Besieged IS militants refuse to surrender, ask for an exit
By SARAH EL DEEB
Monday, February 18
AL-OMAR OIL FIELD BASE, Syria (AP) — More than 300 Islamic State militants surrounded in a tiny area in eastern Syria are refusing to surrender to U.S.-backed forces and are trying to negotiate an exit, Syrian activists and a person close to the negotiations said Monday.
The extremists are bottled up in the village of Baghouz, where they are hiding among hundreds of civilians and preventing them from leaving. The stalling tactics are likely to further delay a declaration of the end of the IS group’s self-proclaimed caliphate, which the U.S.-backed Syrian Democratic Forces were hoping to make last week.
A person familiar with the negotiations said the militants are asking for a corridor to the rebel-held northwestern province of Idlib, and demand that they be allowed to leave along with the evacuated civilians. He spoke on condition of anonymity because he was not authorized to speak about the talks, which he described as taking place indirectly.
The Britain-based Syrian Observatory for Human Rights, an activist group that monitors the civil war in Syria, said another request by IS to be evacuated to neighboring Iraq was also rejected. IS released 10 SDF fighters it had been holding on Sunday, but it was not clear what, if anything, the extremists would get in return, the Observatory said.
The speck of land in Syria’s remote eastern desert, near the border with Iraq, is all that remains of a self-styled caliphate that once sprawled across a third of both countries and included several major towns and cities.
In that tiny patch on the banks of the Euphrates River, the militants are holed up in what SDF officials describe as a small tented village atop a network of tunnels and caves. There are civilians inside as well, possibly including hostages.
The SDF and the U.S.-led coalition have been fighting IS in the surrounding region since September. In recent years, they and other forces have steadily driven IS from nearly all the territory it once controlled, in battles that have killed tens of thousands of people and left entire towns and neighborhoods in ruins.
The DeirEzzor 24, an activist collective in eastern Syria, said several trucks loaded with food entered IS-held areas in Baghouz on Monday. It also reported the release of the SDF fighters, without saying whether there was a quid pro quo.
DeirEzzor 24 said the truce reached last week has been extended for five more days as of Sunday. It added that in return several trucks loaded with food entered the IS-held area on Sunday.
At least 62 people have died in recent weeks, mainly from exhaustion and malnutrition, after making their way out of militant-held territory, the International Rescue Committee said. Spokesman Paul Donohoe said two-thirds were children under the age of one. He said they either died along the way or soon after arriving at a camp for the displaced.
Over 30,000 people who left the last IS-held areas have arrived at the al-Hol camp in Syria’s northern Hassakeh province in the last few weeks, raising the overall population of the camp to almost 42,000.
Elsewhere in Syria, two bomb blasts went off in the northwestern city of Idlib, killing at least 13 people, Syrian opposition activists and paramedics said.
The Observatory said the blasts in the Qusour neighborhood during rush hour Monday killed 17 people and wounded about 50. The Edlib Media Center, an activist collective, said the bombings killed 13 and wounded dozens.
The first blast occurred in the early afternoon and another followed seconds later. The opposition’s Syrian Civil Defense, a group of volunteer first responders, said one of its members was wounded.
The city of Idlib is controlled by al-Qaida-linked militants, who have wide influence in northern Syria.
The city has been hit with bombings in recent months that killed or wounded scores of people.
Associated Press writer Bassem Mroue in Beirut contributed.
EU states mixed on Trump demand to take back IS fighters
By LORNE COOK and GEIR MOULSON
Monday, February 18
BRUSSELS (AP) — U.S. President Donald Trump’s demand that European countries take back their citizens fighting in Syria received a mixed reaction Monday, as nations voiced concerns about how to bring home-grown Islamic State extremists to trial.
The question of such foreign fighters has been a conundrum for the Europeans for several years. Islamic State prisoners could be exposed to torture or the death penalty if they remain in jail in Syria or Iraq, and the EU opposes the death penalty.
But few European countries have embassies in Syria or Iraq, let alone extradition treaties to get their citizens back. Proving who is who and gathering solid evidence against suspects that would stand up in European courts is virtually impossible.
Then there is the question of what to do with the wives and children of European jihadis. The case of a British teenager who ran away to join IS, has given birth to a baby boy and now wants to return to the U.K. has ignited debate in Britain about how to deal with citizens trying to leave Syria now the extremist group is collapsing.
“It is certainly not as easy as they think in America,” German Foreign Minister Heiko Maas told reporters Monday at a meeting of EU foreign ministers. “German citizens have the right to return, but we have little ability in Syria at present to check whether German citizens are actually affected.”
Maas said authorities would have to “check to what extent they were involved in fighting for IS, which would result in criminal proceedings having to be opened against them.”
“These people can come to Germany only if it is ensured that they can immediately be taken into custody,” he said.
Security experts have warned that convicted terrorists will walk free from European prisons by the dozens over the next two years, many of them jihadis who trained or fought in Syria and Iraq but never faced serious charges due to insufficient evidence.
French jihadis made up the largest contingent of European recruits. French officials are concerned because in 2015 and 2016, an Islamic State cell of French and Belgian fighters crossed from Syria into Turkey, eventually launching deadly attacks on Paris and Brussels.
“The last territorial bastions of Daesh (IS) are falling, which doesn’t mean that the action of Daesh is finished. On the contrary,” said French Foreign Minister Jean-Yves Le Drian.
Britain refuses to take back citizens who joined IS and has stripped them of their citizenship. Belgium has said previously that it would not make any great effort to secure the release of 12 citizens imprisoned in Syria and two in Iraq.
Other European countries have remained largely silent about the fate of men and women whom many see as a security threat.
Hungarian Foreign Minister Peter Szijjarto said the issue is “one of the greatest challenges ahead of us for the upcoming months.”
“Our major endeavor now should be not to allow them to come back to Europe,” said Szijjarto, whose staunchly anti-migrant government has linked extremist attacks to migration.
But Slovakian Foreign Minister Miroslav Lajcak, also part of an anti-migrant government, said “I would certainly be in favor” of Europe taking foreign fighters back.
“There is clearly a need to define … the European position on this issue,” Lajcak told reporters.
“Whether we like or dislike the U.S. position, they make no secret of it. It’s very clear,” he said. “This is the key partnership for the European Union. But the rules of this partnership have changed and we need to be able to react to it.”
U.S. Democratic Senator Bob Menendez, on a visit to Brussels, said the Europeans have to find a way to deal with the challenge.
“If we have someone who we have well established under law as someone who is an ISIS fighter then we should be able to prosecute them whether at home or abroad” he said at the German Marshall Fund think tank.
Moulson reported from Berlin. AP writer Lori Hinnant in Paris and video reporter Sylvain Plazy in Brussels contributed.
Iran pressures Europe to do more to save the nuclear deal
By DAVID RISING
Sunday, February 17
MUNICH (AP) — Europeans need to do more than talk if they want to preserve a deal meant to keep Tehran from obtaining a nuclear weapon after the unilateral withdrawal of the United States, Iran’s foreign minister said Sunday, slamming Washington as the “biggest source of destabilization” in the Middle East.
Mohammad Javad Zarif told a gathering of world leaders, top defense officials and diplomats that a barter-type system known as INSTEX, which was set up last month by France, Germany and Britain to allow businesses to skirt direct financial transactions with Iran and thereby evade possible U.S. sanctions, is not enough.
“Many around the world, particularly on this continent, speak eloquently about multilateralism, but they also need to walk the walk,” Zarif told the Munich Security Conference in an impassioned address. “INSTEX falls short of the commitments by (European countries) to save the nuclear deal. Europe needs to be willing to get wet if it wants to swim against a dangerous tide of U.S. unilateralism.”
The three European nations, as well as Russia, China and the European Union as a whole, have been struggling to save the 2015 nuclear deal with Iran since President Donald Trump announced a unilateral American withdrawal from it last year and re-imposed sanctions on Iran.
The deal promises Iran relief from sanctions in exchange for limiting its nuclear program, and so far the International Atomic Energy Agency has said that Tehran has been living up to its obligations.
Those working to preserve the agreement have been trying to walk a fine line between mollifying Iran without angering Washington. Zarif’s comments appeared directed at European assurances that INSTEX could concentrate on products not currently subject to U.S. sanctions, such as medicine, medical supplies and agricultural goods, rather than on broader trade.
On Saturday, U.S. Vice President Mike Pence slammed INSTEX and urged others to abandon the nuclear deal entirely.
“The time has come for our European partners to stop undermining U.S. sanctions against this murderous revolutionary regime,” Pence said before leaving Germany. “The time has come for our European partners to stand with us and with the Iranian people, our allies and friends in the region. The time has come for our European partners to withdraw from the Iran nuclear deal.”
Before Pence spoke, German Chancellor Angela Merkel defended the Iran deal, saying while she shared concerns about Iran’s missile program and its regional ambitions, it was important to keep “the small anchor we have (with Iran) in order maybe to exert pressure in other areas.”
Merkel’s comments, and her defense of global diplomacy instead of a go-it-alone foreign policy, drew lengthy applause.
Zarif told the conference that Pence had “arrogantly demanded that Europe must join the United States in undermining its own security and breaking its obligations” and urged them to push back against American pressure.
“If the United States were to come, in the course of their fight with China, and tell Europe to stop dealing with China, what would you do?” he asked. “Whatever you want to do then, do now, in order to prevent that eventuality.”
He would not comment on whether the nuclear deal will survive without the U.S. but said Iran was not prepared to renegotiate it as Trump has suggested.
“Nothing can be done that is better than this deal,” he said. “It’s not all we want and it’s certainly not all the United States wants but it’s the best that can be achieved.”
Responding to Pence’s comments that Iran was the “greatest threat to peace in the Middle East,” Zarif said the U.S. had an “unhealthy fixation” with Iran and was itself the “single biggest source of destabilization in our neighborhood.”
“The U.S. claims … that it is Iran which is interfering in the region, but has it ever been asked whose region?” Zarif said. “Just glimpse at a map for a second — the U.S. military has traveled 10,000 kilometers to dot all our borders with its bases. There is a joke that it is Iran’s fault that it put itself in the middle of all (the) U.S. bases.”
Zarif also accused the U.S. administration of looking for regime change in Iran — something Washington denies — and said Israel was “looking for war” with “violations of Lebanon’s air space and shooting into Syria.”
“The risk (of war) is great, but the risk will be even greater if you continue to turn a blind eye to severe violations of international law,” he said.
Benny Gantz, a former Israeli military chief and Israeli President Benjamin Netanyahu’s primary challenger in the upcoming April election, responded in a separate forum, slamming Iranian aggression in the region.
“On my watch, there will be no appeasement (of Iran). On my watch, Iran will not threaten Israel by taking over Syria, Lebanon or Gaza strip,” he said. “On my watch, Iran will not have nuclear weapons.”
Gantz told the audience, speaking of Zarif: “do not be deceived by his eloquence. Do not be fooled by his lies.”
The Munich Security Conference is an annual gathering of world leaders and defense and foreign policy officials.
Geir Moulson in Berlin contributed to this report.
China seizes $1.5 billion in online lending crackdown
By JOE McDONALD
AP Business Writer
Monday, February 18
BEIJING (AP) — Chinese police have investigated 380 online lenders and frozen $1.5 billion in assets following an avalanche of scandals in the huge but lightly regulated industry, the government announced Monday.
Beijing allowed a private finance industry to flourish in order to supply credit to entrepreneurs and households that aren’t served by the state-run banking system. But that threatens to become a liability for the ruling Communist Party after bankruptcies and fraud cases prompted protests and complaints of official indifference to small investors.
The police ministry said it launched the investigation because person-to-person, or P2P, lending was increasingly risky and rife with complaints about fraud, mismanagement and waste.
The ministry gave no details of arrests but said more than 100 executives were being sought by investigators and some had fled abroad. It said authorities seized or froze 10 billion yuan ($1.5 billion) but gave no indication how much might be returned to depositors.
Police say some lenders and investment vehicles were brazenly fraudulent, while others collapsed after inexperienced founders failed to manage risk.
Monday’s statement said P2P lenders were investigated for complaints including wasting money, reporting phony investment plans and using illegal tactics to raise money.
Lending through online platforms grew by triple digits annually until 2017 when regulators tightened controls.
Depositors lent 1.9 trillion yuan ($280 billion) last year, but that was down by 50 percent from 2017, according to the Shenzhen Qiancheng Internet Finance Research Institute.
The outstanding loan balance stood at 1.2 trillion yuan ($177 billion) at the end of 2018, down 25 percent from a year earlier, according to Diyi Wangdai, a web site that reports on the industry.
P2P lenders are part of a privately run Chinese finance industry the national bank regulator estimated in 2015 had grown to $1.5 trillion.
The internet has helped financial platforms attract money from financial novices with little knowledge of the risks involved.
Many lend to factories and retailers or invest in restaurants, car washes and other businesses. But inexperience and poor risk control means a downturn in business conditions can bankrupt them.
Finance as a whole has come under tougher scrutiny after a 2015 plunge in stock prices led to accusations of insider trading and other offenses.
In one of China’s biggest financial scams, authorities say depositors lost 50 billion yuan ($7.7 billion) in online lender Ezubo before it was seized by regulators in 2015.
The founder and his brother were sentenced to life in prison in 2017.
Opinion: Entrepreneurs Need Policy to Escape the ‘Startup Trap’
By Michael Mandel and Melissa Blaustein
For many, becoming a small business owner has always been a part of the American Dream and for entrepreneurs launching a successful startup today is, in many ways, the 21st-century version of this ambition. But even if the business gets off the ground, it is becoming more and more challenging for company owners to scale up.
To put it in perspective, “young” businesses — 6 to 10 years — were half as likely to employ 1,000 workers or more in 2014 compared to 20 years ago. That’s based on an analysis of Census Bureau data in research released this month from the Progressive Policy Institute and Allied for Startups.
Large companies have been blamed for acquiring small companies before they can grow. However, there’s another explanation for the scaling-up trap that deserves more attention: the unintentional tax and regulatory cliff created by decades of policies favoring small businesses.
In the United States, small businesses are often exempt from obligations to provide certain employee benefits and comply with certain regulatory rules if the company is small enough. While these “carve-outs” are beneficial for companies who stay below the relevant thresholds, the threat of losing these exemptions can make entrepreneurs think twice before expanding. In fact, sometimes, selling small businesses to larger rivals is more lucrative for owners than scaling their own businesses.
In order for our startup ecosystem to grow, it is vital we create policies that help small companies flourish into larger employers. That’s why we are calling on policymakers, in both the United States and European Union, to establish a Startup Tax Credit that would be structured to support small businesses while they continue to scale. The tax credit — refundable against income taxes, payroll taxes in the United States, or value-added taxes in Europe — would rise to a maximum level as a small business expanded and then, would gradually phase out as the business expanded further. While this tax credit wouldn’t be a perfect fix, it would ultimately encourage small businesses to grow.
Not only would a Startup Tax Credit be good for business, but it would also be a big boost to the economy, creating jobs and spreading wealth across our societies. It’s clear that as our policy currently stands, small business owners are faced with a difficult decision when deciding whether to scale up. In order to help startups succeed and, in turn, boost local economies, developing the Startup Tax Credit is the best place to start.
ABOUT THE WRITERS
Michael Mandel is a chief economic strategist at the Progressive Policy Institute in Washington. Melissa Blaustein is the founder and CEO of Allied for Startups, a global network for startups, entrepreneurs, VCs, and advocacy organizations. They wrote this for InsideSources.com.
China accuses US of trying to block its tech development
By JOE McDONALD
AP Business Writer
Monday, February 18
BEIJING (AP) — China’s government on Monday accused the United States of trying to block its industrial development by alleging that Chinese mobile network gear poses a cybersecurity threat to countries rolling out new internet systems.
And in a potential blow to the U.S.’s effort to rally its allies on the issue, British media reported that the country’s intelligence agencies have found it’s possible to limit the security risks of using Chinese equipment in so-called 5G networks.
The U.S. argues that Beijing might use Chinese tech companies to gather intelligence about foreign countries. The Trump administration has been putting pressure on allies to shun networks supplied by Huawei Technologies, threatening the company’s access to markets for next-generation wireless gear.
The company, the biggest global maker of switching gear for phone and internet companies, denies accusations it facilitates Chinese spying and said it would reject any government demands to disclose confidential information about foreign customers.
The U.S. government is trying to “fabricate an excuse for suppressing the legitimate development” of Chinese enterprises, said the spokesman for the Chinese foreign ministry, Geng Shuang. He accused the United States of using “political means” to interfere in economic activity, “which is hypocritical, immoral and unfair bullying.”
U.S. Vice President Mike Pence, speaking this weekend in Germany, urged European allies to take seriously “the threat” he said was posed by Huawei as they look for partners to build the new 5G mobile networks.
The 5G technology is meant to vastly expand the reach of networks to support internet-linked medical equipment, factory machines, self-driving cars and other devices. That makes it more politically sensitive and raises the potential cost of security failures.
Pence said Huawei and other Chinese telecom equipment makers provide Beijing with “access to any data that touches their network or equipment.” He appealed to European governments to “reject any enterprise that would compromise the integrity of our communications technology or our national security systems.”
In what could amount to a turning point for the U.S. effort to isolate Huawei, Britain’s National Cyber Security Centre has found that the risk of using its networks is manageable, according to the Financial Times and several other British media outlets.
The reports cited anonymous sources as saying that there are ways to limit cybersecurity risks, and that the U.K.’s decision would carry weight with European allies who are also evaluating the safety of their networks.
The British government is due to finish a review of its policies on the safety of 5G in March or April. The office of British Prime Minister Theresa May said Monday that “no decisions have been taken.”
European officials, including a vice president of the European Union, have expressed concern about Chinese regulations issued last year that require companies to cooperate with intelligence agencies. No country in Europe, however, has issued a blanket veto on using Huawei technology in the way the U.S. has urged.
The U.S. Justice Department last month unsealed charges against Huawei, its chief financial officer — who had been arrested in Canada — and several of the companies’ subsidiaries, alleging not only violation of trade sanctions but also the theft of trade secrets.
The United States has not, however, released evidence to support its accusations that Huawei and other Chinese tech companies allow the Chinese government to spy through their systems. That has prompted some industry analysts to suggest Washington is trying to use security concerns to handicap Chinese competitors.
“China has not and will not require companies or individuals to collect or provide foreign countries’ information for the Chinese government by installing backdoors or other actions that violate local laws,” said Geng.
Britain’s National Cyber Security Centre admitted last summer that it had concerns about the engineering and security of Huawei’s networks. While not commenting Monday on the media reports, it added: “We have set out the improvements we expect the company to make.”
Huawei said in a statement Monday that it’s open to dialogue and that “cybersecurity is an issue which needs to be addressed across the whole industry.”
Kelvin Chan in London contributed to this report.