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5:30 PM ET, Tuesday, October 3, 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:  

THE TOP STORIES:

Taiwan Urges Speedier U.S. Weapons Deliveries, Weapons Management Support.  Taiwan’s vice-minister for defense, Hsu Yen-pu, called on the U.S. to speed up weapons deliveries to the island and help Taipei establish its own system to manage the life cycles of some U.S. weapons it has bought.  Hsu made the appeal on Monday at the annual U.S.-Taiwan Defense Industry Conference in Virginia.  Taiwan has complained about delays in weapons deliveries since last year, and U.S. lawmakers are calling for more action to fill Washington’s $19 billion backlog of arms sales to Taiwan.  Hsu highlighted how important it is for the island to quickly acquire U.S. arms to bolster its defense capabilities and military self-reliance amid pressure from China.  He also said Taiwanese forces will be strengthened with the “Total Life Cycle Systems Management,” a U.S. military program that manages and oversees the development, acquisition, sustainment, and disposal of a weapon across its life cycle.  Hsu said if Taiwan used the system, its defense companies and contractors would be able to better maintain U.S.-bought weapons systems.  It could also help integrate U.S.-Taiwan defense industry supply chains.  South China Morning Post

E.U. To Assess Risks to Four Key Technologies in Deciding Possible Export Controls.  The European Commission has identified four technology sectors – artificial intelligence, semiconductors, quantum computing, and biotechnology – that it will examine to assess their potential to threaten the bloc’s economic security, raising the possibility of future export controls.  The Commission said the four advanced technologies are “considered highly likely to present the most sensitive and immediate risks.”  By the end of the year, the Commission plans to complete risk assessments centering on supply chains, critical infrastructure, technology leakage, and the potential for economic dependencies to be weaponized or used as a means of coercion.  Another six key technologies will be examined later.  The announced assessments mark the first time the E.U. is defining technologies it needs to protect on economic security grounds with the aim of securing the bloc’s technological independence and to block the transfer of sensitive technology to rivals or adversaries.  European Commission Vice President Vera Jourova noted that “technology is currently at the heart of geopolitical competition and the E.U. wants to be a player, and not a playground.”  The Commission strategy, Jourova said, aims to strengthen the bloc’s single market, which can be accomplished through a common assessment of risks leading to “a united E.U. position.” China was not mentioned explicitly in the announcement of the technology assessments, but the Commission’s economic security document refers to partnerships with like-minded countries and de-risking, part of the bloc’s approach to reducing reliance on China.  An EU official noted that the assessments will be “country agnostic,” but will consider geopolitical factors.  The Record Reuters Bloomberg Politico South China Morning Post

U.S. Sanctions China-Based Drug “Syndicate” Over Fentanyl.  The U.S. Treasury sanctioned 25 Chinese individuals and entities allegedly involved in manufacturing and smuggling drugs, including precursor chemicals for fentanyl.  The Treasury said the network is the “source of supply” for many U.S.-based narcotics traffickers, dark web vendors and virtual currency money launderers, as well as Mexico-based criminal organizations.  Two individuals targeted by the sanctions are Wang Shucheng and Du Changgen, who are suspected of being members of a Chinese “syndicate.”  The Treasury said Wang directed the establishment of companies used as cover for transfer of illicit goods and Du maintains the most influence over the network.  The U.S. has noted fentanyl from Mexican drug cartels often use precursor chemicals made in China.  Barron’s Financial Times South China Morning Post

THE UKRAINE UPDATE:

Zelensky Visits Eastern Frontline.  Ukrainian President Volodymyr Zelensky visited troops and met with commanders in northeastern Ukraine on Tuesday.  He said he met brigades in the Kupiansk-Lyman sector, where the Ukrainian military reports Russian forces are staging attacks in recently liberated areas.  Zelensky called the area one of the “hottest” on the frontlines and said he spoke with commanders about the operational situation on the battlefield, as well as current issues and needs.  He also said he inspected Western-supplied weapons, including Leopard 2 tanks.  Barron’s  Reuters

Belarus Starts Military Combat Readiness Drills.  The Belarusian Defense Ministry announced on Tuesday that its armed forces started combat readiness drills on Tuesday.  The exercises will reportedly take place in the Minsk and Vetebsk regions and will involve military hardware and aviation.  The ministry did not say when the drills will end.  Belarus allowed Russia to use its territory as a staging ground for its invasion of Ukraine.  Despite this, Minsk maintains it will not conduct hostile action against its neighbors, but has warned it will retaliate against any incursion into Belarusian territory.  Reuters

Russia Employing ‘Elastic Defense’ Against Ukraine Counteroffensive.  Security experts say Russian forces are employing the longstanding military tactic of “elastic defense” to counter Ukraine’s counteroffensive.  The tactic sees Russian forces withdraw to a second line of positions, encouraging Ukrainian troops to advance.  Russian soldiers then attack when advancing Ukrainian forces are vulnerable while crossing open ground or when they arrive at recently abandoned Russian positions.  Experts say the tactic aims to prevent Ukrainians soldiers from securing positions to base further advances, like they were able to do at the southern village of Robotyne.  Elastic defense is not a new tactic and it is difficult to determine if its being used on any given day without access to Russian military commanders.  However, the Institute for the Study of War says it has seen signs of the tactic being used around Robotyne, noting how significant fortifications in the area have recently changed hands several times.   A Ukrainian commander added that the use of military reserves is critical for counterattacks in elastic defense.  The commander noted that Russia is now deploying elite airborne units for defense in the Zaporizhzhia region, suggesting that Russia is running low on regular reserves, which could be “encouraging news” for Ukraine.  New York Times

Kremlin Says Russia Maintaining Moratorium on Nuclear Testing.  Kremlin spokesman Dmitry Peskov said on Tuesday that Russia has not abandoned a moratorium on nuclear testing.  His comment dismissed remarks from Margarita Simonyan, editor-in-chief of Russian state-funded broadcaster RT, who said the Ukraine war is imminently headed for a “nuclear ultimatum,” asserting that Russia needs to send a nuclear message to the West over its support for Kyiv.  She suggested that Russia should detonate a nuclear bomb over Siberia.  Russian state television has pushed nuclear rhetoric since Russia’s invasion of Ukraine.  It was more pronounced late last year but was more subdued in the first half of the year.  Russia suspended participation in the New START nuclear arms control treaty in February.  Russian President Vladimir Putin has threatened to resume nuclear testing if the U.S. does so as well.  Reuters

Ukraine Cracks Southern Spy Ring.  The Ukrainian Security Service (SBU) claims it broke up a large Russian spy ring operating in southern Ukraine.  SBU said authorities detained 13 local residents in the Mykolaiv region who passed information to Russia’s Federal Security Service through a “liaison,” whom the SBU said was pro-Kremlin blogger Sergey Lebedev.  Lebedev was indicted on suspicion of treason in June.  SBU said the informants for Lebedev collected intelligence on the movement of Ukrainian forces in the region and helped direct Russian air attacks to target residential buildings and infrastructure in Mykolaiv city.  Four of the detained have already been found guilty and sentenced to jail, with terms between eight and 15 years.  CNN

Ukraine Names Three Chinese Oil and Gas Producers as Sponsors of Russia’s Invasion.  Ukraine’s National Agency on Corruption Prevention (NAZK) added China’s three biggest oil and gas producers — China National Offshore Oil Corporation (CNOOC Group), China Petrochemical Corporation (Sinopec Group), and China National Petroleum Corporation (CNPC) — to a list of international companies accused of sponsoring Russia’s invasion of Ukraine.  According to NAZK, the three companies continue to work on joint projects with Russia and are “paying significant taxes” in Russia.  NAZK highlighted CNOOC’s joint liquefied natural gas (LNG) projects in the Russian Arctic; Sinopec’s purchases of Russian oil and gas, and its stakes in Russian energy companies; and CNPC’s “integration” with top Russian oil and gas companies.  The move brings the number of Chinese companies on the list to 12.  The three energy companies, the Chinese Mission to the E.U. and the Chinese Embassy in Kyiv did not comment on the listings.  CNN South China Morning Post

Ukraine, Poland, Lithuania Agree on Grain Export Deal.  Ukraine, Poland, and Lithuania on Tuesday agreed on a plan aimed at expediting Ukrainian grain exports. The Ukrainian agriculture ministry said the agreement will shift grain inspections from the Ukraine-Poland border to the Lithuanian port of Klaipeda on the Baltic Sea, facilitating the speedier transport of Ukrainian grain through Polish territory and out from Lithuania.  In addition to accelerating Ukrainian grain exports, this agreement aims to defuse tensions between Poland and Ukraine over the impact of Ukrainian foodstuffs on local grain prices.  Poland, Hungary, and Slovakia previously announced bans on Ukrainian grain imports in what they said was an effort to protect their farmers.  Associated Press

E.U. Approves Four-Year $52 Billion Support Plan for Ukraine.  The E.U. approved a four-year budget that will allocate up to $52.3 billion in financial assistance to Ukraine.  The funds will go towards direct budgetary support, support reforms, and help foster a favorable investment climate to attract private investors for recovery.  The bloc is discussing a separate facility to finance military aid for Ukraine.  The International Monetary Fund (IMF) is also discussing new financial support for Ukraine.  The IMF gave Kyiv access to $15.6 billion in aid in March for recovery efforts as part of a wider $115 billion support package.  CNN

Biden Speaks with Allies About Ukraine Support.  President Joe Biden spoke with top U.S. allies on Tuesday to discuss and coordinate further Ukraine aid.  The White House said Biden spoke with the leaders of Canada, Germany, Italy, Japan, the U.K., Poland and Romania.  He also spoke with the French foreign minister and the heads of NATO, the European Commission and the European Council.  The call came amid concern over the future of U.S. support for Ukraine after Congress passed a short-term spending bill that omitted new aid for Ukraine.  The Pentagon has warned that while there are funds to continue support for Ukraine for the meantime, it could run out soon without action from Congress.  The White House has maintained confidence that Congress will approve new assistance for Ukraine soon.  Bloomberg CNN Politico Reuters

U.S. Pressuring Ukraine on Anti-Corruption Reforms.  The U.S. issued several notices over the last few weeks calling for Ukraine to do more to counter governmental corruption.  The U.S. State Department issued a formal diplomatic note, known as a demarche, late this summer suggesting that some U.S. aid, besides military assistance, will be linked to Ukraine’s progress on anti-corruption and transparency reforms.  The demarche also reportedly emphasized the need for reforms under Ukraine’s International Monetary Fund program, including those related to anti-money laundering and countering terrorism financing.  Separately, the White House has drafted a list of reforms Ukraine should implement to continue receiving U.S. financial assistance and move towards integrating in Europe.  CNN

THE CYBER AND TECH RUNDOWN:

Exploitation of Progress ‘WS_FTP’ Server Flaw Likely Under Way, Researchers Say.  Cybersecurity researchers believe “mass exploitation” of new vulnerabilities in a second Progress Software file transfer tool may be under way.  Rapid7 researchers reported evidence of exploitation on September 30 against a number of WS_FTP Server applications.  Progress released patches for eight WS_FTP vulnerabilities last week.  Rapid7 said it received alerts from multiple customer environments of attempted attacks within minutes of each other on September 30.  The specific vulnerabilities were not identified, but researchers said one or more of those included in the Progress Software notification were targeted.  The exploit chain examined by researchers were uniform in all instances, suggesting that threat actors are attempting large-scale exploitation of WS_FTP flaws.  Caitlin Condon, vulnerability research chief at Rapid7, said observed incidents over the weekend “may indicate that a single adversary was behind the activity,” adding, “we also have not seen any data exfiltration so far.”  Rapid7 emphasized the need to upgrade to the latest version of WS_FTP as soon as possible.  On Tuesday, Progress Software expressed disappointment over the speed with which researchers released information on the WS_FTP vulnerabilities, noting that it “provided threat actors a roadmap on how to exploit the vulnerabilities while many of our customers were still in the process of applying the patch.”  Progress went on to say that it hoped the community of threat researchers “will discourage the irresponsible publication of POC’s (proofs of concept) rapidly following the release of security patches from software vendors.”  TheRegister The Record   TechCrunch

IG Reports Fault DHS Pipeline Cybersecurity Oversight, Misuse of ‘Telemetry Data’.  IG reports at the Department of Homeland Security (DHS) have faulted the department’s implementation of pipeline operator requirements as well as its execution of privacy policies connected to the use of “telemetry data” – including time stamps, GPS coordinates, and device operating systems — by Customs and Border Protection (CBP), Immigration and Customs Enforcement (ICE), and the Secret Service.  The first report examined how the Transportation Security Administration (TSA) oversaw pipeline security requirements put in place after the Colonial Pipeline hack.  The IG found that the TSA failed to ensure all pipeline operators executed their security responsibilities in a timely way, and did not monitor operators’ evaluations of cybersecurity practices.  In the second instance, the IG concluded that DHS components either did not follow or did not enact adequate privacy policies “before procuring and using commercial telemetry data.”  The IG wrote that the privacy lapses stemmed from components’ lack of internal controls to ensure compliance, and because DHS’ own Privacy Office did not follow or enforce privacy guidance.  The IG recommended that CBP and ICE discontinue use of telemetry data until the completion of privacy assessments.  DHS did not accept that recommendation but agreed to six others.  Washington Post

U.K. Regulator Considers Anti-Trust Referral of Amazon, Microsoft Cloud Services.  The U.K.’s media regulator, Ofcom, reportedly will propose going forward with an antitrust investigation of Amazon and Microsoft, which together control between 60-70 percent of Britain’s cloud computing market.  An Ofcom final report scheduled to be issued on Thursday will retain the anti-trust recommendation that was first surfaced in April.  Ofcom argues that the U.K.’s current cloud computing environment makes it difficult for customers to reach good deals with their service providers.  An earlier Ofcom report noted that both technical restrictions and customer discounts favoring a single provider when better alternatives exist could be considered anti-competitive.  Amazon and Microsoft indicated their willingness to continue working with Ofcom prior to its final report being published.   Microsoft earlier noted  that an investigation could harm consumers if they were left with “less vibrant and competitive cloud solutions on a global stage than those available to their rivals in the EU, the U.S. and China."  An Ofcom spokesperson said the agency will announce its decision on a referral to Britain’s Competition and Markets Authority (CMA) by the deadline of October 5.  Reuters

U.S. Issues First Ever Space Junk Fine.  The Federal Communications Commission (FCC) fined Dish Network $150,000 for failing to move an old satellite away from others, marking the first time the U.S. government has issued a fine for space junk orbiting earth.  The FCC said that the satellite poses a risk to others at its current altitude.  Dish meant to move the satellite, originally launched in 2002, to 186 miles further from Earth but had only moved it 76 miles before it lost fuel.  Dish Network admitted liability over its EchoStar-7 satellite and agreed to a “compliance plan” with the FCC.  FCC enforcement bureau chief Loyaan Egal noted that “this is a breakthrough settlement, making very clear the FCC has strong enforcement authority and capability to enforce its vitally important space debris rules”.  Ars Technica BBC Washington Post

ELSEWHERE IN THE WORLD:

Canada Seeks Talks With India to Resolve Diplomatic Row.  Canadian Prime Minister Justin Trudeau said on Tuesday that Ottawa does not seek to “escalate” tensions with India over the diplomatic dispute over the June murder of Sikh separatist leader Hardeep Singh Nijjar, who was killed in Canada and was labeled by New Delhi as a “terrorist.”  Canadian Foreign Minister Melanie Joly added that Ottawa is pursuing private talks with India to resolve the matter.  Their comments came after India said Canada must withdraw 41 diplomats by October 10.  Trudeau said strained relations underscore the need for diplomats on the ground and that Canada is engaging with India on the issue.  The row started over Canada’s suspicion that Indian government agents were involved in the murder of Nijjar.  Reuters New York Times

E.U. Agrees on Sanctions Framework for Key Actions in Sudan War.  The E.U. ambassadors agreed on a framework for sanctions against key figures involved in the war between Sudan’s army and paramilitary Rapid Support Forces.  The sanctions will include asset freezes and travel bans.  The sanctions framework was proposed in July but was not approved until Monday.  E.U. foreign ministers still must sign off on the proposal before targeted individuals and entities can be added to the sanctions list.  That final approval is expected by the end of this month.  Several countries are also expected to submit a motion to the U.N. Human Rights Council to set up an investigation into alleged atrocities committed in the war, including ethnically motivated killings.  Reuters

France Agrees to Future Military Aid Contracts with Armenia.  French Foreign Minister Catherine Colonna said on Tuesday that France has agreed on future contracts to supply Armenia with military equipment to strengthen its defenses.  She did not detail what aid the contracts will include but described them as a show of support for Armenia’s territorial integrity and sovereignty.  Colonna announced the contracts during a trip to Yerevan aimed at assessing immediate needs of refugees who fled Nagorno-Karabakh after Azerbaijan seized the territory.  She also asked E.U. foreign policy chief Josep Borrell to include Armenia in the European Peace Facility (EPF), an E.U. military fund.  Reuters

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