July 3, 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

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

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

/THIS WEEK ON THE KHARON BRIEF

Latest EU Sanctions Against Russia Target Foreign Financial Institutions, Vessels

The EU's latest sanctions package against Russia is designed to target critical sectors of the country's economy, such as the war effort, the export of dual-use goods, and technology sought out by Russia's military-industrial complex. [Read More]

Publicly Traded Metals Companies in Emerging Market Funds Pose Risk to Investors, Manufacturers

A publicly traded China-based metals company has conducted business with a sanctioned Russian entity and is alleged to have bought smuggled North Korean gold. [Read More]

/MEDIA ROUNDUP

SANCTIONS        

In view of Belarus’ involvement in Russia’s war against Ukraine, the EU adopted restrictive measures targeting various sectors of the Belarusian economy and addressing the circumvention of EU sanctions. [European Council]

The EU imposed restrictive measures against two individuals and four entities for circumventing EU sanctions and materially supporting the Russian government. [European Council]

A Russian oligarch transferred the ownership of his Italian luxury resort a day after Moscow’s full-scale invasion of Ukraine in 2022, in a move that preceded Western sanctions. [FT]

Some Chinese shipbuilders who saw opportunity in anchoring their business to orders from Russia are being forced to adapt amid pressure from Western sanctions imposed on Moscow. [SCMP]

The EU sanctioned six individuals and three entities responsible for participating in the financing of Hamas and the Palestinian Islamic Jihad or enabling their violent actions. [European Council]

The U.S. Department of the Treasury, working in close coordination with the Government of Mexico, sanctioned a Mexico-based money launderer and China-based members of a money laundering organization with criminal links to the Sinaloa Cartel. [U.S. Treasury]

COMPLIANCE + ENFORCEMENT        

The Financial Action Task Force added Monaco and Venezuela to its list of jurisdictions under increased monitoring for strategic AML/CT/CPF deficiencies and removed Jamaica and Türkiye from the list. [FATF]

FinCEN announced a proposed rule to strengthen and modernize financial institutions’ anti-money laundering and countering the financing of terrorism programs. [U.S. FinCEN]

The U.S. Bureau of Industry and Security published an updated version of “Don’t Let This Happen to You!,” a compendium of case examples highlighting BIS criminal and administrative enforcement efforts. [U.S. BIS]

A U.S. man was sentenced to over six years and three months in federal prison for laundering more than USD 1.8 million in drug proceeds. [U.S. Justice]

 The owner of a U.S. business pleaded guilty in federal court to her role in a money laundering conspiracy to transfer the proceeds of heroin and methamphetamine trafficking to Mexico. [U.S. Justice]

The president of a freight forwarding company was indicted for allegedly smuggling goods from the U.S. into Russia without a license. [U.S. Justice]

The former vice president of a U.S. company pleaded guilty to crimes related to a scheme to illegally export U.S. avionics equipment to Russia and Russian end users. [U.S. Justice]

Lithuania’s Customs Criminal Service uncovered a sanctions circumvention scheme for car exports from Lithuania to Russia and Belarus. [LRT]

German authorities arrested four individuals and seized their assets for the illegal sale and export of luxury vehicles to Russia in violation of sanctions and trade restrictions. [German Customs]

A German court sentenced two men to several years in prison in the first trial of members of Hezbollah in Germany. [DPA]

A Milan-based international banking group asked a top European court to assess the legality of some elements in a decision by its main regulator forcing the Italian lender to further reduce its presence in Russia. [Bloomberg]

Casinos in Singapore will soon face tighter rules on conducting due diligence checks when receiving cash, as part of updated measures to counter terrorism financing. [CNA]

TRADE CONTROLS + SUPPLY CHAIN        

The U.S. Bureau of Industry and Security added six entries to the Entity List for supporting China’s militarization efforts and for engaging in evasive conduct during end-use checks. [U.S. BIS]

The Biden administration has revoked eight licenses this year that had allowed some companies to ship goods to Chinese telecoms equipment giant Huawei, as it seeks to pressure the resurgent company. [Reuters]

An informal market circumvents U.S. export controls on advanced artificial intelligence chips through supply chain blind spots—and in one case, a student’s luggage. [WSJ]

The parent company of a Chinese chipmaker under consideration for sanctions by the Biden administration plans to invest at least USD 2.4 billion in a cutting-edge packaging facility in Shanghai capable of manufacturing AI memory. [Bloomberg]

The U.S., Japan, and South Korea agreed to work together to strengthen their supply chains for critical goods, including high-tech chips, but stopped short of tightening trade curbs against China despite Washington's efforts. [Nikkei Asia]

RESEARCH SECURITY        

A group of Chinese universities with military ties known as the "Seven Sons of National Defense" are involved in EU-funded research projects. [Politico]

HUMAN RIGHTS        

British authorities must reconsider whether to open an investigation into imports of cotton allegedly produced by forced labor in the Chinese region of Xinjiang, a London court ruled, allowing an appeal by a Uyghur rights group. [Reuters]

A U.S.-based power tool company faces a lawsuit from a former Chinese prisoner who alleges he was forced to make work gloves for a supplier to the company after being jailed for his activism. [WSJ]

CRYPTO        

A defunct California bank that served crypto companies agreed to pay USD 63 million to federal and state regulators to resolve investigations into alleged deficiencies in its anti-money laundering program. [WSJ]