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BLACKWATER USA | DAILY BRIEF


COVID-19

  • The IMF released a dismal economic forecast that estimates the global economy will shrink 4.9% in 2020.

U.S.

  • New coronavirus cases rose to new records in the three most populous U.S. states—California, Texas, and Florida—and New York, New Jersey, and Connecticut said they would require travelers from eight hard-hit states—mostly in the South and West U.S.—to quarantine for 14 days upon arrival.

  • The Post said that military helicopters descended as low as 45 feet from the ground in an effort to clear protesters from Lafayette Park on June 1st, creating tropical storm-level winds on the ground.

  • Over half the member states of the International Criminal Court (ICC) sided with the ICC and against a U.S. threat to sanction ICC employees for investigating alleged war crimes by U.S. forces in Afghanistan.

Terrorism

  • The annual State Department report on terrorism was released yesterday, and doubled the reward for information leading to Islamic State leader Abu Ibrahim al Hashimi al Qurashi to $10 million.

  • It also chastised Pakistan for remaining a “safe haven” for terrorist groups, despite modest progress in 2019, and warned of a losing battle in the Sahel, where jihadists are gaining strength against weak multi-national security coalitions.

Guyana

  • In what CARICOM called “gamesmanship,” Guyana’s Chief Elections Officer Keith Lowenfield submitted a final report to the election commission that contradicted recount results and showed Pres. Granger’s ruling coalition winning the disputed March 2nd vote.

  • Lowenfield—who is loyal to Granger and I believe is not the final decision maker on the election—also estimated that 55% of all ballots cast were fishy: 7% had “anomalies,” 39% suggested voter impersonation, 3% were affected by both “anomalies” and voter impersonation, and 6% came from unreconciled ballot boxes. Naturally, Lowenfield says most of those fishy ballots voted for the opposition and should be tossed out.

Afghanistan

  • Senior ANSF officials from four different provinces estimate COVID-19 infection rates of 60 to 90% among Afghan troops—but because there’s almost no testing capacity, those cases haven’t been confirmed (then again, the ANSF probably wouldn’t release testing statistics even if they existed).

  • While it’s good that few troops are dying of coronavirus (per the same officials), the practice of isolating symptomatic soldiers is leaving the ANSF stretched and vulnerable to Taliban attacks.

  • Afghanistan sorely lacks testing capacity in general: only 65,000 people have been tested, and over 30,000 of those tested positive. The Afghan Health Ministry warned that as many as 26 million Afghans—out of a population of 38 million—could become infected, and deaths could exceed 100,000.

China

  • A new DoD list asserts that Huawei and video surveillance company Hikvision—among others—are backed by the Chinese military, which opens the door to targeting them for U.S. sanctions. Those companies probably are indeed backed by the Chinese state, Communist Party, and / or military, as most major Chinese companies are, but the links are often tenuous and hard to prove. A Reuters exclusive pasted below has more.

North Korea

  • Per CBS: “Analysts say North Korea, after weeks deliberately raising tensions, may be pulling away just enough to make room for South Korean concessions.”

  • Today’s the 70th anniversary of the beginning of the Korean War, which is why we’re seeing lots of articles about it in the news. Russia’s state-owned TASS newswire says the North Korean embassy in Moscow threatened “a new round of the Korean War” against the U.S., but North Korea hasn’t repeated that threat elsewhere—perhaps to avoid provoking the U.S. or South Korea further.

Iran

  • The U.S. added new sanctions on the five Iranian captains who delivered gasoline to Venezuela recently.

Middle East

  • UN SecGen Antonio Guterres called on Israel to drop its plans to annex parts of the West Bank, calling it “a most serious violation of international law.” Israeli PM Netanyahu has set a deadline of July 1st to decide on annexation plans.

Russia

  • Moscow held a fancy annual parade to celebrate Russia’s defeat of Nazi Germany 75 years ago. Some analysts also called it Pres. Putin’s celebration of victory over COVID-19—even though Russia certainly hasn’t beaten the virus yet…in fact, Russian case counts are so high that the EU reportedly plans to exclude Russians (along with Americans) when it reopens its borders on July 1st.

Mexico

  • Pres. AMLO said he’d be visiting Pres. Trump in Washington soon—perhaps around the start date of the USMCA on July 1st.

Other News

  • Human rights groups say Myanmar is deliberately keeping about one million people in Rakhine state in the dark about the coronavirus pandemic via internet restrictions that have been in place for the past year. Then again, if they’re cut off from internet, they’re probably also cut off from infected travelers.

Exclusive: Trump administration says Huawei, Hikvision backed by Chinese military (Reuters)

The Trump administration has determined that top Chinese firms, including telecoms equipment giant Huawei Technologies and video surveillance company Hikvision (002415.SZ), are owned or controlled by the Chinese military, laying the groundwork for new U.S. financial sanctions.

Washington placed Huawei and Hikvision on a trade blacklist last year over national security concerns and has led an international campaign to convince allies to exclude Huawei from their 5G networks.

A Department of Defense (DOD) document listing 20 companies operating in the United States that Washington alleges are backed by the Chinese military was first reported by Reuters.

The DOD document also includes China Mobile Communications Group (0941.HK) and China Telecommunications Corp [CTTTC.UL] as well as aircraft manufacturer Aviation Industry Corp of China [SASADY.UL].

The designations were drawn up by the Defense Department, which was mandated by a 1999 law to compile a list of Chinese military companies operating in the United States, including those “owned or controlled” by the People’s Liberation Army that provide commercial services, manufacture, produce or export.

The Pentagon’s designations do not trigger penalties, but the law says the president may impose sanctions that could include blocking all property of the listed parties.

Huawei, China Mobile, China Telecom, AVIC and the Chinese Embassy in Washington did not respond to requests for comment.

Hikvision called the allegations “baseless,” noting it was not a “Chinese military company,” and had never participated in any R&D work for military applications but would work with the United States government to resolve the matter.

The Pentagon has come under pressure from lawmakers of both U.S. political parties to publish the list, amid rising tensions between Washington and Beijing over technology, trade and foreign policy.

Last September, top U.S. Senate Democrat Chuck Schumer, Republican Senator Tom Cotton and Republican Representative Mike Gallagher penned a letter to Defense Secretary Mark Esper raising concerns about Beijing’s enlisting of Chinese corporations to harness emerging civilian technologies for military purposes.

“Will you commit to updating and publicly releasing this list as soon as possible?” they asked in the letter.

On Wednesday, Cotton and Gallagher praised the DOD for releasing the list and urging the president to impose economic penalties against the firms.

The White House did not comment on whether it would sanction the companies on the list, but a senior administration official said the list can be seen as “a useful tool for the U.S. Government, companies, investors, academic institutions, and likeminded partners to conduct due diligence with regard to partnerships with these entities, particularly as the list grows.”

The list will likely add to tensions between the world’s two largest economies, which have been at loggerheads over the handling of the coronavirus pandemic and China’s move to impose security legislation on Hong Kong, among multiple points of friction that have worsened this year.

Last week, China threatened retaliation after President Donald Trump signed legislation calling for sanctions over the repression of China’s Uighurs.

The list “is a start, but woefully inadequate to warn the American people about the state-owned and -directed companies that support the Chinese government and Communist Party’s activities threatening U.S. economic and national security,” Republican Senator Marco Rubio, who sponsored the Uighur bill, said in a statement.

SPOTLIGHT ON U.S. TIES

The list will also turn a spotlight on U.S. companies’ ties to the Chinese firms as well as their operations in the United States.

In 2012, U.S.-based General Electric Co (GE.N) set up a 50/50 avionics joint venture with AVIC known as Aviage Systems, to supply equipment for China’s C919 passenger jet.

The Defense Department list also includes China Railway Construction Corp, China Aerospace Science and Industry Corp (CASIC), as well as CRRC, the world’s largest maker of passenger trains, which has clinched contracts in Boston, Philadelphia, Chicago and Los Angeles by underbidding rivals.

The companies did not immediately respond to requests for comment.

Many of the firms listed are already in the crosshairs of U.S. regulators. The blacklisting of Huawei and Hikvision has forced some of their U.S. suppliers to seek licenses before selling to them.

In April, the U.S. Justice Department and other federal agencies called on the Federal Communications Commission to revoke China Telecom (Americas) Corp’s authorization to provide international telecommunications services to and from the United States. The telecoms regulator rejected a similar request by China Mobile last year that had been pending for years.

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