May 16, 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 the U.S. Department of Homeland Security's Robert Silvers, Under Secretary for Policy, to discuss the latest in Uyghur Forced Labor Prevention Act (UFLPA) regulatory expectations and enforcement trends.
The discussion will address U.S. government strategy, the impact of enforcement, and the role of the private sector in leveraging technology and due diligence best practices to identify exposure and mitigate risk. [Register Today]
On May 21, we will be hosting a webinar with Exiger on supply chain resilience in the defense industrial base. Our panel of experts will discuss the intricacies of the defense supply chain and associated legal requirements and share best practices for mitigating risks. [Register Today]
/THIS WEEK IN THE KHARON BRIEF
Pharmaceutical and Biotech Industry Faces Possible Exposure to Xinjiang Forced Labor
Several major Chinese pharmaceutical companies have obtained drug ingredients from biotech firms that have participated in government-sponsored labor transfers or are based in Xinjiang. [Read More]
/PARTNERSHIP ANNOUNCEMENT
Kharon is proud to announce its strategic partnership with Exiger, a leader in supply chain and third-party risk AI. Kharon's comprehensive global risk intelligence data can now be leveraged within Exiger's advanced AI-powered platform, offering unparalleled insight for businesses and government organizations. [Learn More]
Sign up to have the Kharon Readbook delivered to your inbox every week, click here.
/MEDIA ROUNDUP
SANCTIONS
The U.S. Department of the Treasury designated a Russian network involved in an attempted sanctions evasion scheme in which an opaque and complex supposed divestment could have unfrozen more than USD 1.5 billion worth of shares belonging to a U.S.-designated Russian oligarch. [U.S. Treasury]
A group of former Soviet republics has emerged as a major transshipment hub for U.S. and European computer chips, lasers, and other products with civilian and military uses headed for Russia. [WSJ]
The U.S. has warned an Austrian bank that it is at risk of having its access to the U.S. financial system curtailed because of its operations in Russia. [FT]
A sanctions loophole that allows Turkey to relabel Russian oil and ship it to the EU has generated billions for Moscow. [Politico]
Sanctions have caused imports of spare parts to collapse, but Russian airlines have found new ways to get components into the country. [FT]
France and the Netherlands are seeking EU sanctions on any financial institution in the world that helps Russia's military pay for goods or technology for making weapons. [Reuters]
The U.S. Department of the Treasury sanctioned two Russian individuals and three Russia-based entities for facilitating weapons transfers between Russia and North Korea. [U.S. Treasury]
South Korea's spy agency said it is looking into suspicions that North Korean weapons made in the 1970s have been supplied to Russia for its war in Ukraine amid deepening military cooperation between Pyongyang and Moscow. [Yonhap]
The European Council broadened the scope of its framework for restrictive measures given Iran’s military support of Russia’s war in Ukraine, allowing the EU to target persons and entities supplying, selling, or otherwise being involved in transferring Iran’s missiles and UAVs. [EU Council]
The Australian Government imposed targeted sanctions on five Iranian individuals and three entities in response to Iran’s destabilizing behavior in the Middle East. [Australian Government]
A U.S. Treasury official warned of risks from illicit transfers of Iranian oil off Malaysia and said that there has been an uptick in attempts by Iran and its proxies, including Hamas, to raise and move money in Southeast Asia. [Reuters]
Canada imposed additional sanctions in response to Hamas’ terrorist attacks against Israel, targeting four individuals who provided support through military training and resources to help bolster Hamas’ terrorist capabilities. [Canadian Government]
India signed a 10-year contract with Iran to develop and operate the Iranian port of Chabahar, despite U.S. sanctions on Iran. [Reuters]
The EU temporarily lifted sanctions against the head of Venezuela’s election authority and three former officials, an overture designed to encourage a free and fair presidential vote in July. [Bloomberg]
The U.S. Department of the Treasury sanctioned three Nicaragua-based entities in a move to target the Ortega-Murillo regime’s repression of the Nicaraguan people and its ability to manipulate the gold sector and profit from corrupt operations. [U.S. Treasury]
Two Sudanese individuals were sanctioned by the U.S. Department of the Treasury for leading the Rapid Support Forces’ war campaign. [U.S. Treasury]
The Biden administration and the Democratic Republic of Congo have proposed a plan to reduce sanctions on an Israeli mining magnate accused of corruption in exchange for his permanent exit from the African country. [WSJ]
The EU urged the country of Georgia to withdraw a highly contested bill that would require organizations receiving more than 20% of their funding from abroad to register as agents of foreign influence. The U.S. had previously suggested it might sanction some Georgian officials if the law went ahead. [Reuters]
COMPLIANCE + ENFORCEMENT
The U.S. Department of the Treasury issued the 2024 National Strategy for Combatting Terrorist and Other Illicit Financing, which provides a blueprint of the U.S. government’s goals, objectives, and priorities to disrupt and prevent illicit financial activities. [U.S. Treasury]
U.S. President Joe Biden signed an act into law that prohibits the import of Russian uranium products into the U.S. as of August 12, 2024. [U.S. State]
A bipartisan U.S. coalition introduced a new bill that would give the Commerce Department’s Bureau of Industry and Security the authority to use export controls on Artificial Intelligence and other national security-related emerging technology. [U.S. Select Committee on the CCP]
U.S. President Joe Biden issued an order requiring a company ultimately owned by Chinese nationals to divest a property operated as a cryptocurrency mining facility that is located near a U.S. Air Force base. [U.S. Treasury]
TRADE CONTROLS + SUPPLY CHAIN
U.S. President Joe Biden unveiled steep tariff increases on an array of Chinese imports including electric vehicle batteries, computer chips, and medical products. [Reuters]
The Biden administration is suggesting the possibility that additional penalties could be put in place if the Chinese makers of electric vehicles try to move their production to Mexico to avoid newly announced import taxes. [AP]
Chinese scientists have created a low-cost method to mass-produce optical chips that are used in supercomputers and data centers, in an effort to reduce the impact of U.S. sanctions. [SCMP]
A developer of sensor technologies used in self-driving cars is suing the U.S. Department of Defense for including it on a list of companies accused of aiding China’s military. [Bloomberg]
RESEARCH INTEGRITY
A university in the U.S. is being investigated for its partnership with a Chinese university that has significant ties to the Chinese military. [U.S. Select Committee on the CCP]
U.S. lawmakers are expected to set in motion a massive reordering of how U.S. pharmaceuticals are developed and made, by advancing a contracting ban on five key Chinese research firms. [Axios]
HUMAN RIGHTS + FORCED LABOR
The U.S. will add 26 Chinese companies to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List, which will bring the total number of banned companies to 65. [WSJ]
U.S. Customs and Border Protection released updated monthly statistics, announcing that in April it stopped 392 shipments valued at more than USD 184 million for further examination based on the suspected use of forced labor. [U.S. CBP]
Forced labor-linked cotton from China’s Xinjiang Uyghur Autonomous Region is still sneaking its way into products sold by U.S. and global retailers, with a sizable portion hidden in blended fibers identified as American or Brazilian in origin. [Sourcing Journal]
CRYPTO + CYBER
Canada’s financial intelligence unit released an advisory that describes the key money laundering and terrorist activity financing risks associated with virtual currency automated teller machines. [FINTRAC]
North Korea laundered USD 147.5 million through virtual currency platform Tornado Cash in March after stealing it last year from a cryptocurrency exchange, according to confidential work by U.N. sanctions monitors. [Reuters]
A Tornado Cash developer has been found guilty of money laundering in the Netherlands and sentenced to 64 months of prison time. [CoinDesk]
A U.S. court has ordered the forfeiture of nearly 300 cryptocurrency accounts linked to North Korea’s laundering of millions of dollars in stolen assets, underscoring increasing efforts to crack down on illicit cyber activities funding Pyongyang’s nuclear ambitions. [NK News]