Tag Archives: Sanctions

U.S. imposes sanctions on Hong Kong’s Lam, other officials over crackdown

By David Brunnstrom and Daphne Psaledakis

WASHINGTON (Reuters) – The United States on Friday imposed sanctions on Hong Kong Chief Executive Carrie Lam, the territory’s current and former police chiefs and eight other officials for their role in curtailing political freedoms in the territory.

The sanctions were imposed under an executive order U.S. President Donald Trump signed last month to punish China for its moves against dissent in Hong Kong and are the latest action by his administration against Beijing in the run-up to his November re-election bid.

As well as Lam, the sanctions target Hong Kong Police commissioner Chris Tang and his predecessor Stephen Lo; John Lee Ka-chiu, Hong Kong’s secretary of security, and Teresa Cheng, the justice secretary, the U.S. Treasury Department said in a statement.

It said Beijing’s imposition of draconian national security legislation had undermined Hong Kong’s autonomy and allowed mainland security services to operate with impunity, “setting the groundwork for censorship of any individuals or outlets that are deemed unfriendly to China.””Carrie Lam is the chief executive directly responsible for implementing Beijing’s policies of suppression of freedom and democratic processes,” it said.

“The United States stands with the people of Hong Kong and we will use our tools and authorities to target those undermining their autonomy,” Secretary of the Treasury Steven Mnuchin said in the statement.

The sanctions freeze any U.S. asset of the officials and generally bar Americans from doing business with them.

Tensions between the United States and China have been increasing daily. China’s foreign ministry said on Friday it firmly opposes executive orders that Trump announced this week to ban U.S. transactions with the Chinese owners of the WeChat and TikTok apps.

Last month, Carrie Lam postponed a Sept. 6 election to Hong Kong’s legislature by a year because of a rise in coronavirus cases, dealing a blow to the pro-democracy opposition that had hoped to make huge gains.

The United States condemned the action, saying it was the latest example of Beijing undermining democracy in the Chinese-ruled territory.

A source familiar with the matter said U.S. deliberations on the sanctions intensified after the election postponement.

(Reporting by Lisa Lambert, Susan Heavey, David Brunnstrom, Daphne Psaledakis and Matt Spetalnick; Editing by Chris Reese and Frances Kerry)

U.S. pushes ahead with bid to extend Iran arms embargo though support unclear

By Michelle Nichols and Humeyra Pamuk

NEW YORK/WASHINGTON (Reuters) – The United States is pushing ahead with its bid to extend an international arms embargo on Iran by way of a second draft U.N. Security Council resolution, despite what some diplomats say is a lack of enthusiasm for such a move among its 15 members.

The U.S.-drafted resolution needs at least nine votes in favor to force Russia and China to use their vetoes, which Moscow and Beijing have signaled they will do. Some diplomats question whether Washington can even secure those nine, however.

“We have tabled a resolution that we think accomplishes what we think needs to be accomplished,” U.S. Iran envoy Brian Hook told the Aspen Security Forum, held virtually, on Wednesday.

“The easy way is to do a rollover of the arms embargo. It’s not difficult, there’s all the reasons in the world to do it. But we will do this one way or another.”

The arms embargo on Iran is currently set to end on Oct. 18 under Tehran’s 2015 nuclear deal with world powers, which Washington quit in 2018.

The second draft circulated by Washington is virtually unchanged from the first text shared with the council in June.

If the United States is unsuccessful in extending the embargo, it has threatened to trigger a return of all U.N. sanctions on Iran under a process agreed in the 2015 deal.

Such a move would kill the deal, touted as a way to suspend Tehran’s suspected drive to develop nuclear weapons. Washington argues it can trigger the sanctions because a Security Council resolution still names it as a participant.

Iran has breached parts of the nuclear deal in response to the U.S. withdrawal and Washington’s re-imposition of sanctions.

“For as long as Iran is allowed to enrich, we’re going to be having this discussion – how close is Iran to a nuclear breakout? … We need to restore the U.N. Security Council standard of no enrichment,” Hook said.

Iran denies it is seeking to build a nuclear bomb.

Diplomats say Washington would face a tough, messy battle if it tries to trigger a return to sanctions.

The United States would have to submit a complaint to the council, which would then have to vote within 30 days on a resolution to continue Iran’s sanctions relief. If such a resolution is not put forward by the deadline, sanctions would be reimposed – what is known as a snapback.

Some diplomats have suggested the United States will submit its complaint by the end of August to ensure the 30 days ends in September, before Russia takes the monthly rotating council presidency in October.

(Reporting by Michelle Nichols; Editing by Sonya Hepinstall)

China vows retaliation after Trump ends preferential status for Hong Kong

By Jeff Mason and Steve Holland

WASHINGTON (Reuters) – President Donald Trump on Tuesday ordered an end to Hong Kong’s special status under U.S. law to punish China for what he called “oppressive actions” against the former British colony, prompting Beijing to warn of retaliatory sanctions.

Citing China’s decision to enact a new national security law for Hong Kong, Trump signed an executive order that he said would end the preferential economic treatment for the city.

“No special privileges, no special economic treatment and no export of sensitive technologies,” he told a news conference.

Acting on a Tuesday deadline, he also signed a bill approved by the U.S. Congress to penalize banks doing business with Chinese officials who implement the new security law.

“Today I signed legislation, and an executive order to hold China accountable for its aggressive actions against the people of Hong Kong, Trump said.

“Hong Kong will now be treated the same as mainland China,” he added.

Under the executive order, U.S. property would be blocked of any person determined to be responsible for or complicit in “actions or policies that undermine democratic processes or institutions in Hong Kong,” according to the text of the document released by the White House.

It also directs officials to “revoke license exceptions for exports to Hong Kong,” and includes revoking special treatment for Hong Kong passport holders.

China’s foreign ministry said on Wednesday Beijing will impose retaliatory sanctions against U.S. individuals and entities in response to the law targeting banks, though the statement released through state media did not reference the executive order.

“Hong Kong affairs are purely China’s internal affairs and no foreign country has the right to interfere,” the ministry said.

Critics of the security law fear it will crush the wide-ranging freedoms promised to Hong Kong when it returned to Chinese rule in 1997, while supporters say it will bring stability to the city after a year of sometimes violent anti-government protests.

The security law punishes what Beijing broadly defines as subversion, secession, terrorism and collusion with foreign forces with up to life in prison.

U.S. relations with China have already been strained over the global coronavirus pandemic, China’s military buildup in the South China Sea, its treatment of Uighur Muslims and massive trade surpluses.

Trump’s handling of the coronavirus pandemic has raised doubts about whether he can win re-election on Nov. 3 amid a surge of new infections. He has attempted to deflect blame onto China.

“Make no mistake. We hold China fully responsible for concealing the virus and unleashing it upon the world. They could have stopped it, they should have stopped it. It would have been very easy to do at the source, when it happened,” he said.

Asked if he planned to talk to Chinese President Xi Jinping, Trump said: “I have no plans to speak to him.”

DOUBLE-EDGED SWORD?

Analysts say that completely ending Hong Kong’s special treatment could prove self-defeating for the United States.

Hong Kong was the source of the largest bilateral U.S. goods trade surplus last year, at $26.1 billion, U.S. Census Bureau data shows.

According to the State Department, 85,000 U.S. citizens lived in Hong Kong in 2018 and more than 1,300 U.S. companies operate there, including nearly every major U.S. financial firm.

The territory is a major destination for U.S. legal and accounting services.

The United States began eliminating Hong Kong’s special status under U.S. law in late June, halting defense exports and restricting the territory’s access to high-technology products as China prepared to enact the security legislation.

In May, Trump responded to China’s plans for the security law by saying he was initiating a process to eliminate the special economic treatment that has allowed Hong Kong to remain a global financial center.

He stopped short then of calling for an immediate end to privileges, but said the moves would affect the full range of U.S. agreements with Hong Kong, from an extradition treaty to export controls on dual-use technologies.

A U.S. official, speaking on condition of anonymity, said the administration was also preparing sanctions against Chinese officials and entities involved in the Hong Kong crackdown, including further U.S. travel bans and possible Treasury sanctions.

The timing remained unclear. The White House has previously threatened such sanctions but so far has only imposed restrictions on visas for an unspecified number of unnamed Chinese officials.

(Reporting by Jeff Mason and Steve Holland; Additional reporting by David Brunnstrom, Alexandra Alper, Patricia Zengerle, Eric Beech, Makini Brice and Matt Spetalnick; Editing by Leslie Adler and Peter Cooney)

U.S. slaps sanctions on Mexican firms, individuals linked to Venezuelan oil trade

By Daphne Psaledakis and Marianna Parraga

WASHINGTON/MEXICO CITY (Reuters) – The United States on Thursday blacklisted Mexico’s Libre Abordo and a related company, accusing them of helping Caracas evade U.S. sanctions in the first formal action by the U.S. Treasury Department against Mexican firms involved in trading Venezuelan oil.

The Treasury said in a statement it imposed sanctions on three individuals, eight entities and two vessels for activities related to a network attempting to skirt U.S. sanctions on Venezuela aimed at ousting President Nicolas Maduro.

Mexico’s peso slumped 2% after the U.S. action.

Among those blacklisted were Mexico-based Libre Abordo and related Schlager Business Group, as well as their co-owners, Olga Maria Zepeda and Veronica Esparza.

The Treasury also targeted Mexican Joaquin Leal Jimenez, accusing him of having worked with Alex Saab, recently arrested in Cape Verde, Libre Abordo and Schlager for brokering the resale of millions of barrels of Venezuelan crude.

“Leal is the critical conduit between Libre Abordo, Schlager Business Group, and their owners, and PDVSA and Saab. Leal has been coordinating the purchase and sale of Venezuelan-origin crude oil from PDVSA,” Treasury said.

Leal did not reply to a request for comment.

A Maduro ally who has previously helped the government buy food, Saab was sanctioned in 2019 and charged with money laundering and conspiracy in a U.S. court in relation to a food program managed by Maduro’s administration. The government has denied any wrongdoing in connection with the program.

Libre Abordo said its lawyers will evaluate the Treasury’s decision, which it said wrongly linked the firm to unrelated entities.

“Our exchange of humanitarian aid with Venezuela should not be subject of sanctions,” Libre Abordo told Reuters in a statement.

The sanctions freeze any U.S. assets of the individuals and entities and generally prohibit Americans from dealing with them.

Libre Abordo and Schlager began receiving Venezuelan oil for resale in Asian markets late last year after signing two contracts with Venezuelan President Nicolas Maduro’s government in mid-2019.

The agreement was framed as an oil-for-food pact exempted from U.S. sanctions as the Mexican firms intended to supply Venezuela with 210,000 tons of corn.

Through May, Libre Abordo and Schlager received some 30 million barrels of Venezuelan oil, according to PDVSA’s documents. Even though they supplied about 500 water trucks in exchange, food was never delivered, as very low oil prices affected a schedule originally planned, Libre Abordo said.

U.S. Secretary of State Mike Pompeo said in a statement that the oil-for-food “enterprise skimmed millions from funds that were claimed to have been for humanitarian aid, yet failed to deliver the promised food to the Venezuelan people.”

Reuters reported last month that the FBI was probing several Mexican and European companies allegedly involved in trading Venezuelan oil, gathering information for a Treasury inquiry.

“They want us to be unable to export oil so the Venezuelan people are left without food, medicine or gasoline,” Venezuela’s Foreign Minister Jorge Arreaza said on Thursday. “Your actions and sanctions are criminal,” he told Pompeo over Twitter.

Washington in January 2019 recognized Venezuelan politician Juan Guaido as the OPEC nation’s rightful leader and has ratcheted up sanctions and diplomatic pressure in the aftermath of Maduro’s 2018 re-election that was widely described as fraudulent.

Maduro remains in power, backed by Venezuela’s military as well as Russia, China and Cuba.

“The United States will continue to relentlessly pursue sanctions evaders,” Treasury Deputy Secretary Justin Muzinich said in the statement.

Washington also targeted on Thursday Marshall Islands-based Delos Voyager Shipping Ltd. and Greece-based Romina Maritime Co Inc. for operating in the Venezuelan oil sector, giving them until July 21 to wind down activities.

The other firms blacklisted are Alel Technologies LLC, Cosmo Resources Pte. Ltd, Luzy Technologies LLC; and Washington Trading Ltd.

The Treasury delisted Marshall Islands-based firm Afranav Maritime Ltd and Greece-based Seacomber Ltd, and two vessels they own, after the companies promised to stop trade with Venezuela while Maduro is in power.

(Reporting by Daphne Psaledakis in Washington and Marianna Parraga in Mexico City; Additional reporting by Ana Isabel Martinez in Mexico City and Eric Beech in Washington; Editing by Tim Ahmann, Jonathan Oatis and Daniel Wallis)

‘From bad to worse’ – Dashed hopes may deter many Iranians from polls

By Babak Dehghanpisheh

DUBAI (Reuters) – Confrontation with America, economic hardship and an airline tragedy have battered Iranians’ confidence in their leaders, posing a potential problem for the authorities in a parliamentary election this week.

As the Feb. 21 vote nears, Iranians are in a gloomy mood, exhausted by a succession of crises that have helped to shred the hopes for a better life they harbored only four years ago.

That does not bode well for leaders seeking a big turnout at the ballot box: In their view, crowded polling stations would signal to arch-foe Washington that Iran is unbowed by sanctions and the killing of a prominent general in a U.S. strike.

Allies of Supreme Leader Ayatollah Ali Khamenei have ensured hardliners dominate the field — meaning that, whatever the turnout, security hawks seeking a more confrontational approach with Washington may tighten their control of the legislature.

But a meager showing would still rattle Iran’s leaders and embolden critics both in the country and outside who argue the Islamic Republic needs to change domestic and foreign policy.

“I’m a person who has voted before. My hope was that things would get a little better when I voted in the past. Now, all the red lines have been crossed,” said a doctor in Tehran whose clinic is struggling to source specialized medicine.

“This time, I have no hope and I will definitely not vote,” she said by phone, asking not to be identified discussing political matters.

Four years ago, things looked very different. Rouhani and his allies won big gains in parliamentary elections, and many hoped a nuclear deal agreed with world powers in 2015 would pull Iran out of political isolation and boost the economy.

“WE HAVEN’T SEEN ANY PROGRESS”

Those aspirations crumbled after President Donald Trump quit the pact in 2018 and reimposed sanctions in an effort to put stricter limits on Iran’s nuclear work, curb its ballistic missile program and end its involvement in regional proxy wars.

“The main root of everything is the economy,” Ali, a mobile phone shop employee in the central city of Isfahan, said by telephone, asking not to reveal his surname.

“If an individual doesn’t have the money to take home bread to his wife and family then he’ll stop praying and even lose his beliefs,” said Ali, who works more hours since his boss kept the store open in traditional afternoon resting periods in the hope customers could wander in. Ali does not plan to vote next week.

“I voted for several years and it didn’t make any difference. We haven’t seen any progress to say we want this or that candidate to come forward,” he said.

The authorities have been under pressure since last year when protests over a fuel price hike were met with the bloodiest crackdown since the 1979 Islamic revolution, killing hundreds.

A U.S. drone strike that felled top commander Qassem Soleimani in January in Iraq rallied Iranians around a common cause. But the show of support was quickly replaced by angry protests over efforts to cover up the accidental shooting down of a Ukrainian airliner that killed all 176 aboard.

The elite Revolutionary Guards apologized for the calamity, but that did not appease thousands protesting in several cities.

“This year, things are going from bad to worse,” said a Tehran resident and homemaker, who does not plan to vote and also asked not to be named.

“After the plane crash, the government has lost a lot of their supporters,” said the resident, who added that the establishment needed the election to show the world “how many supporters they have” after the string of crises.

Even before the latest troubles, sanctions that cut Iran’s crude oil exports by more than 80 percent were placing a painful squeeze on living standards.

The rial has slumped, trading on the free market at about 140,000 against the dollar against its official rate of 42,000, according to foreign exchange website Bonbast.com

VOTING FOR “HARD REVENGE”

The currency plunge has disrupted Iran’s foreign trade and boosted inflation, which the IMF expects at 31% this year.

In the eastern city of Birjand, Hamed said he has no time for elections as he frets about his business filming and photographing weddings, with only one in 10 customers asking for albums after the cost of photo paper rose six-fold since 2018.

“We’re focused on prices and having to call customers and asking them to pay,” Hamed told Reuters by phone, also declining to give his surname due to sensitivities. “We have nothing to do with politicians and politics.”

Analysts expect a lower turnout than the 62% in the 2016 parliamentary elections, with smaller, more conservative cities where families pressure kin to vote seeing a larger showing.

But Khamenei, Iran’s highest authority, has tried to drum up nationalistic sentiment to secure a strong turnout.

“It’s possible that someone doesn’t like me but if they like Iran they must come to the ballot box,” he said in a speech.

Supporters echoed the call on social media.

“A better election can also be another #hard_revenge,” a Twitter user named Teiaaraa posted two weeks ago, referring to a phrase used by state media for the Iranian strikes on Iraq bases that left over 100 U.S. soldiers with traumatic brain injuries.

(Reporting By Babak Dehghanpisheh; additional reporting by Davide Barbuscia; Editing by Ghaida Ghantous, William Maclean)

North Korea’s Kim to unveil ‘new path’ in New Year speech after U.S. misses deadline

By Hyonhee Shin

SEOUL (Reuters) – North Korean leader Kim Jong Un is set to make a closely watched New Year address on Wednesday which is likely to offer a glimpse of a “new path” he has vowed to take if the United States fails to meet his deadline to soften its stance over denuclearization.

The New Year address is expected to touch upon a wide range of issues from foreign affairs and military development to the economy and education.

In his 2019 speech, Kim said he might have to change course if Washington sticks to its pressure campaign and demands unilateral action, while stressing a “self-reliant” economy, a drive he has launched amid tightening sanctions.

The United States was on track to ignore a year-end deadline set by Kim, which Washington has downplayed as artificial, to show more flexibility to reopen talks aimed at dismantling North Korea’s nuclear and missile programs.

The upcoming speech is expected to be the culmination of an ongoing meeting of the ruling Workers’ Party’s 7th Central Committee, a key policy-making body, which Kim convened on Saturday. It was still under way on Tuesday, state media said.

Discussions at the gathering remain largely unknown, but official media KCNA said on Tuesday that Kim spent seven hours during a Monday session discussing state, economic and military building. On Sunday, he called for “positive and offensive measures” to ensure the country’s security.

“The Central Committee plenary meeting is meant to legitimize the process behind the policy decisions Kim Jong-un will announce in his New Year speech,” said Leif-Eric Easley, a professor at Ewha Womans University in Seoul.

“This meeting is to provide political justification for the economic and security policies Pyongyang will pursue in 2020.”

North Korea has provided few hints for what the “new path” may involve, but U.S. military commanders said Pyongyang next move could include the testing of an intercontinental ballistic missile (ICBM), which it has halted since 2017, alongside nuclear bomb tests.

U.S. national security adviser Robert O’Brien warned Washington would be “extraordinarily disappointed” if North Korea tests a long-range or nuclear missile, while Secretary of State Mike Pompeo said he hoped it would choose peace over confrontation.

“We still maintain our view that we can find a path forward to convince the leadership in North Korea that their best course of action is to create a better opportunity for their people by getting rid of their nuclear weapons. That’s our mission set,” Pompeo told Fox News on Monday.

The U.S. Air Force flew an RC-135 surveillance plane over South Korea on Monday and Tuesday, according to military flight tracker Aircraft Spots.

Despite mounting speculation over a potential military provocation, any restart of an ICBM test would risk a personal relationship with Trump, which Pyongyang has repeatedly touted while denouncing Pompeo and other aides, analysts say.

Cho Tae-yong, a former South Korean deputy national security advisor, said Kim had few options that can leave the Trump ties intact.

“In any case, North Korea would add a lot of caveats before and after testing to make sure they’re not intent on destroying the negotiating table and it was the Americans who betrayed them,” Cho told Reuters.

(Reporting by Hyonhee Shin; Editing by Michael Perry)

‘Before it is too late’: Diplomats race to defuse tensions ahead of North Korea’s deadline

By Josh Smith

SEOUL (Reuters) – A last minute flurry of diplomacy aimed at engaging with North Korea ahead of its declared year-end deadline for talks has been met with stony silence from Pyongyang so far, with the looming crisis expected to top the agenda at summits in China next week.

The U.S. special envoy for North Korea, Stephen Biegun, was due to leave Beijing on Friday after meeting with Chinese officials. Earlier in the week, Biegun also made stops in Seoul and Tokyo for discussions with counterparts.

It is unclear if Biegun had any behind-the-scenes contact with North Korean officials, but his overtures and calls for new talks were not publicly answered by Pyongyang.

Biegun’s trip came as China and Russia teamed up this week to propose a resolution that would ease some United Nations Security Council sanctions on North Korea as a way to jumpstart talks.

Next week, Chinese, South Korean and Japanese leaders are due to meet in China, with North Korea likely to top the agenda.

“It’s kind of creepy that there haven’t been any statements from high level (North Korea) Foreign Ministry officials this week…,” Jenny Town, managing editor at the North Korea monitoring website 38 North, said on Twitter. “The silence, even after Biegun’s speech in Seoul, makes me concerned.”

North Korean leader Kim Jong Un has given the United States until the end of the year to propose new concessions in talks over North Korea’s nuclear arsenal and reducing tensions between the long-time adversaries.

North Korea has said it is up to the United States to decide what “Christmas gift” it will receive this year, without specifying what Kim’s decision may be.

The prospect that 2020 may see a return to heightened tensions and major missile or weapons tests by North Korea has led politicians, diplomats, and analysts around the world to debate how to salvage diplomacy after U.S. President Donald Trump’s unprecedented summits with Kim over the past two years failed to make a breakthrough.

On Wednesday, four leading Democrats in the U.S. Senate wrote a letter to Trump arguing that U.S. efforts to establish peace on the peninsula and denuclearize North Korea “appear to be stalled and on the brink of failure”.

“We reiterate our hope that you will execute a serious diplomatic plan before it is too late,” the letter said.

‘THE BEST PLAN’

The Senate Democrats’ letter called for the administration to seek an interim agreement to freeze and roll back some of North Korea’s nuclear weapons and ballistic missile programmes in conjunction with reduced pressure from sanctions.

“While such an agreement would of course only be a first step in a longer process, it would nonetheless be an important effort to create the sort of real and durable diplomatic process that is necessary,” they wrote.

China and Russia on Monday introduced a joint proposal that calls on the U.N. Security Council to lift some sanctions on exports and foreign workers, with Chinese officials calling it the “the best plan in the current situation to resolve the stalemate”.

The United States has said it is opposed to any sanctions relief at the moment, but has also said it is willing to be flexible in discussions.

Meanwhile, analysts at the Foundation for Defense of Democracies, a Washington-based think tank that has often advocated for a hard line against countries such as North Korea and Iran, called for the Trump administration to turn to implement a “maximum pressure 2.0” campaign.

The United States should increase sanctions, target North Korea with offensive cyber operations, and carry out an “aggressive” information campaign against the country, the foundation wrote in a report earlier in December.

A study commissioned by peace activists reported last month that sanctions were disproportionately affecting vulnerable populations in North Korea.

The report for Korea Peace Now! called for lifting all sanctions that may be violating international law or undermining human rights, and to “urgently” try to mitigate the impact on humanitarian efforts.

MILITARY TENSIONS

Recent weeks have seen some U.S. and North Korean officials discussing possible military actions once again.

Earlier this month, Trump angered North Korean officials by suggesting the United States could use military force “if we have to.”

Those remarks led North Korea’s army chief to warn that North Korea would take “prompt corresponding actions at any level.”

North Korea launched several dozen short-range missiles in 2019, and the commander of U.S. air forces in the Pacific said this week that he suspects “some kind of long-range missile” could be North Korea’s “Christmas gift.”

Speaking to reporters in Washington on Tuesday, Gen. Charles Brown said the U.S. military could “dust off pretty quickly and be ready to use” options it had developed during the height of tensions in 2017.

“If the diplomatic efforts kind of fall apart, we’ve got to be ready…we’re already thinking ahead,” he said.

(Editing by Jacqueline Wong)

U.S. senators want Turkey sanctioned over Russia missile system: letter

By Patricia Zengerle

WASHINGTON (Reuters) – Republican U.S. Senator Lindsey Graham and Democratic Senator Chris Van Hollen called on the Trump administration on Monday to impose sanctions on Turkey over its purchase of a Russian missile defense system, saying the failure to do so sends a “terrible signal” to other countries.

“The time for patience has long expired. It is time you applied the law,” Van Hollen and Graham said in a letter to Secretary of State Mike Pompeo seen by Reuters. “Failure to do so is sending a terrible signal to other countries that they can flout U.S. laws without consequence,” they said.

Ankara and Washington have been at loggerheads over NATO ally Turkey’s purchase of the Russian S-400 system, which Washington says is not compatible with NATO defenses and poses a threat to its F-35 stealth fighter jets, which Lockheed Martin Corp is developing.

Infuriating many members of Congress, Turkey shrugged off the threat of U.S. sanctions and began receiving its first S-400 deliveries in July. In response, Washington removed Turkey from the F-35 program.

U.S. President Donald Trump’s administration has held off on imposing sanctions despite Trump signing a sweeping sanctions law, known as CAATSA, in 2017 mandating them for countries that do business with Russia’s military.

U.S. lawmakers’ anger toward Turkey deepened after Ankara crossed into Syria for an offensive against Kurdish militias that had helped U.S. forces combat Islamic State militants.

Normally an ardent defender of fellow-Republican Trump, Graham and some others in his party have been harshly critical of the president’s decision to withdraw troops from northeastern Syria, paving the way for the Turkish move against Kurdish fighters.

Van Hollen and Graham have been among the most vocal senators calling for Washington to push back against Turkey.

Trump hosted his Turkish counterpart, Tayyip Erdogan, at the White House for a meeting last month that Trump described as “wonderful.”

The State Department did not immediately respond to a request for comment on the letter. Pompeo said on Nov. 26 that Turkey carrying out tests on the Russian defense system was “concerning,” and that talks to resolve the issue were still under way.

The same day, the head of Russia’s state arms exporter, Rosoboronexport, was cited as saying that Moscow hoped to seal a deal to supply Turkey with more S-400 missile systems in the first half of 2020.

(Reporting by Patricia Zengerle; Editing by Bill Berkrot)

China suspends U.S. military visits to Hong Kong, sanctions U.S.-based NGOs

BEIJING (Reuters) – China said on Monday U.S. military ships and aircraft won’t be allowed to visit Hong Kong, and also announced sanctions against several U.S. non-government organizations for encouraging protesters to “engage in extremist, violent and criminal acts.”

The measures were announced by China’s Foreign Ministry in response to U.S. legislation passed last week supporting anti-government protesters. It said it had suspended taking requests for U.S. military visits indefinitely, and warned of further action to come.

“We urge the U.S. to correct the mistakes and stop interfering in our internal affairs. China will take further steps if necessary to uphold Hong Kong’s stability and prosperity and China’s sovereignty,” said ministry spokeswoman Hua Chunying said at a daily news briefing in Beijing.

China last week promised it would issue “firm counter measures” after U.S. President Donald Trump signed into law the “Hong Kong Human Rights and Democracy Act,” which supports anti-government protesters in Hong Kong and threatens China with potential sanctions.

There are fears that the row over Hong Kong could impact efforts by Beijing and Washington to reach preliminary deal that could de-escalate a prolonged trade war between the two countries.

The U.S.-headquartered NGOs targeted by Beijing include the National Endowment for Democracy, the National Democratic Institute for International Affairs, the International Republican Institute, Human Rights Watch, and Freedom House.

“They shoulder some responsibility for the chaos in Hong Kong and they should be sanctioned and pay the price,” said Hua.

In more normal times, several U.S. naval ships visit Hong Kong annually, a rest-and-recreation tradition that dates back to the pre-1997 colonial era which Beijing allowed to continue after the handover from British to Chinese rule.

Visits have at times been refused amid broader tensions and two U.S. ships were denied access in August.

The USS Blue Ridge, the command ship of the Japanese-based Seventh Fleet, stopped in Hong Kong in April – the last ship to visit before mass protests broke out in June.

Foreign NGOs are already heavily restricted in China, and have previously received sharp rebukes for reporting on rights issues in the country including the mass detention of Uighur Muslims in Xinjiang.

(Reporting by Cate Cadell and Beijing Monitoring Desk; Editing by Tom Hogue & Simon Cameron-Moore)

U.S.-China trade deal close, White House says, after negotiators speak by phone

By Andrea Shalal, Doina Chiacu and Kevin Yao

WASHINGTON/BEIJING (Reuters) – The United States and China are close to agreement on the first phase of a trade deal, White House adviser Kellyanne Conway said on Tuesday, after top negotiators from the two countries spoke by telephone and agreed to keep working on remaining issues.

U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke with Chinese Vice Premier Liu on Tuesday morning, China’s Commerce Ministry said, as the world’s two largest economies try to hammer out a “phase one” deal in a 16-month trade war that is slowing global growth.

They discussed core issues related to the phase one deal, the ministry said.

Completion of a phase one deal had been expected in November, but trade experts and people close to the White House said last week it could slide into the new year, as Beijing presses for more extensive tariff rollbacks and Washington counters with its own demands.

Tuesday’s news lifted markets, with Wall Street’s three major indexes adding slightly to the previous days’ records. Reaching a trade agreement with China is one of U.S. President Donald Trump’s top priorities.

Conway told Fox News the United States and China were nearing agreement on the preliminary deal.

“We’re getting really close and that first phase is significant,” she said, adding that Trump wanted to “do this in phases, in interim pieces because it’s such a large, historic trade deal.”

Senate Finance Committee Chairman Chuck Grassley, an Iowa Republican, told reporters on Tuesday, an initial trade deal with China could be reached before the end of the year.

He said China had invited Lighthizer and Mnuchnin to visit Beijing for in-person talks and they were willing to go if they saw “a real chance of getting a final agreement.”

The U.S. trade representative and the Treasury did not respond to requests for comment. A source familiar with the trade talks said the U.S. officials could go to Beijing after the Thanksgiving holiday on Thursday.

In October, Trump said he expected to quickly dive into a second phase of talks once “phase one” had been completed, focusing on U.S. complaints that China effectively steals U.S. intellectual property by forcing U.S. firms to transfer their technology to Chinese rivals.

U.S. and Chinese officials, lawmakers and trade experts warn such follow-on negotiations may prove difficult given the November 2020 U.S. presidential election, the difficulties in getting the first-stage done, and the White House’s reluctance to work with other countries to pressure Beijing.

“We continue to negotiate,” Conway said. “But those forced tech transfers, the theft of intellectual property, the trade imbalance of a half a trillion a year with the world’s second largest economy, China – this makes no sense to people.

“But the president wants a deal. But President Trump always waits for the best deal,” she said.

Tuesday’s call took place amid heightened tensions on various fronts between Beijing and Washington, with China saying on Tuesday that it had summoned U.S. Ambassador Terry Branstad on Monday to protest the passage in the U.S. Congress of the Hong Kong Human Rights and Democracy Act.

China’s foreign ministry said the legislation amounted to interference in a Chinese internal matter.

Commerce Minister Zhong Shan, central bank governor Yi Gang and vice head of state planner Ning Jizhe also participated in the phone call.

(Reporting by Doina Chiacu and Andrea Shalal; Editing by Catherine Evans and Jonathan Oatis)