May 23, 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

Key Takeaways: US Adds 26 Textile Companies to Forced Labor List 

The U.S. Department of Homeland Security and the Forced Labor Enforcement Task Force announced last week the addition of more than two dozen cotton and textile companies in China to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List. [Read Kharon's 5 Key Takeaways]

Lawmakers Inquire into a US University’s Partnership with a PLA-Linked Institution

U.S. lawmakers sent an inquiry earlier this month to gain more information on the relationship between Georgia Tech and a research center under a Chinese university with ties to the People's Liberation Army (PLA). [Read More]

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/MEDIA ROUNDUP

SANCTIONS        

The U.K., alongside international partners, announced a new package of sanctions to target the Russia-North Korea "arms-for-oil" trade. [U.K. Government]

U.S. Treasury Secretary Janet Yellen urged German bank executives to step up efforts to comply with sanctions against Russia and shut down efforts to circumvent them to avoid potential penalties themselves that would cut off dollar access. [Reuters]

EU member states approved a plan to use the profits generated by frozen Russian sovereign assets to support Ukraine’s recovery and military defense. [Bloomberg]

EU countries will take weeks to hammer out the next set of sanctions against Russia for its war in Ukraine, though they broadly support the measures, which may include restricting Russian LNG exports for the first time. [Reuters]

Dozens of tankers remain stuck doing nothing months after being sanctioned by the U.S. Treasury Department - a signal of the U.S.’s scope to disrupt Moscow’s petroleum supply chain if it chooses to. [Bloomberg]

Officials responsible for pushing forward Georgia’s Russian-style “foreign agents” law could face asset freezes and travel bans under a new bill to be presented to the U.S. Congress. Several EU countries are also pushing for sanctions against Georgia, including the suspension of visa-free travel to the bloc. [Politico] [FT]

U.K. defense secretary Grant Shapps has accused China of providing or preparing to provide Russia with “lethal aid” for use by Moscow in its war against Ukraine. [FT]

The U.K. amended its Belarus sanctions regulations to prohibit the import of aluminum as well as various transactions and services relating to aluminum. [U.K. Government]

The EU is preparing to tighten sanctions against Belarus and close a loophole that has allowed Moscow to import luxury cars and other western goods banned in Russia in response to the war in Ukraine. [FT]

The U.N. sanctioned three Somali leaders of al-Shabaab, a terrorist group affiliated with al-Qa’ida. [U.N. Security Council]

EU countries have agreed to add 10 new individuals and entities to the Iran sanctions list. The move is said to be related to Iran's support of armed proxies in the Middle East and the Red Sea region as well as the country's military support for Russia. [Reuters]

COMPLIANCE + ENFORCEMENT        

Two alleged members of a transnational money laundering organization were arrested in the U.S. on criminal charges related to their involvement in a scheme to launder millions of dollars in illegal drug proceeds for Mexican drug trafficking organizations, including the Sinaloa and Jalisco cartels. [U.S. Justice]

An Arizona man was sentenced in U.S. federal court to 120 months in prison for his role as a leader in a transnational criminal organization that laundered USD 16.5 million in narcotics proceeds for the Sinaloa Cartel. [U.S. Justice]

The U.S. Treasury launched a new FinCEN Exchange Series specifically designed to work with regional and local banks that will focus on how law enforcement can best support their efforts to monitor activity that may be tied to the illicit trafficking of fentanyl. [U.S. FinCEN]

A Taiwanese man was arrested in New York in connection with his operation and ownership of “Incognito Market,” an online dark web narcotics marketplace that enabled its users to buy and sell illegal narcotics anonymously around the world. [U.S. Justice]

Two Chinese nationals were arrested and charged in the U.S. for leading a scheme to launder funds worth at least USD 73 million tied to an international crypto investment scam. [U.S. Justice]

Two men pleaded guilty to wire fraud conspiracy for their roles in a scheme to fraudulently procure deeply discounted products from a Massachusetts biochemical company and export them to China using falsified export documents. [U.S. Justice]

The U.K. issued guidance for those involved in the sale and brokering of second-hand vessels to third countries, in order to provide further information and tools to counter current and emerging trends related to Russian sanctions evasion. [U.K. Government]

Since Russia invaded Ukraine in 2022, the U.K. has frozen GBP 22.7 billion of Russian assets but has not yet imposed any fines for sanctions evasion. [Politico]

The European Commission issued a compliance alert to warn about circumvention risks in relation to the price caps on crude oil and petroleum products of Russian origin. [European Commission]

The EU Council decided to suspend the broadcasting activities in the EU of four media outlets that spread and support Russian propaganda and the war in Ukraine. [EU Council]

A number of individuals were charged with allegedly participating in schemes to place overseas IT workers—posing as U.S. citizens and residents—in remote positions at U.S. companies to raise revenue for North Korea. [U.S. Justice]

TRADE CONTROLS + SUPPLY CHAIN        

China signaled it will retaliate against trade barriers introduced by the U.S. and the EU as it launched an anti-dumping probe into chemical imports. [FT]

For the past few years, the West has been trying to break China’s grip on minerals that are critical for defense and green technologies. Despite their efforts, Chinese companies are becoming more dominant, not less. [WSJ]

U.S. officials have warned telecommunications companies that undersea cables that ferry internet traffic across the Pacific Ocean could be vulnerable to tampering by Chinese repair ships. [WSJ]

RESEARCH INTEGRITY        

The EU Council adopted a recommendation on enhancing research security that identifies risks relating mainly to the areas of undesirable transfer of knowledge, foreign interference, and ethical or integrity violations. [EU Council]

HUMAN RIGHTS + FORCED LABOR        

A U.S. congressional report revealed major gaps in automakers’ oversight of forced labor in their supply chains - including two companies that shipped cars or parts to the U.S. this year that were made with parts from a banned Chinese supplier. [U.S. Senate Finance Committee]

CRYPTO + CYBER        

U.S. regulators have appointed two separate independent compliance monitors to ensure a cryptocurrency exchange meets the requirements set forth in its settlements over money laundering and sanctions violations. [WSJ]