Canada, China and US were all doomed to lose in Meng Wanzhou’s case
September 26, 2021 3:08 AM   Subscribe

The deal allowing Meng Wanzhou to return home to China (The Guardian) nearly three years after her arrest will come as a relief to all the participants in a saga that rapidly turned from a narrow legal dispute into an escalating geopolitical battle.

Donald Trump made the case explicitly political by saying he would intervene to drop the charges if he thought it would help US-China trade negotiations.

It was highly unusual for the prosecution to be directed at the chief finance officer personally and not at the corporation. Last year, Airbus agreed to pay $4bn in penalties to resolve a bribery case. In 2015, Deutsche Bank was fined $258m for violating Iran- and Syria-related sanctions. But no executives were detained in either case.

Indeed, at a hearing in August, the judge in the case said that the case against Meng seemed very unusual. No one lost money, the allegations were several years old, and the intended victim, a global bank, knew the truth even as it was allegedly being lied to.

Heather Holmes, associate chief justice, asked: “Isn’t it unusual that one will see a fraud case with no actual harm many years later? And one in which the alleged victim, a large institution, appears to have had numerous people within the institution who had all the facts that are now said to be misrepresented?”

Hours later it was announced that Michael Spavor and Michael Kovrig, accused of espionage by China in the same year, were flying home to Canada. (BBC)

Beijing denies detaining the Canadians in retaliation for Ms Meng's arrest. But critics have accused China of using them as political bargaining chips.
posted by xdvesper (26 comments total) 6 users marked this as a favorite
 
The charges against Meng: (Yahoo Finance)

In the final weeks of hearings, Canadian prosecutors revisited the key arguments of the U.S. request: that Meng misled an HSBC executive during a meeting at a restaurant in 2013, that the deception was deliberate, and that HSBC continued to process Huawei’s transactions as a result, putting itself at risk of financial penalties and loss to its reputation.

Her lawyers dispute those characterizations, arguing that there was no deception because HSBC was fully aware of Huawei’s activities in Iran and never suffered any sanctions-related penalties or losses. They also claim the U.S. doesn’t have jurisdiction over the alleged offense.

“What happened on the 22nd of August, 2013, in a Hong Kong restaurant between a Chinese national and an Anglo-Chinese bank is a matter of international law, no business of the United States,” Meng’s lawyer Gib Van Ert told the judge in March. “If any laws were broken that day, that is the concern of China, in whose territory the events occurred.”

The U.S. claims jurisdiction in part because the transactions that HSBC handled for Huawei were cleared through the U.S. dollar system.

---

The partial transcripts of the final arguments have been posted by reporter Rena Li (China Daily)
posted by xdvesper at 3:09 AM on September 26, 2021 [3 favorites]


The U.S. claims jurisdiction in part because the transactions that HSBC handled for Huawei were cleared through the U.S. dollar system.

Of all the parts of this that I don’t understand I don’t understand this part the most. Is the argument here that any exchange made in US dollars falls under the jurisdiction of US courts?

That seems like quite a stretch.
posted by mhoye at 3:13 AM on September 26, 2021 [7 favorites]


Mhoye, most international inter-bank financial transactions are exchanged via the SWIFT banking system.

At one point all of these transactions were processed in the US; I think there is now a secondary processing centre in Europe specifically because the US started claiming jurisdiction over third-party transactions just because of that (rather weak IMO) link to its territory. But many (half? most?) transactions still pass through the US, and bank customers have little or no control over that.
posted by Joe in Australia at 4:21 AM on September 26, 2021 [1 favorite]


She was definitely taken hostage as a bargaining chip. There was no real interest in "justice" here.
posted by dazed_one at 5:46 AM on September 26, 2021 [2 favorites]


God, what a long, stupid, sick, sad saga. I hope we've at least learned to think twice before being proxy goons for American whims but I doubt it.
posted by rodlymight at 6:50 AM on September 26, 2021 [4 favorites]


Is the argument here that any exchange made in US dollars falls under the jurisdiction of US courts?

Pretty much. And if not US courts then US pressure on banks. If you're a bank anywhere in the world you almost always have to be dealing with US banking law at some point, and we wield that power with great vim. Most notably through all the economic sanction schemes against Iran, Russian kleptocrats, etc.

It's why there's such big pressure to develop alternate finance in the world. For instance Russia has been building its own payments system for a couple of years now and while it's mostly used only in-country, it seems to be working pretty well. And China of course would love to see its currency and financial systems eventually ascend to global power but that's going to take a long time before anyone trusts it that completely.
posted by Nelson at 7:54 AM on September 26, 2021 [1 favorite]


Canada, China and US were all doomed to lose in Meng Wanzhou’s case

Canada and China definitely lost, but it's not really clear how the US lost here. The US basically just agreed to give up three years later. Not really a loss, they're just back to where they started.

I hope that Canada learns a lesson about acting on behalf of the US here. It appears that Canada had a policy of basically just arresting whoever the US wants arrested and I sure hope we start to use a little more judgement — though I'm not particularly hopeful. This was clearly a highly political act and not one we should have taken without careful consideration.

I can't help but think that if the two Michaels were American, things would have gone differently — and both China and the US knew that.
posted by ssg at 8:42 AM on September 26, 2021 [13 favorites]


Canada got played like a fiddle here. Pretty reprehensible use of extradition law by the US, using it to kidnap people for political gain. Considering the absence of Canada in the recent AUKUS agreement, I can't help but hope we really start to distance ourselves from our not-such-a-great ally to the south. They treat us like shit.
posted by dazed_one at 9:17 AM on September 26, 2021 [11 favorites]


Considering the absence of Canada in the recent AUKUS agreement

Meh, the only major piece of that deal that Canada doesn’t have already in that act was the nuclear subs and they’ve had no interest in acquiring them. And all the rest of the data sharing, cyber security, etc are all covered by other pacts or about US temporarily staging aircraft and ships in Australia don’t really apply to Canada for obvious reasons.
posted by jmauro at 10:08 AM on September 26, 2021 [2 favorites]


I hope that Canada learns a lesson about acting on behalf of the US here. It appears that Canada had a policy of basically just arresting whoever the US wants arrested

Canada has an extradition treaty with the US under which the arrest was made. There was never a policy decision in Canada to co-operate; I've never heard that the PM was consulted at all. The US used the normal legal machinery, and AFAIK we weren't even aware something was happening until it was done, at which point intervening to unfuck ourselves would've meant violating or abrogating the treaty, as well as politically interfering in our own legal system.

Basically, we were fucked before we even noticed our pants were off.
posted by fatbird at 10:29 AM on September 26, 2021 [15 favorites]


Yes, that's the problem! Canada's extradition treaty with the US explicitly exempts offences of a political nature and gives more leeway for offences committed outside the US. We should be reviewing extradition requests in that context, instead of just blindly doing whatever the US asks. That we allowed the US to screw us over in this way is sad and embarrassing; that it's not clear we wouldn't do exactly the same next time is worse.
posted by ssg at 10:49 AM on September 26, 2021 [4 favorites]


Biden made it a point to say, “The United States has no closer or more reliable ally than Australia — our nations have been together for a long time.”* That must be why the US border remains closed to Canadians even though Canada has eased our land border restrictions for Americans! Got it. (Mind you, I’m not in favour of nonessential cross border travel in either direction during this fourth wave. But the unilateral nature of this is hard to miss.)

Look, I’m as glad as anyone that Donald Trump isn’t the president of the US anymore. But my fellow Canadians are deluded if they think Biden or anyone else in the White House is particularly interested in being a friend or ally to Canada unless it benefits the US. We may be each others’ largest trading partners, but there’s a long history of the United States running roughshod over Canada. And that goes for Democrat just as much as Republican regimes.

* This first article I linked has some other revealing quotes from David Cohen, Biden’s pick for ambassador to Canada.
posted by hurdy gurdy girl at 10:57 AM on September 26, 2021 [4 favorites]


Can you imagine if the election had gone differently? Then we would have been in a Carter-Regan situation with regards to the release of hostages (i.e. the Michaels).
posted by sardonyx at 11:11 AM on September 26, 2021 [1 favorite]


Uh, if O’Toole had been in secret negotiations with China and the US to keep them imprisoned until Tuesday then sure.
posted by saturday_morning at 11:27 AM on September 26, 2021


I'm sure O'Toole would have claimed that his presence alone, being a better ally to the U.S. and a better overall negotiator would have had some (undefined and vague) influence on the outcome, because, as we all know, China said their imprisonment had NOTHING to do with anything else but their own guilty actions. O'Toole would have claimed the victory for negotiating their release.
posted by sardonyx at 11:30 AM on September 26, 2021


Isn’t it unusual that one will see a fraud case with no actual harm many years later?

The actual harm is that the rich and powerful get to benefit from corrupt relationships with banks and corporations. They didn't harm each other, but the public is harmed by this. Of course a legalistic argument may not care about this, but the real lesson for the public is that banks themselves are willing to not call fraud fraud, when powerful business interests are mutually beneficially involved. Just because legal systems aren't set up to deal with this sort of normalized corruption doesn't mean there's no actual harm.
posted by polymodus at 11:59 AM on September 26, 2021 [5 favorites]


The (arguable) abuse of an extradition agreement isn’t unique to the US or even especially uncommon. I expect that for every country there’s a point at which prosecution becomes a political question rather than something that will be left to the usual justice system. For instance, Russia is a member of Interpol and notoriously abuses its “red notice” warrant system to attack dissidents. Why does it remain a member? Well, the alternative would make it too easy for criminals to evade justice: they could break any surveillance by simply travelling via Russia. Similar considerations apply to extradition agreements generally: the ability to extradite criminals from foreign jurisdictions is so necessary to the operation of a justice system that (except in truly egregious cases) we turn a blind eye to possible abuses of it.
posted by Joe in Australia at 3:01 PM on September 26, 2021


The actual harm is that the rich and powerful get to benefit from corrupt relationships with banks and corporations. They didn't harm each other, but the public is harmed by this.

It's weird to pretend this case was about some kind of generalized fraud or protecting the public from corruption. It was about enforcing sanctions against Iran and specifically about the US trying to make a Chinese company follow US sanctions via the international banking system.

There is no way this situation would have come about if Huawei had lied to HSBC about any number of other things. This was not about defending the public from corruption or anything like that. It was entirely geopolitical and about US power in the Middle East.
posted by ssg at 4:53 PM on September 26, 2021 [4 favorites]


It's weird to pretend this case was about some kind of generalized fraud or protecting the public from corruption.

Yeah, I am no law expert, but the chain of liability seems so far removed from Meng.

US sanctions prevent US dollar clearinghouses from participating in transactions with Iran.

So if the US Dollar clearinghouse (SWIFT, or whatever) performed a transaction on behalf of HSBC (UK entity), then the US government would penalize them.

SWIFT could then sue HSBC for damages, for misleading them about the transaction.

HSBC could then sue Huawei for damages, for misleading them about Skycom.

It doesn't look like ANY of that chain of events happened.

For the US government to directly imprison and extradite Meng seems extraordinary.
posted by xdvesper at 7:41 PM on September 26, 2021 [2 favorites]


Jurisdiction isn't necessarily about the location of a guilty party or their victim. It can also be awoken by the fact that a transaction took place there. Because of the SWIFT system, any inter-bank transaction potentially takes place in the USA - specifically, 1621 McDevitt Drive, Culpeper, Virginia. The fact that the transaction took place over SWIFT doesn't make it liable, any more than the post office should be penalised if a fraud by mail occurred.

What I find remarkable is that the US government has this amazing intelligence asset (Culpeper is only an hour's drive from the FBI and 1.5 hours from the CIA headquarters) and it chooses to waste it by underscoring the fact that the SWIFT network is under US scrutiny and control by, e.g., seizing $26,000 being transferred between two European customers to buy Cuban cigars. $26,000! For a secret that could not be bought at any price! It really makes me wonder why we call them intelligence agents.
posted by Joe in Australia at 8:29 PM on September 26, 2021 [3 favorites]


Meng received a heroine's welcome and Chinese social media was filled with jubilant and detailed stories of her return.

The consensus, or the one meant to be built as, seems to be that Huawei with government support withstood pressure from the US to give up their cutting-edge 5G technology. Lest you think that's too conspiracy theory minded, there are collaborating stories about how the US used similar coercive tactics (long-arm jurisdiction ftw!) on Japanese and French business executives in the past for commercial/technological gain (by private US companies presumably).

So, perspectives from the other side.
posted by of strange foe at 7:09 AM on September 27, 2021


But my fellow Canadians are deluded if they think Biden or anyone else in the White House is particularly interested in being a friend or ally to Canada unless it benefits the US.

I think perhaps it might be time people stop thinking of nations as people at all. Nations are never ever friends. They're not human. They are no more capable of being friends than corporations are.

When leaders use humanizing language of friendship they are just camouflaging temporarily useful military alliances that achieve some temporary goals. The moment the goals of alliances members do not align they will no longer be "friends". See the Soviet Union and the entire West's post WWII "friendship".
posted by srboisvert at 1:14 PM on September 27, 2021


I've been following the commentary on reddit r/canada, which is often personally blaming Meng or Justin (with some predictable racism). The entire construct of this affair as a USA/China trade-war tends to be overlooked there.

As mentioned above, this case symbolizes a major geopolitical shift for Canada, no longer a happy trading-buddy with China, and no longer best-friends-allies status with USA (part of the ongoing saga of Decline of the American Empire Act III or IV).

I'm not a hawk, I think military spending is stupid; I've actually approved of Canada half-arsed huddling under the NATO umbrella in the past cold-war decades. Canada's future looks interesting, let's see how it goeth.
posted by ovvl at 5:27 PM on September 27, 2021 [1 favorite]


There is no way this situation would have come about if Huawei had lied to HSBC about any number of other things. This was not about defending the public from corruption or anything like that.

That's missing the point. From the point of view of the judge, of course it is "weird" i.e. absurd and politicized. That's why they literally said, what is the actual harm when they mean harm in the legalistic context. The situation is outside the scope of legal mechanisms to resolve, but that doesn't mean actual harm doesn't exist. And the judge doesn't seem to understand that distinction as a concept, and to rhetorically conclude there is no actual harm. The fact that Trump and the right wing will weaponize this as defending corruption in a totally distorted sense, doesn't mean it's not about corruption in the greater public context.
posted by polymodus at 1:18 AM on September 28, 2021


Canada's future looks interesting

what was that ancient Chinese proverb about living in interesting times? this is a good thing, right? I was trying to discuss this with a Korean friend yesterday evening, and another friend (originally from Hong Kong) has weighed in on things, and based solely on those two interactions my take-away is: Canada is incredibly naive, and China is the clear threat and we need to be prepared for what is coming. Right or wrong is completely irrelevant, I am starting to see this as powerful tides and we are fast approaching the point where we stopped swimming a long time ago and it's just a matter of letting the tides have their way with us. Our proximity to the US leaves no doubt about which 'side' we are on, either. And as things ramp up, my "Chinese-looking" friends and family members will pay an out-sized part of the cost to all this. I see the "China Flu" period as a taste of things to come and I'm getting ready for my own fight.
posted by elkevelvet at 7:27 AM on September 28, 2021


When China wants to be feared
China wants the world to know that it is willing to grab foreigners, if needs be. More than once, court hearings and legal moves against Mr Kovrig and Mr Spavor tracked important moments in Ms Meng’s extradition battle. The message was that the cases were linked. ...

... In private conversations, diplomats called it “frightening”. Chaguan raised this with his host, asking how it helps China to scare Western diplomats. The official’s tone became icy. Canada must feel pain, he replied, so that the next time America asks an ally to act against China, that country will think twice.
posted by Nelson at 12:52 PM on October 7, 2021


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