U.S. destroyer challenges Russian claims in the Sea of Japan

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…As Huawei CFO arrested in Canada on suspicion of violating US sanctions***

The Navy sent a guided-missile destroyer into Russian-claimed waters in the Sea of Japan in what it called a “freedom of navigation” operation on Wednesday.

The operation comes as the United States and Russia are clashing over a variety of issues, including U.S. accusations that Russia has violated terms of the 1987 Intermediate Range Nuclear Forces Treaty, or INF, and U.S. complaints over recent Russian operations near Ukraine.

The Navy said in a statement that the USS McCampbell, an Arleigh Burke-class destroyer operating from U.S. Naval Base Yokosuka in Japan, sailed near Peter the Great Bay “to challenge Russia’s excessive maritime claims and uphold the rights, freedoms and lawful uses of the sea enjoyed by the United States and other nations.”, 201802:07

Under international maritime law, nations’ territorial rights extend only 12 miles from shore. Peter the Great Bay stretches farther than that from parts of the Russian coast, but Moscow claims the entire bay as its own, anyway.

The Defense Department regularly conducts such “freedom of navigation” exercises, but it usually does so in the South China Sea in challenges to claims by China.

Just last week, the United States sent the USS Chancellorsville, a guided-missile cruiser, near the Paracel Islands in the South China Sea to similarly challenge China’s “excessive maritime claims,” the Navy said.

The operation on Wednesday follows Secretary of State Mike Pompeo’s announcement on Tuesday that the U.S. would pull out of the INF treaty unless Russia addresses what he called Moscow’s “flagrant disregard” of its terms.

A spokeswoman for Russia’s Foreign Ministry said Russia “scrupulously abides by the provisions of the treaty, and the U.S. side knows this.”

The United States has also objected to Russia’s seizing of three Ukrainian vessels it accused of having trespassed on Russian waters in the Black Sea last month.

Citing the Black Sea dispute, President Donald Trump last week canceled a planned meeting with Russian President Vladimir Putin at the Group of 20 summit in Buenos Aires, Argentina. A spokesman for Putin said in response that a hoped-for U.S.-Russia summit in Washington “is now out of the question.”

In the meantime, Canada has arrested Huawei’s global chief financial officer in Vancouver, where she is facing extradition to the US in a move likely to exacerbate tensions between the US and China.

Meng Wanzhou, one of the vice-chairs on the Chinese technology company’s board and the daughter of the company founder Ren Zhengfei, was arrested on 1 December and a court hearing has been set for Friday, according to Canada’s department of justice. The arrest is reportedly related to violations of US sanctions.

In a statement, the department confirmed Meng had been arrested and was facing extradition. “As there is a publication ban in effect, we cannot provide any further detail at this time. The ban was sought by Ms Meng,” it said.

US stock futures and Asian shares tumbled after Meng’s arrest. The news came as Washington and Beijing begin three months of negotiations aimed at de-escalating their bruising trade war, which is adding to global investors’ worries over rising US interest rates and other risks to global economic growth.

The S&P500 e-mini futures fell almost 2% and were last were down 1.2%. Shares in Tokyo were off 2.5% in afternoon trade while Hong Kong was down 2.6% and Seoul declined 1.3%. Stocks in Shanghai were down 1.3% and in Sydney the benchmark ASX200 was off 0.6%.

“The US has been telling its allies not to use Huawei products for security reasons and is likely to continue to put pressure on its allies,” said Norihiro Fujito, chief investment strategist at Mitsubishi UFJ Morgan Stanley Securities in Tokyo.

“So while there was a brief moment of optimism after the weekend US-China talks but the reality is, it won’t be that easy,” he said.

US authorities have been investigating Huawei since at least 2016 for allegedly shipping US-origin products to Iran and other countries in violation of US export and sanctions laws, sources told Reuters in April.

Huawei, one of the world’s largest makers of telecommunications network equipment, said in a statement that Meng had been “temporarily detained” and faced unspecified allegations” in the Eastern district of New York.

The company said it had complied with “all applicable laws and regulations where it operates,” including sanction laws.

“There has been very little information provided to Huawei on the specific allegations. Huawei is not aware of any misconduct by Ms. Meng,” Guo Ping, rotating CEO of the company said in a statement posted on his Wechat account on Thursday.

“The company believes the Canadian and US legal systems will ultimately reach a just conclusion,” he said.

The arrest comes days after president Donald Trump and president Xi Jinping held a meeting in Argentina where they agreed to steps to resolve the ongoing trade war between the world’s two largest economies. US stock futures tumbled, followed by Asian markets, after news of the arrest broke.

China’s embassy in Canada on Thursday said it resolutely opposes the arrest of Meng, and had lodged “stern representations” to the US and Canada. The embassy said such actions had “seriously harmed the human rights” of Meng.

“We will closely follow … and take all measures to resolutely protect the legitimate rights and interests of Chinese citizens,” the embassy said in a statement.

Meng served on the board of a Hong Kong-based Skycom tech, which has business in Iran, according to corporate filings seen by Reuters. In 2013, Reuters found that the company, which attempted to sell embargoed Hewlett-Packard computer equipment to Iran’s largest mobile-phone operator had closer ties to Huawei than was previously known.

Huawei – one of the world’s largest telecommunications equipment and services providers – has been tightly constrained in the US by worries it could undermine local competitors and that its phones and networking equipment, used widely in other countries, could provide Beijing with avenues for espionage.

On Wednesday, BT, the UK telecoms group, confirmed it was in the process of removing Huawei equipment from the key parts of its 3G and 4G networks, as part of an existing internal policy not to have the Chinese firm at the centre of its infrastructure.

Governments in New Zealand and Australia have also moved to block the use of Huawei’s equipment in future 5G networks. Earlier this week, the head of the UK’s MI6 questioned the the company’s presence in critical telecoms infrastructure.

“We need to decide the extent to which we are going to be comfortable with Chinese ownership of these technologies and these platforms in an environment where some of our allies have taken quite a definite position,” said Alex Younger.

NBC with additional report from Guardian UK