Iran to be Blacklisted as a Country

Financial Action Task Force, a Paris based organization will take blacklisting action on Iran this week. Finally, it appears Europe is joining the United States in this effort even while former Secretary of State John Kerry and a democrat U.S. Senate delegation met with Iranian leaders in a secret setting.
The task force designation will encompass 39 member countries and organizations where this calls for sanctions on Iran due to money-laundering, financing of terror organizations, corruption politicians, international crime, illegal arms trade and drug trafficking. It is unclear if the United Nations has offered any resistance or comment. The only other country under this full designation is North Korea, yet another 12 countries are subject to the same scrutiny and punitive actions by the task force. Banking and access to international trade will be limited or terminated in many cases completely.

Meanwhile, Russia and China have stepped in to provide more support and aid to Iran.
In an effort to preserve trade and revenue, Iran was construction a rail system into Central Asia connecting the Caspian countries of Azerbaijan, Kazakhstan, Azerbaijan, Russia, Kazakhstan and Turkmenistan. Due to US sanctions, Iran has been in a financial tailspin and construction has essentially stopped and the costs were escalating due to the difficult mountainous regions and regional politics. Enter China and Russia.

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The project is expected to cost 1.2 billion euros ($1.5 billion) and is being financed by an export credit that Moscow has extended to Tehran. It will involve the electrification of 495 kilometers of existing line, including 203 kilometers in mountainous areas, and the updating of 31 stations and 95 tunnels. This railway segment is projected to carry up to ten million tons of cargo annually upon completion, in 2024. Russian and Iranian officials are jubilant: “All this creates conditions for the growth of goods traffic along the International North–South Transport Corridor and the intensification of economic ties in the Caspian region,” they say (Casp-geo.ru, February 18). The reasons are obvious: if this rail project is completed, Russia and Iran will be able to control much of the trade coming through or out of Central Asia, thus limiting the freedom of action of the states of that region and giving Moscow and Tehran a greater voice in Chinese decisions there (Casp-geo.ru, November 28, 2019; Ru.irna.ir, November 13, 2019).

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Development of Xinjiang

For China, the project is extremely important due to several factors. First, it will stimulate the economic development of the Xinjiang Uygur Autonomous Region. This autonomous region of China plays a significant role in rail freight transportation on the New Silk Road. The majority of container trains from central, eastern and southern China to Europe run via Xinjiang. Its capital, Urumqi, is also an important railway hub on the corridor towards Europe.

Kashgar, one of the westernmost cities in China, could be another junction in Xinjiang. The Chinese government is discussing the construction of two railway lines from Kashgar: one westward to Kyrgyzstan and Uzbekistan, and another southward. The latter heads to Pakistan, where China Overseas Port Holding Company operates Gwadar Deep Sea Port, and where China intends to build its second, after Djibouti, overseas naval base.

New Silk Road

The second factor of success is the potential of the railway line for the New Silk Road. According to estimations, the Xinjiang – Kyrgyzstan – Uzbekistan route will shorten the route from China to Uzbekistan. Currently, containers going to this Central Asian country must cover long distances and cross the territory of neighbouring Kazakhstan.

Moreover, the railway link between China and Uzbekistan links to Iran (via Turkmenistan) and Turkey, as well as eventually to Europe, especially to Southeast Europe. With this, the route from China to Southeast Europe could be reduced up to 900 kilometres, equal to up to seven or eight days. At the same time, the new railway will allow China to better involve Kyrgyzstan and Uzbekistan into the New Silk Road.

Dem Senators Meet in Secret with Zarif/Iran Last Week

Did you hear about Senator(s) Whitehouse and Murphy and their secret meeting and delegation?

*** “Murphy is a frequent speaker at the National Iranian American Council, a lobbying group with alleged links to the Islamic Republic of Iran.” He also criticized the killing of Soleimani, the world’s most notorious terrorist, who also killed more than 600 US soldiers in Iraq.

ImageImage source

Sen. Chris Murphy of Connecticut and other Democratic senators had a secret meeting with Iranian Foreign Minister Mohammad Javad Zarif during the Munich Security Conference last week, according to a source briefed by the French delegation to the conference. Murphy’s office did not respond to repeated requests for comment by press time.

Such a meeting would mean Murphy had done the type of secret coordination with foreign leaders to potentially undermine the U.S. government that he accused Trump officials of doing as they prepared for Trump’s administration. In February 2017, Murphy demanded investigations of National Security Advisor Mike Flynn because he had a phone call with his counterpart-to-be in Russia.

“Any effort to undermine our nation’s foreign policy – even during a transition period – may be illegal and must be taken seriously,” Murphy said in 2017 after anonymous leaks of Flynn’s phone call with Russian ambassador Sergey Kisylak were published. He also strongly criticized the open letter some Republican senators sent Iranian leaders during the Obama administration’s campaign for a nuclear agreement.

However, Murphy has previously defended rogue meetings if they’re done by Democrats such as former Secretary of State John Kerry.

“Unless it was authorized by the president or secretary of state, conducting independent foreign policy sends mixed signals to our adversaries,” said Christian Whiton, former State Department senior advisor in the Trump and George W. Bush administrations. “It seems very unpalatable. If we want to talk to Iranians, they know how to reach us and they don’t need to go through an intermediary.”

A State Department official who spoke on background said that the State Department was not aware of any side meetings with Iranian officials that Murphy was engaged in.

The Munich Security Conference, an annual forum on international security policy, welcomes hundreds of world leaders each February. This year’s conference featured robust debate on the United States’ maximum pressure policy against Iran, China’s handling of the coronavirus and technology concerns, and the European alliance with the United States. Other Democrat senators at the conference included Sens. Robert Menendez of New Jersey and Chris Van Hollen of Maryland. Former Sen. John Kerry of Massachusetts also attended.

Both Murphy and Zarif spoke publicly during a two-hour session on Middle East policy, with Murphy and Zarif both fiercely criticizing U.S. policy.

President Donald Trump has reoriented American policy in the Middle East away from President Barack Obama’s friendly posture toward Iran. He departed from Obama’s Joint Comprehensive Plan of Action, a nuclear arrangement with the Republic of Iran that was not ratified by the United States Senate.

Trump has exerted instead a “maximum pressure” campaign against the regime, with 12 demands on Iran before a new deal is reached. Those demands include a full account of its nuclear program, ending its proliferation of ballistic missiles, releasing all U.S. citizens held on spurious charges, ending support to terrorist groups, withdrawal of forces in Syria, and cessation of its threatening behavior against its neighbors.

The “maximum pressure” campaign of sanctions has devastated the Iranian economy, which is in recession and faces rising inflation. It has made it difficult for Iran to pay foreign fighters engaged in supported terror operations. Iranians have taken to the streets in protest.

Iran recently killed an American contractor in Iraq and the United States killed Iranian general Qassim Suleimani, a top Iranian leader who was responsible for the killing and maiming of thousands of U.S. soldiers. Iran’s retaliatory strike for that killing resulted in no U.S. deaths, but the country did shoot down a Ukrainian passenger plane then lied about it for days.

At the conference, Zarif said official retaliation for the killing of Suleimani had ended, although he suggested independent attacks from others in the country might follow.

Murphy is a frequent speaker at the National Iranian American Council, a lobbying group with alleged links to the Islamic Republic of Iran. Republican Sens. Mike Braun of Indiana, Tom Cotton of Arkansas, and Ted Cruz of Texas recently asked the Department of Justice for potential violations of the Foreign Agents Registration Act.

They wrote that the influential lobbying group “purports to improve understanding between American and Iranian people but in reality seems to spread propaganda and lobby on behalf of the Iranian government.” Evidence indicates that evidence Zarif himself was involved in founding the group. Hat tip/Federalist

UN Blacklists Israeli Companies

Primer:Remember the United States crafted and offered a peace agreement between Israel, Hamas, the Palestinians just a few weeks ago. Reading below, note that ‘united nations’ is hardly what this blacklist encourages.

The UN High Commissioner for Human Rights published on Wednesday a “database” of companies doing business with Israeli settlements. The list includes 112 firms, 94 of them Israeli and the other 18 from six other countries, including the United States.

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The database was generated pursuant to Resolution 31/36, adopted by the UN Human Rights Council (UNHRC) on March 24, 2016, which calls upon the UN High Commissioner for Human Rights to produce a “database of all business enterprises” engaged in certain settlement-related activities in “the Occupied Palestinian Territory, including East Jerusalem.”

The database, also referred to as a blacklist, is inconsistent with U.S. law and policy. U.S. law, at 19 U.S.C. 4452(b)(4), states that Congress “opposes politically motivated actions that penalize or otherwise limit commercial relations specifically with Israel, such as boycotts of, divestment from, or sanctions against Israel.”

In addition, compliance with the blacklist could be inconsistent with the U.S. anti-boycott statute (50 U.S.C 4842), which has long been used to punish compliance with boycotts (and blacklists) fostered by the Arab League.

Boycotts spurred by the UNHRC and its blacklist would likely also run afoul of some or all of the two dozen U.S. state laws that require divestment from companies that boycott Israel (in some cases specifically defined to include Israeli settlements).

Compliance with a boycott fostered by the UNHRC and its blacklist may also cause U.S. companies to run afoul of the U.S. Treasury Department’s separate antiboycott regulations. The regulations implement the Ribicoff amendment to the Tax Reform Act of 1976. Internal Revenue Code section 999 requires U.S. taxpayers to report whether they (or corporations they control) have participated in or cooperated with boycotts not sanctioned by the U.S. government. According to the Treasury, U.S. persons who participate in such boycotts “may be subject to penalties that reduce their foreign tax credit, the benefits of foreign sales corporations, and the deferral available to U.S. shareholders of controlled foreign corporations.”

The blacklist also lacks a basis in international law. Indeed, international law does not prohibit business in disputed territories. Nor is doing such business inconsistent with the principles of corporate social responsibility (which are non-binding). That is the official view of the United Nations, expressed in its Global Compact document titled “Guidance on Responsible Business in Conflict-Affected and High-Risk Areas: A Resource for Companies and Investors.”

Finally, the legitimacy of the database is also thrown into doubt by the very makeup of the UNHRC, which includes as members many of the world’s worst human rights violators. Current UNHRC members sitting in judgment of Israel include the Democratic Republic of the Congo, Eritrea, Libya, Pakistan, Sudan, and Venezuela.

There are more than 100 territorial disputes in the world today, including in Crimea, Cyprus, Kashmir, Nagorno-Karabakh, Tibet, and Western Sahara. Yet only the West Bank and East Jerusalem were singled out for such a database. The decision to focus on Israel raises the question of whether the database is really about human rights, or rather about hypocritically bashing Israel.

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The list identified companies listed in the United States, France, the Netherlands, Luxembourg, Thailand and Britain.

Inclusion on the list had no immediate legal implications for the companies. But the issue is highly sensitive as companies named could be targeted for boycotts or divestment aimed at stepping up international pressure on Israel over its West Bank settlements.

Israeli President Reuven Rivlin expressed solidarity with the named businesses, saying, “Boycotting Israeli companies does not advance the cause of peace and does not build confidence between the sides.”

“We call on our friends around the world to speak out against this shameful initiative which reminds of dark periods in our history,” he added.

Israeli Prime Minister Benjamin Netnayahu said, “Whoever boycotts us will be boycotted. The UN Human Rights Council is a biased body that is devoid of influence. Not for nothing have I already ordered the severing of ties with it. It was also not for nothing that the American administration has taken this step together with us. In recent years, we have promoted laws in most US states, which determine that strong action is to be taken against whoever tries to boycott Israel. Therefore, this body is unimportant. Instead of the organization dealing with human rights, it only tries to disparage Israel. We strongly reject this contemptible effort.”

The head of Israel’s centrist Blue and White party — ex-IDF Chief of Staff Benny Gantz — tweeted, “A dark day for human rights. The UN high commissioner for human rights has lost touch with reality.”

Hillel Neuer — executive director of the Geneva-based UN Watch NGO — tweeted, “The list has no precedent & turns the UN into Ground Zero for the global anti-Israel boycott campaign.” More here.

 

US Navy Seizes Iran Ship with SAMs on Board

Our turn eh? Hummm, the same say that the Senate votes to limit the President’s war power measures on declaring war with Iran, this event from last week hits the headlines. By the way, President Trump has never indicated he would go to war with Iran with or without Congressional approval so that whold bi-partisan measure in the Senate was just a formality…gesture.

The Senate passed a war powers resolution Thursday that constrains President Donald Trump’s ability to authorize military strikes against Iran.

The resolution from Democratic Sen. Tim Kaine received bipartisan support. It passed 55–45 with eight Republicans voting with Democrats in favor. However, Trump has signaled he will veto the resolution, and there are not enough votes in Congress to override the veto.

Kaine introduced the resolution in early January after escalating tensions with Iran culminated in an American strike killing Iranian general Qassem Soleimani and Iran responding by firing missiles at two American bases in Iraq. The administration gave Congress a briefing to justify the strike after the fact, which didn’t satisfy Democrats and infuriated two administration allies, Republican Reps. Mike Lee and Rand Paul.

“The nation should not be at war without a vote of Congress,” said Kaine Wednesday. “Even if he chooses to veto it and we can’t override, the will of both bodies and the public they represent, that could be a factor in his decision making.” h/t

Anyway, back to the SAMs…surface to air missiles…

U.S. Warship in Arabian Sea Seizes Suspected Iranian Weapons

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Ticonderoga-class guided-missile cruiser USS Normandy (CG-60) seized a cache of Iranian-made anti-tank missiles and other munitions aboard a dhow in the Arabian Sea over the weekend.

Normandy stopped the dhow while conducting maritime security operations over the weekend, in accordance with international law, according to a statement released Thursday by U.S. Central Command.

The seized weapons include:

  • 150 Dehlavieh anti-tank missiles, which are Iranian-made version of the Russian Kornet anti-tank missiles
  • Three Iranian-made surface-to-air missiles
  • Thermal imaging weapon scopes
  • Components for manned and unmanned aerial and surface vessels

The CENTCOM statement noted that many of the munitions seized over the weekend by Normandy are similar to weapons and components seized in November by the crew of Arleigh Burke-class guided-missile destroyer USS Forrest Sherman (DDG-98).

The weapons included 358 surface-to-air missile components and ‘Dehlavieh’ anti-tank guided missiles (ATGM), intended for the Houthis in Yemen, aboard a stateless dhow during a maritime interdiction operation in the U.S. Fifth Fleet area of operations on Feb. 9, 2020. US Navy Photo

The weapons seized by Forrest Sherman were determined to be destined for Houthi rebels fighting in Yemen, according to CENTCOM. Houthi rebels have been fighting Saudi Arabian forces in Yemen for five years. The force has used unmanned aerial and surface vessels to attack Saudi Arabian forces in the past, using equipment that U.S. military experts say comes from Iran.

The shipment of weapons seized over the weekend would violate a United Nations Security Council resolution prohibiting the “direct or indirect supply, sale, or transfer of weapons to the Houthis,” the CENTCOM statement notes.

Chinese Spy Leading California Public Pension Fund?

This may add some very new and different questions when it comes to the Biden foreign operations….read on….

Rep. Jim Banks, R-Ind., joined “Mornings with Maria” to explain why he wrote a letter to California Gov. Gavin Newsom highlighting his concerns about the state public pension fund’s chief investment officer having ties to China.

The fund has invested $3.1 billion in Chinese companies, some of which have been blacklisted by the U.S. government, Banks told FOX Business’ Maria Bartiromo.

“If this were up to me, I would fire [Chief Investment Officer Yu Ben Meng] immediately because of these suspicious ties,” he said. “We learned that Mr. Meng, who is the chief investment officer of CalPERS, was actually recruited to this position by the [Chinese Communist Party] through something called the Thousand Talents Program. Now he’s denied it.”

CalPERS stands for the California Public Employees’ Retirement System, the largest public pension fund in the nation.

“What is unusual is that many of these companies are companies that we’ve blacklisted, that make Chinese military equipment or are responsible for technologies like Hikvision, which is the equipment that’s used by the Chinese for surveillance on the Uighur Muslim population that they’ve been abusing in their own country,” Banks said.

The Commerce Department blacklisted Hikvision in October “for engaging in or enabling activities contrary to the foreign policy interests of the United States.”

CalPERS defended Meng.

“This is a reprehensible attack on a U.S. citizen. We fully stand behind our Chief Investment Officer who came to CalPERS with a stellar international reputation,” a CalPERS spokeswoman told Reuters.

China's Social Credit System – It's Coming To The United ...

Hold on, it is actually worse… going back 4 months ago….

(Reuters) – Some of the biggest public pensions funds in the United States have invested in one of the world’s largest purveyors of video surveillance systems that the U.S. government claims are used in wide-scale repression of the Muslim population of western China.

The Trump administration’s decision to put the company, Hangzhou Hikvision Digital Technology Co (002415.SZ), on a blacklist last week has prompted at least two of the pension plans to say they are reviewing or monitoring that development.

The blacklist applies to Hikvision and seven other companies because they allegedly enabled the crackdown that has led to mass arbitrary detentions in the Xinjiang region.

“We are tracking the situation given this new development with the Department of Commerce’s announcement,” a spokeswoman for the California State Teachers’ Retirement System (CalSTRS) said in an email.

CalSTRS owned 4.35 million Hikvision shares at the end of June 30, 2018, the last data available. The holding, owned directly and through emerging market exchange-traded funds, would be worth $24 million at that share count.

The New York State Teachers Retirement System also owned Hikvision, reporting 81,802 shares at the end of June, up from 26,402 shares at the end of 2018, fund disclosures show.

“Our holdings are primarily held according to their weights in passive portfolios matching the MSCI ACWI ex-U.S. index, our policy benchmark. We are monitoring the situation,” said a spokesman for the teachers’ fund. The ex-U.S. All Country World Index includes stocks from 22 developed and emerging markets.

The blacklisting means Hikvision and the other companies will not be able to buy U.S. technology, such as software and microchips, without specific U.S. government approval. It does not prevent U.S. investors from buying the companies’ shares. In August, Hikvision had been banned from selling to U.S. federal agencies because the government said its products could allow access to sensitive systems.

Hikvision’s General Manager Hu Yangzhong told Reuters on Wednesday it has been talking to the U.S. government about Xinjiang and has hired human rights lawyers to defend itself against the blacklisting.

A spokeswoman for law firm Sidley Austin LLP, which has lobbied for Hikvision this year, declined to comment.

Another major fund investing in Hikvision shares is the Florida Retirement System (FRS), with 1.8 million shares at the end of June.

A spokesman for the fund said it was working closely with external money managers “related to the issue in order to meet all regulatory and fiduciary requirements.”

POSTER CHILD

Risk consultants say the ease with which money used for the retirements of tens of millions of Americans is being invested in such companies should concern U.S. authorities at every level, as well as Americans generally.

“Hikvision has emerged as the corporate poster child for enabling Chinese human rights abuses, with its surveillance cameras visible atop the walls of detention camps incarcerating some one million or more Uighurs in Xinjiang,” said Roger Robinson, president and CEO of Washington DC-based risk consultancy RWR Advisory Group.

Beijing denies any mistreatment of people at the camps, which it says provide vocational training to help stamp out religious extremism and teach new work skills.

Robinson said that many Americans are unwittingly owning shares in such companies because they are in index funds. “They are picked up by the index providers in sizable numbers and sluiced into U.S. investor portfolios with seemingly very little, if any, due diligence or disclosure in the categories of national security and human rights.”

MSCI Inc (MSCI.N), whose products are designed for global investors, added Hikvision to its benchmark emerging markets index last year. MSCI declined to comment.

One other company among the blacklisted eight that is owned by some of the big pension funds is iFlytek Co Ltd (002230.SZ), a speech-recognition firm. Its shares were owned by funds in Florida, New York State as well as CalSTRS and the California Public Employees Retirement System (CalPERS) indirectly through the iShares MSCI Emerging Markets ETF at their last disclosure dates. IShares, a top ETF provider owned by BlackRock Inc (BLK.N), declined to comment.

CUTTING TIES

Not all the funds have stuck with Hikvision.

The New York State Common Fund, one of the country’s biggest pension funds, liquidated its position months ago. It had owned 2.7 million shares worth $14.2 million at the end of March through an external fund manager, but sold them in May, a spokesman said, declining to say why.

U.S. mutual funds have also cut or eliminated positions in Hikvision amid the negative publicity, which included it being named in a Human Rights Watch report on mass surveillance in Xinjiang in May.

Just 9% of global emerging markets funds now own Hikvision, down from 20% in 2018, according to Copley Fund Research. One fund to pull out is the $2.7 billion Artisan Developing World Fund (APDYX.O), which had a $66 million position in Hikvision at the end of March but reported holding no shares three months later, fund disclosures show. Artisan did not respond to a request for comment.

At least one U.S. pension fund had worried this summer about whether to invest in the Chinese surveillance company.

The $33 billion Alaska Permanent Fund had considered an investment in a China fund featuring Hikvision as a top holding, according to minutes of a June meeting of its trustees and staff. The minutes were published last month.

Schroders Global Asset Management, a finalist for the fund’s mainland China investment mandate, touted Hikvision as a top performer.

Some Alaska trustees, however, worried about “headline risks” of investing in companies that aid the Chinese government’s surveillance activities, according to the minutes.

Jack Lee, portfolio manager of the China fund, assured Alaska pension officials he had spoken with Hikvision executives. Hikvision will “try to avoid that kind of business,” the trustees were told, but “they don’t necessarily know how their equipment is used,” Lee told the trustees, according to the minutes.

Reuters could not determine whether Alaska made an investment in the Schroders fund that included Hikvision stock.

A spokeswoman for the Alaska Retirement Management Board, which oversees the pension, said it does not have any additional information to share regarding Schroders’ efforts. A Schroders spokesman declined to comment.