August 10, 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 Kharon’s Howard Mendelsohn and MUFG’s Brian Grant on August 15 as they discuss initial findings from Kharon’s ongoing research on HS Codes of high priority Russian battlefield items that were sanctioned in recent US, EU and UK guidance. Learn from experts how to utilize data and technology to uncover sanctions and export control evasion related to this new guidance. [Register Today]

On May 11, 2023, Canada passed a new act to address the use of forced labor and child labor in global supply chains. In this webinar, experts will break down the new regulatory framework and its implications for organizations, as well as best practices for identifying forced labor exposure. [Register Today]

THIS WEEK ON THE KHARON BRIEF

Chinese Firms Help Russia Acquire Military Items, U.S. Intelligence Report Says

State-owned and private companies in mainland China and Hong Kong have supplied Russia with hundreds of millions of dollars worth of priority dual-use products through circuitous routes, a recent report by the U.S. Office of the Director of National Intelligence (ODNI) warned. [Read More]

Iran’s Ballistic Missile Program Relies on Foreign Suppliers as the International Community Weighs Sanctions

A wide-ranging network in China, India, and Turkey have supplied Iran with centrifuge components, missile propellants, and western products for its ballistic missile program. This support has enabled Iran’s development and proliferation of missiles capable of carrying nuclear warheads in spite of U.N., E.U. and U.S. restrictions. [Read More]

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MEDIA ROUNDUP

SANCTIONS        

The U.S., U.K. and Canada have imposed sanctions on Lebanon’s former central bank governor Riad Salameh over allegations that he abused the powers of his office “to engage in a variety of unlawful self-enrichment schemes. [FT]

The U.S. Department of the Treasury designated eight individuals and five entities on the three-year anniversary of the Belarusian authorities’ falsification of the August 2020 presidential election and their callous crackdown on the Belarusian protest movement demanding fundamental freedoms. [U.S. Treasury]

The U.S. Department of the Treasury designated three Sinaloa Cartel members involved in the illicit trafficking of fentanyl and other deadly drugs. [U.S. Treasury]

Canada is imposing fresh sanctions on Iran, targeting the country’s drone and aviation industry with accusations of destabilizing the region and supporting Russia’s war on Ukraine. [Global News]

The U.K. Foreign Secretary has announced 22 new sanctions on individuals and businesses outside Russia supporting Putin’s illegal invasion of Ukraine, as well as 3 Russian companies importing electronics vital to Russia’s military equipment used on the battlefield. [U.K. Government]

Niger was hit with more sanctions, hours after its new military leaders rejected the latest diplomatic mission aimed at restoring constitutional order following a July 26 coup. Nigerian President Bola Tinubu ordered the new sanctions through Nigeria's central bank, aimed at squeezing those involved in the takeover. [Reuters]

A handful of deep-pocketed Russian oligarchs are pushing back on sanctions, intensifying their legal challenges in U.K. and European Union courts in a long-shot attempt to remove restrictions that include travel bans and asset freezes. [WSJ]

Russian companies are turning to Hong Kong for dispute arbitration services as sanctions over the Ukraine war restrict their access to western courts. Lawyers in the city say Russian companies are increasingly adopting Hong Kong’s governing law in their commercial contracts for similar reasons. [FT]

Russia's invasion of Ukraine and unprecedented Western sanctions levied on Moscow have created a business opportunity for used car dealers in Armenia as U.S cars are sent to Russia. [France24]

Despite heavy sanctions intended to isolate Russia over the war in Ukraine, dozens of Russians connected to President Vladimir Putin or the Russian military are still welcome in European Union countries, drawing criticism from politicians and antiwar activists. [WaPo]

Venezuela has appointed a new vice president at PDVSA who will lead the state company's gas operations, a key move as the South American country negotiates licenses with foreign companies to develop its mostly untapped natural gas reserves. [Reuters]

Following the expiration of General License 5 on August 5, the United States will continue to carefully monitor compliance and scrutinize transactions with a Myanma Foreign Trade Bank or Myanma Investment and Commercial Bank nexus. [U.S. State Department]

A Singaporean bank is cutting off counterparts in Myanmar as pressure from Western sanctions mount, ending correspondent bank relationships in a move that could significantly restrict the military regime's access to the global financial system. [NikkeiAsia]

An unusual sighting of a Russian military jet in North Korea is stoking concern that Kim Jong Un is selling Vladimir Putin weapons as ties strengthen between the sanctioned states. [Bloomberg]

COMPLIANCE + ENFORCEMENT        

U.S. lawyers voted to adopt a revised rule that imposes a more explicit obligation to vet potential clients, as part of an effort to quell concerns about the use of lawyers to facilitate money laundering and other financial crimes. [WSJ]

Ukraine’s National Agency on Corruption Prevention has set up a searchable database that lists paintings and sculptures thought to have been bought and sold in recent years by the Russian oligarchs who are accused by the west and Kyiv of aiding and abetting Vladimir Putin’s war in Ukraine. [Guardian]

The son of Colombian President Gustavo Petro acknowledged that his father’s 2022 election campaign received money of dubious origin, according to prosecutors investigating the son for alleged illicit enrichment and money laundering. [AP]

EXPORT CONTROLS + SUPPLY CHAIN        

The U.S. will prohibit Americans from investing in some Chinese companies developing advanced semiconductors and quantum computers starting next year, escalating Washington’s efforts to prevent Beijing from producing cutting-edge technology for its military. [WSJ]

China is going after licenses to boost its access to German technology as investment regulation makes company acquisitions in the sector increasingly difficult. Tech licenses are one way for China to try to get in "through the back door.” [Reuters]

Imports from China to the EU, including of sensitive technology and critical minerals, have increased in recent years, despite lawmakers’ attempts to “de-risk” economic links amid deteriorating diplomatic relations with Beijing. [FT]

CRYPTO        

Three U.S. senators are pressing the Biden administration to disclose more information about its efforts to counteract North Korea’s dependence on stolen cryptocurrency to fund its nuclear program. [WSJ]