June 6, 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 Kharon for an hour-long conversation with Department of Homeland Security Under Secretary for Policy Robert Silvers. Under Secretary Silvers chairs the U.S. Government's Forced Labor Enforcement Task Force, which is responsible for setting enforcement priorities for the UFLPA and for managing the UFLPA Entity List. [Register Today]

Join us for a 30-minute webinar as we discuss Kharon's innovative new solution for sanctioned securities, designed for compliance officers, financial analysts, and risk management professionals committed to upholding the highest standards of regulatory compliance in dynamic global conditions. [Register Today]

/THIS WEEK IN THE KHARON BRIEF

In May, the U.S. Department of Homeland Security announced that 26 textile companies would be added to the UFLPA Entity List, marking the largest one-time expansion of the list since the law went into effect. In our latest Snapshot, we break down the additions and share insights on the broader network of one of the newly listed entities. [Watch]

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/MEDIA ROUNDUP

SANCTIONS        

The U.S. Department of the Treasury sanctioned four entities that have procured critical parts for Iran’s UAV program as well as an Iranian executive who oversees UAV manufacturers. [U.S. Treasury]

Whistleblowers claim to have uncovered billions of dollars worth of previously undetected transactions carried out by a U.K. bank with Iran-linked entities, including sanctioned companies and terrorist organizations. [FT]

Members of the House Select Committee on the Chinese Communist Party called on the U.S. Treasury to investigate six Chinese companies funded by U.S. investment for supporting Iran's military and terrorist proxies. [Select Committee on the CCP]

Two senior U.S. officials said that the U.S. will coordinate with allies to punish Chinese firms helping Russia bolster its military-industrial base, including through the potential imposition of sanctions against financial institutions. [Bloomberg]

A Chinese trade body sought to buy drone-jamming equipment for Russian buyers last month, underlining the close ties between the two countries amid concerns in Europe and the U.S. over China’s supply of dual-use technology to Moscow. [FT]

Western sanctions and export controls have inadvertently birthed a global shadow economy tying together democracy’s chief foes, with Washington’s primary adversary, China, at the center. [WSJ]

Leaked internal documents have exposed the activities of a Russian state-backed legal defense foundation that European intelligence agencies and analysts say is in fact a Kremlin influence operation active in 48 countries across Europe and around the world. [Guardian]

Documents reveal that leaders of an online news site aimed at Americans have received money from both Russian and Iranian government media outlets, showing how widening geopolitical alliances are making it harder to identify and trace foreign influence operations. [WaPo]

Under pressure from Greece’s navy, traders of Russian oil have found a new place to switch cargoes of crude in the Mediterranean Sea, a sign of how hard it will be to clamp down on an activity that has alarmed regulators and European governments. [Bloomberg]

A Swiss commodities trader has quietly hired the man who once oversaw exports of Russia’s most important commodity at its state-backed oil heavyweight. [WSJ]

The Group of Seven nations and the EU are studying ways to increasingly target banks that help Moscow evade sanctions. [Bloomberg]

Russia is seeking to take over uranium assets in Niger held by a state-controlled French company, in a further challenge to Western interests in Africa. [Bloomberg]

A Russian broker urged foreign investors to sign up to its asset swap scheme aimed at freeing up funds blocked by sanctions. [Reuters]

The deputy secretary of the U.S. Department of the Treasury, Wally Adeyemo, outlined the importance of why the private sector must play its part in hobbling Putin’s military-industrial complex. [FT]

The EU sanctioned six individuals and three entities because of sanctions evasion activities carried out by North Korea that could generate funds for its nuclear and ballistic missile programs. [European Council]

North Korean trading companies have been contacting factories and companies in China about hiring more North Korean workers as Pyongyang seeks to bring in more foreign currency for its struggling economy. [RFA]

The U.N. Security Council voted to extend its sanctions regime on South Sudan, to include asset freezes, travel bans, and an arms embargo, reiterating its readiness to review arms embargo measures through modification, suspension, or progressive lifting. [U.N. Security Council]

Seven trading companies based in the Middle East were blocked pending investigation by the U.S. Department of the Treasury for reasons relating to the conflict in Sudan. [U.S. Treasury]

The EU intends to impose sanctions on six Sudanese military figures who are fueling the conflict in the country. [Guardian]

The U.S. Department of State imposed sanctions on “Lions’ Den,” a militant Palestinian group in the West Bank. [U.S. State]

The U.S. Department of the Treasury sanctioned the Ecuador-based Los Lobos Drug Trafficking Organization and its leader Wilmer Geovanny Chavarria Barre for contributing significantly to the violence gripping the country. [U.S. Treasury]

COMPLIANCE + ENFORCEMENT        

The U.S. BIS imposed a civil penalty of USD 44,750 against a U.S.-based satellite communications and networking systems company to resolve three violations of the antiboycott provisions of the Export Administration Regulations. [U.S. BIS]

The EU has approved the creation of a new anti-money-laundering watchdog to oversee the most high-risk financial entities, a move aimed at closing loopholes for illicit cash flows. [WSJ]

Two Dutch individuals were arrested and their homes and businesses were raided on suspicion of importing Russian timber in breach of the EU’s sanctions and for circumventing the prohibition on Russian timber imports by purchasing timber through Chinese suppliers. [Dutch FIOD]

Lithuania’s law enforcement authorities identified four suspects in an investigation into the possible export of sanctioned goods to Russia by a Lithuanian company. [Lithuanian National Radio and Television]

Sweden's foreign ministry said it had been in contact with several Swedish multinationals after the European Commission said they were suspected of exporting products to Russia despite EU sanctions. [AFP]

A federal grand jury charged 14 people with participating in an international multi-million-dollar cocaine trafficking and money laundering scheme. [U.S. Justice]

Fourteen indictments were unsealed charging 47 alleged members of a Sinaloa Cartel-linked fentanyl and methamphetamine distribution network with drug trafficking, firearms, and money laundering offenses. [U.S. Justice]

TRADE CONTROLS + SUPPLY CHAIN        

Australia’s government has ordered funds linked to a Chinese businessman to cut their stakes in a rare-earths miner, in a sign of how control of critical minerals is becoming a political concern. [FT]

U.S. lawmakers requested a briefing by U.S. officials on a Chinese biotech firm and its U.S.-based subsidiaries to determine the extent of the Chinese Communist Party’s influence and control over their operations. [Select Committee on the CCP]

Some Chinese AI chip companies are now designing less powerful processors to retain access to a Taiwanese semiconductor company’s production in the face of U.S. sanctions. [Reuters]

China’s largest chip company is operating a new production line key to Chinese leader Xi Jinping’s goal to eliminate reliance on U.S. technology. [WSJ]

HUMAN RIGHTS + FORCED LABOR        

Members of the House Select Committee on the Chinese Communist Party revealed new evidence implicating major Chinese battery manufacturers in state-sponsored Uyghur forced labor. [Select Committee on the CCP]

U.S. lawmakers sent a letter to the president of an American finance company outlining significant concerns after the firm removed its forced labor red flag for a European automobile manufacturer’s factory in China. [Select Committee on the CCP]

The U.S. will impose new visa restrictions on Chinese and Hong Kong officials over guilty verdicts in the National Security Law trial of pro-democracy organizers in Hong Kong. [Reuters]