July 11, 2024

The Readbook is Kharon's weekly roundup of our published pieces, upcoming events, and the best-curated news feed on the intersection of international security and global commerce. Subscribe to the email version.

/WEBINARS

Our experts and Stephen Tracy, former Program Manager of the U.S. Government’s Organized Crime Drug Enforcement Task Force (OCDETF) Program, discuss the Treasury's recent actions and the rising trend in suspicious activities related to fentanyl supply chains in China and Mexico. [Watch on demand]

During this Quick Take, our experts provide an in-depth analysis of the European Commission's new sanctions, their implications, and practical guidance on compliance. [Watch on demand]

/THIS WEEK ON THE KHARON BRIEF

US Forced Labor Task Force Targets New High-Priority Sectors

This week, the Forced Labor Enforcement Task Force, chaired by the U.S. Department of Homeland Security, released its updated Uyghur Forced Labor Prevention Act strategy with new high-priority sectors for enforcement. [Read More]

/MEDIA ROUNDUP

SANCTIONS        

Switzerland has expanded its sanctions against Russia to include additional measures recently taken up by the European Union against Moscow. [Swiss Government]

The EU has decided to deny the protections of the Energy Charter Treaty to investments and investors from Russia and Belarus, in order to reinforce the application of EU sanctions against these countries. [European Commission]

A Russian mining giant is in talks with China to form a joint venture that would allow the company to move its entire base to China, marking Russia's first uprooting of a domestic plant since the U.S. and Britain banned metal exchanges from accepting new aluminum, copper and nickel produced by Russia. [Reuters]

A Scottish company is shipping Russian gas to Europe, defying a call by the government to break off trading relations with the country. [Sunday Times]

A high-end supplier of perfumes is facing a criminal investigation after continuing to sell his high-value products to Russia, in a sign that luxury goods are still being sent to the country in breach of UK sanctions. [Bloomberg]

U.S. Treasury Department officials have proposed new actions aimed at crippling a fleet of aging oil tankers that are helping deliver Russian oil to buyers around the world in defiance of Western sanctions.  [NYT] 

International efforts to find a U.N. replacement for the Panel of Experts monitoring North Korea sanctions have largely fizzled out, according to multiple U.N. diplomatic sources, less than three months after the Panel disbanded due to a Russian veto. [NK News] 

North Korea's newest weapons factory appears to be using large Chinese machinery to produce "ultramodern precision munitions," once again demonstrating Pyongyang's ability to evade sanctions targeting its arms industry. [NK News]

The U.S. Department of the Treasury sanctioned a Venezuela-based transnational criminal organization that is expanding throughout the Western Hemisphere and engaging in diverse criminal activities. [U.S. Treasury]

The U.S. Department of the Treasury updated its general license on Venezuela, which authorizes certain transactions involving the exportation or reexportation of liquefied petroleum gas to Venezuela. [U.S. Treasury]

The U.S. Department of State imposed sanctions on individuals and entities contributing to the violence and instability in the West Bank. [U.S. State]

COMPLIANCE + ENFORCEMENT        

The U.S. Bureau of Industry and Security (BIS) published guidance outlining the different actions that BIS takes to inform industry and academia about parties that present risks of diversion of items subject to BIS export controls to countries or entities of concern. [U.S. BIS] 

The U.S. Department of the Treasury, as Chair of the Committee on Foreign Investment in the U.S. (CFIUS), issued a proposed rule that would expand CFIUS’s jurisdiction over certain transactions by foreign persons involving real estate in the United States. [U.S. Treasury]

The U.S. FinCEN released a supplemental alert highlighting additional red flags related to the financing of Israeli extremist settler violence against Palestinians in the West Bank. [U.S. FinCEN]

A New York man and a Canadian national plead guilty to conspiracy to commit export control violations for their roles in a global procurement scheme on behalf of sanctioned Russian companies, including Russian military companies. [U.S. Justice]

The U.S. Department of Justice seized two domain names, while searching 968 social media accounts, used by Russian actors to create an AI-enhanced social media bot farm that spread disinformation in the U.S. and abroad. [U.S. Justice]

Britain’s National Crime Agency has for the first time asked a court to permanently seize funds held by a Russian oligarch, arguing that they are “proceeds of crime,” because he allegedly moved the money in violation of sanctions regulations. [OCCRP] 

Lithuania fined a crypto company a record USD 10.1 million for sanctions and money laundering violations involving Russian clients. [Bloomberg]

Japanese police have arrested a 38-year-old Russian citizen on suspicion of participating in activities assisting Russia in the evasion of international sanctions imposed over Moscow's ongoing invasion of Ukraine. [RFERL]

The Hong Kong unit of a Singaporean multinational banking and financial services corporation was fined USD 1.28 million by the city’s regulator for lapses in adhering to anti-money laundering and counter-terrorist financing regulations. [Bloomberg] 

A financial services group is facing a court case in Denmark related to weak anti-money-laundering controls. [WSJ]

TRADE CONTROLS + SUPPLY CHAIN        

The U.S. has intervened in the sale of a Congolese copper mine to a Chinese arms manufacturer in an effort to prevent Beijing from further increasing its control of critical minerals. [FT] 

Germany has invoked national security concerns to block the sale of a gas turbine business to a Chinese company, in the latest western move to protect sensitive technologies from potential misuse in China. [FT] 

Germany will remove Chinese components from the country’s 5G mobile networks by the end of 2029, ending years of debate that had left the country dragging far behind allies in addressing what the U.S. has warned was a key vulnerability. [WSJ]

An American multinational technology company is on course to sell USD 12 billion worth of artificial intelligence chips in China this year despite U.S. export controls that have throttled its business in one of the world’s biggest semiconductor markets. [FT] 

An investigation by Taiwan's government into the use of Chinese-made technology by their military has revealed the use of Huawei routers at an Army base. [Taiwan News] 

The U.S. Department of State released a statement of concern related to certain mineral supply chains from Rwanda and eastern Democratic Republic of the Congo that is contributing to the ongoing conflict. [U.S. State]

HUMAN RIGHTS        

The U.S. Department of Homeland Security released its updated 2024 UFLPA strategy where it identified new high-priority sectors for enforcement – aluminum, polyvinyl chloride (PVC), and seafood. [U.S. DHS] 

A solar panel maker in the U.S. booked USD 230 million in federal tax credits and stands to collect hundreds of millions more despite the fact it has sourced material from companies with suppliers that U.S. officials have sanctioned over forced labor in China. [Bloomberg]

CRYPTO + CYBER        

Russia's central bank told businesses they should use "multiple choice solutions" including cryptocurrencies and other digital assets to facilitate payments with foreign partners to counter Western sanctions imposed over the Ukraine conflict. [Reuters] 

A cryptocurrency exchange has pleaded guilty to a U.S. criminal charge over its failure to maintain an adequate anti-money-laundering program, federal prosecutors said. [WSJ]

Australia, the U.S. and six other allies warned that a Chinese state-sponsored hacking group poses a threat to their networks, in an unusual coordinated move by Western governments to call out a global hacking operation they say is directed by Beijing’s intelligence services. [WSJ]