
Huawei hid business operation in Iran after Reuters reported links to CFO - amaajemyfren
https://www.reuters.com/article/us-huawei-iran-probe-exclusive/exclusive-huawei-hid-business-operation-in-iran-after-reuters-reported-links-to-cfo-idUSKBN23A19B
======
cgh
This is why Canada detained Huawei's CFO Meng Wanzhou. I'm also guessing this
news is why Telus, a major Canadian telco, just dropped Huawei for its 5G
rollout and went with Ericsson instead. This is in line with other Canadian
telcos and I believe the rest of the Five Eyes as well. Although didn't the UK
flirt with Huawei for a while there?

~~~
billfruit
How exactly does US sanctions restrict/constrain a Chinese or any other
nationality company from doing business with Iran? Do China have sanctions on
Iran?

~~~
rgbrenner
Meng was arrested for fraud for the claims she made to banks as part of the
sale of HP servers to Iran. She knew it was illegal, so she lied to cover it
up so the banks would transfer money to Hauwei. This is the US.. fraud is a
crime. If you or me went into a bank and lied to get a loan, you would get
arrested too.

Meng wasn't arrested for selling goods to Iran. The truth is Huawei is free to
sell to Iran. But action have consequences... and if Huawei wants to sell to
Iran, the US isn't going to help them do it. They can't use our banks, buy our
equipment, or sell their goods here. They can make a choice: do business with
Iran or do business with the US. That's their free choice to make.

Huawei is upset because they want to sell to Iran, but still do business here.
They don't like the consequences of their actions. They want to force the US
to engage in commerce that we've decided we don't want to engage in.

~~~
billfruit
From report it looks like it was the HSBC bank which was involved, and it
looks like the banking transactions was executed in Hong Kong. But it isn't an
US or Canadian bank, how does the rest of the argument follow?

~~~
mthoms
As I understand it, it follows because HSBC and has a major US presence and is
therefore subject to US banking restrictions. It makes sense if you consider
that the money from the sale, once it enters the HSBC system could easily flow
back to the US.

There's also the matter that it was American equipment being sold and Huawei
would have also needed to lie to the US government when the equipment was
exported.

This is more difficult to get a foreign government to extradite for since
there is a doctrine (at least in Canada, but I believe also in other western
countries) that it would have needed to be a crime in Canada for the offence
to be extraditable (Canada did not have Iran sanctions at the time).

Thus, the extradition case _so far_ has focused on the fraud of
misrepresenting oneself to the bank. Certainly a crime in Canada.

~~~
sudosysgen
Sure, but I find it difficult to justify that this should be tried in a US
court under control of the US government, for a crime between two non-American
actors outside the United States.

The fact that it was about selling US equipment seems to be completely
orthogonal to the crime (which is fraud), as it is not illegal for a non-US
citizen outside the US to sell American goods bought to another non-US actor.

The fact that Huawei would have to lie to the US government also seems
orthogonal as Huawei did not lie to the US government, and if it did then
Huawei would be liable.

This simply seems to me like the US trying to impose it's power over foreign
transactions.

~~~
mthoms
HSBC has a United States banking license, employs tens of thousands of
Americans (in America) and is traded on the New York Stock exchange. Thus it
(a) has to abide by US finance laws and (b) is afforded some US protections.

If having ones head office overseas would provide immunity from US laws it
wouldn't be a very effective system would it? :-)

>Huawei did not lie to the US government

That remains to be seen (as I understand it - maybe you have evidence to the
contrary?), but I can't imagine how they would export so much equipment
without doing so.

>This simply seems to me like the US trying to impose it's power over foreign
transactions.

I agree to an extent. But since everyone (especially banks) need to do
business in the United States it's unavoidable.

~~~
sudosysgen
In that case, HSBC should be held liable for damages and should sue the party
in order to recover them. If they cannot recover damages in that jurisdiction
then they should either stop operating there or stop operating in the US.

It's pretty much indefensible to me that someone that has nothing to do with
the US operating outside the US would be tried in the US for a crime they
allegedly commited elsewhere.

~~~
mthoms
>In that case, HSBC should be held liable for damages

I've no love for HSBC (at all) but in this instance it appears they are the
victim of fraudulent representations made by Huawei.

Your "solution" proposes prosecuting not only an _innocent_ party, but one of
the _victims_? That's an ... ummm ... _interesting_ take.

~~~
sudosysgen
Well no, that is not my solution. That is the only ethical way the US could
enforce sanctions. The solution would be to put the Iran deal back up, but I
digress.

Yes, there is absolutely no way of enforcing sanctions without prosecuting
innocent parties. The only way that the US can get foreign banks not to deal
with Iran is by punishing them, even if they were the victims of fraud, the
bank would then have to decide if they want to continue operating in the US
and try to recoup their losses by going after the fraudster, not operate in
the jurisdiction of the fraudster if that is impossible, or not deal with Iran
at all (in which case a competitor will). Otherwise, they can also stop
dealing with the US.

~~~
gruez
>even if they were the victims of fraud, the bank would then have to decide if
they want to continue operating in the US and try to recoup their losses by
going after the fraudster

So you're proposing that the government shouldn't prosecute fraud criminally,
and it should be up to the banks go after the perpetrators in civil court
instead?

~~~
sudosysgen
No, I think that the local government where the fraud happened should pursue
criminal charges if appropriate, not the US government.

You can be suef in civil and criminal court at the same time.

~~~
gruez
How does this square with jurisdictions that don't enforce those laws because
the crimes benefit them? Should russian cybercriminals who victimize americans
be allowed go to whatever country they please, knowing that they won't be
prosecuted in their home country (because the government turns a blind eye to
their activities), and can't be prosecuted/extradited in whatever country they
travel to?

~~~
yorwba
In this case neither perpetrator nor victim of the fraud appear to be US
entities, so your example of Russian cybercriminals victimizing Americans
doesn't exactly apply. Unless the country requesting the extradition of said
Russian from Canada is, dunno, Australia, for some unrelated beef they have,
using the crime against Americans as a convenient excuse.

~~~
gruez
But in this case, the US entity is being victimized. Specifically, they were
tricked into violating US sanctions, which can carry criminal penalties for
them. I guess you argue that we can simply decriminalize this for the US
entity, but that opens a huge loophole for bypassing sanctions. Say you're
china and you want to buy some American semiconductors (which are currently
banned from being sold into china). All you need to do is set up a company in
Russia, buy the semiconductors, promise that they won't be later transferred
into china (wink wink), then import it into china.

~~~
billfruit
Bank may not be an US entity is what it appears. Also the bank is supposed to
do due diligence. Careful reading of the judgement, indicate that none of the
liabilities from the transaction are possibly active, ie, all payments have
been made and the matter closed, with no issue of defaults, etc. The question
being considered is the 'risk of reputational damage to the bank', which does
it sound like a criminal matter?

------
pphysch
Funny how easy it is for "independent" reporters to find financial malfeasance
goldmines when it is in the interest of US military leadership.

 __*

Daily white collar crime? Panama papers? i sleep

Manufacturing consent for endless war with Eastasia? REAL SHIT

 __*

"China’s foreign ministry said the United States was politicizing economic and
trade issues, which is not in the interest of Chinese or American firms."

Hard to disagree.

~~~
threeseed
Problem is that most if not all of the tax evasion, money laundering and white
collar crime happening today is being done so 100% legally.

Also prosecutors seems to not have much success in the courts at getting
criminal charges to stick. Hence why they favour settlements or civil charges.

~~~
pphysch
"Legally" is an empty word when we are talking about US foreign policy,
unfortunately.

~~~
president
So your point is that US is evil/lawless when it comes to FP and other nations
aren't? So how do you feel about China's militarization of the South China
Seas and debt trap diplomacy of poor African nations via the Belt and Road
Initative? Powerful nations all became powerful nations by being dicks. The
same works with politics, corporations, org charts, and all other power
structures in nature.

------
sct202
I think it's amazing that out of all the things Huawei has been accused of
doing the thing that got them officially in trouble is reselling _American_
servers.

~~~
jorblumesea
It wasn't ever going to be IP theft, corporate espionage or anything like
that. The CCP has made it clear they have no will to enforce anything like
that. Most likely, most of Huawei's behavior is state sanctioned anyways. They
have close but opaque connections to the government, and China has been known
to support domestic industries with government actions.

Pretty much the only way they were ever going to be punished is if they did
something like this.

~~~
yorwba
> The CCP has made it clear they have no will to enforce anything like that.

Could you point me to an official statement to that effect? Patent
infringement lawsuits in China definitely paint a different picture: foreign
companies are more likely to win and awarded higher damages than Chinese
companies: [https://patentlyo.com/patent/2018/02/things-infringement-
lit...](https://patentlyo.com/patent/2018/02/things-infringement-
litigation.html)

~~~
EricE
"Could you point me to an official statement to that effect?" LMAO - are you
for real? That article still doesn't exactly paint a rosey picture - and
that's if you can believe the numbers they release. If they are willing to lie
substantially about something as serious as a virus do you seriously think
they are going to be 100% transparent about something that could wreak their
economy?

~~~
yorwba
Those are not "numbers they release". They are statistics collected by a
researcher who read court proceedings of 1663 patent infringement cases
decided in China in 2014. (EDIT: Originally said "all" cases and "between 2014
and 2018". As virtue3 points out below, that was incorrect). It's not
something that can be manipulated by just changing a number in a spreadsheet.

~~~
virtue3
See Chao Ma, Xiaohong Yu & Haibo He, Data Analysis: Report on the Publication
of Chinese Judicial Decisions on the Internet, China Law Review 12(4), 2016:
208. (Table 10 lists the ratios of the number of judicial documents of each
province publicly available on CJO to the number of cases adjudicated in each
province, ranging from 15.17% to 78.14%.)

So cherry-picked cases that range from 15-78% of the data set.

1.6k patent cases over multiple years seems -extremely- low to me. The USA has
roughly 3-4x that per year. [https://law.stanford.edu/wp-
content/uploads/2016/07/Revised-...](https://law.stanford.edu/wp-
content/uploads/2016/07/Revised-Stanford-August-4-2016-Class-Presentation.pdf)

~~~
jialutu
Doesn't the US have a huge problem with IP trolls? It's really hard to get an
accurate figure when the US can just issue IPs like it's no one's business and
can to go to court to dispute these equally as easily. At least here in
Europe, it's a lot more difficult to file for patents, I've not found any
conclusive numbers, but if you can extrapolate from these numbers here I would
say that the US is the outlyer rather than the norm [https://www.simmons-
simmons.com/en/publications/ck0d2ofe9u6d...](https://www.simmons-
simmons.com/en/publications/ck0d2ofe9u6dh0b8588o5p7om/080218-how-much-patent-
litigation-is-there-in-europe-other-countries)

------
chvid
Suppose Tim Cook’s daughter was arrested in Thailand for Apple’s alleged
breach of China’s sanctions against Saudi Arabia.

How would you Americans feel about that?

~~~
shliachtx
> Suppose ~Tim Cook’s daughter~ _the CFO of Apple_ was arrested in Thailand
> for Apple’s alleged breach of China’s sanctions against Saudi Arabia.

The CFO of the company is responsible for the company's financial behavior,
being the daughter of the founder does not exempt her.

~~~
xster
The CFOs of Banco do Brasil, Bank of America, Bank of Guam, Bank of Moscow,
Bank of Tokyo-Mitsubishi, Barclays, BNP Paribas, Clearstream Banking,
Commerzbank, Compass, Crédit Agricole, Deutsche Bank, HSBC, ING, Intesa
Sanpaolo, JP Morgan Chase, National Bank of Abu Dhabi, National Bank of
Pakistan, PayPal, RBS (ABN Amro), Société Générale, Toronto-Dominion Bank,
Trans-Pacific National Bank, Standard Chartered, and Wells Fargo enter the
chat.

[https://archive.is/kyKGf](https://archive.is/kyKGf)

~~~
shliachtx
That may very well be the case, it does appear to be selective enforcement -
but the comment I was responding to made it sound as if the person arrested
was merely related to the CEO, when she is in fact the CFO.

------
Waterluvian
China is holding two innocent Canadian diplomats in poor conditions while
Canada does what a modern nation does and allow The CFO a presumption of
innocence. She gets to stay in a mansion. Those two Canadians may never see
their families again.

This extradition better be worth it. If the US frees her as some political
pawn I’m going to lose my shit.

~~~
mcguire
Shouldn't Canada be using its own diplomatic capabilities to get them freed?

Oh, wait. There's money involved. Never mind.

~~~
Waterluvian
Our government is trying. But we have to be realistic: Canada doesn’t have
much power.

~~~
tlear
It lacks will, it has tons of things it can do. Meng is not the only one with
mansion in Vancouver.

~~~
mrcorona
Canada is really playing this game badly, if they piss of India next they
won't have much of an economic future as a country very soon.

------
jhpriestley
This corporate malfeasance seems pretty tame in comparison to what US
multinationals regularly get away with. For example, no one has been arrested
from Boeing.

~~~
munk-a
This is because you folks down south have tanks - and that's the same reason
our PM had 21 seconds of silence when, if we were talking about a press
crackdown in a third world nation, he would have spoken up immediately. Good
old might makes right.

~~~
some_random
You have to be joking, right? You seriously think that the 21 seconds of
silence was US censorship? If the US had that kind of power then perhaps that
same PM would not have casually praised a Central American dictator upon their
death.

~~~
myth_drannon
It was self-censorship.

~~~
Udik
I watched it earlier. I think it was 1/3 self-censorship, 1/3 _a display_ of
self-censorship, and 1/3 of carefully choosing the words before speaking.
Overall, brilliant.

------
xster
This was the entire premise why Canada held Meng Wanzhou no? I don't see any
new information surfaced in this article from what was already publicized in
2018.

Seems like it's just a chance to re-broadcast a headline for another news
cycle.

~~~
lawnchair_larry
I believe Canada held her because an extradition treaty with the US required
them to do so.

------
KCUOJJQJ
I don't know why Canada has an extradition treaty with the USA. Hostage-taking
for the USA doesn't always work well apparently.

------
dingoegret
Good. US sanctions on Iran are violations of international agreements, decency
and a treacherous renege on the Nuclear Deal.

------
ngcc_hk
The Canadian court ruled she has broken Canadian law and hence extradition is
on. Not seems to mention in the discussion so far.

