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6:00 PM ET, Thursday, July 27, 2023

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

In the Americas

U.S. Intelligence Says China Likely Supplying Military Technology to Russia.  An unclassified U.S. intelligence report released on Thursday alleges that China is providing Russia with military and dual-use technology, which the Russian military uses in Ukraine.  The report says that customs records show transfers of technology including “shipping navigation equipment, jamming technology, and fighter jet parts.”  It adds that China is now “an even more critical partner” of Russia since Moscow’s invasion of Ukraine in 2022, noting an increase in bilateral trade settled in Chinese yuan and Beijing’s increased importation of Russian energy exports.  The report was compiled by the Office of the Director of National Intelligence and published by the House Permanent Select Committee on Intelligence.  China has repeatedly denied allegations of sending military equipment to Russia and helping Moscow evade Western sanctions and end-use controls.  Reuters

U.S. Lawmakers Urge More Submarine Funding Following AUKUS Deal.  A group of twenty-five U.S. Republican lawmakers sent a letter to President Joe Biden on Thursday urging him to increase funding for the U.S. submarine fleet.  The letter calls for more funding for submarine production to both fulfill commitments in the AUKUS deal — which will supply nuclear-powered submarines to Australia — while also maintaining the strength of the U.S. submarine fleet.  The letter specifically warns that the decision to sell three attack submarines to Canberra under the deal without a way to replace them will “unacceptably weaken” the U.S.  To remedy this, the lawmakers are asking for clear, separate spending requests to fund both “AUKUS-specific” needs and to generally increase submarine production to at least 2.5 Virginia-class attack submarines per year, rather than the 1.2 submarines currently being produced.  Under the AUKUS deal, the U.S. will sell three Virginia-class nuclear-powered submarines to Australia in the early 2030s.  This will be followed by Australia and Britain jointly producing a new SSN-AUKUS-class submarine with “cutting-edge” U.S. technology by the early 2040s.  Issues remain over U.S. technology-sharing and U.S. production capacity restricting delivery of the Virginia-class submarines.  Reuters

Western Europe

Switzerland, Finland, Sweden Considering Partnering With U.S. National Guard.  General Dan Hokanson, chief of the U.S. National Guard, announced on Thursday that Switzerland, Finland and Sweden are considering joining the National Guard’s State Partnership Program.  The National Guard security partnership program is a lesser-known vehicle for U.S. cooperation with foreign militaries, offering training and educational exchanges with young officers.  Ukraine was first to join the program, partnering with California’s National Guard.  Ukraine’s air force has since cooperated with the California National Guard for training support.  Al Jazeera Associated Press Washington Post

Swedish PM ‘Extremely Worried’ Over Quran Burnings.  Swedish Prime Minister Ulf Kristersson said on Thursday that he is “extremely worried” about the consequences if more demonstrations that include Quran burnings are permitted.  His comments come after a series of demonstrations in Sweden and Denmark in recent weeks that have included Quran burnings.  While the Swedish and Danish governments have repeatedly said they do not condone the demonstrations, authorities in Stockholm and Copenhagen have allowed them to go ahead under freedom of speech laws.  The incidents sparked anger from those in Egypt, Iraq, Turkey, and other countries across the region.  Kristersson said if more such demonstrations take place, there will be “a clear risk of something serious happening.”  Iraqi protesters stormed and set fire to Sweden’s embassy in Baghdad on July 20.  More long-term, Kristersson’s concerns may also refer to the Quran burnings potentially threatening Ankara’s support for Sweden’s NATO membership bid.  Reuters The Guardian

Central and Eastern Europe

Ukraine Claims Liberation of Staromaiorske.  Ukrainian troops have reportedly recaptured the southeastern village of Staromaiorske in a major success on the southern front.  Ukrainian President Volodymyr Zelensky published a video on Thursday showing troops from the 35th brigade and the ‘Ariy’ territorial defense unit in the newly liberated village, which is south of a cluster of settlements Ukraine had liberated at the start of its counteroffensive in June.  The Ukrainian military earlier said it was “solidifying positions” it had advanced into in the same area east of Zaporizhzhia city.  BBC Reuters

Putin Claims Major Ukrainian Losses in Zaporizhzhia.  Russian President Vladimir Putin said Thursday that Russian forces repelled Ukrainian attacks in the southern Zaporizhzhia region, though acknowledged a “significant” escalation of fighting in the region, as Ukrainian and U.S. officials spoke of Kyiv launching a major push on southern frontlines. Putin maintained that attacking Ukrainian forces suffered “very large losses of personnel — over 200 people.”  He noted that the Russian side also suffered losses, but that there was a “colossal” difference in numbers, with Ukraine losing “more than 10 times” more troops.  He also said that Ukrainian troops were “dispersed” when they attempted to retrieve “abandoned wrecked equipment” and bodies of those killed.  He added that such developments were due to the “heroism” of Russian forces.  Putin’s claims could not immediately be verified.  Ukrainian officials have not released many details about the southern push, saying only that troops are moving towards Melitopol and Berdiansk.  Yuriy Sak, an advisor to Ukraine’s defense minister, told Reuters that Ukrainian troops are “moving forward slowly but surely” in the south.  Associated Press Al Jazeera New York Times Reuters

Wagner Group’s Prigozhin Seen at Russia-Africa Summit in St. Petersburg.  Wagner Group leader Yevgeny Prigozhin was reportedly seen attending the Russia-Africa summit in St. Petersburg on Thursday.  Photos of Prigozhin showed him meeting with officials at the summit, including officials from the Central African Republic (CAR).  Hundreds of Wagner fighters are reportedly in the CAR as the country prepares for a constitutional referendum that could extend the rule of Faustin-Archange Touadéra, who been president since March 2016.  Prigozhin’s attendance at the summit, hosted by Russian President Vladimir Putin, comes just a month after the aborted Wagner mutiny.  CNN Financial Times Politico

Ukraine Extends Martial Law, Ruling Out Parliamentary Elections in October.  Ukraine’s parliament voted to extend martial law by an additional 90 days until November 15.  The law bars 18- to 60-year-old men from leaving the country and was passed the day Russia invaded Ukraine in 2022.  The extension rules out the possibility of parliamentary elections being held in October as scheduled, since elections cannot be held during martial law.  The decision to push back the vote was not unexpected.  Ukraine is still scheduled to hold presidential elections in March next year.  Reuters

Asia and Oceania

‘Unreported’ U.S.-China Military Encounters Impact Risk Mitigation.  It is growing increasingly difficult to assess risks from U.S.-China military encounters because some incidents are going unreported, said Josiah Case, analyst of the Centre for Naval Analyses during a Brookings Institution event. That lack in reporting, he said, is making it harder to see such encounters outside of a “vacuum,” while adding that recent encounters are not the first times that the China’s People’s Liberation Army (PLA) has acted “unprofessionally.”  Chinese and American vessels and aircraft have been interacting in increasingly dangerous encounters in recent months with the U.S. reporting close-calls and near collisions in several instances.  These incidents include when a Chinese warship approached a U.S. destroyer in the Taiwan Strait and forced it to slow down in early June and when a Chinese fighter jet took an “unnecessarily aggressive maneuver” to intercept a U.S. spy plane over international waters over the South China Sea in May.  Beijing has pushed back on these accusations, saying that the U.S. is acting provocatively.  U.S. officials have partially blamed these developments on the lack of high-level military communications between the two countries, which further increases risks of escalation from these incidents.  Case noted that PLA pilots have been acting more professionally over the years, but “operation error isn’t entirely gone.”  South China Morning Post

China-Built Naval Pier in Cambodia Nearing Completion.  A Chinese-built and funded naval pier in Cambodia is almost complete, according to satellite images from the U.S. company BlackSky Technology.  The images, released on Monday, showed construction work finishing up at the pier, which is at Cambodia’s Ream Naval Base on the Gulf of Thailand.  The U.S. has expressed concern over the project, urging Phnom Penh to be more transparent about how it will be used.  Some U.S. officials have suggested the base may become part of a Chinese strategy to build military bases around the globe.  The Cambodian defense ministry has denied this, saying China’s People’s Liberation Army will not be using the pier.  The Chinese foreign ministry has said the project is aimed at strengthening Cambodia’s naval capabilities.  Some observers have suggested China could moor a massive naval vessel like an aircraft carrier at the pier, though other experts have cast doubt, saying that the pier is too small and the waters around the base are not suitable for such port calls.  Experts who have said not to over-exaggerate the impact of the pier have also highlighted that Cambodia’s constitution forbids the construction of foreign military bases on its soil.  South China Morning Post 

Indonesia’s Widodo Visits China.  Indonesian President Joko Widodo met with Chinese President Xi Jinping in the southwestern Chinese city of Chengdu on Thursday.  Xi said in their meeting that China is willing to deepen strategic cooperation with its “like-minded” partner Indonesia.  He also said that China and Indonesia should ensure the completion of the Jakarta-Bandung high-speed railway, which is part of China’s Belt and Road Initiative and expand commodities and agricultural trade, as well as technological cooperation.  In addition, the two countries are set to launch a dialogue mechanism between their foreign and defense ministers.  Widodo is in China to attend the opening ceremony of the FISU World University Games in Chengdu.  His trip also coincides with the 10th anniversary of Jakarta and Beijing upgrading their relations to a comprehensive strategic partnership.  South China Morning Post Nikkei Asia Reuters

Middle East and Northern Africa

S&P Warns Israeli Judicial Reform Causing Economic Disruption.  S&P Global Ratings said in a report on Thursday that unrest over Israel’s judicial reform plans is escalating domestic political uncertainty and is set to hamper medium-economic growth.  The reform, which will lessen the Israeli judiciary’s powers, has triggered mass protests, including strikes in key sectors and threats from army reservists that they will not report for duty.  It has also spooked foreign investors and reportedly made some critical technology and defense startups consider leaving Israel.  S&P said that it expects “domestic political polarization and volatility” in Israel to remain “high” in the coming months, though it does not expect tensions to “escalate into more significant domestic confrontation or a sustained armed conflict in Gaza or the West Bank.”  S&P did not take any ratings action on Israel with the report.  Its next ratings review is scheduled for November 10.  Reuters Times of Israel

Bombing at Shrine Near Damascus Injures Several.  A bomb planted in a taxi exploded outside the Sayeda Zeinab shrine, south of the Syrian capital of Damascus on Thursday.  Preliminary reports say the blast killed as many as six people and injured several others, according to Syrian state media.  A separate explosion outside of the shrine earlier this week wounded two people.  Reuters Al Jazeera

Sub Saharan Africa

Somalia Says Russia Grants $684 Million in Debt Relief.  Somali officials report that Russia granted Somalia more than $684 million in debt relief during a meeting on the sidelines of the Russia-Africa summit in St. Petersburg.  Somalia has been working to secure international debt relief as it emerges from decades of civil war, and has been working with the International Monetary Fund and World Bank to secure these funds.  Somali Finance Minister Bihi Egeh said the Russian assistance will help tremendously in the country’s debt forgiveness process.  Reuters

Cyber and Tech

U.S.-Owned Chip Maker in France Probed for Attempted Tech Transfer to Russia, China.  French authorities investigating a leading chip supplier for reported smuggling of advanced chip technology to China and Russia have filed “preliminary charges” against two Chinese and two French citizens.  The French prosecutor specializing in arms proliferation cases has been probing Ommic, a U.S.-owned semiconductor manufacturer based near Paris.  According to a French judicial official, an investigation is under way by magistrates into suspected illegal exports, forgery, and other crimes.  By filing the preliminary charges against the Chinese and French individuals, authorities believe there is “considerable evidence” of crimes, but more investigation is needed.  The Le Parisien newspaper reported that investigators have found more than $13 million in suspected illicit technology exports.  According to the paper, Ommic’s French manager is suspected of personally delivering chips to Russian customers.  In addition, unspecified products reportedly were exported to Chinese arms manufacturers using forged documents.  A Chinese businessman based in Beijing with ties to China’s defense industry bought a majority stake and took control of Ommic in 2018.  France’s counter-espionage agency reportedly assessed the Chinese investor as seeking to transfer a specialized semiconductor process to China.  French authorities stripped the Chinese investor of his stake and placed Ommic under state control until its sale to Massachusetts-based Macom Technology Solutions in June for $42.8 million.  Associated Press Bloomberg

SEC Shortens Timeline for Companies Reporting ‘Material’ Cyber Breaches.  Publicly traded companies will be required to reveal “material’ cybersecurity breaches within four days according to new rules approved by the Securities and Exchange Commission (SEC).  The qualification in the rules is that affected companies must deem breaches to be a “material risk” to company profitability.  With the new requirements, the SEC is seeking transparency and consistency in company information open to investors.  As SEC Chair Gary Gensler explained, “Whether a company loses a factory in a fire — or millions of files in a cybersecurity incident — it may be material to investors.”  Determining what constitutes a “material” breach and requires reporting may be a challenge for some companies, according to cybersecurity and legal sources.  They note that premature disclosure of breaches before they have been resolved could put companies at risk.  The unique feature of the new SEC rule is that breach documentation provided to the commission will be public and made available to investors.  Harley Geiger, a counsel at the Center for Cybersecurity Policy and Law, observed that revealing a breach before a remedy is in place could reveal a vulnerability to be exploited by other threat actors.  The new SEC rules reduce the timeline for company breach disclosures and require that firms provide the commission with annual reports on their cybersecurity risk management strategy.  CyberScoop The Record BleepingComputer Axios Bloomberg Wall Street Journal

Chinese Satellite Tests ‘Next Generation’ Technology Needed To Rival Starlink.  A Chinese communications satellite featuring an “ultra-thin flexible solar wing” was launched Sunday to test technologies critical to the country’s ambition to create a broadband mega-constellation rivaling SpaceX’s Starlink network. Ultimately, China projects a 13,000-satellite constellation operating in low-Earth orbit.  Zhu Zhengxian, chief technology officer of GalaxySpace, which built the Lingxi-03 satellite, said that the onboard ultra-thin solar wing is “small, lightweight and easy to store. They absorb more solar energy than traditional solar panels do and are especially suitable for large-scale stackable satellite launches.”  Chinese TV reported that the only prior use of ultra-thin solar panels was to power the Tiangong space station.  Lingxi-03 is the first Chinese satellite to have an integrated main body structure manufactured with advanced die-cast technologies suitable for mass production.  The satellite’s digital payload can process tens of gigabytes of data per second and will help confirm technologies needed for next-generation broadband communications and stackable satellite launches.  Satellite commander Hu Zhao said the digital capability “synthesizes many functions of a ground-based station and can analyze an enormous amount of user information.”  South China Morning Post

Huawei to Resume 5G Chip Production.  Huawei Technologies is set to restart making its cutting-edge 5G mobile chips as early as this year despite restrictions from the U.S. and its allies on the company and Beijing’s access to semiconductor technology.  Sources told Nikkei Asia that Huawei is working with Chinese chipmaker Semiconductor Manufacturing International Co. (SMIC) mass produce its house-designed chips in the coming months.  If successful, it will mark a major victory for China as it seeks to develop a domestic chip industry amid Western efforts to curb its semiconductor industry.  SMIC will use 7-nanometer process technology — the most advanced in China but around two generations behind global chipmaking leaders — to make Huawei’s chips.  Products using the chips are not likely to be sold till 2024.  Nikkei Asia

Japanese Government Using ChatGPT.  Microsoft will supply artificial intelligence technology to the Japanese government. Microsoft-backed startup OpenAI will be rolled out after Microsoft enhances the processing power of its data centers within the country. Japan’s Digital Agency will make OpenAI available on a trial basis for tasks such as analyzing government statistics, according to Nikkei Asia. This rollout will be the first overseas deployment of its kind for Microsoft’s technology, aside from Europe.  Reuters Nikkei Asia

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