December 19, 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. 

/THIS WEEK IN THE BRIEF

BIS Report: US Companies Lack Visibility into Chinese-Made Legacy Chip Supply Chains

A BIS report highlights U.S. companies' limited visibility into supply chains for Chinese-made legacy semiconductors, with over two-thirds of products likely containing Chinese chips, raising supply chain transparency and national security concerns. [Read More]

Experts Share Insights on Navigating Russian Diversion Tactics, Strengthening Sanctions Compliance

In a recent Kharon webinar, experts discussed how Russia is using diversion tactics to bypass sanctions, including complex supply chains and third-party intermediaries. [Read More]

EU Sanctions Chinese, Hong Kong Entities, Expands ‘Shadow Fleet’ Restrictions in Latest Russia Crackdown

The EU's 15th sanctions package targets global networks enabling Russia's war efforts, including entities in China, Hong Kong, and elsewhere. Key measures include blocking critical military supplies and expanding restrictions on Russia’s "shadow fleet." [Read More]

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/MEDIA ROUNDUP

SANCTIONS        

The EU adopted a 15th package of restrictive measures designed to address the circumvention of sanctions through the targeting of Putin’s shadow fleet and to weaken Russia’s military and industrial complex. [EU Council]

The EU imposed sanctions against 16 individuals and three entities responsible for Russia’s destabilizing actions abroad, including through the use of coordinated information manipulation and interference. [EU Council]

The U.K. announced new sanctions on two companies enabling the trading of Russian oil as well as 20 shadow fleet vessels carrying Russian oil. [U.K. Government]

The U.S. Department of State imposed sanctions on a number of entities previously sanctioned pursuant to the Protecting Europe’s Energy Security Act (PEESA) for their involvement in the construction of the Nord Stream 2 pipeline, as well as several new owners of vessels previously blocked pursuant to PEESA. [U.S. State]

The U.S. will in the coming days introduce financial sanctions against Serbia's oil company NIS, which is majority owned by Russia's Gazprom Neft and Gazprom, Serbia’s president said. [Reuters]

Ten EU countries have proposed further sanctions on Russian trade, including its output of metals such as aluminum, to further cut the country's revenues and funding for its war in Ukraine, a letter seen by Reuters showed. [Reuters]

The U.S. Treasury Secretary said that the U.S. is looking at further sanctions on "dark fleet" tankers and will not rule out sanctions on Chinese banks as it seeks to reduce Russia's oil revenue and access to foreign supplies to fuel its war in Ukraine. [Reuters]

Tankers carrying Russian oil through European waters will be asked to prove they have adequate accident insurance or face potential sanctions, according to officials briefed on a new scheme designed to tighten restrictions on Moscow’s “dark fleet” of aging vessels. [FT]

Proceeds from Russian exports are accumulating abroad due to increasing delays in international trade settlements caused by U.S. pressure on financial institutions in countries that remain friendly to the Kremlin. [Bloomberg]

The EU imposed restrictive measures on 26 individuals and two entities in Belarus, including members of the judiciary and individuals who have benefited from the Lukashenka regime. [EU Council]

The U.S. Department of the Treasury designated three individuals and four entities in Bosnia and Herzegovina that form part of U.S.-designated Republika Srpska President Milorad Dodik’s financial network and enable the Dodik family’s continued attempts to evade sanctions, as well as a politician who serves as a key enabler of Dodik’s corruption and destabilizing political agenda. [U.S. Treasury]

In a coordinated action with the U.S., the U.K. sanctioned five senior individuals responsible for violent attacks against journalists and peaceful protestors in Georgia. [U.K. Government]

Hungary and Slovakia blocked a proposed package of EU sanctions against leading Georgian officials for that government's violent crackdown on pro-West protesters over recent weeks. [RFE/RL]

The U.S. Department of the Treasury and the U.S. Department of State sanctioned 11 individuals and eight entities that have provided financial, military, and procurement support to North Korea. [U.S. Treasury] [U.S. State]

The U.S. Department of the Treasury sanctioned two individuals and one entity involved in a network that launders millions of dollars of illicit funds generated by North Korean information technology workers and cybercrime to support the North Korean government. [U.S. Treasury]

The South Korean government designated 11 individuals and 15 organizations for their involvement in illegal military cooperation between Russia and North Korea. [South Korean Government]

In light of the continuing proliferation threat of Pakistan’s long-range missile development, the U.S. designated four entities involved in the proliferation of weapons of mass destruction and their means of delivery. [U.S. State]

The U.S. Department of the Treasury sanctioned two entities and two individuals for their role in developing and procuring components for sensitive navigational systems for the Iranian military, and the U.S. Department of State designated one individual and two entities involved in Iranian UAV and missile development. [U.S. Treasury] [U.S. State]

Republican and Democratic U.S. senators said it is too soon to consider lifting sanctions on Syria following the removal of President Bashar al-Assad, an indication that Washington is unlikely to change its policy any time soon. [Reuters]

France said it would host an international meeting on Syria in January and that the lifting of sanctions and reconstruction aid would be conditional on clear political and security commitments by the transitional authority. [Reuters]

Two U.S. senators said they are prepared to introduce sanctions legislation against Turkey unless Ankara forces Syrian opposition fighters into a ceasefire with U.S.-backed Kurdish partners in the northeast of the country. [The Hill]

The EU sanctioned four individuals affiliated with either the Sudanese Armed Forces (SAF) or the Rapid Support Forces (RSF). [EU Council]

Switzerland’s parliament approved a proposal to ban the Lebanese militia group Hezbollah, describing it as a paramilitary terrorist organization. [Bloomberg]

U.S. lawmakers introduced the Sanctions and Accountability for Non-Compliance and Transparent Investigative Oversight for National Security (SANCTIONS) in the West Bank Act, a bicameral bill that codifies President Biden’s February 2024 Executive Order imposing sanctions on individuals undermining peace, security, and stability in the West Bank. [U.S. Representative Summer Lee]

The U.S. Department of the Treasury sanctioned 12 individuals and eight entities, located across seven countries, that are linked to the global illicit drug trade. [U.S. Treasury]

U.S. lawmakers unveiled new bipartisan legislation aimed at holding China accountable for the fentanyl crisis, including through the strengthening of sanctions on China-based and China-backed entities engaged in drug trafficking. [Select Committee on the CCP]

Canada imposed sanctions against five current or former senior Venezuelan government officials for engaging in activities that have directly or indirectly undermined democracy in Venezuela. [Canadian Government]

The EU sanctioned three Haitian individuals in response to the escalating gang violence in the country. [EU Council]

COMPLIANCE + ENFORCEMENT        

The U.S. Department of the Treasury announced two settlement agreements with an individual who violated the Global Magnitsky Sanctions Regulations and with a manufacturer of musical instruments that shipped instruments and related accessories ultimately destined for Iran. [U.S. Treasury]

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) imposed a civil penalty against a radio frequency and microwave power solutions engineering and manufacturing company that made a significant number of shipments to Russia, several of which occurred after the products had been designated as Common High Priority List (CHPL) items. [U.S. BIS]

Canada proposed new measures that will help its anti-money laundering regulator impose stronger penalties for financial crimes after a big national bank pleaded guilty in the U.S. for failures in its compliance program. [Reuters]

Australia's financial crime watchdog launched legal proceedings against a sports betting and gaming group, alleging breaches of the country's anti-money laundering and counter-terrorism financing laws by its online betting platforms. [Reuters]

A Minnesota-based global transportation and logistics company agreed to pay a fine to settle potential civil liability relating to 82 apparent violations of sanctions against Iran and Cuba conducted by five of its non-U.S. subsidiaries. [U.S. Treasury]

U.S. authorities are investigating whether a Chinese company whose popular home internet routers have been linked to cyberattacks poses a national security risk and are considering banning the devices. [WSJ]

Fourteen North Korean nationals were indicted for their involvement in long-running conspiracies to violate U.S. sanctions and to commit wire fraud, money laundering, and identity theft. [U.S. Justice]

A Russian national was indicted for assisting a sanctioned oligarch in schemes to employ an American citizen to launch and operate a Russian television network. [U.S. Justice]

A U.K.-based provider of training simulators was found guilty on three counts of exporting military goods without the necessary license and fined. [U.K. Government]

The founder of an Iranian company and an employee of a U.S. microelectronics manufacturer were charged with violating export control laws in a conspiracy to procure sensitive U.S. technology for use in IRGC military drones. [U.S. Justice]

A federal jury convicted a U.S. man on charges relating to his efforts to provide material support to the Islamic State of Iraq and al-Sham (ISIS) through a crypto financing scheme. [U.S. Justice]

A U.S.-sanctioned Afghan man was sentenced to prison for attempting to import heroin into the U.S., engaging in narco-terrorism for the benefit of the Taliban, attempting to engage in narco-terrorism for the benefit of the Haqqani Network, and witness tampering offenses. [U.S. Justice]

TRADE CONTROLS + SUPPLY CHAIN        

U.S.-made technology continues to fall into Russian hands in Ukraine as a key national security office remains critically underfunded, according to a report from Senate Democrats. [NBC]

The U.K. published an annual report detailing its strategic export controls policy and export licensing decisions for 2023. [U.K. Government]

The U.S. is preparing rules that would restrict the sale of advanced artificial intelligence chips in certain parts of the world in an attempt to limit China’s ability to access them, according to people familiar with the matter. [WSJ]

The Biden administration has taken its first step to retaliate for China’s broad hack of American telecommunications firms, moving to ban the few remaining operations of China Telecom in the U.S. [NYT]

The Biden administration is set to initiate a trade investigation into Chinese semiconductors in the coming days, as part of a push to reduce reliance on a technology that U.S. officials believe pose national security risks. [Bloomberg]

The U.S. Department of Defense removed a producer of chipmaking equipment and an investment firm from its list of Chinese military companies operating in the U.S. [U.S. Federal Register]

Switzerland will make changes to the list of dual-use goods in its Goods Control Ordinance to bring export controls back into line with those of important partner countries of the Swiss business and scientific community. [Swiss Government]

HUMAN RIGHTS        

Chinese surveillance technology group Hikvision terminated five contracts with local governments in Xinjiang, a move that could help shield it from pressure from the incoming administration of U.S. president-elect Donald Trump. [FT]

Canada announced its intent to introduce legislation to create a new regime for supply chain due diligence, which will require government entities and businesses to scrutinize their international supply chains for risks to fundamental labor rights and take action to resolve these risks. [Canadian Government]