May 30, 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]

/THIS WEEK IN THE KHARON BRIEF

Russia Moves To Bolster Its Domestic Drone Technology

In the face of international sanctions and a global focus on Russia’s procurement of unmanned aerial vehicles (UAVs) and drone components from Iran and China, Russia’s technology sector has been quietly bolstering its domestic drone capabilities. [Read More]

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/MEDIA ROUNDUP

SANCTIONS        

The U.S. Department of the Treasury sanctioned three individuals for their activities associated with the malicious botnet tied to the residential proxy service known as 911 S5, as well as three entities that are owned or controlled by one of the individuals. [U.S. Treasury]

The U.S. Department of the Treasury sanctioned two companies that are linked to the Wagner Group in a continued effort to counter Russia’s activities in Africa. [U.S. Treasury]

The EU sanctioned two individuals and one entity responsible for conducting propaganda actions that distorted and manipulated facts in order to justify and support Russia's war of aggression against Ukraine. [European Council]

The EU Council established a new framework for restrictive measures against those responsible for serious human rights violations or abuses, repression of civil society and democratic opposition, and undermining democracy and the rule of law in Russia. The Council listed one entity and 19 individuals under the new regime. [European Council]

A French agency conducted raids on a company that had advertised on the dark web that it could provide a turnkey sanctions evasion service. The investigation highlighted an exponential growth of exports to third countries bordering Russia. [French Government]

The EU’s executive arm is examining the feasibility of a proposal by one of its member states to sanction a major Russian insurance company, as part of efforts to choke revenue-generating streams that Moscow needs to finance its war against Ukraine. [Bloomberg]

One of Russia’s richest men is seeking sanctions-related damages from Luxembourg on assets worth USD 15.8 billion and plans to take the government to court if it cannot agree to a payout. [FT] 

The operator of the world's biggest refining complex has signed a one-year deal with Russia's Rosneft to buy at least 3 million barrels of oil a month in rubles - a currency shift that permits trade despite U.S. and European sanctions. [Reuters] 

According to the Bank of Russia, expanded sanctions on Russia and enhanced pressure on countries that Moscow considers friendly are hurting Russian firms' export revenues and creating oil payment issues. [Reuters]

Western companies have remained in Russia despite saying they planned to leave after the invasion of Ukraine, as bureaucratic obstacles increase and consumer activity rebounds. [FT]

One of the world’s largest banks transferred ownership of its Russian unit to Expobank for an undisclosed fee, following a 2023 announcement that it would halt commercial payments to and from Russia and Belarus due to sanctions making it "increasingly challenging" to operate there. [Reuters]

A Russian drone plant that uses Iranian tech and has hired a workforce from East Africa could shape the war in Ukraine. [WSJ]

The U.S. and its partners are prepared to use sanctions and export controls to prevent China-Russia trade that threatens their security amid the ongoing Ukraine war. [Reuters] 

Chinese exporters selling to Russian clients have experienced more difficulties in payment processing as Western sanctions intensify. [SCMP]

The EU is discussing imposing sanctions on the Iranian defense minister as part of a potential package that would hit Iran for providing military support to groups in the Middle East and the Red Sea. [Bloomberg]

South Korea and Japan announced a series of sanctions applied to individuals, organizations, and ships related to Russia's alleged procurement of weapons from North Korea in breach of U.N. Security Council resolutions. [Reuters] 

The Australian Government listed Ansar Allah, also known as the Houthis, as a terrorist organization. [Australian Government]

A major oil company and Trinidad and Tobago’s state energy firm have received a two-year license from the U.S. Treasury Department to negotiate and develop gas fields with Venezuela. [Reuters]

A U.S. energy magnate secured a license to continue importing asphalt from Venezuela without breaching U.S. sanctions. [Bloomberg]

The U.S. Department of the Treasury amended regulations to update and clarify authorizations in support of internet-based services to promote internet freedom in Cuba, support independent Cuban private sector entrepreneurs, and expand access to certain financial services for the Cuban people. [U.S. Treasury]

COMPLIANCE + ENFORCEMENT        

A U.S. federal regulator fined a global financial services firm USD 200 million for failing to properly surveil billions of trades that have been executed since 2014. [WSJ]

A manager of a Mexico-based drug trafficking organization was sentenced to prison and ordered to forfeit over USD 1.3 million for his role in an international drug trafficking conspiracy. [U.S. Justice]

A Ukrainian national pleaded guilty to a money laundering charge for his role in a scheme to violate U.S. export laws and regulations by attempting to smuggle a dual-use export-controlled item to Russia. [U.S. Justice]

A former officer in the Venezuelan National Guard was sentenced to prison for participating in a money laundering scheme that involved bribes to foreign officials and defrauding foreign financial institutions. [U.S. Justice] 

TRADE CONTROLS + SUPPLY CHAIN        

Chinese firms tagged as military entities are rebranding and creating U.S.-domiciled businesses to sell their wares as the Biden administration expands the government entity lists that restrict Chinese companies’ business dealings in the U.S. [WSJ]

The largest U.S. semiconductor equipment maker disclosed that it received another subpoena from the U.S. Department of Commerce this month, as regulators request more information on shipments to China. [Reuters]

In an appeal for firms to stem the flow of parts being used to wage war in Ukraine, a Biden administration official warned that a disturbing number of Russian weapons are powered by electronic components from companies in the U.S. and allied nations. [Bloomberg]

CRYPTO        

The U.S. Department of the Treasury published its first Non-Fungible Token (NFT) Illicit Finance Risk Assessment, which explores how vulnerabilities associated with NFTs and NFT platforms may be exploited by illicit actors for money laundering, terrorist financing, and proliferation financing. [U.S. Treasury]

A bipartisan pair of U.S. senators is pressuring the Biden administration to do more to crack down on how drug cartels use cryptocurrency to traffic fentanyl. [CNN]