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Monday, February 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:  

In the Americas

US Downs Chinese Surveillance Balloon.  The US Department of Defense says a US fighter jet shot down a suspected Chinese surveillance balloon off the coast of South Carolina on Saturday.  Authorities temporarily halted commercial air traffic through the region to conduct the operation.  The military is now collecting debris from the crashed balloon.  The Pentagon announced Thursday that it had been tracking the balloon as it traveled over the US.  While President Joe Biden approved the plan to down the balloon on Wednesday, the military waited for it to fly over water to minimize damage from debris.  US defense officials say the balloon entered US airspace in Alaska, traversed through Canada and re-entered over US land in Idaho last week.  They add that the balloon flew over sensitive sites, including an air force base in Montana.  The balloon incident has damaged already-strained US-China relations.  The Pentagon called the balloon flight an “unacceptable violation” of US sovereignty, and US Secretary of State Antony Blinken canceled his planned trip to Beijing this week over the incident.  China’s foreign ministry criticized the US for destroying what it called a “civilian unmanned aircraft” that accidentally strayed into US airspace due to weather conditions.  The ministry also warned Washington against escalating the situation further, while saying that Beijing reserved the right to respond.  Bloomberg Deutsche Welle New York Times Reuters South China Morning Post Wall Street Journal

Classified Report Warned of Aerial Surveillance Threat.  A classified report to Congress last month warned of the threat of adversaries using aerial surveillance technology against the US.  The report detailed at least two incidents – one at a naval air station in Nevada and another at a Marine Corps air station in Japan – of rivals using aerial surveillance to spy on the US.  While it did not specify the country behind the incidents, officials familiar with the report say China was likely to blame.  The report highlighted the risk of incidents that were not fully understood or publicly identified as a sign that increasingly advanced technology is being used.  New York Times

Biden Administration Offer to Brief Trump Officials on Past Aerial Surveillance.  Biden administration officials said Sunday that they are willing to brief Trump-era officials on new intelligence about reported Chinese surveillance operations using balloons they say occurred during former President Donald Trump’s administration.  The offer came after some top Trump security officials said they were never briefed on incursions by Chinese airships into US airspace during their time in charge.  Senior US Defense Department officials said Chinese spy balloons entered US airspace during the Trump administration at least three times, though the balloons did not stay above US land for significant periods of time or behave in extraordinary ways, like the recently downed balloon did.  CNN Politico

Former CIA Director Panetta Criticizes Handling of Balloon Incident.  Leon Panetta, the former US Defense Secretary and CIA director during the Obama administration, criticized the Biden administration’s handling of the Chinese spy balloon on Sunday.  He told CNN that he thinks the US should have more actively tried to stop it from entering US airspace and that he did not see the “logic” in letting it cross the country.  While he noted concerns about damage from debris, he said the balloon should have been dealt with earlier and that the Biden administration should have been more transparent about the incident.  The Biden administration is facing criticism for waiting to down the balloon.  CNN

Colombia, Costa Rica Say Balloon Entered Their Airspace.  A day before the US downed the Chinese balloon, the Colombian Air Force and Costa Rica’s Civil Aviation Authority said they spotted a similar observation balloon in their airspace last week.  Colombian military officials say they monitored the balloon and that it did not pose a national security threat.  The Chinese foreign ministry has since said the balloon belongs to China and that it was used for flight tests in the region.  The ministry said weather conditions caused the balloon to stray off course like the balloon that flew over the continental US.  The US military appeared to be aware of this second balloon as it said Friday that another Chinese balloon was sighted over Latin America.  CNN Reuters

Canada Deploys Patrol Aircraft to Haiti.  Canada says it deployed a Royal Canadian Air Force (RCAF) CP-140 Aurora long-range patrol aircraft to Haiti to support the Haitian National Police counter armed gangs.  The patrol aircraft will reportedly conduct intelligence, surveillance and reconnaissance for Haitian authorities “for a number of days.”  The UN continues to call for a rapid action task force to deploy to Haiti to address escalating gang violence there.  Reuters

Western Europe

Yellen Says G7 Oil Price Caps Degrading Russian Economy, Military.  Western economies agreed to new price caps on Russian oil exports on Friday.  The caps are at $100 per barrel on premium products like diesel and $45 per barrel on discount products like fuel oil.  US Treasury Secretary Janet Yellen said the new measures will build on the crude oil cap set in December.  She added that these price caps are working as major importers like China and India are following the restrictions, driving a steep bargain on Russia’s oil sector and degrading its military.  Reuters

Central and Eastern Europe

ISW RUSSIAN OFFENSIVE CAMPAIGN ASSESSMENT, FEBRUARY 5, 2023.  Here is the update for February 5, 2023 from the Institute for the Study of War (ISW).  ISW

Ukraine Bracing for New Russian Offensive at End of February.  Ukrainian Defense Minister Oleksii Reznikov said at a press conference on Sunday that Ukraine is anticipating a new Russian offensive focused on the eastern Donbas and southern Ukraine later this month.  He said that not all new shipments of Western weaponry will reach Ukraine by then, but that Ukraine’s military has enough reserves to hold out.  Reznikov added that Russia has not gathered all of its resources for this offensive but that it may conduct it anyways as a symbolic move to mark the anniversary of its invasion on February 24.  BBC

Ukraine Pledges Not to Hit Russian Territory With New Longer-Range Missiles.  At the same press conference, Reznikov said that Ukrainian forces will not use longer-range weapons from the US to hit targets in Russian territory.  Reznikov said the new weapons will only be used against Russian forces in occupied Ukrainian territory.  The pledge comes to dispel concerns about Kyiv’s use of new rockets that are part of a new $2.175 billion US military aid package and will double Ukraine’s strike range.  Reuters

Iranian Drone Facility Opening in Russia.  The Wall Street Journal has an exclusive report that says Moscow and Tehran are reportedly opening a new factory in Russia that will make at least 6,000 Iranian-designed drones to support Russia’s invasion of Ukraine.  An Iranian delegation visited Russia in late January to discuss plans for the factory, which is set to produce a faster drone that could better overcome Ukrainian air defenses.  The US previously warned in December that deepening Russia-Iran military ties will soon culminate into a joint drone-production line in Russia.  The ground for the site has not been broken yet, so the factory is unlikely to start production soon and make an immediate impact on the Ukraine war.  Wall Street Journal

Turkey’s Erdogan Criticizes Western Countries Over Security Warnings.  Turkish President Recep Tayyip Erdogan said Western countries will pay for issuing security warnings for their citizens in Istanbul and temporarily closing their consulates in Turkey for potential terror attacks.  Ankara summoned the ambassadors of nine countries over the warnings, saying there were “no concrete threats.”  Turkish authorities say that they arrested 15 suspected Islamic State militants who had received instructions to target the Swedish and Dutch diplomatic missions and Christian and Jewish holy places, though there was no evidence of impending attacks.  The Western warnings came after far-right protests in Europe which included burings of copies of the Koran.  Reuters

Massive 7.8 Earthquake Hits Turkey, Syria.  A massive 7.8 magnitude earthquake struck central and southern Turkey and northwest Syria on Monday.  It was shortly followed by a magnitude 7.5 earthquake in the same region.  Authorities say around 2,300 people have been confirmed killed by the quakes and that thousands more are injured, missing and homeless.  It is the worst quake to hit Turkey since 1999.  Rescue operations are ongoing amid difficult, cold weather conditions.  CNN Reuters

Asia

Top Taiwan Opposition Leader to Visit China.  Andrew Hsia, the vice-chairman of Taiwan’s Kuomintang (KMT) opposition party, will visit China this week.  He will meet Song Tao, the new head of China’s Taiwan Affairs Office, in a rare engagement between top Chinese and Taiwanese officials.  The KMT said Hsia’s trip aims to refresh communication ties following a reshuffle in Chinese officials and convey concerns about security in the Taiwan Strait.  The KMT traditionally favors closer ties and open communication with China, though it maintains it is not pro-Beijing.  Reuters South China Morning Post

Former Pakistan President, Key US Ally Against Al Qaeda, Dies at 79.  Former Pakistani President Pervez Musharraf died in Dubai on Sunday due to a prolonged illness.  Musharraf – who took power in a 1999 military coup and was president between 2001 and 2008 – was a key US ally against al Qaeda after the 9/11 attacks and is credited with attracting foreign investment to Pakistan and countering militant groups.  However, he is also remembered for his crackdown on dissent, which included the arrest of current Prime Minister Shehbaz Sharif and a six-week long state of emergency where he suspended the constitution.  BBC Reuters

Middle East and Northern Africa

Iran’s Supreme Leader Pardons Thousands of Prisoners.  Iranian state media reports that Iran’s Supreme Leader Ayatollah Ali Khamenei has issued pardons for “tens of thousands” of prisoners, some of whom were arrested during the crackdown on recent anti-government protests.  A judiciary head requesting the pardons wrote that many people, especially youth, were influenced by “indoctrination and propaganda of the enemy” to participate in the protests and now “regret their actions.”  The pardons do not apply to detained dual nationals.  Those accused of “corruption on earth” – a charge that four protesters have been executed for – and espionage will also not be pardoned.  BBC Reuters

Saudi Minister Warns of Energy Disruptions from Sanctions.  Saudi Energy Minister Prince Abdulaziz bin Salman warned that energy sanctions and underinvestment in energy could disrupt global energy supplies. He did not specifically refer to sanctions targeting Russia’s energy sector over the Ukraine war, though they marked the biggest disruptions to the energy market in 2022.  He added that the 2022 energy market showed that the world should trust OPEC for energy and oil policy.  Reuters

Cyber and Tech

Charlie Hebdo Hack Linked to Iranian Cybersecurity Firm.  Microsoft said Friday that hackers allegedly affiliated with the Iranian cybersecurity company Emennet Pasargad breached the systems of French satirical magazine Charlie Hebdo.  A user called “Holy Souls” posted on a hacking forum in early January that they obtained and were attempting to sell the personal information of 230,000 Charlie Hebdo customers.  Microsoft linked the user to Emennet Pasargad, which is under US sanctions.  The breach came after Charlie Hebdo said in December that they are holding a contest for caricatures of Iran’s Supreme Leader Ayatollah Ali Khamenei.  Microsoft says the magazine’s subscribers may be in danger from the hack.  CyberScoop Politico The Record

 Italy Raises Alarm Over Global Ransomware Campaign.  Italy’s National Cybersecurity Agency (ACN) warned Sunday that thousands of computer servers are being targeted in a massive, global ransomware hacking campaign that is exploiting a software vulnerability in VMware ESXi servers.  Dozens of Italian organizations and servers in France, Finland, the US, Canada and elsewhere were likely to have been affected.  CISA says it is assessing the impact on US networks.  VMware says it is aware of the issue and is urging customers to apply patches to address the vulnerability.  Reuters

 Japan Planning Restrictions on Chip Manufacturing Exports to China.  Japan’s Kyodo News reported on Saturday that Tokyo will start restricting exports of advanced semiconductor manufacturing equipment to China in the spring after amending a foreign exchange law to enact the new measure.  The regulation will reportedly not specifically mention China to minimize anger from Beijing.  The US previously said that Japan and the Netherlands are joining its controls targeting China’s chip industry.  Reuters

 Bermuda Power Outage Disrupts Internet, Phone Services.  Bermuda suffered a widespread power outage on Friday that disrupted the island’s internet and phone services.  Bermuda called the outage a “serious incident” at BELCO, the island’s sole power provider.  BELCO said it restored most services Friday evening and that it is still unclear what caused the outage.  BleepingComputer

 Italian Telecom Firm Suffers Internet Connection Problems.  Italian telecommunications firm Telecom Italia (TIM) suffered internet connection problems that disrupted services for thousands of customers on Sunday.  TIM blamed “an international interconnection problem” for the issue.  Italian media reports that there was no indication that hackers were behind the incident.  Reuters

  EU Industry Chief Says Cyber Rules to Address ChatGPT.  EU industry chief Theirry Breton said the bloc’s new proposed artificial intelligence rules will address concerns about OpenAI’s ChatGPT generative text app and other AI technology.  His comments mark the first time a top EU official has addressed the new app.  According to the draft legislation, ChatGPT would be considered a general purpose AI that can be used for high-risk purposes like job candidate selection and credit scoring, which could lead to stricter compliance requirements on OpenAI.  Reuters

LockBit Claims Ransom Paid in Attack on UK Trading Firm ION.  LockBit ransomware gang claimed responsibility for a ransomware attack on ION Trading UK, a financial software and data firm, and says that a ransom has been paid.  LockBit did not say how much the ransom was or provide evidence that it had been paid.  The hacker group only said that the ransom came from a “very rich unknown philanthropist.”  The firm’s parent company ION Group did not comment on LockBit’s claim.  US and British cyber authorities did not comment on the claim either.  The ransomware attack at ION started on Tuesday and disrupted all processing of clients’ financial trading.  The FBI said there are no risks to the wider financial system from this incident.  Bloomberg Reuters 

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