Criminal Executive

The Odds of Huawei’s CFO Avoiding U.S. Extradition Are Just One in 100000

Meng Wanzhou’s extradition hearings begin in earnest on Monday

By Natalie Obiko Pearson and Yuan Gao

Huawei Technologies Co. Chief Financial Officer Meng Wanzhou has joined Carlos Ghosn in the 1% legal club.
Those are the odds that the Chinese executive will win her bid to avoid extradition to the U.S., similar to the chances of acquittal for the auto titan-turned-fugitive in Japan. 

While Ghosn fled Japan in a big black box for Lebanon, Meng squares up to begin extradition hearings in a Vancouver court on Monday, 13 months after she was arrested on a U.S. handover request.
The hearings offer her first shot -- however slim -- at release as a Canadian judge considers whether the case meets the crucial test of double criminality: would her crime have also been a crime in Canada? 

If not, she could be discharged, according to Canada’s extradition rules.

Meng, the eldest daughter of billionaire Huawei founder Ren Zhengfei, has become the highest profile target of a broader U.S. effort to contain China and its largest technology company, which is seen as a national security threat. 

The U.S. accuses her of fraud, saying she lied to HSBC Holdings Plc to trick it into conducting transactions in breach of U.S. sanctions on Iran. 

Meng, who turns 48 next month, is charged with bank and wire fraud, which carry a maximum term of 20 years in prison on conviction.
“In most extradition cases, double criminality is an easy piece of analysis,” says Brock Martland, a Vancouver-based criminal lawyer.

Meng Wanzhou leaves her home for a court appearance in Vancouver on Oct. 1, 2019.

In Meng’s case, it’s not, which may help nudge her into the 1% of defendants in Canada who have historically beaten extradition orders to the U.S.
Her defense has argued that the U.S. case is, in reality, a sanctions-violations complaint that it’s sought to “dress up” as fraud to make it easier to extradite her. 

Had Meng’s conduct taken place in Canada, the transactions by HSBC wouldn’t have violated any Canadian sanctions, they say. 

Canada’s federal prosecutors counter the underlying offense is fraud because she lied to HSBC, causing them to miscalculate Huawei’s risk as a creditor and conduct transactions it otherwise wouldn’t have.

Another potential sticking point is that Meng’s misconduct didn’t take place in the U.S. or Canada -- it rests heavily on a 2013 meeting at a Hong Kong teahouse between Meng and an HSBC banker.
“Canadian fraud laws do not have an extraterritorial reach,” said Ravi Hira, a Vancouver-based lawyer and former special prosecutor. 

“If you commit a fraud in Hong Kong, I can’t just prosecute you in Canada.”
While the double-criminality hearings are scheduled for four days, the ruling would likely come much later -- possibly in months.
Being trapped in the middle of a trade war has brought the luxury of time. 

Before her arrest, Meng traveled so frequently for the world’s largest telecommunications equipment maker that she’d gone through at least seven passports in a decade. 

These days, she passes her time oil painting and pursuing an online doctorate. 

Phone calls with her father have gone from once a year to every few days.
“If a busy life has eaten away at my time, then hardship has in turn drawn it back out,” Meng wrote last month on the one-year anniversary of her arrest. 

“It was never my intention to be stuck here so long.”

Ghosn Escape
Meng would find it harder to pull a Ghosn. 

She’s under 24-hour surveillance by at least two guards at her C$13 million ($10 million) mansion. 

Her whereabouts are recorded continuously by a GPS tracker on her left ankle. 

While she’s allowed to roam a roughly 100-square-mile patch of Vancouver during the day accompanied by security, any violation -- including tampering with the device or venturing anywhere near the airport -- would automatically alert police. 

She’s posted bail of C$10 million, of which C$3 million came from a group of guarantors, some of whom pledged their homes as collateral. 

Fleeing would cost them all.
If the court finds her case fails the double-criminality test, Canada’s attorney general would have the right to appeal within 30 days. 

In theory, she could be on a plane back to China well before that, says Gary Botting, a Vancouver-based lawyer who’s been involved in hundreds of Canadian extradition cases.

Of the 798 U.S. extradition requests received since 2008, Canada has only refused or discharged eight, according to the department of justice. 

That’s a 99% chance of being handed over -- similar to the conviction rate in Japan. 

Another 40 cases were withdrawn by the U.S.
Still, that’s fractionally better than the odds of two Canadians hostages detained in China, where the conviction rate currently stands at 99.9%, according to Amnesty International.

Canadians Hostages
That’s if Michael Kovrig and Michael Spavor ever make it to trial. 

The two men were thrown in jail on spying allegations just days after Meng’s arrest in December 2018. 

Last month, the Chinese government confirmed their cases were transferred to prosecutors, raising the possibility they might finally get access to lawyers.
As of last week, that hadn’t happened yet for Kovrig, according to the International Crisis Group, his employer. 

The former diplomat has been allowed one consular visit a month; in between, he’s unreachable. Communication with his family is limited to letters exchanged in those visits, according to the group.
Families of the two men aren’t speaking publicly for fear of jeopardizing their cases. 

Some sense of the conditions they’re enduring can be gleaned from past history.
Spavor, a businessman who ran tours to North Korea from his base in a border town in northeastern China, has been held since May in Dandong Detention Centre, according to the Globe and Mail.
It’s a jail familiar to another Canadian, Kevin Garratt, who was snatched along with his wife Julia by Chinese security agents in 2014, becoming pawns and hostages in an earlier high-stakes attempt by Beijing to prevent Canada from extraditing millionaire businessman Su Bin to the U.S.
Garratt spent 19 months in the forbidding compound surrounded by two-story-high cement walls. Crammed into a cell with up to 14 other inmates, he slurped meals from a communal bowl on the floor. 

If they were lucky, they got 30 minutes of hot water a day and could exercise in a small outdoor cage, he said in a December 2018 interview.

Perfidious but naïve Albion

Boris Johnson’s Bad Bet on China
The controversy around Huawei shows you can’t benefit from the Chinese economy without acquiescing to Chinese politics.
By ISAAC STONE FISH

Boris Johnson in London in 2016.

It was an odd juxtaposition. 

At a NATO summit in London on Dec. 4, British Prime Minister Boris Johnson promised he would keep the controversial Chinese telecommunications giant Huawei away from Britain’s 5G network if it jeopardized the United Kingdom’s work with its intelligence-sharing partners, the United States, Canada, Australia, and New Zealand. 

“I don’t want this country to be unnecessarily hostile to investment from overseas but, on the other hand, we cannot prejudice our vital national security interests,” Johnson said. 

Then, perhaps fearing he had ventured too far, less than 24 hours later Johnson pulled out a phone and took a selfie with two TV anchors — a Huawei phone.
Though his staff later claimed the phone didn’t belong to him, the incident got wide coverage in British press. 

The British government will reportedly announce how to handle Huawei after the Dec. 12 election, which pits the widely reviled Johnson and his Conservatives against his widely reviled challenger Jeremy Corbyn and the Labour Party. 

Corbyn, who is unlikely to win, has spoken little about China or how to deal with state-backed companies like Huawei.
But Johnson, in his more than a decade in the public eye, has a long track record on China. 

Johnson believes he has a brilliant solution that policymakers elsewhere have missed: by acknowledging the political and security risks of a close economic relationship with China, London can then overlook those risks in favor of trade. 

“China is a rival,” Johnson said in a leaked June 2018 recording, while he was foreign secretary, “but China is a rival whose growth and whose incredible developing power can be used to our advantage.” On the one hand, he said in the same recording, Britain should “treat China as our friend and our partner,” on the other hand, “they will try to stiff us.” 

Johnson seems to believe the United Kingdom can benefit from China economically while not acquiescing to it politically—to have its cake and eat it too, as the prime minister is fond of saying.
This position is naïve. 

It ignores the most important reality of a Chinese Communist Party–controlled China: Politics always trumps economics. 

Building a trade relationship isolated from a political relationship is a lovely ambition, but Beijing’s Leninist political system precludes it. 

“No part of the Communist Chinese state is ultimately able to operate free of the control exercised by its Communist Party leadership. This is a simple statement of fact,” writes Richard Dearlove, the former head of Britain’s Secret Intelligence Service, in the foreword to a critical May 2019 report on the risks of Huawei in the British system, “and no amount of sophistry can alter it.”
The debate over Huawei typifies the British government’s China myopia. 

Founded in 1987 by the former army engineer and Party member Ren Zhengfei, the telecoms giant has always had close links to the party. 

Ren’s management thinking naturally carries “very deep imprints of the Communist Party culture,” according to a 2017 Chinese book based on more than 100 interviews with top Huawei executives, and written by a friend of Ren’s. 

The U.S. and other governments have long been suspicious of Huawei’s ability to act as a proxy for Beijing; in 2012 the House Intelligence Committee called Huawei a national security threat and the U.S. government, and in August 2018 President Donald Trump signed a law de facto banning government agencies from using Huawei products.
In December 2018 Canadian police, at Washington’s request, arrested Meng Wanzhou, Huawei’s CFO and Ren’s daughter, on charges related to sanctions violations in Iran. 

Tensions between the two superpowers spiked. 

London attempted to seesaw between the United States, Britain’s largest trading partner and most important ally—potentially an even more important one post-Brexit—and the rising economic power of China. 

In April, embattled then–Prime Minister Theresa May decided to allow Huawei to build noncore elements of Britain’s 5G network. 

Then, after the U.S. government condemned the move, the British government announced it hadn’t yet decided and May fired Defense Minister Gavin Williamson, blaming him for leaking the decision (he denied the charge).
This hedging stretches back to 2010, when British security officials reportedly began noticing unusual “chattering”—communicating data to unknown sources—in Huawei equipment used in the country. 

That year, the British intelligence service GCHQ partnered with Huawei to establish the Huawei Cyber Security Evaluation Centre, also known as the Cell. 

The Cell is supposed to inspect Huawei equipment for malicious code. 

Huawei funds the Cell, and most of the employees are from Huawei. 

Despite this sponsorship, the Cell’s latest annual report, from March 2019, states that it can “only provide limited assurance” that Huawei does not jeopardize U.K. national security. 

And then, in May of this year, Huawei Chairman Liang Hua absurdly offered to “sign a no-spy agreement” to placate London.
If Huawei is trustworthy, why does it need to be monitored? 

And if it’s duplicitous, how would a “no-spy agreement” constrain it? 

“It is far easier to place a hidden backdoor inside a system than it is to find one,” writes the former British diplomat Charles Parton in a February 2019 paper. 

“In the battle between Chinese cyber attackers and the UK’s Huawei Cyber Security Evaluation Centre, the advantage and overwhelming resources lie with the former.” 

It’s hard to escape the conclusion that the Cell strengthens rather than weakens Huawei’s ability to harm British national security.
A well-connected senior member of a prestigious British think tank faults the 2010–2016 Chancellor of the Exchequer George Osborne, who in September 2015 publicly advised Britain to “run towards China.” 

Under Osborne’s influence, in 2015 the United Kingdom became the first major Western country to join Beijing’s Asian Infrastructure Investment Bank (despite “a very hostile briefing from the Obama White House telling us not to do it,” a former adviser to the British treasury told me.) 

Former Prime Minister David Cameron, who launched what he called a “golden era” of relations between Britain and China, resigned in June 2016 after the Brexit vote and tried to raise a fund to invest in projects with China’s Belt and Road Initiative. 

Embarrassingly, he failed.
Johnson has played his part as well. 

In 2008, four years before London hosted the Summer Olympics, then-Mayor Johnson joked in Beijing that “ping pong was invented on the dining tables of England in the 19th century and it was called wiff waff.” 

Or, as he joked in 2013 after announcing a Chinese company would refurbish the Port of London Authority building, which stands in for the offices of the spy agency MI6 in the James Bond film Skyfall, “if that isn’t openness to China, I don’t know what is.” 

He added, “we have sold you our offices of the secret service. Saves time, I imagine.”

Beijing’s harshness is forcing Canada to rethink its China delusions

The Globe and Mail

The one silver lining in the extradition case against Huawei executive Meng Wanzhou, now entering its second year, is that Beijing’s behaviour has awakened Canadians – including senior members of the Trudeau government – to the nature of China’s Communist Party regime.

Many in Ottawa and the business community had talked themselves into believing fantasies about the hard men who run Beijing. 

Some imagined that, although China might play rough with other countries, Canada would somehow be entitled to special treatment.
Instead, Beijing has spent the last year giving Canada a special education in how it sees our not-at-all special relationship.
We should be thankful for the lessons. 

The Trudeau government, and the entire political and business establishment, must study them carefully. 

It may allow this country to finally get over its China delusions.
China, and the Communist regime that runs it, are not going anywhere. 

We will have to deal with them, hopefully on peaceful and respectful terms, for a long time to come. But the starting point for the relationship has to be Canada being honest with itself about who we are dealing with.
When Canada followed the rules of its extradition treaty with its closest ally, Beijing had no hesitation in taking two of our citizens hostage – there is no other way to describe what happened to Michael Spavor and Michael Kovrig – with the price of ransom being Meng’s release.
All the decades’ worth of treacly odes to Dr. Norman Bethune, Mao’s pet Canadian; all the gratitude Canada supposed it was owed for early recognition of the Communist regime; all the alleged reverence for Trudeau père that allegedly would carry over to Trudeau fils – all turned out to be worth exactly nothing.
Totalitarian dictatorships are not sentimental. 

That’s not something Canada should have had to learn.
The two Michaels are of course still locked up, and there is no sign of their release. 

Yet despite the importance of their condition, the long-term goal of Canada’s China foreign policy is bigger than securing the safe return of two innocents.
Canada of course has to continue to demand their release. 

But it is essential that Ottawa understand that our prisoners in Beijing are also levers that can be used to pressure Canada into going silent on other matters – human rights, the rule of law, Chinese spying, Hong Kong, and a long list of worries that Washington and other Western governments have – in favour of focusing on what China wants, and how it wants Canada to behave so as to avoid being subjected to future hostage-takings.
Canada has never had a relationship like this. 

The Soviet Union was a superpower, but it was also a clear adversary. 

We joined the world’s most important military alliance to oppose it, and it was part of a separate economic system, with which we had almost no trade. 

The lines between the two worlds were thick and bright.
China, in contrast, is part of all of the formerly “Western” or “developed” world’s main institutions. 

It is our second-most important economic relationship, after the United States. 

While there was a time when its party dictatorship appeared to be moving closer to democratic norms, with the Communist Party dispensing with cults of personality and loosening party control, under Xi Jinping that trend is aggressively reversing. 

It is now clear that Beijing joined the international community’s institutions without sharing the international community’s practices and values.
To survive in this new world, Canada needs allies and alliances. Beijing has become expert at playing divide-and-conquer, punishing those who don’t do as they’re told and rewarding those that go along to get along. 

And too many, including Canada, have too often been too ready to go along.
From Sussex Drive to Bay Street, a lot of people would like nothing better than for the past year’s nastiness to be forgotten. But that would mean forgetting all the valuable lessons learned.

A Fierce Slap to Chinese tyrants

U.S. Senators Press Ahead With Hong Kong Bill

After House passage, legislation awaits action in Senate
By Daniel Flatley and Dandan Li

Hong Kong Bill Will Pass in the Senate, Says Rep. Chris Smith

Republican senators said Wednesday they want to move quickly on legislation to support pro-democracy protesters in Hong Kong despite a "threat" of retaliation from China.
“Hong Kong is a high priority for me,” said GOP Senator Jim Risch, chairman of the Foreign Relations Committee. 

“We’re going to move on it as rapidly as we can.”

Senator Jim Risch

Senator Roy Blunt, a member of the Senate GOP leadership, said there haven’t been any discussions about the timing for a vote on Hong Kong legislation similar to a measure that passed the House Tuesday. 

That bill would subject the city’s special U.S. trading status to annual reviews and provides for sanctions against officials deemed responsible for undermining its “fundamental freedoms and autonomy.”
There is broad backing in both parties in Congress to show support for the protesters and punish China for any crackdown. 

The White House declined to comment on whether Trump would sign the Hong Kong legislation, but there are enough votes in the House to override a veto and no significant opposition in the Senate.
The next step will be up to Senate Majority Leader Mitch McConnell who’ll set the schedule for a vote, and he’s being pressed by his Republican colleagues.

“I think we’re going to get it up on the floor here fairly soon,” Florida Republican Senator Marco Rubio, a China critic, told reporters.
South Dakota Senator John Thune, another member of Republican leadership, said that while he hasn’t looked closely at the four bills the House passed Tuesday, there are a number of senators “interested in making a strong statement on Hong Kong.”
Maryland Senator Ben Cardin, a Democrat on the Foreign Relations Committee, said the main House bill, the Hong Kong Human Rights and Democracy Act, has deep bipartisan support, but there might be some Republicans who object to the bill being passed by unanimous consent without a floor vote.
Cardin said the fact that the House passed their four bills separately, rather than bundling them together, means the Hong Kong Human Rights and Democracy Act has a better chance of getting a vote in the Senate.

Demonstrators wave U.S. flags during a rally in support of the Hong Kong Human Rights and Democracy Act, Oct. 14.

Chinese Ministry of Foreign Affairs spokesman Geng Shuang warned American lawmakers to stop "meddling" in China’s internal affairs.

Both Trump and Chinese dictator Xi Jinping have so far prevented the international uproar over Hong Kong from scuttling their trade talks. 

The two sides went ahead with negotiations and reached some broad agreements last week, even though the House vote was widely expected at the time.

A spokesman for the Hong Kong government “expressed regret” over the House action, which came hours before Chief Executive Carrie Lam addressed a raucous session of the Legislative Council. 

She barely managed a few words before pro-democracy lawmakers forced her to stop talking. 

She ended up delivering her annual policy address via video instead.
While the pro-democracy bloc only comprises about a third of lawmakers, Wednesday’s display showed they have the ability to shut down debate on major economic initiatives. 

That spells even more trouble ahead for an economy sliding into recession as protests against Beijing’s grip over the city grow increasingly violent.
China’s retaliation threat against the U.S. roiled markets during Asian trading, at one point wiping out a 0.8% rally in the regional equity benchmark.
U.S. lawmakers have embraced the Hong Kong protesters’ cause as the yearlong trade war fuels American support for pushing back against China, and they have hosted Hong Kong’s pro-democracy activists on Capitol Hill in recent weeks. 

The National Basketball Association’s struggle to manage Chinese backlash against a Houston Rockets executive’s support for the movement has only focused wider attention on the debate.
On Tuesday, the House passed H.Res. 543, a resolution reaffirming the relationship between the U.S. and Hong Kong, condemning Chinese interference in the region and voicing support for protesters. 

Lawmakers also passed the Protect Hong Kong Act, H.R. 4270, which would halt the export to Hong Kong of crowd-control devices such as tear gas and rubber bullets.

Joshua Wong arrives to speak on Capitol Hill on Sept. 17.

Representative Chris Smith, a New Jersey Republican and a sponsor of the main Hong Kong bill, dismissed the threats from Beijing.
“Retaliation, that’s all they ever talk,” Smith told Bloomberg TV. 

“They try to browbeat and cower people, countries, presidents, prime ministers and the like all over in order to get them to back off. We believe that human rights are so elemental, and so in need of protection. And that’s why the students and the young people are out in the streets in Hong Kong virtually every day.”
The House also adopted a resolution by Foreign Affairs Committee Chairman Eliot Engel of New York and the panel’s top Republican, Michael McCaul of Texas, urging Canada to start U.S. extradition proceedings against Huawei Technologies Co. executive Meng Wanzhou. 

The resolution, H.Res. 521, also calls for the release of two Canadians detained in China and due process for a third sentenced to death for drug smuggling.

Ted Cruz

Canada vs. thuggish China

Trudeau accuses China of using arbitrary detentions for political ends: ‘This is not acceptable in the international community’

The Guardian

Canada’s relations with China soured after its arrest of Chinese Huawei executive Meng Wanzhou on a US warrant last December. 

Justin Trudeau has accused Beijing of using arbitrary detentions as a tool in pursuit of political goals in the latest broadside in a diplomatic and trade row with China.

“Using arbitrary detention as a tool to achieve political goals, international or domestic, is something that is of concern not just to Canada but to all our allies,” Trudeau told the Toronto Star editorial board.
He said nations including Britain, France, Germany and the United States “have been highlighting that this is not acceptable behaviour in the international community because they are all worried about China engaging in the same kinds of pressure tactics with them”.
Canada’s relations with China soured after its arrest of Chinese Huawei executive Meng Wanzhou on a US warrant last December.
Nine days later, Beijing detained two Canadians – former diplomat Michael Kovrig and businessman Michael Spavor – and accused them of espionage as retaliation.
Trudeau added that “we need to figure out how to engage with them, but we also have to be clear-eyed about it, that China plays by a very different set of rules and principles than we do in the west”.
His comments may further inflame tensions between the two countries, which had appeared to be trying to move on from the row. 

This week both Beijing and Ottawa nominated new ambassadors.

The previous Canadian ambassador John McCallum was fired in January after he said it would be “great” if the US dropped its extradition request for the Huawei executive. 

She is wanted by the US on fraud charges and is currently out on bail in Vancouver and living in her multi-million dollar home awaiting extradition proceedings.

Criminal Company

Inside the U.S. war on Huawei

By Cassell Bryan-Low, Colin Packham, David Lague, Steve Stecklow, Jack Stubbs

CANBERRA -- In early 2018, in a complex of low-rise buildings in the Australian capital, a team of government hackers was engaging in a destructive digital war game.
The operatives – agents of the Australian Signals Directorate, the nation’s top-secret eavesdropping agency – had been given a challenge. 

With all the offensive cyber tools at their disposal, what harm could they inflict if they had access to equipment installed in the 5G network, the next-generation mobile communications technology, of a target nation?
What the team found, say current and former government officials, was sobering for Australian security and political leaders: The offensive potential of 5G was so great that if Australia were on the receiving end of such attacks, the country could be seriously exposed. 

The understanding of how 5G could be exploited for spying and to sabotage critical infrastructure changed everything for the Australians, according to people familiar with the deliberations.
Mike Burgess, the head of the signals directorate, recently explained why the security of fifth generation, or 5G, technology was so important: It will be integral to the communications at the heart of a country’s critical infrastructure -- everything from electric power to water supplies to sewage, he said in a March speech at a Sydney research institute.
Washington is widely seen as having taken the initiative in the global campaign against Huawei Technologies Co Ltd, a tech juggernaut that in the three decades since its founding has become a pillar of Beijing’s bid to expand its global influence. 

Yet Reuters interviews with more than two dozen current and former Western officials show it was the Australians who led the way in pressing for action on 5G; that the United States was initially slow to act; and that Britain and other European countries are caught between security concerns and the competitive prices offered by Huawei.
The Australians had long harbored misgivings about Huawei in existing networks, but the 5G war game was a turning point. 

About six months after the simulation began, the Australian government effectively banned Huawei, the world’s largest maker of telecom networking gear, from any involvement in its 5G plans. 

An Australian government spokeswoman declined to comment on the war game.
After the Australians shared their findings with U.S. leaders, other countries, including the United States, moved to restrict Huawei.
The anti-Huawei campaign intensified last week, when President Donald Trump signed an executive order that effectively banned the use of Huawei equipment in U.S. telecom networks on national security grounds and the Commerce Department put limits on the firm’s purchasing of U.S. technology. 

Google’s parent, Alphabet, suspended some of its business with Huawei, Reuters reported.
Until the middle of last year, the U.S. government largely “wasn’t paying attention,” said retired U.S. Marine Corps General James Jones, who served as national security adviser to Barack Obama. 

What spurred senior U.S. officials into action? 

A sudden dawning of what 5G will bring, according to Jones.
“This has been a very, very fast-moving realization” in terms of understanding the technology, he said. 

“I think most people were treating it as a kind of evolutionary step as opposed to a revolutionary step. And now that light has come on.”
The Americans are now campaigning aggressively to contain Huawei as part of a much broader effort to check Beijing’s growing military might under Xi Jinping. 

Strengthening cyber operations is a key element in the sweeping military overhaul that Xi launched soon after taking power in 2012, according to official U.S. and Chinese military documents. 

The United States has accused China of widespread, state-sponsored hacking for strategic and commercial gain.

A THREAT TO CRITICAL INFRASTRUCTURE
If Huawei gains a foothold in global 5G networks, this will give Beijing an unprecedented opportunity to attack critical infrastructure and compromise intelligence sharing with key allies. 

This could involve cyber attacks on public utilities, communication networks and key financial centers.
In any military clash, such attacks would amount to a dramatic change in the nature of war, inflicting economic harm and disrupting civilian life far from the conflict without bullets, bombs or blockades.

However, blocking Huawei is a huge challenge for Washington and its closest allies, particularly the other members of the so-called Five Eyes intelligence-sharing group – Britain, Canada, Australia and New Zealand. 

From humble beginnings in the 1980s in the southern Chinese boom town of Shenzhen, Huawei has grown to become a technology giant that is deeply embedded in global communications networks and poised to dominate 5G infrastructure. 

There are few global alternatives to Huawei, which has financial muscle – the company reported revenue for 2018 jumped almost 20 percent to more than $100 billion – as well as competitive technology and the political backing of Beijing.
For countries that exclude Huawei there is a risk of retaliation from Beijing. 

Since Australia banned the company from its 5G networks last year, it has experienced disruption to its coal exports to China, including customs delays on the Chinese side. 

Tension over Huawei is also exposing divisions in the Five Eyes group, which has been a foundation of the post-Second World War Western security architecture. 

During a trip to London on May 8, U.S. Secretary of State Mike Pompeo issued a stark warning to Britain, which has not ruled out using Huawei in its 5G networks. 

“Insufficient security will impede the United States’ ability to share certain information within trusted networks,” he said. 

“This is exactly what China wants; they want to divide Western alliances through bits and bytes, not bullets and bombs.”

Washington argues that surreptitious backdoors aren’t necessarily needed to wreak havoc in 5G systems. 

The systems will rely heavily on software updates pushed out by equipment suppliers -- and that access to the 5G network, says the United States, could be used to deploy malicious code.
Asked whether the United States was slow to react to potential threats posed by 5G, Robert Strayer, the State Department’s lead cyber policy diplomat, told Reuters that America had long been concerned about Chinese telecom companies, but that over the past year, as 5G loomed closer, “we were starting to talk more and more with our allies.” 

Banning Huawei from 5G networks remains “an end goal,” he said.
The West has long harbored concerns about Chinese telecom equipment. 

In 2012, a U.S. House Intelligence Committee report concluded Chinese tech companies posed a national security threat. 
Despite such concerns, the U.S. government’s response to the threats posed by 5G only took shape more recently.
In February 2018, Malcolm Turnbull, then prime minister of Australia, flew to Washington D.C. 

Even before Australia’s eavesdropping agency had run its war game, Turnbull was already raising red flags in Washington. 

A former technology entrepreneur, he believed 5G presented significant risks and wanted to press allies to act against Huawei.
“He was warning about how important 5G networks would be and the security risks we all needed to think about around countries that had capability, form and intent, as well as coercive laws,” a senior Australian source told Reuters.
A spokesman for Turnbull declined to comment.
Turnbull and his advisers met U.S. officials, including Kirstjen Nielsen, then U.S. secretary of homeland security, and Michael Rogers, then head of the U.S. National Security Agency, the U.S. signals-intelligence operation. 

The Australians said they believed Beijing could compel Huawei to do its bidding and that this posed a threat should tensions with China rise in the future, said two of the Australian officials familiar with the meeting.
The U.S. officials were receptive to the Australian message, but imposing restrictions on the world’s largest maker of mobile network gear didn’t appear to be a high priority, according to the two Australian officials. 

“They didn’t share our concern with the same urgency,” said one.
Rogers declined to comment. 

A Department of Homeland Security official did not elaborate on the meeting, but said the agency works closely with Australia on security issues and that “China will continue to use cyber espionage and bolster cyber-attack capabilities to support its national security priorities.”
5G technology is expected to deliver a huge leap in the speed and capacity of communications. Downloading data may be up to 100 times faster than on current networks.
But 5G isn’t only about faster data. 

The upgrade will see an exponential spike in the number of connections between the billions of devices, from smart fridges to driverless cars, that are expected to run on the 5G network. 

“It’s not just that there will be more people with multiple devices, but it will be machines talking to machines, devices talking to devices – all enabled by 5G,” said Burgess, the Australian Signals Directorate chief, in his March address.
This configuration of 5G networks means there are many more points of entry for a hostile power or group to conduct cyber warfare against the critical infrastructure of a target nation or community. 

That threat is magnified if an adversary has supplied equipment in the network, U.S. officials say.

In July 2018, Britain delivered a blow to Huawei. 

A government-led panel that includes senior intelligence officials said it was no longer fully confident it could manage national security risks posed by the Chinese telecom equipment giant.
That panel oversees the work of a laboratory that was set up by the British government in 2010 and is funded by Huawei to vet the company’s equipment used in the UK. 

The facility was established because even then Huawei was perceived as a security risk. 

The oversight panel said serious problems it had identified with Huawei’s engineering processes “exposed new risks in the UK telecommunication networks and long-term challenges in mitigation and management.”
That report was a “bombshell,” shaping how the Americans viewed the Huawei 5G risk, said one U.S. official.
U.S. officials also point to Chinese laws enacted in recent years that they say could compel individuals and companies to assist the Chinese government in conducting espionage.

THE WEST AWAKES
Through the middle of last year, the Australians continued to apprise other countries of their worries about 5G. 

“We were sharing our concerns about security with many allies, not just the U.S. and not just the traditional partners,” said one of the senior Australian officials. 

“We shared our thoughts with Japan, Germany, other European countries and South Korea.”
In Washington, the administration began imposing restrictions on Huawei. 

In August, Trump signed a bill banning federal agencies and their contractors from using equipment from Huawei and ZTE Corp, another Chinese telecom equipment maker. 

Huawei has since filed a lawsuit in federal court in Texas challenging the ban.
In late August, the Australians went further: They banned companies that didn’t meet their security requirements, which included Huawei, from supplying any equipment for the country’s 5G network, whether run by the government or by private firms.
In November, New Zealand’s intelligence agency blocked the country’s first request by a telecom service provider to use Huawei kit for a 5G network, citing national security concerns.
Like the Australians and Americans, British security officials had concerns over China’s potential use of Huawei as a channel for conducting espionage. 

But the options are limited. 

Huawei is one of only three major global companies that analysts say can supply a broad range of advanced mobile network equipment at scale. 

The other two are Ericsson and Nokia. 

And Huawei has a reputation among telecom operators for supplying cost-effective equipment promptly.
Nevertheless, British security officials were becoming increasingly frustrated with Huawei’s failure to fix software flaws in its equipment, particularly discrepancies in the source code – the programs’ underlying set of instructions.
This problem means the laboratory near Oxford set up to vet Huawei equipment can not even be sure that the code it is testing is exactly the same as the code Huawei deploys in its real-world equipment.
This makes it difficult to provide safety assurances about the company’s gear.

British officials say the array of flaws could be exploited by malevolent China.

Ian Levy, a British security official who oversees the UK’s review of Huawei equipment, told Reuters the company’s software engineering is like something from 20 years ago. 

“The chance of a vulnerability with a Huawei piece of kit is much higher than other vendors,” he said.
The company said it has pledged to spend at least $2 billion “over the next five years” to improve its software engineering capabilities.
British ministers have agreed to allow Huawei a restricted role in building parts of its 5G network, but the government has yet to announce its final decision. 

The European Union has left it to individual governments to decide whether to ban any company on national security grounds. 

Some European security officials say banning one supplier doesn’t address the broader issue of the risks posed by Chinese technology in general.

As the tensions between the West and Huawei intensified through last year, they suddenly took a personal turn. 

U.S. law enforcement officials had for some time been investigating links between Huawei and Iran, including the involvement of Meng Wanzhou, Huawei’s chief financial officer, who is the daughter of the company’s founder. 

The probe followed Reuters stories in 2012 and 2013 that revealed links between Huawei, Meng and another company that attempted to violate U.S. sanctions on Iran.
When U.S. officials became aware that Meng would be traveling through Vancouver in December, they pounced, asking Canada to detain her on allegations of bank and wire fraud. 

Meng remains free on bail in Canada while the U.S. government tries to have her extradited. 

The Huawei conflict isn’t only about U.S.-China superpower rivalry: The activities of Meng and Huawei were under scrutiny by U.S. authorities long before Trump began a trade war with China, according to interviews with people familiar with those probes. 

But there is no doubt the wider showdown with Huawei has now become intensely geopolitical.
In recent months, the U.S. has ramped up diplomatic efforts to urge allies to sideline Huawei. 

5G is a “game-changing technology with implications across all aspects of society from business, government, military and beyond,” Gordon Sondland, U.S. ambassador to the European Union, told Reuters in February. 

“It seems common sense to me to not hand over the keys to your entire society to an actor that has … demonstrated malign conduct.”
Asked whether there is evidence of Huawei equipment having been used for espionage, Sondland said “there is classified evidence.” 

He declined to expand on the nature of the material beyond saying there was no doubt that Huawei had “the capability to hack a system” and “the mandate by the government to do so upon request.”
Pompeo has publicly gone further than most U.S. officials by directly linking the company to Beijing. “Huawei is owned by the state of China and has deep connections to their intelligence service,” he said in March. 

“That should send off flares for everybody who understands what the Chinese military and Chinese intelligence services do.”

While Huawei was initially muted in its public response, it too has become more combative. 

In late February, the company confronted the United States at a major annual gathering of mobile industry executives in Barcelona, where Huawei’s red logo was ubiquitous. 

Top American officials arrived intent on warning government and industry representatives off Huawei. 

But the company had flown in a team of senior executives to offer customers and representatives of European governments reassurance in the face of the U.S. accusations.
In a keynote speech, Guo Ping, a deputy chairman at Huawei, took aim at America’s own spying operations. 

Europeans pushed back, too. 

During one closed-door session, senior representatives from European telecom operators pressed a U.S. official for hard evidence that Huawei presented a security risk. 

One executive demanded to see a smoking gun, recalled the U.S. official.
The American official fired back: “If the gun is smoking, you’ve already been shot. I don’t know why you’re lining up in front of a loaded weapon.”

Huawei Scapegoats

China Charges 2 Canadians With Spying

By Chris Buckley and Javier C. Hernández

Outside the Canadian Embassy in Beijing in December. China’s detention of two Canadians that month roiled relations between the two countries.

BEIJING — Two Canadian men detained in China since December have been formally arrested on espionage charges, the Chinese Foreign Ministry said on Thursday, in a move likely to ratchet up tensions between China and Canada that broke out with the arrest of Huawei's Meng Wanzhou in Vancouver.
Michael Kovrig, a former diplomat who was detained while visiting Beijing, was charged with “gathering state secrets and intelligence for abroad,” while Michael Spavor, a business consultant who was detained in northeast China, was accused of “stealing and providing state secrets for abroad,” Lu Kang, a spokesman for the foreign ministry, said at a regularly scheduled news briefing.
The vague reference to unspecified overseas entities left open the question of whether the men were suspected of working for a government or for some other organization.
The charges are likely to anger the government of Canada who condemned the initial detentions of Mr. Kovrig and Mr. Spavor as “arbitrary” and politically motivated.
Their detentions were retaliation for the arrest in Canada of Meng Wanzhou, chief financial officer of Huawei, at the behest of the United States.
The United States has pressured allies not to use Huawei’s technology, arguing that China could use it to spy on other countries. 
Those efforts intensified on Wednesday, when President Trump moved to ban American telecommunications firms from installing China-made equipment that could pose risks to national security.
The measure seemed aimed at blocking sales by Huawei.

Michael Kovrig

Mr. Kovrig and Mr. Spavor were seized by the police in December, days after Meng was arrested while changing planes in Vancouver.
The Chinese government was incensed by Meng’s arrest, and the charging of Mr. Kovrig and Mr. Spavor makes it more likely that they will face trial and conviction, deepening the standoff with Trudeau’s administration.
Lu did not provide further details and said only that the arrests were made recently.
Before the latest announcement, Chinese officials had already signaled that Mr. Kovrig and Spavor could be charged with espionage offenses.
Mr. Kovrig worked for the United Nations and the Canadian foreign service before 2017, when he joined the International Crisis Group, a nonprofit organization that tries to defuse conflicts between states.
He focused on Chinese foreign policy, Asian regional politics and North Korea, and he was often quoted in foreign news outlets and invited to meetings in China.
Mr. Spavor followed a less conventional path, using his knowledge of the Korean language to establish himself as a consultant for companies and people interested in North Korea, including Dennis Rodman, the former basketball star who has befriended the North’s leader, Kim Jong-un.
Mr. Spavor was detained in Dandong, the Chinese city on the North Korean border where he was based.
In early March, a legal affairs committee within China’s ruling Communist Party said investigators believed that Mr. Kovrig had been “stealing and spying to obtain state secrets and intelligence,” and that Mr. Spavor had supplied him with information.

Michael Spavor

But China’s definition of state secrets is opaque, and the International Crisis Group has said Mr. Kovrig’s work for it was in no way nefarious.
Since they were detained, Mr. Kovrig and Mr. Spavor have been held in secretive detention sites, without visits from lawyers and family members.
Canadian diplomats have been allowed to visit them about once a month.
Lu, the Foreign Ministry spokesman, did not respond to questions Thursday about where the two men were being held.
Human rights advocates on Thursday denounced the arrests of Mr. Kovrig and Mr. Spavor.
“Their cases show again how the Chinese criminal system violates the human rights of detainees,” said Patrick Poon, a researcher for Amnesty International in Hong Kong.
He called on Chinese officials to release the men, absent “credible and concrete evidence” of crimes.
Meanwhile, Meng has been granted bail as she fights extradition to the United States to face criminal charges.
Her lawyers have said that they would sue Canadian border services, the police and the federal government for violating her constitutional rights when she was detained for three hours in December before being arrested.
In January, American prosecutors released an indictment of Meng and Huawei, laying out efforts by the company to steal commercial secrets, obstruct a criminal inquiry and engage in bank fraud while trying to evade American sanctions on Iran. 
The Chinese foreign minister, Wang Yi, said at a news conference in early March that the case against Huawei and Meng was “by no means a purely judicial case, but rather a deliberate political case” intended to bring down Huawei.
Trudeau and Canadian and United States officials have said that the case against Meng is a legal matter, not a political one.
But Trump veered from that position in December, when he suggested that he could intervene in the case if that helped to seal a trade agreement with China.

The Spied Spy

By spying on Huawei, U.S. found evidence against the rogue firm

By Brendan Pierson, Karen Freifeld

NEW YORK -- U.S. authorities gathered information about Huawei Technologies Co Ltd through secret surveillance that they plan to use in a case accusing the Chinese telecom equipment maker of sanctions-busting and bank fraud, prosecutors said on Thursday.
Assistant U.S. Attorney Alex Solomon said at a hearing in federal court in Brooklyn that the evidence, obtained under the U.S. Foreign Intelligence Surveillance Act (FISA), would require classified handling.
The government notified Huawei in a court filing on Thursday of its intent to use the information, saying it was “obtained or derived from electronic surveillance and physical search,” but gave no details.
The United States has been pressuring other countries to drop Huawei from their cellular networks, worried its equipment could be used by Beijing for spying. 

Brian Frey, a former federal prosecutor who is not involved in the Huawei case, said FISA surveillance, which requires a warrant from a special court, is generally sought in connection with espionage.
“The reason they typically would have gotten the surveillance through a FISA court is where we suspect someone may be spying on behalf of a foreign power,” Frey said.
The U.S. government has been concerned about espionage by Huawei for years, he added.
In the Brooklyn case, Huawei and its chief financial officer, Meng Wanzhou, are accused of conspiring to defraud HSBC Holdings Plc and other banks by misrepresenting Huawei’s relationship with Skycom Tech Co Ltd, a Huawei front company that operated in Iran.
Meng was arrested in Canada in December at the request of the United States to face the charges of bank and wire fraud laid out in the indictment, which was not unsealed until January. 

Huawei last month pleaded not guilty to the 13-count indictment. 

Chasen Skinner, a spokesman for the company, declined to comment on Thursday on the secret U.S. surveillance, saying the company does not comment on pending litigation.
Huawei has said Skycom was a local business partner, but prosecutors said in their indictment against Huawei and Meng that it was an unofficial subsidiary used to conceal Huawei’s Iran business.
Huawei used Skycom to obtain embargoed U.S. goods, technology and services in Iran, and to move money via the international banking system. 

The charges against the company include violating U.S. sanctions on Iran.
Last month, Reuters detailed how U.S. authorities secretly tracked Huawei’s activities by collecting information copied from electronic devices carried by Chinese telecom executives traveling through airports.
Reuters also broke news of the bank fraud charges in December and exclusively reported in February how an internal HSBC probe helped lead to the charges against Huawei and Meng.
The U.S. sanctions investigation was spurred by Reuters reports over six years ago that Skycom offered to sell embargoed Hewlett-Packard computer equipment to Iran's largest mobile-phone operator and detailed the close ties between Huawei and Skycom. (reut.rs/2sUq8RT here)
Trump told Reuters in December that he would intervene in the case if it helped secure a trade deal with China. 

The next court date in the Brooklyn case is set for June 19.

China is a trade bully. Trudeau needs to stop dithering and fight back

No nation-state, or individuals, should be held to ransom by China
By Diane Francis
Police officers stand guard outside the Canadian embassy in Beijing on January 27, 2019.

It’s time to stop pretending that China is an honourable trading partner.

It is a trade bully and Canada should join the Americans in waging a trade war against Beijing following years of abuse.
The U.S. has imposed tariffs, or laid charges, on China in retaliation for various unfair trade practices and theft of intellectual property, among other practices.
Canada has also been a victim. 

Beijing threw two Canadians in a Chinese jail on suspicion of espionage, and, more recently, suddenly blocked canola imports worth $2.7 billion a year. 

That’s about 40 per cent of Canada’s canola exports.
Such draconian moves were unleashed following the December detainment of Huawei’s chief financial officer Meng Wanzhou in Vancouver on charges of fraud in the U.S. 

She has been free on bail and awaits an extradition hearing this May.
This arrest was not churlish — like China’s arrest of the two Canadians — but constituted a legally binding requirement under extradition treaties. 

Canada was obliged to arrest her upon a formal request by the U.S. and hold a hearing into the merits of U.S. charges. 

The hearing may result in her being freed, or being transported to the States.
China’s measures are excessive and unjust and should be met with commensurate actions. 

Instead of dithering, the Prime Minister must announce a series of counter measures: 

• the imposition of tariffs on Chinese goods, equivalent to the damage inflicted on Canada’s exports and jailed citizens; 
• a ban preventing Huawei from doing sensitive telecom work; 
• and a revamp of trade policies and financial packages to exporters in order to incentivize businesses to pursue other markets.

Obviously, China is a huge market but it’s not the only game in town. 

Most countries don’t incarcerate innocent people or unilaterally abrogate contractual obligations.
Besides, Canada has leverage: In 2018, China bought $29 billion worth of exports from Canada, but shipped as much to Canada as it bought, or $46.4 billion, according to Statistics Canada. 

China, in other words, is more dependent on Canada than the other way around and everything not imported from China can, and should, be imported from countries that respect agreements and the rule of law.
The world is going to divide itself into trading blocs comprised of countries that share values. 

That’s why Canada’s trade with the U.S. and Europe must be its priority export targets. 

Some may argue the U.S. is not reliable, given NAFTA irritants, but these are relatively minor family squabbles. 

China, on the other hand, doesn’t hesitate to mug its trading partners.
There’s also the issue of intellectual property theft. 

The U.S. estimates this costs its economy up to US$600 billion a year. 

Its businesses claim China forces them into joint ventures with Chinese firms that then copy or steal their technologies, ignoring patents and copyrights.
This has happened here. 

For example, Imax Corp., with its giant screen technologies, fell victim to intellectual property theft and may eventually be grievously damaged globally. 

In 2014, Imax won $7 million in a Canadian court against a former employee and software engineer, Gary Tsui, who stole its technology in 2009 and then sold it to a state-owned enterprise in China. 

Tsui has remained outside Canada, ignoring a detention order and injunction by a Canadian court.
China is pushing around many countries, as I wrote recently. 

With the canola assault, it’s time to forge a “fair trading league” with others that will make it clear that an attack against one is considered an attack against all. 

And taking tough action, along with the U.S., is essential.
No nation-state, or individuals, should be held to ransom by China.

U.S. think tank leaders urge China to release Canadian researcher, citing threat to ties

By Emily Rauhala

Louis Huang holds a placard calling for China to release Canadian detainees Michael Spavor, left, and Michael Kovrig outside a court hearing for Huawei Technologies chief financial officer Meng Wanzhou in Vancouver on March 6. 

A high-profile group of think tank leaders and scholars is calling for the release of a Canadian policy adviser being held in China, warning that his detention threatens U.S.-China relations at a critical moment.
In a rare joint statement published Monday, leaders working for leading U.S. and international institutions said the arrest of Michael Kovrig of the International Crisis Group on vague allegations of endangering national security is having a “chilling effect” on efforts to improve the bilateral relationship.
The statement comes more than three months after Kovrig was detained in China in retaliation for the arrest in Vancouver of Chinese technology executive Meng Wanzhou. 

The United States and its allies have said Kovrig’s detention is unlawful and have called for his immediate release.
It also comes as the United States and China remain locked in a tense dispute over trade, technology and other issues — a dispute the signatories worry will deepen if independent policy institutions are no longer able or willing to conduct research in China.
“At this moment of testing for the bilateral relationship — defined by growing differences and suspicions between our governments — we believe these efforts and the partnerships we’ve built with counterparts in China over many years are more important than ever,” the statement said.
“Michael’s arrest has a chilling effect on all those who are committed to advance constructive U.S.-China relations. We urge China to release Michael so that he can return to his family.”
The statement is a show of unity and resolve from U.S. think tanks and academic leaders across the political spectrum. 

Signatories include senior leaders from the Brookings Institution, the American Enterprise Institute, the Carnegie Endowment for International Peace and the Hudson Institute, as well as former diplomats such as Anne-Marie Slaughter and Nicholas Burns.
In January, a group of academics and former diplomats signed a letter calling for Kovrig and another Canadian, businessman Michael Spavor, to be released.
That letter, signed by 116 scholars and 27 former diplomats from 19 countries, warned that researchers were getting nervous about traveling to China.
“We who share Kovrig and Spavor’s enthusiasm for building genuine, productive, and lasting relationships must now be more cautious about traveling and working in China and engaging our Chinese counterparts,” it said.
The arrests are part of a conflict that has put Canada in the middle of a broader standoff between the United States and China.
Kovrig is a former diplomat who had worked since 2017 as an adviser for the Brussels-based International Crisis Group, conducting research on northeast Asia, including China, Japan and the Koreas.
He was detained in December in a retaliation for the arrest of Meng, chief financial officer for Huawei Technologies, who was wanted on U.S. charges.
Meng was arrested at Vancouver’s airport on Dec. 1. As China scrambled to secure her release, Chinese authorities detained Kovrig and, later, Spavor.
Not long after, Robert Lloyd Schellenberg, a Canadian serving time in China for smuggling drugs, was hastily retried and sentenced to death.
As Meng awaits her extradition hearing from the comfort of one of her family’s multimillion-dollar houses in Vancouver, Kovrig and Spavor are being held without charge and with no access to lawyers.
The International Crisis Group thanked colleagues for urging Kovrig’s release.
“We are extremely grateful and heartened by the support shown by the prominent signatories from the research community and by the fact that they have come together as one on this issue,” said Robert Malley, the organization’s president and chief executive.
“Many members of that community wish to constructively engage with China. Michael’s arbitrary detention can only scare them away.”

Rogue Company

Meng Wanzhou’s lawsuit against Canadian authorities is a setback to the Chinese company’s PR campaign.

By Tim Culpan
Who sues Canada? Meng Wanzhou, for one.

Canada! Seriously, who sues Canada?
Meng Wanzhou, that’s who. 

The CFO of Huawei Technologies Co., and the daughter of its founder, feels wronged by Canadian authorities over her arrest and detention. 

“False imprisonment” is among the accusations made in a civil case filed March 1.
Huawei has gone on the offensive in recent months to try to prove it’s a good international citizen and can be trusted to supply networking equipment that won’t become a conduit for Chinese espionage. Founder Ren Zhengfei himself started fronting the media because, by the company’s own admission, it’s in the middle of a public-relations crisis.
In addition to attempting to recruit current and former journalists to its PR team, Huawei has started inviting journalists to its Shenzhen campus, as if a guided tour would prove anything. 

The result was a slew of articles in which the company made its case against charges of spying.
At trade show MWC Barcelona last week, rotating Chairman Guo Ping even invoked Edward Snowden’s name to take jabs at U.S. espionage programs:
“Prism, prism on the wall, who is the most trustworthy of them all? ... It is a very important question and if you don’t answer that, you can go and ask Edward Snowden.”
This new campaign appears to be having some success. 

New Zealand Prime Minister Jacinda Ardern last month left the door open for Huawei to sell its equipment for next-generation mobile networks, while the U.K. cybersecurity watchdog thinks it can manage any risks associated with deploying the company’s products in 5G systems.
But it’s also come off as ham-fisted. 

Huawei was reported as offering to pay for flights, hotel and food for overseas journalists such as Washington Post columnist Josh Rogin, spurring a backlash on social media. 

To clarify, such all-expenses-paid offers are quite common in the tech industry, but most outlets refuse to accept on ethical grounds, which makes that now-famous letter to Rogin (which he shared on Twitter) somewhat confounding.


Josh Rogin
✔@joshrogin
INBOX: #Huawei is inviting me on an all-expenses-paid junket to China? That's gonna be a hard pass. Any American journalist who takes Huawei money should be ashamed and shamed.

In 2017, a jury found the company liable in a civil case for stealing designs for T-Mobile US Inc.’s “Tappy” robot, but that’s not the kind of espionage U.S. authorities have in mind. 

The January arrest of a company executive alongside a former Polish security agent on charges of spying for China doesn’t look good for Huawei, but it’s no smoking gun.
Then there’s Ren himself. 

The 74-year old’s credibility evaporated when he told foreign media, including CBS and a separate gathering that included Bloomberg News, that his company would refuse to obey Chinese law if it was required to participate in espionage. 

That’s the founder of a Chinese company with 180,000 employees stating he would break Chinese law rather than infringe the law of any foreign nation.
Which is why the decision to sue Canada is a backward step in its PR campaign. 

It also reveals Huawei as a cornered tiger that lashes out when its purr fails to sedate the skeptics.
Whether Meng’s case has legal merit isn’t the point. 

Huawei needs to ask what it gains, even if victorious. 

The quest for justice is everyone’s right, yet Huawei risks coming off as belligerent instead of the calm and trustworthy partner it’s trying to portray. 

And the irony of appealing to Canada’s rule of law when no such option exists back home isn’t lost on the hordes of critics who were already wary of this new charm offensive.
Huawei was doing a pretty good job trying to convince people that it’s not their foe. 

Suing Canada shows that the company’s biggest enemy is probably itself.

Rogue Company

Canada approves Huawei extradition proceedings

By David Ljunggren

OTTAWA -- The Canadian government, as expected, on Friday approved extradition proceedings against the chief financial officer of Huawei Technologies Co Ltd.
Meng Wanzhou, the daughter of Huawei’s founder, was detained in Vancouver last December and is under house arrest. 

In late January the U.S. Justice Department charged Meng and Huawei with conspiring to violate U.S. sanctions on Iran.
Meng is due to appear in a Vancouver court at 10 a.m. Pacific time (1800 GMT) on March 6, 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 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.
U.S. Justice Department spokeswoman Nicole Navas Oxman said Washington thanked the Canadian government for its assistance. 

“We greatly appreciate Canada’s steadfast commitment to the rule of law,” she said in a statement.
Legal experts had predicted the Liberal 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.
But it could be years 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 likely 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.
After Meng’s detention, China arrested two Canadians on national security grounds, and a Chinese court later sentenced to death a Canadian man who previously had only been jailed for drug smuggling.
Brock University professor Charles Burton, a former Canadian diplomat who served two postings in China, said Beijing was likely to retaliate further.
“They’re not going to take this lying down ... one shudders to think what the consequences could be,” he told the Canadian Broadcasting Corp, saying Beijing might crack down on Canadian canola shipments or stop Chinese students from going to Canada.
Ottawa rejects Chinese calls to release Meng, saying it cannot interfere with the judiciary.
Beijing had earlier questioned the state of judicial independence in Canada, noting the government faces accusations that it tried to intervene to stop a corruption trial.
Canadian Justice Minister David Lametti declined to comment.
Huawei was not immediately available for comment.

China's Huawei spy risks threaten U.S. diplomacy abroad

By Hollie McKay

Chinese tech criminal Huawei violated US sanctions and stole trade secrets: The Department of Justice

For months, American officials have been warning the Chinese telecommunications giant is obligated to their government and has the capacity – through its developing 5G network – to spy on people in countries where its technology exists.
But the issue has spawned into more than just a spy story – and now challenges Washington’s relations with European partners. 

On Thursday, Secretary of State Mike Pompeo cautioned that the U.S. would not be able to team up with, nor share, crucial intelligence information that countries that go forth in enabling Huawei Technologies.
“Whether through classic economic espionage, intellectual property theft, or espionage on behalf of a government, the global footprint and technology reach of Huawei easily makes it a security risk to U.S. interests,” Erik Rasmussen, Head of Cybersecurity and Risk Management Solutions at public accounting firm Grobstein Teeple, told Fox News. 

“Given the size of the company, it is a difficult undertaking to quickly and swiftly track spying with or without Huawei’s knowledge, but direct influence on business operations by the Chinese government is undeniable.”
U.S authorities have expressed a growing concern the telecom conglomerate could – as a result of 2017 legislation in China that permits the government to keep tabs on people under the guise of national security – undertake “undetected espionage” on users.
The 2017 legislation mandates all China-owned companies must comply with the government’s intelligence wing should it be requested, meaning that if Huawei is asked to do so and denies to so, they could be breaking their own national security laws.
The issue has not only caused a schism in U.S. relations with Canada – who have conveyed frustration in having absorbed retaliation from the Chinese government for detaining the company’s CFO Meng Wanzhou on an extradition request by the U.S – but threatens alliances with Europe too.

In this courtroom sketch, Meng Wanzhou, right, the chief financial officer of Huawei Technologies, sits beside a translator during a bail hearing at British Columbia Supreme Court in Vancouver, on Friday, Dec. 7, 2018. Meng faces extradition to the U.S. on charges of trying to evade U.S. sanctions on Iran. She appeared in a Vancouver court Friday to seek bail. 

Germany this week made the preliminary determination to continue to the process in allowing Huawei to partake in developing their high-speed internet infrastructure after their own investigation found no sufficient proof its equipment could be used to spy. 

Britain is currently examining the tech giant’s products, and is expected to make a decision in the coming weeks.
Over the past year, the Trump team has been ramping up pressure on its European allies to drastically limit or entirely rebuff Huawei’s involvement in both developing the 5G infrastructure and its presence on existing networks. 

While Huawei has mostly been barred in the United States, its foothold in Europe is strong.
“Next to Apple and Samsung, Huawei is the world’s largest mobile technology company in terms of market share, so if the company is compromised from within, the risk is undeniable,” Rasmussen said. 

“Given the historical alliances between the US and many European countries where Huawei technology is common, there is a vested interest to track this accordingly and share information when prudent. The UK and Germany will naturally have to weigh the costs and benefits to allowing risky technology in their country.”

However, the Huawei president and former Chinese army engineer Ren Zhengfei – whose daughter Meng Wanzhou has been held Canadian authorities for almost three months awaiting possible extradition – continues to deny that the company assists the Chinese government in collecting intelligence through its devices. 

The Chinese government has also refuted U.S. accusations that they have the capacity to funnel off personal data and information.
Experts and analysts remain far from convinced.
“If these pieces of electronic equipment used in telecom infrastructure are compromised – for example, by having hidden backdoors, which allow for access with specific access codes – this would enable Chinese intelligence to have access to western telecoms networks, ‘sniffing’ and listening to all information such as data and voice going through that equipment,” explained J. Eduardo Campos, Chief Information Security Specialist and founder of Embedded-Knowledge Inc. 

“Huawei denies it vehemently, but given the recent history of State-sponsored hacking by the Chinese government, it makes anyone suspicious. Moreover, Chinese tech companies could be compelled by the Chinese government to modify their technology for spying purposes. And we would never know it.”
According to Campos, the 5G technology – the next iteration of mobile network technology – could potentially help cities become smarter, improving traffic management, citizen services, and access to public information from mobile devices. 

Therefore, it will enable many types of cutting-edge applications, such as self-driving cars and remotely operated devices.
“They will be able to send and receive large amounts of data faster than it is currently possible. 

One way of seeing a potential threat is that an increased reliance on mobile technologies means its disruption would have serious consequences, both in terms of safety as well as the country’s economy,” he observed. 

“Imagine that a failure because a remote hacking by a foreign power could lead to the death of patients, the crash of self-driving cars, or even just halting down airplanes on the ground because of massive system outages. This poses real national security risks. The US government has all rights to crack down on this and at least demand extra measures to protect the infrastructure against companies that operate too close to foreign powers not aligned with the US, such as Huawei technologies.”
Meanwhile, the White House has been urging Western technology companies to get up to speed with their Chinese counterparts in mastering the 5G modal.
“The Trump Administration is in the tough position of balancing free market principles with national and cybersecurity. The President and his advisors are tasked with regulatory oversight of 5G implementation, and they understand that this new technology has revolutionary capabilities in terms of innovation and economic growth,” added Theresa Payton, Former White House Chief Information Officer under George W. Bush and current CEO of security consulting company, Fortalice Solutions. 

“But the key is to strike a balance between a successful 5G rollout that spawns economic growth and a safe and secure rollout that doesn't give bad actors and nation states unwarranted access to private or sensitive information."