China Spygate: Arrest of Huawei CFO

Canadian officials arrested Huawei’s CFO, Meng Wanzhou, for allegedly violating sanctions against Iran. Canada claims they did so at the behest of the US and extradition will follow.  But no one in the US seems to have a clue who ordered the arrest, and given that arrests for sanctions violations have never been conducted by the US, the entire scheme seems more than a bit odd, if not a setup, if not falsely reported.

Typically, charges for violations are brought by the Justice Department and involve heavy fines – not arrests.  In this case, HSBC was the favored means of laundering according to reports.  HSBC has a history of laundering with the dubious honor of holding the largest sanctions fine as of 2012 at $1.3 billion as part of a prosecution agreement and $665 million in civil penalties.   At the time, the customers included Cuba, Iran, Libya, Sudan and Burma.  No individual was prosecuted.  In 2014, BNP beat the previous honor and agreed to fork over $8.9 billion in penalties after admitting to laundering transactions involving Iran, Sudan and Cuba.  NO prosecution of individuals ensued.

Bolton has claimed he was both aware in advance – and unaware of the arrest.  Trump was most emphatically unaware, which begs the questions who, why, and how?

The announcement was parlayed on the same day that Trump announced progress in trade talks with China’s Xi Jinping.  And thus alludes to the belief that the arrest was an attempt to defrock the positive and tank the stock market.   China has been relatively quiet, Xinhau News making no comment today, and yesterday relaying a press release that was the only press release available to all media outlets.

Canada has released partial information given a ban on media was requested and granted on Ms. Wanzhou’s request.   According to the Canadian government, they state that Wanzhou, who is ‘Chinese’ is suspected of working for the Chinese government and is a spy.  Which would make the Iran sanctions violation a distraction over the real reason for the arrest.

Ren Zhengfei, founder and President of Huawei Technology, is Wanzhou’s father.  Ren was a member of the Peoples Liberation Party where he worked in the military division as an IT Researcher.  He later joined the Communist Party of China.

Due to his military and Party affiliations, India felt Huawei presented a security concern and barred them from winning particular contracts.   Other countries have made similar security concern comments, but no one – did anything.   Huawei’s attempt to buyout US 3Com was forcibly collapsed due to spying concerns.   They have been on the radar and skated.

Hauwei manufactures telecommunications equipment, smartphones, and networking equipment.  Allegations have arisen that its equipment could contain ‘backdoors’ allowing unauthorized surveillance by the Chinese government and the PLA.  The company response was that their equipment posed no greater threat than any other company – which is legal speak for ‘everyone’s doing it’.  As such, miffed, August 2018, they stated that they would pull out of the US market.  Not quite so easily done.

Huawei is enmeshed in various partnerships with:  Motorola, T Mobile, Honeywell, GE, Deutsche Telekom, Groupe PSA, Symantec, Siemens and others.  Well ingrained in equipment throughout the world, it has overtaken Apple in sales of smartphones and is well on its way to being one of the top five cloud computing companies.

Obviously the Iran sanction violation is a media distraction.  The gag order is being contested.  But given the fact that China is actually being relatively silent regarding the entire situation would indicate that they know considerably more.

The arrest might also be a different backdoor – a bargaining chip…

For an arrest to have been made, evidence of the allegations would be necessary.  The Justice Department is currently head by Acting Attorney General, Matthew Whitaker, hardly a light weight.   He is an avid Trump supporter, and faithful to draining The Swamp.

The media has claimed that William Barr heads the list for Trump’s pick for Attorney General, however whether Barr wants the nomination is unclear and confirmation could easily take months, thereby giving Whitaker reign on the possibility of China spygate.

Tariffs anyone?

 

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