversation.com/whats-wrong- ... irm-109036 Don't build R&D units if you can steal technology from other countries.
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: US arrests CFO of China's largest telecom equipment provider

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Jeebus, Donnie is a tone deaf twit! There is nothing he understands about the sanctity of Law for democracy and for freedom. To him eveything has a price because everything is for sale!

Hence his mail-order bride from whom he should have learned about the limits of “love-for-sale” by now.
"It is better to be violent, if there is violence in our hearts, than to put on the cloak of non-violence to cover impotence. There is hope for a violent man to become non-violent. There is no such hope for the impotent." -Gandhi

Re: US arrests CFO of China's largest telecom equipment provider

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Bisbee wrote: Tue Jan 29, 2019 9:24 pm Jeebus, Donnie is a tone deaf twit! There is nothing he understands about the sanctity of Law for democracy and for freedom. To him eveything has a price because everything is for sale!

Hence his mail-order bride from whom he should have learned about the limits of “love-for-sale” by now.
Hopefully Donnie Dipshit hasn't poisoned the federal cases. He did block the sale of Qualcomm to Broadcom which has Chinese connections, but there are still plenty of smartphones made in China. Chapter 2 ahead.
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

Re: US arrests CFO of China's largest telecom equipment provider

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US DOJ waited almost until the last minute to file for extradition, all the while Canada was holding Meng on a US international warrant. China has arrested two Canadians in China as retaliation.
Canada has approved extradition proceedings against the chief financial officer of Huawei Technologies, prompting a furious reaction from China. Meng Wanzhou, the daughter of Huawei’s founder, was detained in Vancouver last December and is under house arrest. In late January, the US justice department charged Meng and Huawei with conspiring to violate US sanctions on Iran. Meng will appear in a Vancouver court on 6 March, when a date will be set for her extradition hearing.

“Today, department of Justice Canada officials issued an authority to proceed, formally commencing an extradition process in the case of Ms Meng Wanzhou,” the government said in a statement. China, whose relations with Canada have deteriorated badly over the affair, denounced the decision and repeated previous demands for Meng’s release. Foreign ministry spokesman Lu Kang said in a statement on Saturday that Beijing “deplores and firmly opposes the Canadian side’s obstinately moving forward the so-called judicial process”.

He said: “This is a severe political incident. We once again urge the US side to immediately withdraw the arrest warrant and extradition request for Ms Meng Wanzhou and urge the Canadian side to immediately release Ms Meng Wanzhou and ensure that she returns to China safe and sound.” Legal experts had predicted the government of prime minister Justin Trudeau would give the go-ahead for extradition proceedings, given the close judicial relationship between Canada and the United States.

It could be years, though, before Meng is sent to the United States, since Canada’s slow-moving justice system allows many decisions to be appealed. A final decision will probably come down to the federal justice minister, who will face the choice of angering the United States by rejecting the extradition bid, or China by accepting it. Professor Wesley Wark of the University of Ottawa’s Graduate School of Public and International Affairs said “the Canadians will take a beating throughout this whole process” from China. “I suspect the Trudeau government is desperately hoping that the Americans reach a deal with the Chinese,” he said by phone.

Donald Trump told Reuters in December he would intervene if it served national security interests or helped close a trade deal with China, prompting Ottawa to stress the extradition process should not be politicized. Last week, Trump played down the idea of dropping the charges.
https://www.theguardian.com/world/2019/ ... s-approved

Donnie screws another ally. Hope Canada can somehow expedite the extradition and deliver Meng to the US border.
"Everyone is entitled to their own opinion, but not their own facts." - Daniel Patrick Moynihan

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