June 27, 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 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. [View On Demand]

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. [View On Demand]

/THIS WEEK ON THE KHARON BRIEF

Solar Panels with Supply Chain Links to Xinjiang are Entering the US

Solar panels assembled by an Indian company whose supply chain has links to Xinjiang-origin polysilicon continue to flow into the U.S. market despite a 2021 ban on the importation of the raw material from the region. [Read More]

US Treasury Guidance Warns Banks on Illicit Fentanyl Trade

Solar panels assembled by an Indian company whose supply chain has links to Xinjiang-origin polysilicon continue to flow into the U.S. market despite a 2021 ban on the importation of the raw material from the region. [Read More]

/MEDIA ROUNDUP

SANCTIONS        

The EU adopted a 14th package of economic and individual restrictive measures that target high-value sectors of the Russian economy and crack down on sanctions circumvention. [European Council]

The EU sanctioned six persons involved in Russian cyberattacks affecting information systems relating to critical infrastructure, critical state functions, the storage or processing of classified information, and government emergency response teams in EU member states. [European Council]

The U.S. Department of the Treasury sanctioned twelve individuals in executive and senior leadership roles at AO Kaspersky Lab, a Russia-based anti-virus software and cybersecurity company. [U.S. Treasury]

EU ambassadors agreed to a new package of sanctions on Belarus as the bloc tries to crack down on Russia’s circumvention of penalties imposed over its invasion of Ukraine. [Bloomberg]

A Caribbean shell company has smuggled at least USD 80 million worth of electronics into Russia under the disguise of a Canadian address, according to leaked Russian trade filings. [CBC]

Russia’s richest woman is helping insulate Russia’s economy from sanctions by building an alternative to the global payment system major Russian banks were excluded from. [Bloomberg]

The Russia division of the Bank of China, which focuses on payments denominated in Chinese yuan, has stopped processing payments in the Chinese currency. [Newsweek] 

The German Vice Chancellor called on China to stop diverting exports of European goods to Russia that could be used in the war on Ukraine. [Bloomberg]

The South Korean government imposed independent sanctions on five entities, four ships, and eight individuals involved in the transportation of weapons and import of refined oil into North Korea. [JoongAng Daily]

Venezuela's state oil company PDVSA has begun using tankers that navigate off radar to supply its closest political ally, Cuba, as a fleet of state-owned vessels that have historically covered the route dwindles, according to documents and ship monitoring services. [Reuters]

A report by a U.N. expert on human rights says that Thai banks have become the main supplier of international financial services for Myanmar’s military government. [WaPo]

The U.S. Department of the Treasury sanctioned nearly 50 entities and individuals that constitute multiple branches of a sprawling “shadow banking” network used by Iran to gain illicit access to the international financial system and process the equivalent of billions of dollars since 2020. [U.S. Treasury]

The U.S. Department of State imposed sanctions on three UAE companies involved in the transport of Iranian petroleum or petrochemical products as well as 11 vessels associated with these entities. [U.S. State] 

Iranian aviation company Mahan Air retrieved two Western-made aircraft in circumvention of the existing U.S. sanctions related to Iran’s nuclear program by smuggling them out of Lithuania. [LRT]

Canada sanctioned nine individuals and two entities in response to the terrorist attacks by Hamas on Israel and the threat that Hamas and its affiliates pose to regional security. [Canadian Government]

Canada imposed sanctions against seven individuals and five entities in response to the breach of international peace and security posed by their violent and destabilizing actions against Palestinian civilians and their property in the West Bank. [Canadian Government] 

Canada imposed sanctions against three Haitian gang leaders believed to have committed and led violent criminal acts and human rights violations that undermine the peace, security, and stability of Haiti. [Canadian Government]

The EU sanctioned six individuals responsible for activities undermining the stability and political transition of Sudan, where fighting is still ongoing between the Sudanese Armed Forces and the Rapid Support Forces and their respective affiliated militias. [European Council]

COMPLIANCE + ENFORCEMENT        

The U.S. Department of the Treasury announced a USD 538,000 settlement with an Italy-based animation company for 18 apparent violations of the North Korea Sanctions Regulations. [U.S. Treasury] 

FinCEN issued a final rule that prohibits U.S. financial institutions and agencies from opening or maintaining a correspondent account for or on behalf of an Iraqi bank that serves as a conduit for terrorist financing. [U.S. FinCEN] 

The U.S. Department of the Treasury issued a Notice of Proposed Rulemaking to implement Executive Order 14105, which sets out a process for establishing a new national security program to address threats posed by certain U.S. outbound investments into China, Hong Kong, and Macau. [U.S. Treasury] 

The Financial Transactions and Reports Analysis Centre of Canada issued a special bulletin on financial activity associated with suspected sanctions evasion. [FINTRAC] 

Venezuela is expected to be added to FATF’s “gray list” for not making sufficient progress to stem illicit financial flows. [Bloomberg]

A U.S.-based subsidiary of one of the largest oil and gas companies in the world has entered into an agreement to pay a fine and monetary forfeiture totaling USD 14.5 million for violations of U.S. export law. [U.S. Justice]

A Russian national was charged for conspiring with Russian military intelligence to hack into and destroy computer systems and data in countries including Ukraine and the U.S. [U.S. Justice]

The leader of a notoriously violent Haitian gang was sentenced to prison for his role in a gunrunning conspiracy that smuggled firearms to Haiti in violation of U.S. export laws and the laundering of ransoms paid for U.S. hostages held by the gang. [U.S. Justice]

China's top prosecutor urged law enforcement officials across the country to focus efforts on combating drug trafficking, capping a week in which Beijing and Washington announced a rare joint counternarcotics investigation. [Reuters]

TRADE CONTROLS + SUPPLY CHAIN        

The Biden administration is investigating three Chinese state-backed companies over concerns the firms could exploit access to American data through their U.S. cloud and internet businesses by providing it to Beijing. [Reuters]

A major Chinese technology company is working with a U.S. chip designer on developing an advanced AI processor, a move that would help them secure a sufficient supply of high-end chips amid U.S.-Sino tensions. [Reuters]

The U.S. Bureau of Industry and Security reached a settlement agreement with a U.S. university regarding 42 violations related to the export of fruit flies genetically modified to produce a subunit of a controlled toxin. These exports went to numerous research institutions and universities worldwide without the required export licenses. [U.S. BIS]

U.S. officials say Chinese organized crime groups are laundering much of the cash accumulated by Mexican drug cartels. [FT]

RESEARCH SECURITY        

A prestigious U.S. scientific society’s partnership with a Chinese telecommunications giant that’s in the crosshairs of U.S. national security officials ran far deeper than publicly known, blossoming over decades even as U.S.-China tensions over technology soared. [Bloomberg]

HUMAN RIGHTS        

A Chinese fast fashion retailer privately sought to convince U.S. politicians and regulators that the firm’s products do not contain cotton from China’s Xinjiang region, while shying away from doing so in public for fear of angering Beijing. [FT]