4:00 PM ET, Wednesday, December 20, 2023
Daily national security briefings aren’t just for the president anymore. The Cipher Brief uses AI partnered with human analysis and expert perspective to keep you up-to-date on national security news from around the world.
Here’s what’s happening now:
THE TOP STORIES
China’s Xi says deepening China-Russia relations a ‘strategic choice’ by both sides. Chinese President Xi Jinping, during a meeting with Russian Prime Minister Mikhail Mishustin, emphasized that the deepening of China-Russia relations is a mutual "strategic choice" and pledged to continue developing high-level political and economic ties with Moscow. Xi highlighted the resilience and prospects of bilateral cooperation, urging deeper collaboration in economy, trade, energy, connectivity, and other areas. The meeting occurred amid new EU sanctions on Russia over the Ukraine war and as Moscow strengthens economic and energy ties with Beijing. January-November bilateral trade reached $218 billion, surpassing the annual target of $200 billion set by Xi and Russian President Vladimir Putin a year ahead of schedule. (US-China bi-lateral trade in 2022, according to the U.S. government was pegged at $758.4 billion.) Xi and Putin met twice in 2022, expressing their commitment to boost economic cooperation within multilateral frameworks, including the expanded Brics group. Despite Western scrutiny of Russia's actions in Ukraine, China has maintained its close ties with Moscow. Mishustin's visit follows the EU's latest sanctions on Russia and reinforces economic and energy cooperation between the two nations. South China Morning Post
ANALYSIS: China expanding secretive base for nuclear tests. Evidence suggests that China is considering testing a new generation of nuclear weapons in its northwestern Lop Nur region, where it conducted its first nuclear test. Satellite images reveal extensive upgrades at the main military base in the region, including newly drilled boreholes suitable for containing radiation from large nuclear blasts, expanded roads leading from the base to testing areas, and signs of recent excavation at tunnels used for past nuclear tests. The activity may signal China is preparing to resume nuclear tests, which would violate the global test ban in place since 1996. Analysts suggest the activity could be a warning to the West or indicate a broader modernization of China’s nuclear capabilities. Experts warn that Chinese nuclear expansion could prompt similar moves from other nuclear powers, triggering a nuclear arms race. New York Times
Germany’s Top Prosecutor seeks to seize €720 million of frozen Russian funds. Germany's top federal prosecutor has filed a motion to confiscate about €720 million held by a Russian financial institution in a Frankfurt bank account, citing concerns over the funds being used to finance Russia's war against Ukraine. The move, an escalation of Germany's efforts to sanction Russia, could provide an unexpected financial boost to the country's federal coffers. The funds, held by a subsidiary of the Moscow Stock Exchange, were frozen after the European Union imposed sanctions on the institution in June 2022 due to Moscow's invasion of Ukraine. The Frankfurt Higher Regional Court will determine whether Germany can ultimately confiscate the money. This action follows international precedents, such as the U.S. transferring forfeited Russian assets for use in Ukraine and the European Commission presenting a plan to use frozen Russian assets in the EU to rebuild Ukraine. Politico Kyiv Independent
ISRAEL-HAMAS WAR
U.S. Defense Secretary visits aircraft carrier in Middle East. U.S. Defense Secretary Lloyd Austin on Wednesday made an unannounced visit to the Gerald R. Ford aircraft carrier in the eastern Mediterranean Sea, which he called the “lynchpin” in Middle Eastern deterrence and preventing a wider regional conflict. The Ford was deployed to the region after the Hamas attacks against Israel on October 7. Austin has extended the Ford’s deployment three times as part of efforts to deter Iran and its regional proxies, namely Lebanon’s Hezbollah, from joining the conflict against Israel. It is unclear how much longer the Ford will stay in the eastern Mediterranean and whether it will return to its home port in Virginia before Israel transitions to a lower-intensity campaign in Gaza. Austin said during his visit to Israel earlier this week that the U.S. will not dictate timelines to Israel on its military operations in Gaza. Defense News Reuters Washington Examiner
Shipping industry still in the dark about the U.S.-led naval force in the Red Sea. Shipping companies remain in the dark about the U.S.-led multinational naval operation meant to protect shipping in the Red Sea from Houthi attacks. Shipping and maritime security officials say it is still unclear to the companies how large the operation will be, when ships for the initiative will reach the area, or the coalition’s rules of engagement and actual strategy to protect commercial vessels. Because of this uncertainty, companies are continuing to avoid the Red Sea area. The U.S. has said the naval operation will patrol the region and is intended for defensive purposes only. The Iran-backed Houthis have vowed to continue attacks in the Red Sea despite the launch of the naval force. The Houthis have also threatened to retaliate against U.S. warships if they are attacked. Reuters Wall Street Journal
THE UKRAINE UPDATE
Ukraine pledges to produce 1 million FPV drones, thousands more attack drones next year. Ukraine’s minister for strategic industries, Oleksandr Kamyshin, said on Wednesday that Ukraine plans to make 1 million FPV (first-person view) drones and over 11,000 medium- and long-range attack drones next year for use in the fight against Russia. Kamyshin highlighted that Ukraine is on track to produce 50,000 FPV drones this month and that current contracting for 2024 includes at least 1,000 drones with a range of over 620 miles. Ukrainian President Volodymyr Zelensky likewise made the same pledge that Ukraine will make over a million drones next year earlier this week. Both Ukraine and Russia have relied on drones for reconnaissance and attacks on the battlefield. The pledges for drone production come as Ukraine seeks to bolster its domestic military manufacturing to lessen reliance on Western supplies. Reuters Kyiv Independent
Ukraine receives over $160 million in E.U. aid for recovery efforts. Ukraine’s Finance Ministry announced on Wednesday that Ukraine received 150 million euros ($164.5 million) in E.U. grants for recovery efforts focused on restoring critical infrastructure damaged by Russian attacks. A second tranche of 100 million euros is expected in the first quarter of 2024 for further recovery efforts and Ukraine’s agriculture sector. Ukrainian Prime Minister Denys Shmyhal estimated in July that total reconstruction costs are $750 billion. Kyiv Independent
ELSEWHERE IN THE WORLD
Asia and Oceania
Taiwan presidential frontrunner says China views all presidential candidates as separatists. Taiwanese Vice President William Lai, the front runner in Taiwan’s upcoming elections in January, said on Wednesday that China views all Taiwanese presidential candidates as separatists. Beijing has called Lai, the candidate for the ruling Democratic Progressive Party, as a separatist and is framing the election as a vote between war and peace. Lai said China’s policy is a desire to “swallow up” Taiwan and called on the island to not be foolish and let Beijing define Taiwan’s independence. Lai’s opponents suggested his leadership would be detrimental for Taiwan. Hou Yu-ih of the Kuomintang party, which calls for stronger ties with China but refutes being pro-Beijing, said Taiwanese independence would bring war and voiced support for Hong Kong’s self-governance model, which has virtually no political support in Taiwan. Former Taipei mayor Ko Wen-je of the smaller Taiwan People’s Party called on Taiwan to be a bridge between the U.S. and China, rather than a “pawn” in confrontation between the two powers. Reuters
India’s Modi promises to investigate evidence of ties to murder plot in U.S. Indian Prime Minister Narendra Modi said India will look into information it receives about the Indian government’s links to the foiled plot to assassinate a Sikh separatist leader in the U.S. Modi affirmed that any wrongdoing by an Indian national will be investigated and that New Delhi is committed to the rule of law. The U.S. Justice Department said last month that an Indian government official directed the plot and charged a man accused of orchestrating the assassination attempt. India has sought to distance itself from the plot and pledged to formally investigate the matter. The charges in the U.S. plot came two months after Canada accused Indian agents of murder another Sikh separatist in Vancouver in June. India has rejected Canada’s accusations. Reuters Financial Times
Europe
Putin warns of ‘severe’ response against foreign intelligence services supporting Ukraine. Russian President Vladimir Putin said on Wednesday that there must be a “severe” response against foreign intelligence services that “directly” support Ukraine and seek to “Destabilize the socio-political situation in Russia.” He also accused Ukraine of “state terrorism” and engaging in sabotage and targeted assassinations, without elaborating. Ukraine rarely comments on attacks within Russia and does not take direct responsibility. Russian intelligence is widely believed to conduct significant operations to destabilize foreign countries and target perceived opponents of Putin. Kyiv Independent
The Americas
U.S. releases Maduro ally, Venezuela releases Americans and extradites Navy scandal mastermind. The U.S. government released an ally of Venezuelan President Nicolas Maduro, Colombian businessman Alex Saab, in exchange for Maduro’s government releasing around 20 opposition-related prisoners and 10 Americans, six of whom Washington has designated as wrongfully detained. U.S. prosecutors accused Saab of siphoning off $350 million from Venezuela in a money laundering scheme. Saab has denied the charge. In addition to the prisoner releases, Venezuela has also agreed to extradite Leonard Glenn Francis, known as “Fat Leonard,” to the U.S. Francis is a fugitive defense contractor who has admitted to a $35 million bribery scheme that is the largest corruption scandal in U.S. military history. He pleaded guilty to bribing “scores” of Navy officials for classified or inside information he used to defraud the Navy. He fled the U.S. last year before his sentencing. The exchange deal, which was mediated by Qatar, is the strongest move by the U.S. to improve relations with Venezuela and obtain concessions from Maduro. The arrangement comes after the Biden administration agreed to some sanctions relief for Venezuela after Maduro agreed to work towards a free and fair 2024 presidential election. The Biden administration said his release was difficult but necessary to secure the release of Americans detained abroad. Associated Press Reuters Washington Post
OPINION- U.S. Steel’s sale to Japan’s Nippon Steel should not be a surprise. The Wall Street Journal editorial board is out with a new op-ed that highlights what it calls the ‘irony’ in Washington's protectionist policies as Japanese steel manufacturer Nippon Steel looks set to acquires U.S. Steel in a $14.1 billion deal. Despite tariffs and industrial policies aimed at protecting U.S. manufacturers, U.S. Steel's, an iconic American industrial company, looks to be bought under a political environment whereby the U.S. sought to protect U.S. industry. The 2018 tariffs on foreign steel, implemented by the Trump administration under the pretext of national security, have not resulted in expected increased job numbers at U.S. Steel where the labor force has shrunk by nearly 22% since 2018. Washington's industrial policy, including conditions in the 2021 infrastructure bill requiring the use of U.S.-made steel, has boosted demand for domestic steel and increased profits for U.S. manufacturers. The op-ed questions the doubts raised by politicians about the Nippon Steel deal on national security grounds, suggesting that welcoming foreign investment in the U.S. should be considered. Wall Street Journal
THE CYBER AND TECH RUNDOWN
Ukraine allies announce ‘Tallinn Mechanism’ to bolster degraded cyber infrastructure. A number of Ukraine’s international partners, including the U.S., Britain, Germany, and France, have announced a program, dubbed the Tallinn Mechanism, to reinforce Ukraine’s cyber defenses. The Mechanism is named after the Estonian capital of Tallinn where the plan was developed last May. It calls for efforts to bolster Ukraine’s cyberspace defenses by coordinating and facilitating the buildup of the country’s civilian cyber capacity and to “address longer-term cyber resilience needs.” Additional countries committed to the program are Canada, Denmark, the Netherlands, Poland, and Sweden. An announcement posted to the Estonian Foreign Ministry website acknowledges that Russia’s cyber operations have damaged Ukraine’s critical infrastructure and disrupted essential services thereby requiring “multi-year assistance for Ukraine to maintain and strengthen its cybersecurity and cyber resilience capabilities.” The Mechanism seeks to correct the ad hoc way Ukraine has received multinational assistance, although it is separate from military cyber capacity-building efforts that Western nations are also supporting. The Foreign Ministry statement clarified that through the Mechanism, “Ukraine’s needs will be systemized and matched to the possibilities of donors in such a way that support from various countries forms a coherent whole.” The Record Kyiv Independent
U.S. envoy says China tech meddling raised in recent NATO visits to Japan, South Korea. The U.S. representative to NATO, Julianne Smith, said NATO officials learned about protecting the alliance’s technological edge from China’s “classic hybrid playbook” during recent visits to Japan and South Korea. NATO ambassadors acknowledge that China employs disinformation, cyberattacks, and economic pressure to undermine the advantage in technologies enjoyed by NATO members, among other nations. Growing ties between NATO, Japan, and South Korea has prompted charges from Beijing that the alliance intends to expand to Asia. The agenda for the NATO ambassadors in their swing through Asia included discussions on tightening collaboration with Japan and South Korea on topics like cyber defenses and supply chain security. A partnership agreement signed in July between NATO and Japan, South Korea, and Australia calls for joint work spread across 11 sectors, including counterterrorism, emerging technologies, and cybersecurity. South China Morning Post
China’s low-altitude aviation industry set for rapid growth by 2025. China's low-altitude economy, encompassing industries related to civil-manned and unmanned aerial vehicles, is set to become a reality, contributing between 3 trillion yuan and 5 trillion yuan ($703 billion) to China's economy by 2025, according to industry insiders. The low-altitude economy includes activities such as passenger transport, cargo delivery, and other operational tasks using drones, helicopters, and other low-altitude aircraft. Registered civilian unmanned aerial vehicles in China exceeded 1.11 million by the end of August, with a 16% increase compared to the end of 2022. A recent white paper by the Shenzhen-based International Digital Economy Academy emphasized the vast potential and application prospects of the low-altitude economy, driven by China's digital economic DNA and the development of information technology, digitization, and intelligent technologies. South China Morning Post
AlphV ransomware gang claims to have ‘unseized’ website taken down by law enforcement. In the wake of a multinational law enforcement takedown of AlphV/Blackcat dark web websites, the ransomware gang yesterday replaced an FBI “splashpage” with one of its own announcing that the websites have been “unseized.” AlphV went on to announce that it was removing restraints it previously imposed on affiliate groups that put targets like “hospitals, nuclear power plants” off limits for cyberattacks. Presumably, this adds those and similar institutions to ransomware gang target lists as long as they exist outside the Commonwealth of Independent States, countries affiliated with the former Soviet Union. However, some visitors to the AlphV website note that the FBI announcement is still present with no sign of the ransomware gang notice. Cybersecurity experts speculate that a behind-the-scenes struggle between law enforcement and AlphV may be playing out in an arena known as “an onion service,” where anonymous websites can only be accessed through the Tor network. Steven Murdoch, a security engineering professor at University College London, explained that in circumstances where there are multiple parties with the private key related to the domain name “the last one to submit their entry will win.” The Record CyberScoop Cybernews
Breach of medical software vendor results in data exposure of 3 million patient records. In what is described as a “sophisticated” ransomware attack, personal data on almost 3 million healthcare clients have been exposed in a breach of ESO Solutions, which provides software to hospitals and other healthcare facilities. In a breach notification letter issued on December 12, ESO said the intrusion resulted in the exposure of patient information, including names, treatment types, and some social security numbers. ESO, which is based in Austin, Texas, did not respond to requests for information about how many hospitals had information stolen, the identity of the ransomware gang, or if a ransom was paid. The company said that once the breach was identified, affected systems were shut down and third-party forensic specialists assisted in responding to the attack. The company noted that it has confirmed the security of its systems and safely restored operations through viable backups. The Record Cybernews BleepingComputer
Senate confirms Lt. Gen. Haugh as new Cyber Command, NSA Chief. The Senate on Tuesday confirmed Air Force Lt. Gen. Timothy Haugh as the dual-hat leader of the National Security Agency and the Cyber Command. Haugh’s nomination was one of several military leadership promotions that had been delayed by the blanket hold of Alabama Senator Tommy Tuberville. Haugh replaces Army Gen. Paul Nakasone who completes a term of nearly six years during which NSA and Cyber Command have been given expanded authorities and responsibilities for cybersecurity and cyber defense, including the protection of U.S. elections from foreign interference and countering online threats from ransomware gangs and other threat actors. Both Cyber Command and NSA will now be in a position to make additional leadership changes, including within NSA’s cybersecurity directorate. The Record
The data cutoff for this product was 8:00 a.m. E.T.
Brad Christian, Ethan Masucol, and Ken Hughes contributed to this report.
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