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10:00 AM 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:

U.S. Senators Visiting China, Seek to Meet Xi and Discuss Micron.  Senate Majority Leader Chuck Schumer and Sen. Mike Crapo (R-ID) are planning to lead a bipartisan group of senators visiting China next week.  Crapo said the group hopes to meet with President Xi Jinping, but such a meeting has not been confirmed.  According to sources familiar with preparations for the trip, the senators plan to raise the issue of Micron Technology Corporation’s ability to operate in China as the company is being investigated by China’s cybersecurity administration.  The sources said the senators also plan to meet with representatives of U.S. businesses in Shanghai, where they will discuss the investment climate for American companies.  Crapo said the purpose of the trip is to engage with the Chinese just as senior Biden administration officials have been doing “on a broad array of issues that we have.” Sources said the White House supports the senators’ trip.  Bloomberg

Taiwan Tech Firms Helping Huawei Build Chip Plants in China.  Several Taiwanese tech companies are helping China’s Huawei Technologies build infrastructure for a network of chip plants in southern China.  A Bloomberg News investigation found the Taiwanese companies include a subsidiary of L&K Engineering, chip material reseller Topco Scientific, and a subsidiary of United Integrated Services.  Meanwhile, Cica-Huntek Chemical Technology Taiwan Company posted on its website that it had won contracts to build chemical supply systems for two Chinese chipmakers, Shenzhen Pensun Technology Company and Pengxinwei IC Manufacturing, both of which have been identified as working with Huawei to build chip fabrication facilities.  Pengxinwei IC was blacklisted by the U.S. last year.  Cica-Huntek removed the website post after Bloomberg inquired about it.  Li Jung-Shian, professor of electrical engineering at Taiwan’s National Cheng Kung University, told Bloomberg the chips from Chinese plants built with Taiwanese assistance could wind up being “used on Chinese missiles aimed at Taiwan.”  Li added that the Taipei government must tighten controls on Taiwanese companies’ support for Huawei.  Taiwan’s Ministry of Economic Affairs said that it will investigate the matter.  It seems unclear whether the Taiwanese companies’ involvement with Huawei violates U.S. sanctions.  Trade policy expert and Akin Gump partner Kevin Wolf said it is impossible to know whether US regulations are being violated without more detailed information.  Bloomberg

U.N. Security Council Approves Haiti Security Mission.  The U.N. Security Council on Monday voted to authorize a Kenya-led multinational security mission for Haiti aimed at helping local authorities counter rampant gang violence.  The Council voted 13 in favor, with China and Russia abstaining.  The force will be deployed for one year, with a review after nine months.  The security mission will be tasked with guarding Haitian critical infrastructure like airports, ports, schools, hospitals and key traffic intersections and will conduct “targeted operations” with Haitian National Police.  Haiti’s Foreign Minister Jean Victor Geneus said the vote is an “expression of solidarity” and a “glimmer of hope” for the Haitian people.  Kenya’s Foreign Affairs Minister Alfred Mutua said he hopes Kenyan police officers will arrive in Haiti by January.  U.N. spokesperson Stephane Dujarric added that countries who send security forces to Haiti for the mission will be held accountable for the conduct of their personnel.  Kenya pledged at least 1,000 security personnel for the force.  Jamaica, Barbados, Antigua and Barbuda and other countries have said they will join the mission.  The Biden administration pledged $100 million total for the mission itself, along with another $100 million from the Pentagon, for intelligence support, airlifts, communications, and medical assistance.  Reuters Associated Press New York Times The Cipher Brief

THE UKRAINE UPDATE:

Ukraine Says it Downed 29 Russian Drones, One Cruise Missile.  Ukraine’s Air Force said Ukrainian air defenses successfully downed 29 of 31 drones and one cruise missile launched by Russia in a wave of overnight attacks.  The drones were destroyed over the regions of Mykolaiv and Dnipropetrovsk.  Falling debris caused some damage to manufacturing facilities in the city of Pavlohrad, but there were no reports of casualties. CNN Reuters

Russia Claims Ukraine Shelled Village with Cluster Munitions.  The governor of Russia’s Bryansk region, Alexander Bogomaz, claims that Ukraine fired cluster munitions at the village of Klimovo near the Ukrainian border on Tuesday.  Bogomaz said the reported attack did not cause casualties but damaged homes.  He has reported frequent Ukrainian attacks on Bryansk in recent months, including missile and drone strikes.  Ukraine did not comment on his accusations.  Reuters could not independently verify his claims.  The U.S. started supplying cluster munitions to Ukraine in July and said Kyiv pledged not to use them on populated areas.  The U.N. reports that Russia has also used cluster munitions in Ukraine, including in densely populated areas.  Reuters CNN 

Russia Denies Ukraine Broke Through Southern Defensive Lines.  Russian Defense Minister Sergei Shoigu on Tuesday claimed that Ukrainian forces have not broken through Russian defensive lines near Verbove and Robotyne in Ukraine’s southern Zaporizhzhia region and said Russian troops repelled attacks there and in Bakhmut.  Russian officials said last month that Russian forces “tactically left” Robotyne after losing it to Ukrainian soldiers.  There is continued fighting south of the village as Ukrainian troops push south towards the strategic rail hub Tokmak.  CNN could not verify battlefield claims by either side, but video footage from the front and accounts from troops on the ground suggest Ukrainian armored vehicles pushed past Russian defensive lines near Robotyne, west of Verbove.  CNN 

Polish Armaments Group Announces that Ukrainians have Received Refurbished Tanks. The Polish Armaments Group (PGZ), an industrial supplier out of Poland, announced on Monday that Ukraine has received the first batch of refurbished Leopard tanks from Poland. The PGZ said that while “others are making declarations concerning the future, we are consulting with the Ukrainian side in our actions.” PGZ is known to be a main partner of the Polish Armed Forces and has announced plans for a second shipment of refurbished tanks to Kyiv.  CNN

Russia Says 335,000 Join Military, No Plans for New Mobilization.  Russian Defense Minister Sergei Shoigu on Tuesday said Russia is not planning another mobilization of men since over 335,000 have joined the armed forces or voluntary units.  He claimed that 50,000 citizens signed contracts with the Russian military in September alone.  The figures suggest that Russia’s armed forces are seeing steady progress getting recruits and absorbing former Wagner Group fighters into “voluntary formations.”  Shoigu added that recently conscripted soldiers, including from illegally annexed Ukrainian regions, will not be sent to the frontlines, maintaining that the Russian military already has enough men for offensive actions in Ukraine.  Russia ordered a “partial mobilization” of 300,000 reservists in September last year, prompting hundreds of thousands of young men to leave Russia.  Russian President Vladimir Putin has long said there is no need for an additional mobilization.  CNN Reuters 

Kharkiv to Construct Ukraine’s First Underground School.  The northeastern Ukrainian city of Kharkiv plans on building the country’s first underground school to protect students from the constant threat of Russian attacks.  Kharkiv Mayor Ihor Terekhov said that “such a shelter will enable thousands of Kharkiv children to continue their safe face-to-face education even during missile threats."   Though he did not reveal the planned size or opening date of the underground school, Terekhov said that the facility will meet all regulatory requirements and maintained that education funding will not be reduced over the next two years despite budget strains.  While other Ukrainian cities have been forced to rely on online classes throughout the war, Kharkiv has sought to restart in person teaching.  It is currently using space in five of its metro stations to teach 1,000 children in person. The Ukrainian ministry of education reports that at least 363 educational institutions have been destroyed and close to 3,800 damaged throughout the country.  Reuters Al Jazeera Nikkei Asia BBC

Ukraine Removes Hungarian Bank from Blacklist.  Ukraine has removed Hungary’s OTP Bank from its blacklist of “international sponsors of war,” the Ukrainian National Agency on Corruption Prevention (NACP) announced on Monday.  Ukrainian officials said the move came after the bank made several commitments regarding its plans for the Russian market.  The NACP said it hopes the decision will lead Hungary to unblock $523 million worth of “vital E.U. military aid” to Ukraine.  The NACP placed OTP Bank on the blacklist last spring, citing the bank’s continued operations in Russia and its recognition of the Donetsk and Luhansk regions in eastern Ukraine as breakaway republics.  CNN

EU Considers Releasing Frozen Hungarian Funds for Ukraine Support.  The European Union is considering un-blocking part of 22 billion euros for Hungary that were frozen over concerns about the rule of law in that country as the bloc seeks Hungarian approval for aid to Ukraine and talks over possible E.U. membership for Kyiv.  The E.U. froze the funds over concerns that Prime Minister Viktor Orban has restricted the independence of Hungary’s courts.  E.U. officials say laws approved in Hungary over the summer to increase judicial independence have brought a deal closer, but sources say an agreement is not final.  Opening E.U. membership talks would require unanimous approval.  An E.U. diplomat said Hungary “needs the money urgently” and that the European Commission needs Hungary “to lift its vetoes on a number of issues in return.”  Reuters 

Leaked Strategy Shows U.S. Concern About Ukraine Corruption.  A strategy document obtained by Politico suggests the Biden administration is far more concerned about corruption in Ukraine than it admits publicly. The “sensitive but unclassified” document lists steps Washington is taking to help Kyiv eliminate corruption in a variety of sectors. The document emphasizes that corruption could cause Western allies to abandon the Ukrainian war effort.  The document is about three times longer and its analysis significantly starker than a 22-page public version of the “Integrated Country Strategy” posted by the State Department a month ago.  U.S. officials are pressing Kyiv on the issue in private meetings.  One U.S. official told Politico that the Biden administration is talking to Ukrainian leaders about the possibility of conditioning future economic aid on anti-corruption reforms, but that military aid will not be contingent on such reforms.  Politico

Russian Polling Shows Manipulation of Views with ‘Foreign Agent’ Designation.  Recent polling by Russia’s state-owned Russian Public Opinion Research Centre (VTsIOM) suggests that Russian authorities are effectively using the “foreign agent” designation as a weapon to shift public opinion behind the Kremlin’s pro-war, anti-West narratives.  In September, VTsIOM published the results of a poll focused on Russians' sentiments towards people and organizations registered as “foreign agents,” reporting that 61% of the people surveyed said that they considered foreign agents to be “traitors” who spread falsehoods about Russia.  Since invading Ukraine in 2022, Moscow has widened the foreign agent legislation, thereby narrowing the information space within the country and creating more hurdles for citizens to express any opinion that does not align with the ideas of the government, especially views that criticize the war.  UK Ministry of Defense X

THE CYBER AND TECH RUNDOWN:

New Round of U.S. Restrictions on AI Chip Exports to China Possible in Early October.  The U.S. has warned China that it plans to update controls on exports of AI chips and chipmaking equipment, a move that could occur as soon as early this month.  The Commerce Department continues work on the updated export controls that were first introduced in October 2022.  The measures are expected to expand the list of restricted chipmaking tools in alignment with limits introduced by the Netherlands and Japan earlier this year.  The update also aims to close loopholes in restrictions on AI chips.  An unidentified official said the U.S. informed Chinese counterparts in recent weeks on the expected export changes.  The advance notice to Beijing is said to be part of an expanded effort by the Biden administration to stabilize relations with China.  The Commerce Department declined comment on the export control update, and Liu Pengyu, spokesperson for the Chinese Embassy in Washington, had "nothing to offer" in response to a request for comment, though he did reiterate that "China firmly opposes the U.S.'s overstretching of the national security concept and abuse of export control measures to wantonly hobble Chinese enterprises."   The timing of the update could be influenced by the Biden administration’s desire that Chinese President Xi Jinping attend the Asia-Pacific Economic Cooperation (APEC) summit in San Francisco in November.  For this reason, export controls that are not ready to be announced early this month likely would be delayed until after the summit.  On Friday, an official said "as of this moment, final plans are not in place."  The updated export controls could impact the Dutch company, ASML, the world's leading chip equipment maker.  Reuters

New Cyber Reporting Rules for Federal Contractors To Be Offered for Comment.  A White House notice will be published in the Federal Register on Tuesday that will propose revisions to federal acquisition regulations to standardize cybersecurity rules and introduce incident reporting guidelines for government contractors.  The proposed rules are intended to address “inconsistent security requirements across contracts.”  The lack of uniform cybersecurity requirements across government departments and agencies cause confusion and add to costs, may discourage competition.  The General Services Administration, DoD, and NASA developed the new rules for federal contractors as well as cyber threat reporting measures.  The proposal would require contractors to provide CISA with access to threat and incident information and to collaborate with the agency in responses to cyberattacks.  In addition to CISA, the FBI, Justice Department, and contracting agencies in the event of an attack would be provided "full access to applicable contractor information and information systems" as well as to contractor personnel.  The new rules stem from a cybersecurity executive order issued in May 2021.  Contractors also will be required to develop and maintain software bills of materials (SBOMs) for all software used as part of a federal contract.  Contractors and other key stakeholders will have 60 days to comment on cyber incident reporting timelines, and to express any concerns they may have about providing CISA and other federal agencies with full access to information, equipment and personnel during cyber incidents.  NextGov

Industrial Control System Exposures Endanger Worldwide Critical Infrastructures.  Thousands of critical infrastructure operations around the world are susceptible to hacker intrusions due to exposed industrial control systems (ICS’s), according to a new report by the cybersecurity firm, Bitsight.  The research focusing on exposed ICS’s concluded that “critical infrastructure sectors could present significant risks to organizations and communities around the world.”  Sectors risking disruptions include power grids, traffic light systems, security, and water systems. The systems studied by researchers included those communicating by commonly used ICS protocols, such as Modbus, KNX, BACnet, Niagara Fox, and others.  Nearly 100K ICS’s are public-facing, allowing threat actors to identify the locations and functions of systems.  The U.S. has the largest number of exposed organizations, followed by Canada, Italy, Britain, and France.  In terms of vulnerable sectors, education leads the number of organizations with exposed ICS’s.  Technology, government, business services, and manufacturing also have significant exposure rates.  The Bitsight report concludes that ICS manufacturers must bolster device cybersecurity, especially “prior to deployment and working with clients to ensure the proper configuration and security of already deployed devices.”  Cybernews

ELSEWHERE IN THE WORLD:

U.S. Intelligence Community Misses Congressional Deadline on Defining Terms.  U.S. intelligence agencies failed to meet a September 30 deadline imposed by Congress last year to define 23 terms routinely used by the intelligence community.  Lawmakers and civil-society groups are expressing frustration at that failure.  Of particular interest is how “open-source” intelligence is defined and how open-source data sold by data brokers is used.  Sen. Ron Wyden (D-OH) said defining open-source intelligence “gets at the heart of the problem,” adding that Americans have a right to know how “highly personal information about them” that the government has purchased is being handled.  ACLU National Security Project Deputy Director Patrick Toomey said the definitions “have major implications” for Americans’ privacy and civil liberties.  Bloomberg 

China Offers Cooperation on Lunar Mission.  China has opened up a lunar mission to international collaboration as mission deadlines grow nearer for setting up a permanent base on the moon’s south pole.  At the 74th International Astronautical Congress in Baku, Azerbaijan on Monday, the China National Space Administration (CNSA) announced that it would welcome international organizations and nations on its uncrewed Chang'e-8 mission and to jointly conduct "mission-level" projects.  CNSA said the cooperation could see Beijing and its partners jointly explore the surface of the moon, launch and operate spacecraft, and perform spacecraft-to-spacecraft "interactions.”  CNSA also welcomed international partners to "piggyback" on the Chang'e-8 mission and deploy their own modules after the Chinese spacecraft lands on the lunar surface.  Potential partners must submit a letter of intent to CNSA by the end of the year, and the final selection of proposals will occur in September 2024.  So far, only Russia and Venezuela have agreed to participate in Beijing’s lunar station project.  China seeks to land astronauts on the moon by 2030.  The U.S. Artemis program aims to put U.S. astronauts back on the moon in December 2025.  Reuters

India Says Canada Must Withdraw 41 Diplomats Amid Diminishing Ties over Sikh Murder.  India has told Canada that it must repatriate 41 of its 62 diplomatic personnel in the country by October 10, in the latest escalation of tensions over Ottawa’s accusation that Indian agents were involved in the June murder of Hardeep Singh Nijjar, a Sikh separatist leader that India had called a “terrorist.”  A source claimed that New Delhi threatened to rescind the diplomatic immunity of diplomats who remain in India after the deadline.  Neither the Indian government nor the Canadian foreign ministry commented on the situation.  India has previously said it wants “parity” in the number and grade of diplomats each nation sends to the other.  Peter Boehm, chair of the Canadian Senate committee on foreign affairs and international trade, said the expulsion of more diplomats will not help the situation and will only further strain relations.  Indian Foreign Minister Subrahmanyam Jaishankar said earlier that there was an “atmosphere of intimidation” and a “climate of violence” against New Delhi’s diplomatic personnel in Canada.  Financial Times Reuters

Turkey Arrests 145 People with Suspected Links to Kurdish Militants.  Turkish police arrested 145 people with suspected links to the Kurdistan Workers’ Party (PKK) after a suicide bombing in Ankara on Sunday that the group claimed responsibility for.  Turkish Interior Minister Ali Yerlikaya said 466 operations were conducted against PKK “intelligence units” in the country.  Turkey conducted airstrikes on PKK targets in Iraq after the group claimed responsibility for the bombing.  Reuters

Israeli Air Strike Wounds Two Syrian Troops in Deir al Zor.  Syrian state media said Tuesday that an Israeli air strike on Syrian military posts around the eastern Deir al Zor province on Monday wounded two soldiers.  The Israeli army has not yet commented on the matter.  Two days before the reported airstrike, Israel reportedly launched other air strikes near Damascus, targeting an Iranian arms shipment that appeared to be bound for Lebanon.  For years, Israel has conducted assaults against alleged Iran-linked targets in Syria.  Reuters Times of Israel

Niger Says 29 Soldiers Killed in Insurgent Attack.  Niger’s defense ministry says armed insurgents killed at least 29 Niger soldiers in an attack near the border with Mali.  The ministry said over 100 assailants attacked the soldiers with explosive devices and suicide bombers, adding that dozens of attackers were killed.  The ministry did not accuse a group of launching the attack.  Niger and other West African countries have been battling militants linked to Al Qaeda and Islamic State.  Reuters

Banners in Mexico Say El Chapo's Sons Prohibit Fentanyl Production in Sinaloa.  Roadside banners that have recently cropped up in northern Mexico say that a faction of the Sinaloa cartel headed by the four sons of former-Mexican drug lord Joaquin "El Chapo" Guzman has barred the production and sales of fentanyl in Sinaloa.  The banners, which were signed by Los Chapitos, a group of brothers who inherited their father's criminal operation when the U.S. extradited Guzman in 2017, said that "the sale, manufacture, transportation or any type of business involving the substance known as fentanyl is strictly prohibited in Sinaloa." Ex-DEA agent Leo Silva said he believed the cartel would not cease the lucrative production of fentanyl, arguing that the banners are likely an attempt to shift blame of fentanyl production to other groups. It is not known who put up the banners in Sinaloa, or whether Los Chapitos could enforce such a ban across the state, because much of the territory is run by Ismael "El Mayo" Zambada, El Chapo's old partner.  Reuters Associated Press The Cipher Brief

Blinken Meets with President-Elect of Guatemala Amid Concerns of a ‘Coup D'état.’  U.S. Secretary of State Anthony Blinken met virtually with Guatemala’s president-elect President-elect Bernardo Arevalo on Monday to express support for a peaceful transition of power in the country.  The virtual meeting came amid concerns that the Guatemalan authorities are undermining the transfer of power to Arevalo, who has said prosecutors are attempting a "coup d'état" against himself and his party after winning a landslide victory in August elections.  Guatemala's Public Ministry reportedly conducted a raid lasting almost 20 hours on the Supreme Electoral Tribunal last Friday, taking boxes of tabulations of votes from the election.  The ministry has alleged party registration flaws for Arevalo’s party, Mivemiento Semilla, which denies the accusations.  The United Nations High Commissioner for Human Rights in Geneva has expressed concerns about the rule of law and the electoral process in Guatemala, and the Organization of American State has warned of constitutional violations.  Reuters

Mexico’s President Bashes U.S. Military Support of Ukraine, Calls for More Resources for Latin America.  Mexican President Andres Manuel Lopez Obrador on Monday criticized U.S. military support for Ukraine as “irrational” and suggested that Washington divert more funds to Latin America.  He said the U.S. decision to pledge “30 to 50 billion dollars” in Ukraine military aid was “damaging” and asserted that Washington should no longer “ignore Mexican authorities.”  Lopez Obrador has urged the U.S. to devote more resources towards fostering economic development in Central America and the Caribbean to address the regional migrant crisis.  He has maintained a stance of neutrality on the war in Ukraine and has criticized Western military support of the war, while also backing U.N. resolutions denouncing Russia’s invasion of Ukraine.  Reuters 

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