March 2, 2023

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.

MEDIA ROUNDUP

SANCTIONS        

In one of its most significant sanctions actions to date, the U.S. Department of the Treasury targeted the metals and mining sector of the Russian economy as well as over 30 third-country individuals and companies connected to Russia’s sanctions evasion efforts, including those related to arms trafficking and illicit finance. [U.S. Treasury]

In its 10th package of sanctions against Russia, the EU targeted 121 individuals and entities involved in the country's political, economic, and military and defense sectors — including military commanders of the Wagner Group as well as Iranian individuals involved in supplying drones used by Russia against Ukraine. [EU]

The U.K. announced a new package of sanctions against Russia, including export bans on every item that Ukraine has found Russia to have used on the battlefield to date. [U.K.]

The U.S. is sounding out close allies about the possibility of imposing new sanctions on China should Beijing provide military support to Russia for its war in Ukraine, according to four U.S. officials and other sources. [Reuters]

With Russia cut off from the European market, North African countries have stepped forward to become voracious buyers of its diesel and other refined oil products, offering a lifeline of sorts for Moscow. [WSJ]

Indian buyers of Russian oil, a crucial lifeline for the Kremlin over the past months, are struggling under the weight of increasingly onerous demands from financiers wary of breaching Western sanctions. [Bloomberg]

The U.S. is closely monitoring Russia’s efforts to evade sanctions via Central Asia, highlighting concerns that Russia is receiving microchips and other technology through imports from its neighbors. [Bloomberg]

Russian nuclear fuel deliveries to a new Chinese reactor are raising U.S. concerns about the potential to produce weapons-grade plutonium. [Bloomberg]

Three entities and two individuals were designated by the U.S. Treasury Department for illicitly generating revenue in support of the North Korean government. [U.S. Treasury]

 The U.S. Treasury Department sanctioned eight Mexican companies linked to timeshare fraud on behalf of the Cártel de Jalisco Nueva Generación. [U.S. Treasury]

 Mexican arms trafficker Jesús Cisneros Hernández was sanctioned by the U.S. for conspiring to purchase high-powered firearms in Wisconsin, smuggle them into Mexico, and then supply the weapons to the Cártel de Jalisco Nueva Generación. [U.S. Treasury]

The U.S. Department of State designated six entities that have engaged in the transport or sale of Iranian petroleum products or petrochemical products and identified 20 vessels as property or interests of these entities. [U.S. State]

The U.N. atomic agency confirmed that its inspectors found traces of near-weapons-grade nuclear material at Iran’s underground Fordow facility, but said that Iran was still enriching to the less dangerous level of 60% at the site. [WSJ]

Afghanistan's Taliban-led administration has set up a consortium of companies — including some in Russia, Iran, and Pakistan — to create an investment plan focusing on power, mining, and infrastructure. [Reuters]

COMPLIANCE + ENFORCEMENT         

After adopting 10 sanctions packages against Russia, several EU countries have pushed the European Commission to shift its focus from adopting new sanctions against Russia to enforcing existing ones. [Politico]

In an unprecedented move, the Financial Action Task Force (FATF) suspended Russia’s membership in the organization on the one-year anniversary of the Kremlin’s invasion of Ukraine. [WSJ]

The Financial Action Task Force (FATF) added South Africa to its "grey list" of countries under special scrutiny to implement standards for preventing money laundering and terrorist financing. [Reuters]

The U.S. Treasury Department announced a USD 332,500 settlement with a Mumbai-registered tobacco company for five apparent violations of the North Korea Sanctions Regulations. [U.S. Treasury]

An American engineering company agreed to pay up to USD 27 million in settlement fines for illegally exporting to China controlled design drawings for military electronics and spacecraft, among other violations. [Reuters]

The U.S. Department of Justice charged a Russian national with conducting various activities related to smuggling devices commonly used in counterintelligence operations out of the U.S. to Russia for the benefit of the Federal Security Service and North Korea. [U.S. Justice]

The U.S. Justice Department's Task Force KleptoCapture unsealed two separate cases charging evasion of Russian economic countermeasures, including the forfeiture of USD 75 million in luxury properties owned by oligarch Viktor Vekselberg. [U.S. Justice]

EXPORT CONTROLS + SUPPLY CHAINS        

In two separate actions, the U.S. Department of Commerce's Bureau of Industry and Security (BIS) imposed export restrictions on 86 entities in an effort to further cut off the Russian defense-industrial base and military from low-technology consumer goods that Russia seeks to obtain for its war with Ukraine. [BIS]

Western allies are pushing the UAE to halt exports of critical goods to Russia as they seek to starve Vladimir Putin’s military of components to sustain its war against Ukraine. [FT]

The Biden administration is considering revoking export licenses issued to U.S. suppliers for sales to Chinese telecom company Huawei Technologies Co. as part of a broader tightening of technology trade over national security concerns. [WSJ]

Chipmakers must agree to not expand capacity in China for a decade if they are to receive money from a USD 39-billion federal fund designed to build a leading-edge U.S. semiconductor industry, according to new U.S. Commerce Department rules. [FT]

The U.S. Department of Commerce and other government agencies approved about 69.9% of export license applications involving China in the 2022 fiscal year, according to written testimony that was made public ahead of a hearing in the U.S. House of Representatives. [Reuters]

HUMAN RIGHTS        

A German automobile manufacturer drew criticism from campaigners and a large investor after the head of its Chinese business said that he saw no signs of forced labor when he visited the carmaker's plant in China's Xinjiang region. [Reuters]