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6:00 PM ET, Wednesday, September 6, 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 Americas

Microsoft Says Breach of Engineer’s Account Led to Hacks of U.S. Officials.  Microsoft said Wednesday that a Chinese hack of email accounts belonging to top U.S. State and Commerce Department officials started from the compromise of a Microsoft engineer’s corporate account.  Microsoft said the Storm-0558 hacking group extracted a cryptographic key from the account and used it to access email accounts that the key should not have given them access to.  Microsoft said it has fixed the flaws that allowed the key to be accessible from the account.  The hacks drew scrutiny to Microsoft’s data security and has led to calls to investigate the company’s practices.  Officials whose email accounts were hacked include Commerce Secretary Gina Raimondo, U.S. Ambassador to China Nicholas Burns and Assistant Secretary of State for East Asia Daniel Kritenbrink.  The Chinese Embassy in Washington did not respond to the Microsoft update but has said the allegation that China stole the emails is a “groundless narrative.”  Reuters Microsoft

U.S. Sanctions Leaders of Sudan’s RSF.  The U.S. has sanctioned Abdelrahim Dagalo, deputy leader of Sudan’s paramilitary Rapid Support Forces (RSF) and brother of the group’s commander Mohamed Hamdan Dagalo, as well as Abdul Rahman Juma, the RSF’s top general in West Darfur, over human rights abuses.  The measures freeze Dagalo’s assets and impose visa restrictions on Juma.  The RSF is accused of violence, lootings, and rape against civilians in the region, including targeted abuses against members of the Masalit ethnic group.  The RSF has denied any accusations of wrongdoing.  Al Jazeera Reuters

Western Europe

Germany Tripling Ammunition Purchases in 2024.  German Defense Minister Boris Pistorius said Germany is planning to triple spending on ammunition purchases in 2024.  The announcement comes as Western countries scramble to replenish depleted stocks brought on by the war in Ukraine.  Germany is currently the second-biggest donor to Ukraine after the U.S.  NATO had pledged in February to increase stockpiles of ammunition, yet Kyiv is still burning through shells faster than Western nations can replace them.  NATO members have kept how much ammunition they have in their stocks a well-guarded secret.  Reuters

Poland Buys $2 Billion Worth Of Naval Strike Missiles.  Poland’s procurement agency says it has ordered several hundred Naval Strike Missiles in a deal totaling $2 billion (8 billion zloty).  The deal also includes two new naval missile units that will be added to Poland’s existing Naval Strike Missile anti-ship system.  The contract to supply the missiles has been awarded to Norwegian company Kongsberg Defense and Aerospace.  Deliveries are scheduled to take place between 2026 and 2032. The Naval Strike Missile is a sea-skimming missile with a range exceeding 185 kilometers (115 miles), according to Kongsberg.  Defense News

EU Court Upholds Sanctions on Russian Oligarchs.  The Court of Justice of the European Union (CJEU) dismissed complaints by several Russian oligarchs and tycoons about sanctions the bloc imposed on them over the Ukraine war.  The CJEU upheld sanctions on Dmitry Alexandrovich Pumpyanskiy, former owner of a company that manufactured steel pipes for the gas and oil industry, which is a key source of revenue for the Russian government; Gennady Timchenko, former manager of Russia’s largest private natural gas producer Novatek and long-time ally of Russian President Vladimir Putin; Tigran Khudaverdyan, a former head of Russia’s top internet company Yandex; and Alexander Shulgin, a former head of Russia’s e-commerce platform Ozon.  The EU has sanctioned around 1,800 individuals believed to be linked to the Kremlin.  Around 60 Russian lawsuits appealing EU sanctions are still pending.  Deutsche Welle Reuters

EU Official Says Draft G20 Declaration on Ukraine Needs More Work.  A senior EU official told reporters on Wednesday that the draft declaration on Ukraine being prepared by the Indian presidency of the G20 is “not going far enough” for G7 and EU members.  The official said the issue is that Russia and China are not backing the language agreed to at the G20 summit in Indonesia last year, where leaders issued a statement condemning Russia’s invasion of Ukraine.  The official said that it is unknown whether a statement will be agreed to since negotiations are ongoing, though they said it would still be worth it to have “19 against one” in agreement on a final text.  Short of a unified declaration, the official said the EU will accept a presidency report, which does not require unanimous agreement, though they said “that will not be good.”  CNN

Central and Eastern Europe

Blinken Calls Ukraine’s Counteroffensive Progress Encouraging.  U.S. Secretary of State Antony Blinken met with Ukrainian President Volodymyr Zelensky in Kyiv on Wednesday, where he reaffirmed strong U.S. support both for Ukraine’s counteroffensive and long-term efforts to build deterrence against future aggression.  He added that Ukraine’s progress in the counteroffensive has been “very, very encouraging” and said he looked forward to Zelensky’s assessment of the fighting after his recent visit to the frontlines.  Zelensky thanked Blinken for the “great message of support” and noted that U.S. financial support is “crucial,” especially as winter approaches.  Barron’s CNN

Ukraine’s Parliament Approves Umerov as New Defense Minister.  Ukraine’s Parliament approved the appointment of Rustem Umerov as the country’s new defense minister.  Speaking shortly after the approval, Umerov pledged to “liberate every centimeter” of Ukrainian territory from Russia and return all Ukrainians in captivity, including prisoners of war, political prisoners, civilians and children.  Umerov was former chairman of the State Property Fund, which is tasked with attracting investment to Ukraine, and has been involved in the return of prisoners of war.  Umerov replaced Oleksii Reznikov, who was removed amid corruption scandals at the defense ministry.  Ukrainian President Volodymyr Zelensky called for “new approaches” to the war before replacing Reznikov.  CNN Kyiv Post

Romania Says Possible Debris from Russian Drone Fell in its Territory.  Romania confirmed debris from a Russian drone may have fallen into Romanian territory during a Russian attack on a Ukrainian port on the Danube River.  Romania’s defense minister Angel Tilvar confirmed the discovery of wreckage in the area and said that it has been taken for further analysis.  Romania’s defense ministry previously denied earlier reports that a Russian drone fell on the Romanian side of the Danube.  Romanian President Klaus Iohannis said if it is confirmed that the debris is from a Russian drone, it would mark an “inadmissible and serious violation” of Romanian sovereignty and territorial integrity, though he reiterated there is no direct threat to Romania, distinguishing between “an act of aggression and an incident.”  He also called the Russian attacks on the Ukrainian port war crimes happening a “small distance” from Romania.  CNN Reuters 

Russia Retraining Soldiers Who Fought in Ukraine for to Teach New Defense Course in Schools.  Russia has established a center to prepare veterans of the war in Ukraine to teach children a new security and defense course, according to the education minister.  Moscow has been overhauling its school curriculum since its invasion of Ukraine last year, such as by circulating new textbooks that provide a revised interpretation of the fall of the Soviet Union, the Putin era and the causes of the Ukraine war.  The new defense course, called "Fundamentals of Security and Defense of the Motherland,” builds on an existing course to provide basic military training for children aged 16 and over. It will include lessons on how to handle a Kalashnikov assault rifle and various hand grenades as well as general self-defense, according to the education ministry.  The course will also include instruction on combat drones, which have become increasingly important amid the Ukraine war.  Russia is planning on implementing the full version of this course by September 1st of next year.  Reuters

Russia’s Spy Chief Says CIA Contact Rare But Regular.  Sergei Naryshkin, the head of Russia’s SVR foreign intelligence service, said that his agency has regular contacts with the CIA, but at long intervals, according to Russia state news agency RIA.  Reuters

Russia Looks to China, India for Icebreakers for Arctic Route.  Russia says it is in talks with India and China to help bolster its construction of ice-breaking vessels meant for the Northern Sea route.  The route stretches from Murmansk near the Russian border with Norway eastwards to the Bering Strait near Alaska.  Russia plans to build 50 icebreakers and ice-class vessels for the Northern Sea route by 2035.  Alexei Chekunkov, the head of Russia’s Ministry for the Development of the Russian Far East and Arctic, said Russia is currently limited by a lack of shipyards that build icebreakers, so it is looking to China and India for help on joint shipbuilding, as well as development of navigation technologies.  Chekunkov said 34 million tons of cargo were shipped through the route last year and the same is expected this year, and that Russia seeks to ship 80 million tons next year and 200 million tons by 2031.  Reuters

Russia Says Finalizing Route of Planned China-Bound Gas Pipeline.  Russia is reportedly finalizing the route of its China-bound Power of Siberia-2 gas pipeline.  Russia’s Deputy Prime Minister Alexander Novak wrote in the Russian energy ministry’s in-house magazine that planning for the pipeline’s route is in its “final stage” and that it is “assumed” the pipeline will pass near several eastern Siberian cities, go through the Buryatia region south of Lake Baikal, and then reach the Mongolian border near the settlement of Naushki.  Russia’s state-run gas giant Gazprom wants the pipeline to start operations by 2030.  China and Russia are reportedly still negotiating the terms of the gas deliveries through the pipeline, including pricing.  Experts note that China is not expected to need more gas till after 2030.  Russia reportedly wants to increase gas supplies to China by 50 billion cubic meters (bcm) per year through Power of Siberia-2, while the existing Power of Siberia pipeline is set to send 38 bcm per year by 2025.  Reuters 

Slovakia Sends Troops to Border With Hungary to Address Migrant Surge.  Slovakia will assign 500 soldiers to help police control the increasing flow of migrants coming across the border with Hungary, according to Prime Minister Ludovit Odor.  Slovakia has recorded a massive surge in migration, mostly coming from Syria, as they cross into the EU to get to richer countries, mainly Germany.  Odor said it was impossible to completely seal the border with Hungary but the extra support from the troops would help the police register the migrants and patrol border towns. The Slovakian government is also considering stopping the practice of issuing registration forms to migrants, which it said is a pull factor for migrants.  Many other countries along the Balkan route already do not provide the forms.  The surge in migrants comes ahead of winter and the September 30 election in Slovakia.  Reuters

Asia and Oceania

China, Singapore Hold Joint Military Drills.  China and Singapore are holding joint military drills scheduled for September 1 to 14.  The “Exercise Cooperation 2023” drills are taking place in Singapore and include small-arms live fire, sniper tactics, fast roping, hand-to-hand combat, and cohesion activities.  It is the first joint exercise between Singapore and Beijing since the Covid-19 pandemic.  The drills come days after the U.S.-led “Southeast Asia Cooperation and Training” counterterrorism naval exercises in Singapore, which involved 21 countries.  The back-to-back exercises demonstrate Singapore’s efforts to navigate the U.S.-China competition in the region and maintain defense cooperation with both countries.  South China Morning Post

Analysis: Xi’s Absence at G20 Summit Points to Wider Diplomatic Hurdles With China.  Analysts say Chinese President Xi Jinping’s decision not to attend the G20 summit in India adds to a trend of China closing diplomatic access to the West and its allies.  Envoys based in China told Reuters that they are facing increasing difficulty in engaging with Chinese officials and others from state-linked entities and that this has become more of an issue in 2023 even after China ended strict pandemic controls.  Western envoys added that when meetings are arranged, Chinese counterparts rigidly stick to scripted comments and even sometimes display hostile behavior.  Analysts said the limitations on interactions points to China becoming more wary about engaging with foreign powers.  One analyst argued that China is using engagement as “leverage” to shape the behaviors of countries with whom it has disagreements, while other analysts said China’s national security drive may have had an impact too since it has increased scrutiny of Chinese officials with close working relationships with Western counterparts.  For Xi specifically, his absence at this year’s G20 summit may be due to tensions between China and India, but his international travel in general has lessened in the last year, only including a trip to Moscow and a visit to South Africa for a BRICS summit, where he also missed a keynote address without explanation.  Reuters South China Morning Post 

Middle East and Northern Africa

Iran Detains Mahsa Amini's Uncle Ahead of Her Death Anniversary.  Security forces in Iran detained the uncle of Mahsa Amini, the woman whose death in the custody of morality police sparked nationwide protests last year.  Amini’s uncle was reportedly followed by security forces for a week and had his home and car searched before being detained.  Iran has recently increased its crackdown on dissent ahead of Amini’s upcoming death anniversary on September 16th.  Over 500 people were killed during anti-government protests after her death last year, including 71 minors.  Amnesty International alleged last month that Iranian authorities have been subjecting the families of those who were killed in the protests to arbitrary arrest and detention, imposing restrictions on peaceful gatherings at grave sites, and destroying victim’s gravestones.  Iranian authorities have accused the U.S. and Israel and their local agents of causing the unrest to destabilize the country.  Reuters

Sub Saharan Africa

Sudan Army Strike Kills 32.  Sudanese army artillery strikes killed at least 32 civilians in the Ombada neighborhood in western Omdurman on Tuesday.  Military sources said earlier this week that the army deployed many ground troops to Omdurman for an operation to cut off the paramilitary Rapid Support Forces’ main supply route from the Darfur region to the capital Khartoum.  Both the army and RSF deny responsibility for attacks that have killed civilians.  Reuters

Cyber and Tech

CISA Finishing Up Cyber Incident Reporting Rule.  CISA Director Jen Easterly said her agency is “finishing” a long-awaited cyber incident reporting requirement for critical infrastructure companies and plans to implement it “later this year or early next year.”  Congress tasked CISA with developing a reporting mandate in the fiscal 2022 spending bill, giving it two years to publish an interim rule outlining critical infrastructure companies’ obligations and another 18 months to publish a final rule.  Easterly said CISA is moving much faster than the given timetable due to concerns about future cyberattacks.  The Securities and Exchange Commission (SEC) adopted rules requiring public companies to disclose breaches within four days in July, though lawmakers have called on the commission to review how the rules interact with other federal incident reporting requirements.  The Record

QakBot Operation Demonstrates BotNet Takedown Method, Analysts Say Arrests and Asset Seizures Needed to Complete Operation.  The FBI’s recent takedown of the QakBot botnet, which has been used in ransomware and scam attacks for 15 years, successfully demonstrated a method that could be used against other botnets.  Senior FBI and Justice Department officials called the operation in which they infiltrated QakBot’s infrastructure to shut it down as “the most significant technological and financial operation ever led by the Department of Justice against a botnet.”  The operation used the Qakbot’s auto-updating feature against itself to send a custom application that uninstalled Qakbot and disabled it on U.S. devices.  A researcher said all modern botnets have similar auto update functionality and if you can infiltrate their communication channels to manipulate this feature, “you can essentially make them self-destruct.”  Law enforcement agencies have conducted similar operations to take down botnet networks in the past, though it has not stopped networks from reforming if operators are not arrested and authorities do not seize key assets.  Even for QakBot, analysts say it is unclear if the operation fully took down the operation or just temporarily disrupted it, noting that only the arrest and prosecution of personnel along with the dismantling of technical infrastructure will eliminate the network for good.  The FBI and Justice Department have yet to announce any potential arrests linked to QakBot.  The Record

Tornado Cash Co-Founder Pleads Not Guilty to Laundering $1 Billion.  Roman Storm, a co-founder of sanctioned cryptocurrency “mixer” Tornado Cash, pleaded not guilty on Wednesday to federal charges that he helped facilitate $1 billion in money laundering, including for North Korea’s Lazarus Group.  Storm was arrested on August 23 after the U.S. Treasury banned Tornado Cash last November after saying Lazarus Group laundered millions of dollars in hacking proceeds through the platform.  U.S. officials say such virtual currency “mixers,” which combine cryptocurrencies of many users, help cryptocurrency owners conceal their identities and ill-gotten gains.  Another Tornado Cash co-founder, Roman Semenov, remains at large.  Reuters

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