More on Huawei CFO arrest

We learned last week why the US wants Meng Wanzhou extradited:

With Ms. Meng, 46, seated inside a glass box at British Columbia’s Supreme Court, Mr. Gibb-Carsley laid out what had led to her arrest. He said that between 2009 and 2014, Huawei used a Hong Kong company, Skycom Tech, to make transactions in Iran and do business with telecom companies there, in violation of American sanctions. Banks in the United States cleared financial transactions for Huawei, inadvertently doing business with Skycom, he said.

The banks were “victim institutions” of fraud by Ms. Meng, Mr. Gibb-Carsley said. In 2013, articles by Reuters alleged that Huawei used Skycom to do business in Iran, and had tried to import American-made computer equipment into the country in violation of sanctions. Several financial institutions asked Huawei if the allegations were true, Mr. Gibb-Carsley said.

At the time, Ms. Meng arranged a meeting with an executive from one of the financial institutions, he said. During the meeting, she spoke through an English interpreter and presented PowerPoint slides in Chinese, saying that Huawei operated in Iran in strict compliance with United States sanctions. Ms. Meng explained that Huawei’s engagement with Skycom was part of normal business operations and that Huawei had sold the shares it once held in Skycom.

But there was no distinction between Skycom and Huawei, Mr. Gibb-Carsley said. Huawei operated Skycom as an unofficial subsidiary, making efforts to keep the connection between the companies secret. […]

Ms. Meng’s presentation to the financial institution constituted fraud, Mr. Gibb-Carsley said. Her attorney, David Martin, said the bank was HSBC.

The legal nuances of this are way above my pay grade, but this is definitely a provocative move by the US:

No business executive has EVER been arrested for sanctions violations before — much less someone of Meng’s prominence. This is not law enforcement business-as-usual but a new and dramatic escalation. How on earth could tis have been done without informing POTUS?

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It surely could have been done without Trump’s knowledge: It is a policy measure masquerading as a criminal justice action. The president is not informed over every extradition request, and this could have been processed at Assistant Secretary level, according to friends who have worked in sanctions enforcement at a senior level.

China appears to have taken a hostage in response:

A former Canadian diplomat has been detained in China, two sources said on Tuesday, and his current employer, the International Crisis Group, said it was seeking his prompt and safe release. […]

“International Crisis Group is aware of reports that its North East Asia Senior Adviser, Michael Kovrig, has been detained in China,” the think-tank said in a statement. […]

The exact reason for the detention, which was made sometime early this week, according to the sources, was not immediately clear.

By the way, those who are inclined to voice their outrage and righteous indignation over this shocking act of American thuggishness might want to consider China’s history of detaining foreign citizens under often dubious circumstances. I would add to this list Mark Reilly, the British head of GSK’s China operations, who spent a year in and out of detention before being deported from China following a secret one-day trial.

Sadly, like anyone facing legal problems in autocratic China, Mr Reilly’s human rights have since been blithely disregarded by the authorities.

For months, he had only limited means to communicate with friends, family, and legal representatives, and was unable to see Louise, Jessica or Jill.

Then, in May, this already perilous situation took a turn for the worse. At a police press conference in Changsha, a 90-minute flight west of Shanghai, Mr Reilly was formally accused of presiding over a ‘massive bribery network’ in which doctors and health officials were illegally paid £320 million over several years.

In scenes reminiscent of a Soviet-era show trial, detectives aggressively dubbed him a criminal ‘Godfather’, who they claimed had greased palms with cash and free holidays, and arranged for associates to be given sexual favours from prostitutes.

They were shocked, shocked to find bribery and sexual favors going on here!

That’s a good boy

Australian Trade Minister Steven Ciobo

Australian Trade Minister Steven Ciobo

The Australian government happily complies with China’s demand to keep the public in the dark about the terms of an infrastructure MOU between the two countries:

The Turnbull government has refused to release an agreement it signed with China covering the controversial “Belt and Road Initiative” infrastructure program on the grounds Beijing does not want it made public.

Trade Minister Steven Ciobo signed the memorandum of understanding last September for cooperation on building infrastructure such as roads, bridges and dams in third countries – including under the Belt and Road Initiative – during a visit to Beijing. […]

The MOU would be expected to state Australia’s conditions for cooperating with China – such as that projects are financially transparent, do not involve corruption, genuinely help other countries and do not burden them with unsustainable debt.

But the Department of Foreign Affairs and Trade has refused to release the agreement under the Freedom of Information Act.

Mr Ciobo told Fairfax Media that “both parties are required to agree to release the text of the MOU and China has not agreed to do so”.

Why all the secrecy? Is there some aspect of building roads, bridges and dams that needs to be concealed from the public? The comments to the article tend to indicate that the Australian people are *not* happy about this.