September 14, 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.

UPCOMING EVENTS

Join experts from Kharon, TrusTrace, and ArentFox in a discussion of current and developing international guidance related to forced labor. The webinar will address practices that businesses can institute to comply with existing forced labor guidance, while also preparing for new regulations. [Register] 

Join Kharon and Perkins Coie for an in-depth discussion on the U.S. Government's March Tri-Seal Guidance on sanctions evasion vigilance, as experts outline best practices for identifying Russian evasion. [Register]

WHITE PAPER INSIGHTS

Since the establishment of the UFLPA Entity List last June, an additional 4 entities and 9 subsidiaries have been added to the list. Meanwhile, UFLPA and forced labor compliance expectations and guidance continue to evolve. Read more about updated government guidance in our new white paper. [Download Here]

THIS WEEK ON THE KHARON BRIEF

U.S. Sanctions Hizballah Financial Network in Latin America

The U.S. government has imposed sanctions against a network of Hizballah financial facilitators and companies in South America that generate significant revenue for the terrorist group, and enable its activities in the western hemisphere. [Read More]

Russian Disinformation Network Remains Active in Africa Despite Account Removals

A disinformation network tied to Russia’s Wagner Group remains a disruptive force in sub-Saharan Africa despite efforts by social media companies to remove the network’s presence from their platforms, Kharon researchers have found. [Read More]

RAPID RESPONSE VIDEO

U.S. Sanctions Targeting Hizballah

Following the U.S. Department of the Treasury's sanctions imposed on a Hizballah financial network in Latin America this week, Kharon experts sat down for a quick conversation to discuss the network, one that Kharon has been researching for years. [Watch Now]

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MEDIA ROUNDUP

SANCTIONS        

 The U.S. Department of the Treasury imposed sanctions on nearly 100 individuals and entities related to Russia’s military-industrial base as the U.S. continues to leverage sanctions and economic restrictions to undermine Russia’s capacity to wage its war against Ukraine. [U.S. Treasury]

The U.S. Department of State designated more than 70 entities and individuals involved in expanding Russia’s energy production and export capacity, operating in Russia’s metals and mining sectors, and aiding Russian individuals and entities in evading international sanctions. [U.S. State]

The EU sanctioned prosecutors and judges active in courts established by Russia’s occupying force in illegally annexed Crimea who took part in the politically motivated court proceedings against journalist Vladyslav Yesypenko and Nariman Dzhelyalov, a Crimean Tatar. [EU]

FinCEN issued a Financial Trend Analysis on patterns and trends contained in Bank Secrecy Act reporting on suspected evasion of Russia-related export controls that indicate almost USD 1 billion in suspicious activity. [U.S. FinCEN]

The EU has agreed to lift sanctions against three Russian business tycoons targeted in response to Moscow’s war against Ukraine, in the most prominent delistings since the conflict began. [FT]

Russian steel billionaire Victor Rashnikov lost a European Union court fight against his inclusion on the bloc’s sanctions list following the invasion of Ukraine. The EU’s General Court in Luxembourg, the bloc’s second-highest tribunal, dismissed his appeal. [Bloomberg]

Since Russia’s invasion of Ukraine, Greek shipowners have discovered an apparently even more lucrative source of revenue: selling the ships themselves to mysterious buyers linked to Russia. [FP]

Russia has managed to overcome sanctions and export controls imposed by the West to expand its missile production beyond prewar levels, leaving Ukraine especially vulnerable to intensified attacks in the coming months. [NYT] 

An Austrian construction group set out details of a planned capital reduction in its latest step aimed at decreasing the stake held by a company belonging to sanctioned Russian shareholder Oleg Deripaska. [Reuters]

A shadowy fight is playing out on three continents for control of Yevgeny Prigozhin’s sprawling interests as head of the Wagner mercenary group. The biggest prize: his lucrative operations in Africa. [NYT]

The U.S. Russian Elites, Proxies, and Oligarchs (REPO) Task Force has identified some USD 5 billion in Russian central bank assets in the U.S. banking system, a small fraction of the estimated USD 280 billion in global assets, according to REPO officials. [Axios]

Myanmar received a shipment of two Russian Su-30 fighter jets one year after the two countries signed a contract for the delivery of six fighter jets. [Reuters] 

The Biden administration has issued a waiver for banks to transfer USD 6 billion in frozen Iranian oil funds without fear of U.S. sanctions — a key step in securing the release of five American citizens detained in Iran. [WaPo]

The chairman of the Hong Kong Bar Association has warned that any U.S. sanctions against local judges could pose a “real threat” to the city’s legal system and prevent the judiciary from recruiting top talent to combat a manpower shortage. [SCMP]

COMPLIANCE + ENFORCEMENT        

The U.K.’s financial regulator warned the country’s largest banks not to cut their risk controls amid tough economic conditions and other pressures, saying it intends to step up its oversight. [WSJ]

U.S. prosecutors are increasingly focusing their attention on investigating corporate crimes that have national security implications, as investigations in recent years have revealed potential national security violations, including violations of sanctions, export controls, and material support for terrorism. [WSJ]

A resident of the U.S. and a citizen of Belarus pleaded guilty to engaging in a scheme to violate U.S. sanctions and commit money laundering by conducting transactions for the purchase and acquisition of metal products valued at over USD 139 million from companies owned by Sergey Kurchenko, a sanctioned oligarch. [U.S. Justice]

In the first-ever criminal resolution involving a company that violated sanctions by facilitating the illicit sale and transport of Iranian oil, the U.S. Justice Department announced the disruption of a multimillion-dollar shipment of crude oil by the Islamic Revolutionary Guard Corps. [U.S. Justice]

A New Hampshire charity pleaded guilty in connection with the illegal export of goods to Syria. The charity falsely reported that the end destination of the shipments was Turkey and not Syria, and artificially deflated the value of the goods. [U.S. Justice]

One of the world's largest banks will halt commercial payments by business customers to and from Russia and Belarus, as lenders tighten restrictions beyond sanctions imposed after Russia's invasion of Ukraine. [Reuters]

A foreign national was sentenced to 10 years in prison and ordered to forfeit USD 6 million for conspiracy to commit money laundering after laundering millions of dollars of drug proceeds on behalf of international drug trafficking organizations. [U.S. Justice] 

Latvia’s State Revenue Service (VID) has commenced a total of 201 criminal proceedings over circumvention of anti-Russian and anti-Belarusian sanctions. Latvian customs officials performed more than 190,000 cargo document and physical cargo inspections since sanctions came into effect. [BNN]  

EXPORT CONTROLS + SUPPLY CHAIN          

A research team with a major Chinese defense company says it has built a radar chip with a record power output using semiconductor technology that is the subject of strict U.S. sanctions. [SCMP]

A South Korean semiconductor company has opened an investigation into the use of its chips in the latest phone from Huawei after a teardown of the device revealed its memory and flash storage inside. [Bloomberg]

CRYPTO        

A fintech owner in London is facing allegations that he helped notorious drug traffickers attempt to launder hundreds of millions of euros through a crypto exchange platform on a scale rarely seen by European prosecutors. [Bloomberg]