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4:00 PM ET, Monday, December 4, 2023

The Cipher Brief curates open source information from around the world that impacts national security. Here's a look at today's headlines:  

THE TOP STORIES

Russian Major General Reportedly Killed in Ukraine.  Major General Vladimir Zavadsky, deputy commander of Russia’s 14th Army Corps, was reportedly killed in Ukraine.  The governor of Russia’s Voronezh region, Alexander Guzev, said Zavadsky died “at a combat post.”  Russian media reports previously said on November 29 that Zavadsky was killed by a landmine explosion.  The pro-Kremlin newspaper wrote that Zavadsky was killed near Izium in the Kharkiv region, but analysts say this is unlikely since Izium was liberated from Russia last September and is now miles behind the front lines.  The independent Russian media outlet Important Stories says that Zavadsky was the seventh Major General confirmed killed by Russia and the 12th senior military official overall to be reported dead in the war.  Kyiv Independent Reuters

White House Warns U.S. Almost Out of Money to Support Ukraine.  White House budget director Shalanda Young sent a letter to House of Representatives Speaker Mike Johnson and other congressional leaders warning them that the U.S. is set to run out of funds to support Ukraine in the coming weeks.  Young plainly said the U.S. is now “out of money to support Ukraine” against Russia and that time is swiftly running out for Congress to approve new funding, adding that “there is no magical pot of funding available.”  She noted that without the flow of arms from the U.S. to Ukraine, Russian victories will become more likely.  The White House reports that the Defense Department has used 97% of its $62.3 billion budget for Ukraine support, the State Department has used 100% of its $4.7 billion to spend on military aid for Ukraine, and the State Department and USAID have used 100% of the $27.2 billion they have for economic and civilian security assistance for Kyiv, including humanitarian demining programs.  Young highlighted that humanitarian and economic aid is “just as essential to Ukraine’s survival as military assistance.”  The warning comes as Congress debates the Biden administration’s $106 billion request for funds for Ukraine, Israel, and U.S. border security.  Johnson has previously said that the administration has “failed to substantively address” Republican concerns about Ukraine strategy and has emphasized the need for additional funds for the U.S. border.  Reuters Kyiv Independent Wall Street Journal

Former American Diplomat Charged as Foreign Agent for Cuba.  The U.S. Department of Justice charged Manuel Rocha, former U.S. ambassador to Bolivia, for allegedly serving as an agent for Cuba for over 40 years.  Court papers allege that Rocha engaged in “clandestine activity” on behalf of Cuba, starting in 1981.  He allegedly engaged with Cuban intelligence operatives and provided false information to U.S. officials. Rocha has been officially charged with crimes including acting as an illegal agent of a foreign government.  Attorney General Merrick Garland said the case “exposes one of the highest-reaching and longest-lasting infiltrations of the United States government by a foreign agent.”  Associated Press

ISRAEL AND HAMAS WAR

Israel, Hamas Engage in Some of Fiercest Fighting of War.  Israeli troops and Hamas fighters are currently engaged in some of the fiercest fighting since the Hamas attacks on October 7.  The fighting, including in close quarters, comes as Israel works to end its operations in the northern Gaza and escalate its offensive in the south. It appears that the Israeli military has contained Hamas fighters in two strongholds in the northern Gaza strip, the Shajaiya neighborhood and the city of Jabalia. Since fighting resumed after a week-long ceasefire, the Israeli military has conducted heavy airstrikes on the two areas. In the south, Israel has turned its attention to the city of Khan Younis, the hometown of Hamas leader Yahya Sinwar and where Israel’s military believes hostages are being held.  Israel warned residents in a fifth of the city to evacuate ahead of military operations. Israeli military commanders have said that they are working to swiftly complete their objective of eliminating Hamas amid fears that U.S. support will cease as the war continues on and civilian casualties in Gaza continue to rise.  Gaza’s health ministry says that over 15,000 Palestinians have been killed during Israel’s offensive.  Wall Street Journal

Israel Investigates Potential Trading Knowledge Ahead of Hamas Attacks.  Israeli authorities are reportedly investigating investors after U.S. researchers claimed that some might have known in advance that Hamas was going to launch attacks on Israel on October 7 and used the information to profit off of Israeli securities. Law Professors Robert Jackson from New York University and Joshua Mitts of Columbia University published research that found significant short-selling of shares leading up to the attack.  They wrote that days before the attack, traders seemed to “anticipate the events to come,” citing short interest in the MSCI Israel Exchange Traded Fund (ETF) that significantly spiked on October 2. They also referred to patterns that occurred in early April when it was reported that Hamas was initially planning its attack. They noted that short volume of the same ETF peaked on April 3 at similar levels as those on October 2.  Reuters

Turkey's Erdogan says Israel's Netanyahu Will be Tried as ‘War Criminal.’ Turkish President Tayyip Erdogan said that Israeli Prime Minister Benjamin Netanyahu would eventually be tried as a war criminal over Israel's offensive in the Gaza Strip, calling him a “butcher” and comparing him to Yugoslav ex-President Slobodan Milosevic, who was tried for genocide. Erdogan also slammed Western countries currently supporting Israel.  Turkey calls for a two-state solution to the decades-old conflict and has vehemently criticized Israel over its campaign in Gaza. Turkey is one of the only NATO members that does not view Hamas as a terrorist organization and hosts some of its members.  Reuters

THE UKRAINE UPDATE

Ukrainian Drone Strikes Reportedly Destroy Russian Ammo Depots in Luhansk.  The Security Service of Ukraine (SBU) said on Monday that it used two drones to destroy Russian depots containing equipment and ammunition near the city of Svatove in the Luhansk region. This is the latest attack by Ukraine beyond the front lines in Russian-occupied territory. Since Russia invaded in February of 2022, Ukraine has allegedly used drones to reach locations as far as Moscow. Svatove has been occupied by Russia since June of 2022. Since mid-July, Russian forces have concentrated attacks in the area, namely around Kupiansk in the north in the Kharkiv region, in an attempt to regain positions lost during Ukraine’s counteroffensive.  Kyiv Independent

First Trucks Cross New Ukraine-Poland Border Crossing.  Ukraine’s border service said on Monday that 30 empty semi-trucks traveled through the newly-opened Uhryniv-Dolhbychuv crossing at the Ukrainian-Polish border after protests from Polish truckers blocked the crossing and others. The protests started on November 6, with four border crossings under blockade. Polish truckers have been demanding the end to Ukrainian truckers having permit-free access to the E.U., which they argue is harming their competing local businesses. Poland’s Prime Minister Mateusz Morawiecki said on Monday ahead of an E.U. ministers’ meeting that Warsaw “strongly and unequivocally” demands that the E.U. restore the permits for Ukrainian drivers. Poland, Slovakia, and Hungary have said that their delegates would inform the E.U. about the impact of the removal of permits on their local trucking industries. The permits were first abolished after Russia’s invasion of Ukraine last year.  Both Polish and Slovak truckers are blockading crossings to protest the matter.  Reuters

Ukrainian Sniper Claims to Break Distance Record by Shooting Russian Soldier Over 2 Miles Away.  Ukrainian sniper Vyacheslav Kovalskiy claims to have broken the sniping distance world record, shooting a Russian soldier almost 2 ½ miles away, surpassing the previous record by over 850 feet.  The shot was documented in a video that was reviewed by The Wall Street Journal.  Some are skeptical that the shot broke records, noting the lack of confirmation and uncontrollable variables like the weather.  However, Kovalskiy remains confident and the claim, which was widely covered by Ukrainian news outlets, has reportedly been a much needed boost to Ukrainian morale.  Wall Street Journal

CYBER AND TECH RUNDOWN

Israel Promises Funding to Protect Tech Startup Industry Amid Israel-Hamas War.  The Israel Innovation Authority is planning to provide $100 million in conditional grants to early-stage technology startups if it can get matching funds from the private sector.  The Israel Innovation Authority’s CEO, Dror Bin, said talks are ongoing to secure the funding to help protect startups that have been held back due to problems caused by the Israel-Hamas war, including uncertainty among venture capital firms, lower consumer demand, and a shortage of manpower due to military call ups.  Bin said the Israeli government is providing guarantees to absorb losses and an “upside booster” to increase profits from successful investment to encourage participation.  Bloomberg

Microsoft Warns Russian Hackers Attacking Unpatched Outlook Systems.  Microsoft warned on Monday that hackers associated with Russia’s military intelligence, which the company tracks as Forest Blizzard but are also known as Fancy Bear and APT28, are still actively exploiting a vulnerability in Microsoft software to access victims’ emails.  The group has attempted to use the vulnerability since as early as April 2022.  Polish Cyber Command said successful exploitation of the bug allows hackers access to victims’ email correspondence.  Microsoft patched the flaw in spring after the group used it in attacks against targets in the “government, transportation, energy, and military sectors in Europe.”  Microsoft is urging users to ensure Microsoft Outlook is patched to mitigate the threat.  The Record

E.U. Artificial Intelligence Act in Critical Negotiations.  The E.U. is holding negotiations this week to try and finalize comprehensive artificial intelligence (AI) rules for the bloc.

The E.U.’s AI Act was first proposed in 2019 and was expected to be the world’s first comprehensive AI regulations, but the process to finalize the legislation has been delayed due to disputes over governing general-purpose AI systems and services like chatbots built on foundation models, which train systems on data scraped off the internet.  The focus on foundation models comes from the regulation’s aim to increase accountability to address risks posed by specific uses.  Big tech companies are lobbying against potential overregulation that could stifle innovation, while France, Germany, and Italy — the bloc’s top three economies — have called for self-regulation.   A final decision on the rules is required by April, when E.U. lawmakers start campaigning for bloc-wide elections in June.  The law would not take force before a transition period, which is usually two years.  Associated Press

ELSEWHERE IN THE WORLD

Asia and Oceania

Belarus’s Lukashenko Meets China’s Xi in Beijing.  Belarusian President Alexander Lukashenko met with Chinese President Xi Jinping in Beijing on Monday and agreed to strengthen “strategic coordination.”  Xi called Lukashenko “an old friend” and said Beijing will improve ties in areas like industrial cooperation and cross-border transport, as well as work in multilateral mechanisms, such as the U.N. and Shanghai Cooperation Organization.  Belarusian state media reported that Lukashenko — who arrived in Beijing on Sunday for his second trip to China this year — likewise said Belarus would continue to be a “reliable partner” to China and praised Xi’s “concept of building a community” in contrast to Western countries “trying to tear everything apart.”  The meeting came amid criticism of Belarus for its support for Russia amid the Ukraine war.  South China Morning Post

Europe

Netherlands Court Hears Suit Aimed at Stopping Transfer of F-35 Parts to Israel.  Human rights groups argued in court on Monday that exporting F-35 jet components to Israel could make the Netherlands complicit in possible war crimes in a bid to stop such deliveries. The Netherlands currently has one regional warehouse of U.S.-owned F-35 components which are distributed to surrounding countries, including Israel. The rights groups argued that Israel was using the planes to kill civilians and that preventing that was more important than the Netherlands fulfilling its commercial or political obligations to allied countries. Israel denies committing war crimes in its response to Hamas’s October 7 attack. Lawyers for the Dutch state argued that they considered the risks by allowing exports to continue and weighed them with other factors, including Israel’s right to self-defense. A lawyer also argued that it did not make sense for the court to pass judgment on the Israeli military without all of the facts. He added that it was also in the Netherland’s broader interests to follow through on delivery obligations. The court’s decision is expected in two weeks.  Reuters

U.K. Military Faces $22 Billion Equipment Shortfall, Watchdog Warns.  A public spending watchdog said on Monday that the U.K. military faces an equipment funding shortfall of 17 billion pounds ($21.6 billion) over the next decade. The National Audit Office (NAO) published an estimate for the cost of new weapons and equipment at 305.5 billion pounds for 2023-2033. This put the British military at 16.9 billion pounds over budget, the largest deficit since its first report in 2012. The NAO attributed this deficit to the soaring costs of Britain’s naval and nuclear programs and inflation, which it said have caused a “marked deterioration” in the U.K. Ministry of Defense’s financial position. This comes as Russia’s war in Ukraine has emphasized the need for increased military spending across Europe. Defense Minister Grant Shapps said in response to the report that the Ministry of Defense “is confident that it can live within its equipment budget”. Earlier this year, the government raised defense spending by an extra 5 billion pounds, increasing it to 2.25% of the U.K.’s GDP from 2%. Shapps said that the NAO did not take into account that the government wants to raise the defense budget to 2.5% of GDP when economic conditions allow.  Reuters

Middle East

Putin to Visit UAE, Saudi Arabia This Week.  Russian President Vladimir Putin is expected to visit the United Arab Emirates and Saudi Arabia this week, Russian news outlet Shot reported on Monday. The visit will come after OPEC+ group members agreed to voluntary oil output cuts on Thursday. Putin is expected to first travel to the UAE and then to Saudi Arabia for unspecified “useful” negotiations, according to Putin’s aide Yury Ushakov.  Putin has rarely traveled abroad in recent years and mostly visits states that were a part of the Soviet Union. His last trip outside those countries was to China in October.  Putin’s travel was further limited in March when the International Criminal Court (ICC) issued a warrant for his arrest for his alleged role in the forced transfer of Ukrainian children. The UAE and Saudi Arabia are not members of the ICC.  Reuters

Africa

U.S. Sanctions Three Former Sudanese Officials for Undermining Peace.  The U.S. Treasury Department on Monday sanctioned three individuals for their role in “undermining peace, security, and stability in Sudan.”  The Department said that the sanctions were being imposed under an executive order that penalizes people who destabilize Sudan and undermine democracy. The three individuals named were: Taha Osman Ahmed al-Hussein, Salah Abdallah Mohammed Salah (Salah Gosh), and Mohamed Etta Elmoula Abbas. All three are former Sudanese officials.  Elmoula and Gosh are accused of working to restore former regime actors to power and undermine efforts to establish a civilian government, while Taha is accused of facilitating the transfer of military aid to the paramilitary Rapid Support Forces (RSF).  Reuters U.S. Department of the Treasury 

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Brad Christian, Ethan Masucol, Leighton Durham, and Ryan Simons contributed to this report. 

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