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10:00 AM ET, Tuesday, November 14, 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

China, U.S. Reportedly Set to Announce Fentanyl Deal.  President Joe Biden and Chinese President Xi Jinping are expected to announce a new deal that would see Beijing clamp down on the manufacture and export of fentanyl, according to sources familiar with negotiations. The agreement, which is still being finalized and set to be announced on Wednesday when the two leaders meet at the Asia-Pacific Economic Cooperation summit in San Francisco, would require China to crack down on chemical companies linked to fentanyl production to curb the spread of the materials used to make the opioid drug. Washington would, in return, ease restrictions on Beijing’s forensic police institute, which the U.S. has accused of committing human rights abuses and oppressing ethnic Uighurs.  Neither the Chinese Ministry of Foreign Affairs nor a White House National Security Council spokeswoman would comment on the developments. On Monday, National Security Advisor Jake Sullivan said he hoped to see progress on the problem, which could establish a path towards “further cooperation on other issues.” Though the U.S. considers the potential agreement an important breakthrough, analysts believe that the deal could easily disintegrate if Washington criticizes China’s Communist Party or Xi. American officials have warned that strict enforcement of the deal will also be necessary to produce real results and stem the flow of fentanyl.  Bloomberg The Cipher Brief

U.N. Expresses Concern Over China and Russia’s Support of North Korea.  U.S. Defense Secretary Lloyd Austin said on Tuesday that U.N. members enforcing the armistice that ended the Korean War are concerned that Russia and China are helping North Korea expand its military capability by evading U.N. sanctions.  Austin’s remarks came at a meeting of defense ministers and other officials from the 17 countries of the U.N. Command (UNC) in Seoul.  North Korea and Russia have denied any arms deals, although their leaders’ meeting in September promised closer military cooperation.  China says it is complying with its international obligations.  A joint statement by the UNC and South Korea said Seoul, the U.S. and other member states agreed to expand joint military exercises while also seeking dialogue. The South Korean navy said it is conducting joint drills with the U.S. this week. Austin and South Korean Defense Minister Shin Won-sik agreed on Monday to revise a bilateral security agreement to strengthen deterrence of North Korea’s growing nuclear and missile threats.  North Korea on Monday called the UNC “a U.S. tool for confrontation” that must be dissolved if war on the Korean Peninsula is to be prevented.  Reuters Associated Press

China Targeting Americans with World’s Largest Known Online Disinformation Operation.  A CNN review of court documents and social media disclosures show that China has created the world’s largest known online disinformation campaign and is using it to harass U.S. politicians, businesses and other residents. The documents show communications, sometimes threatening violence, are part of a well-organized intimidation campaign known as “Spamouflage” or “Dragonbridge.” The State Department said the campaign is part of a larger, multi-billion effort to shape information and silence critics of China, an effort that has expanded under President Xi Jinping. Victims have been subject to thousands of social media posts calling them such things as traitors and dogs and subjecting them to racist and homophobic slurs. CNN says some victims have brought the issue to the attention of law enforcement agencies, including the FBI, but that little has been done. Private researchers have tracked the campaign since it was discovered more than four years ago, but only in recent months have federal prosecutors and Facebook parent company Meta said publicly that the operation has ties to the Chinese government. Meta, Google, and X (formerly Twitter) have blocked thousands of “state-linked” accounts, according to company blogs. But experts who monitor disinformation warn that, given the relatively low cost of such programs, China will continue to use such tactics to try to bend online discussions closer to Beijing’s preferred narrative. The Chinese campaign is drawing attention in Congress. House Select Committee on the Chinese Communist Party Chairman Mike Gallagher said the campaign is “expanding across the board.”  CNN

U.S., Indonesia Upgrades Ties to ‘Comprehensive Strategic Partnership.’  President Joe Biden met with Indonesian President Joko Widodo at the White House on Monday where the two leaders agreed to upgrade their countries relations to a “comprehensive strategic partnership,” boosting cooperation in a number of areas.  Both sides agreed to bolster defense cooperation on maritime security, cybersecurity, and counterterrorism.  Biden and Widodo also discussed efforts towards a critical minerals accord that could give U.S. companies more access to Indonesia’s nickel market, which would support battery and electric vehicle production.  Some U.S. lawmakers have opposed such investment in Indonesia, saying that the country is not meeting standards for labor rights, environmental protection, and human rights and highlighting that China is deeply invested in Indonesian mining and refining.  Officials note that talks are only in “the very first phase.”  Biden and Widodo also discussed the Middle East, with the Indonesian leader calling for a ceasefire in Gaza.  The strengthening of ties between the U.S. and Indonesia marks the latest move by Washington to counter China’s influence in the Indo-Pacific.  Bloomberg Nikkei Asia White House 

ISRAEL AND HAMAS WAR

U.S. Official Says Hamas Operating Command Node Beneath Al-Shifa Hospital.  A U.S. official familiar with American intelligence said that Hamas is operating a command center beneath Gaza’s largest hospital, Al-Shifa.  The official also said that Hamas is using fuel intended for the hospital and gathering its militants around the facility.  Israel has said that Hamas operates in and around Gazan hospitals and other civilian facilities, including Al-Shifa Hospital.  Israel has also said it has given fuel to Al-Shifa and established evacuation routes for people to leave the hospital.  Hamas and hospital authorities have denied that the militant group is using Al-Shifa as a command center.  U.S. National Security Advisor Jake Sullivan said on Monday that it is Hamas’s “track record” to use hospitals and other civilian infrastructure “for command-and-control, for storing weapons, for housing its fighters.”  U.S. intelligence seems to support claims about Hamas’s presence at Al-Shifa, though CNN has not viewed the intelligence cited by the American official.  The CIA declined to comment on the matter. CNN 

Biden Calls for Gaza Hospitals to be Protected.  President Joe Biden said Gaza’s hospitals “must be protected” and urged for “less intrusive action” around the medical facilities.  Israel maintains that Hamas has placed command centers and its tunnel network under hospitals in Gaza, which Hamas and hospital officials have denied.

In clarification of Biden’s remarks, National Security Council coordinator for strategic communications John Kirby said that Biden was speaking about "this extra burden” that Israeli forces face “as they go into Gaza – because Hamas does shelter themselves behind civilian infrastructure.” He said that militants hide in locations like tunnels beneath residential buildings, hospitals, and schools, putting civilian lives at risk and creating issues for Israeli forces who seek “legitimate targets” that are lodged in civilian infrastructure. Kirby reiterated that Biden was referring to an “incredibly difficult conundrum” that Israel is facing.

Health authorities say Al-Shifa hospital, Gaza’s largest, is no longer operating.  The Palestinian Red Crescent Society said fighting and explosions near the Al-Quds Hospital, which it said was also not operational, has disrupted evacuation efforts from the facility.  The Israeli military released a statement saying that a “terrorist squad” had positioned itself amongst civilians at the hospital’s entrance and fired at Israeli troops.  The statement said around 21 terrorists were killed when Israeli soldiers fired back.  It did not say whether there were any civilian casualties.

Israeli military spokesman Daniel Hagari said on Monday that there were “signs indicating hostages were held” in a basement of the al-Rantisi Hospital in northern Gaza.  CNN Reuters New York Times Al Jazeera ABC News Forbes

Gaza Facing Communication Blackout.  Communications in the Gaza Strip are being heavily disrupted amid fighting in the territory.  Palestine’s minister of telecommunications and information technology, Ishaq Sidr, warned that Gaza faces an imminent, complete halt of communications and internet services by Thursday due to the lack of fuel supplies.  The interruption will likely exacerbate the humanitarian crisis in Gaza by complicating communication between medical workers.  CNN says it has been unable to reach Palestinians in northern Gaza via the internet since Friday, though regular phone calls have been possible despite frequent disconnections.  Gaza’s Health Ministry says it has been unable to update reports on the death toll in the territory since Friday due to internet cuts and loss of communication with hospitals.  CNN Washington Post

Six Palestinians Killed During Israeli Raid in West Bank’s Tulkarem Refugee Camp.  The Israel Defense Forces (IDF) said it clashed with terror operatives in the West Bank’s Tulkarem refugee camp and conducted a drone strike against armed Palestinians who were throwing explosives at Israeli troops.  Eyewitnesses reported Israeli armored vehicles at the camp.  The IDF said its troops continued to operate in the camp through Tuesday morning, adding that they found explosive devices and arrested wanted Palestinians overnight.  The Palestinian health ministry reports that six Palestinians were killed in clashes with Israeli troops.  Al Jazeera Times of Israel 

Israel Confirms Death of Soldier Taken Hostage by Hamas.  Israel’s military on Tuesday confirmed the death of an Israeli soldier, Noa Marciano, who was being held hostage by Hamas.  The militant group released a video of her alive followed by images of what it said was her body after she was killed by an Israeli air strike in Gaza.  The Israeli military did not comment on the cause of Marciano’s death, only describing her as an “abductee fatality in the hands of a terrorist organization.”  It appears to be the first time Israel has confirmed a claim by Hamas that a captive the group was holding was killed by fighting in Gaza.  Reuters Times of Israel

Israeli Minister Calls for ‘Voluntary Emigration’ of Palestinians from Gaza.  Israel’s far-right Finance Minister Bezalel Smotrich said on Tuesday that Israel cannot accept Gaza’s existence as an “independent entity” and called for Palestinians there to leave to other countries.  He said that he supports suggestions by lawmakers in his religious nationalist party that Western countries should accept Palestinians from Gaza who seek to relocate through “voluntary emigration.”  His comments underscore concerns in the Arab world that Israel is seeking another “Nakba” (catastrophe), referring to the mass displacement of Palestinians after the 1948 war and accompanying founding of the state of Israel.  Neighboring Arab states have said any displacement of Palestinians from Gaza into their territories would be unacceptable.  Al Jazeera Reuters 

Israel Says War Priority in 2024 Budget.  Israel’s economy and industry minister Nir Barkat said on Monday that military spending for the war with Hamas will be the priority in Israel’s 2024 budget.  The budget will also include concessions to expand the unity government and will be structured to focus on growth after the war.  Israel’s finance ministry is announcing a new budget in the coming days amid the Israel-Hamas conflict, which is reportedly proving to be more expensive than predicted.  The ministry estimates that the war is costing the Israeli economy around $260 million per day, both through increased spending on the military and lower revenue from tourism and household consumption.  Barkat maintained that Israel can handle the 2 to 3% of GDP that the war will cost Israel, adding that Israel will pay whatever is needed to ensure it can achieve security.  Bloomberg

Blinken Addresses Dissent Within State Department Over U.S. Response to Israel-Hamas Conflict.  U.S. Secretary of State Antony Blinken is addressing dissent within his department over the Biden administration’s policy on Israel and the War in Gaza.  Blinken told department employees in a letter sent out on Monday that he is listening to those who disagree with the administration’s approach. U.S. officials say multiple cables have been filed with the department’s dissent channel, which was created during the Vietnam War to enable diplomats to express policy disagreements without fear of retaliation. Blinken’s letter acknowledged that some diplomats have expressed reservations about U.S. support for Israel as it presses an assault on Hamas in Gaza that has resulted in a heavy civilian death toll. The letter said the department has organized forums in Washington and around the world to hear from employees who wish to express their views. Blinken’s letter also went to employees of USAID, where more than 1,000 employees had endorsed an open letter asking the administration to call for an immediate cease-fire in the war. The letter cited what it said were numerous Israeli violations of international law aimed at protecting civilians.  Washington Post 

THE UKRAINE UPDATE

Ukraine Says Russia Escalating Attacks on Avdiivka.  The Ukrainian military said Monday that there is continued intense fighting around the eastern town of Avdiivka, though officials report that Ukraine’s forces managed to repel Russian attacks around the city and in other areas along the 600-mile eastern front line. Ukrainian military spokesman Oleksandr Shtupun said that Russia is both deploying more infantry and increasing the amount of “air strikes using guided bombs from Su-35 aircraft” around Avdiivka.  However, he said that 14 Russian vehicles and two tanks were “burned out” in attempted attacks.  He also said Ukrainian soldiers had driven back eight attacks on the city in 24 hours.  The chief of Avdiivka's military administration, Vitaliy Barabash, reported that Russia has suffered heavy losses, with 3,000-4,000 dead and 7,000-8,000 wounded.  The Ukrainian General Staff said that its units had pushed back 15 Russian assaults close to the settlement of Maryinka, which lies east of Avdiivka, in addition to 11 attacks near Bakhmut and six near Kupiansk in the northeast.  According to Russia, its forces repelled five Ukrainian attacks on villages surrounding Bakhmut.  Reuters

Ukraine Downs 7 Russian Drones in Overnight Attack.  The Ukrainian Air Force said on Tuesday that it shot down seven of nine Shahed "kamikaze" drones launched by Russia from Krasnodar Krai overnight. Moscow also launched a Kh-35 guided missile from an occupied area in the Zaporizhzhia region and an Iskander ballistic missile from occupied Crimea.  The Air Force did not provide more information about the missile assault.  Kharkiv Oblast Governor Oleh Syniehubov said that the Russian military attacked Izium with six Shahed drones on Monday evening.  Air defense systems downed four of the drones.  Dnipropetrovsk Governor Serhii Lysak reported that one drone was also shot down over Pavlohrad. Kyiv Independent

U.S. Purchases 60 Anti-Aircraft Guns to be Sent to Ukraine.  The U.S. Department of Defense has purchased 60 Gepard self-propelled anti-aircraft guns for transfer to Ukraine.  The weapons were originally sold to Jordan from the Netherlands in 2013 for 21 million euros.  The Pentagon purchased the same machinery for 110 million euros. A spokesperson for the Dutch Defense Ministry said that the uptick in value is linked to the changing “geopolitical situation” of the world. The Gerpard has the capability to shoot down planes and helicopters. The system is also highly effective against drones. Germany has already sent Ukraine nearly 50 Gerpards since the start of Russia’s invasion.  Kyiv Independent 

Russian Oil in U.S. Military Supply Chain.  A Washington Post examination of shipping and trade data has found that since the U.S. and other Western countries announced bans on Russian oil in response to the invasion of Ukraine last year, petroleum products originating in Russia have continued flowing to the Motor Oil Hellas refinery in Greece, which serves the U.S. military. Shippers simply took a new route hundreds of miles out of the way through a storage facility in Turkey and changed ownership multiple times to obscure their origination in Russia. Motor Oil Hellas issued a statement denying it trades in Russian oil. The precise amount of Russian fuel oil contained in U.S. Defense Department purchases could not be determined. The Pentagon has approved almost $1 billion worth of new contracts with Motor Oil Hellas since the ban on Russian oil took effect in March 2022. Defense Logistics Agency spokesman Joe Yoswa said the agency has no knowledge of fuel from Russia being routed to its Greek supplier, but he also said it is difficult or impossible to trace the origins of its purchases. Over the past two years, Turkey’s Dortyol port has received 5.4 million barrels of fuel oil by sea, all but 1.9 million from Russia, according to the financial data firm Refinitiv. Since February, Dortyol has shipped 7 million barrels of fuel oil, about 4.2 million going to Motor Oil Hellas.  Washington Post 

THE CYBER AND TECH RUNDOWN

Lockbit Claims Chinese Bank Paid Ransom After Market-Disrupting Hack.  The Lockbit ransomware gang claims that a ransom was paid by the Industrial and Commercial Bank of China (ICBC) following a cyberattack on its U.S. subsidiary that briefly disrupted trading on the U.S. Treasury market.  A Lockbit member told Reuters via a messaging app, "They paid a ransom, deal closed."  The Chinese bank did not respond to a request for comment.  The shutdown at ICBC's U.S. broker-dealer generated a temporary debt of $9 billion, much larger than its net capital.  The impact of the hack even suspended corporate email operations, forcing staff to use Google mail services.  ICBC reportedly has yet to fully restore normal operations.  Officials from the lender arrived in the U.S. over the weekend to limit fallout from the incident.  The ransomware attack is likely to be reviewed by regulators who already are concerned about the resiliency of the Treasury market valued at $26 trillion.  The U.S. Treasury Department did not offer comment on Monday.  The Financial Services Information Sharing and Analysis Center, a financial industry cybersecurity group, said "we are reminding members to stay current on all protective measures and patch critical vulnerabilities immediately."  Bloomberg Reuters

South Korean Intelligence Agency Exposes China-Owned Misinformation Websites.  South Korea’s intelligence service has identified a network of 38 fake news websites owned by Chinese companies that has been working within the country.  The National Intelligence Service (NIS) reported that Haimai and Haixun, Chinese-owned  public relations firms, have sponsored the websites, which bore domain and site names similar to genuine media platforms.   The suspect websites misidentified themselves as members of the Korea Digital News Association and circulated pro-Beijing and anti-U.S. material through the network’s websites as well as via NewsWire, a Seoul-based news distribution service.  The NIS reported that the network will be shut down, adding that it is “closely monitoring China’s efforts to extend its cyber influence in Korea.”  The NIS last week signed an agreement with the U.S. Cybersecurity and Infrastructure Security Agency to boost cybersecurity cooperation.  Cybernews

White House Announces Wireless Spectrum Strategy To Meet Commercial Demand.  Federal agencies have been instructed by the Biden administration to set aside segments of the wireless telecommunications spectrum to make room for commercial vendors preparing for greater demand for 5G services.  The administration’s National Spectrum Strategy released Monday gives a two-year deadline for “detailed studies” to be conducted on several sets of airwaves to support multiple uses, including wireless broadband as well as drone and satellite operations.  The spectrum for possible repurposing is nearly double the goal released in March by the Commerce Department's National Telecommunications and Information Administration (NTIA).  goal released in March.  That plan aimed to identify at least 1,500 megahertz of spectrum to study for potential new uses.  The strategy notes that 5G, 6G, and wi-fi technologies "necessitate additional spectrum resources with the capacity for wider channels, resulting in benefits beyond increased capacity, including enhanced energy efficiency, improved reliability and reduced latency.” Bloomberg Reuters

China Releases New Draft Rules Governing Auditing Data Involving ‘National Security’.  Auditing work that involves national security should be subject to additional cybersecurity safeguards, according to China’s finance ministry.  A draft of new measures was released on Friday that applies to auditors managing data for domestic firms or those performing cross-border work.  Each auditing firm’s chief partner is held responsible for data security.   The proposed rules are the latest in a series of Chinese government moves to strengthen data security for auditors.  A set of rules issued in May directed state-owned companies and listed enterprises to strengthen checks on accountants' management of information security.  In February, the government asked certain state-owned firms to stop using the “big four” international accounting firms to curb the influence of Western auditors.  Public comment on the draft rules will be open until Dec. 11.  The world’s four largest accounting firms — PricewaterhouseCoopers, Deloitte, KPMG, and EY — did not immediately respond to requests for comment.  Reuters

ELSEWHERE IN THE WORLD

Asia and Oceania

Taiwan Working On One-on-One Biden Meeting at APEC Summit.  Taiwanese National Security Council Secretary-General Wellington Koo says Taiwan is working with the U.S. to arrange a one-on-one meeting between its APEC summit representative Morris Chang and President Joe Biden. The White House had no comment. The State Department said it had nothing to announce on specific bilateral meetings at the summit but that Biden looks forward to Taiwan’s summit participation. Asked whether Chang had been asked to greet Chinese President Xi Jinping or relay a message from Taiwanese President Tsai Ing-wen to Xi, Koo said no and that everything “should happen naturally.”  Reuters

Former Chinese Envoy Says ‘Everything’ But Taiwan on the Table for U.S. Summit. Veteran Chinese diplomat Cui Tiankai said at the Family Business Summit in Hong Kong that “everything” would be on the table for discussion at the Asia-Pacific Economic Cooperation (APEC) summit, except Taiwan. Cui emphasized that top Chinese leaders would engage on any issue if Washington respects Chinese control over Taiwan. The former diplomat argued that not doing so would be nothing short of advocating for war.  Cui told reporters that specific issues like military exchanges, artificial intelligence, and climate change could be discussed at the conference. Zhou Bo of the Centre for International Security and Strategy at Tsinghua University agreed with the belief that military discussions would resume on Wednesday between the two nations, with the South China Sea at the forefront of talks.  Many speakers at the business summit expressed hopes that the expected meeting between President Joe Biden and Chinese President Xi Jinping will improve tense relations between Washington and Beijing.  South China Morning Post 

North Korea Denounces G7 as 'Remnant of the Cold War’ that Breeds Conflict.  North Korean state media on Tuesday condemned the Group of Seven (G7) nations as a "remnant of the Cold War" that causes conflict for its own interests and breaches the sovereignty of other countries. The director general of the Department of International Organizations at Pyongyang's foreign ministry, Jo Chol Su, criticized G7 ministers for "slandering" North Korea’s exercise of "self-defensive and legitimate sovereignty." Last week, the G7 released a joint statement that criticized Pyongyang’s missile tests and arms transfers to Russia. Jo argued that the G7 “caused and fomented the recent international crisis” and is the major “dangerous source” of global instability and unrest.  He called for the dismantlement of the G7, saying that its disbandment would be the “first step” towards global peace.  Jo also condemned the U.S. both for supplying Ukraine with weapons and for "shielding Israel's hideous massacre of civilians."  Reuters Barron's 

Australia Considers Restrictions on Technology-Sharing.  Australia is considering legislation that will toughen restrictions on how industries and universities over foreign access to defense technology, while exempting AUKUS partners Britain and the U.S. from the technology-sharing controls.  The law aims to replicate U.S. export controls on defense technology and is seen as a step towards the AUKUS plan aimed at building new nuclear-powered submarines in Australia and the U.K.  The proposed law creates three criminal offenses on unapproved technology-sharing, further restricts sharing of defense technology to foreign persons, and allows license-free sharing among AUKUS partners.  Australian Defense Minister Richard Marles said the move will integrate Australia’s industrial base with AUKUS partners by removing “burdensome red tape.”  Some critics are wary about the legislation’s impact on scientific collaboration, including with China.  Reuters

Thailand Abandons Plans for Joint Patrols with Chinese Police After Public Backlash.  Thailand on Tuesday dropped plans for joint patrols with Chinese police in popular Thai tourist areas after fierce public backlash.  Tourism officials on Sunday proposed the patrols as a way to bolster confidence among tourists, including Chinese nationals.  The plan sparked outrage online, with critics saying the patrols would compromise national sovereignty.  Thailand’s police chief also rebuked the plan.  Tourism Minister Sudawan Wangsuphakijkosol on Tuesday said there are “many alternative ways” to restore confidence among tourists and that the Thai police “is already adequate.”  Thai authorities are seeking to tighten security after a shooting at a luxury mall in Bangkok killed two people, including one Chinese national. Reuters 

Europe

Croatia Appoints New Defense Minister.  Croatian Prime Minister Andrej Plenkovic appointed Ivan Anusic as Croatia’s new defense minister.  Plenkovic said the Balkan nation’s parliament will hold a vote on the appointment as soon as Thursday.  If approved, Anusic will replace Mario Banozic, who was dismissed after his involvement in a fatal car crash on Saturday.  Bloomberg Politico 

Africa

Unknown Attackers in Burkina Faso Kill 70 Civilians.  Unidentified attackers killed at least 70 civilians in northern Burkina Faso earlier this month, according to a state prosecutor.  The attack occurred on November 5 in the village of Zaongo in the northern Centre-North region.  Investigations into the attack are ongoing.  The U.S. condemned the attack and the E.U. called for a swift probe into the massacre of “nearly a hundred civilians.”  CNN Reuters

President of Madagascar to Seek Re-Election Amid Protests of His Eligibility. The current President of Madagascar, Andry Rajoelina, who came to power as a transitional leader during a 2009 coup, has announced his plan to seek reelection amid calls for disqualification. Members of Rajoelina’s party and opposition party leaders have called for a suspension of first-round ballot voting, set for Thursday, because of Rajoelina’s acquisition of French citizenship in 2014. Protests have been held around the country, often being broken up with tear gas. Rajoelina argues that the Constitution does not require presidential candidates to hold Malagasy nationality. The president has urged his supporters to vote on Thursday, calling the opposition’s calls nothing more than a political tactic. “The Malagasy people do not want any more destabilization,” Rajoelina told supporters at a Young Malagasy People Ready rally. The first round of voting is expected to proceed uninhibited on Thursday.  Reuters 

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Ethan Masucol, Bruce Wilmot, Ken Hughes, Katharine Campbell and Emma Fisk contributed to this report.

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