Report for Thursday, May 30, 2024

Top Headlines

Israeli military takes control of Philadelphi corridor separating Gaza from Egypt

NATO calculates it has just 5% of air defenses needed to protect its eastern flank

Authorities arrest Chinese national allegedly running ‘likely world’s largest ever’ cybercrime botnet

Cipher Brief Exclusives

A Russian Gas Pipeline, and a $6 Billion Question for Ukraine.  In a strange economic reality for Ukraine, Kyiv is still earning $800 million a year shipping Russian gas to Europe, which then nets Russia over $6 billion a year in hard currency.  Ukraine could end this cash flow to Moscow with a flick of a switch, but it is under pressure by European Union buyers of cheap Russian gas – namely Hungary, Slovakia, and Austria – to keep the tap running.  Ukraine is currently bound by a 2019 agreement with Russia and delivery contracts with E.U. member states to continue gas flows, but the contract expires in seven months.  Ukraine could then not renew the contract, cutting off significant funds and a key hydrocarbon export route for Russia.  Ukraine may also renew the Russia deal over concerns about its future in the E.U., which is dependent on the member states still buying Russian gas.  The Cipher Brief

Israel Hamas War

Israeli military takes control of Philadelphi corridor separating Gaza from Egypt.  Israel said Wednesday it had achieved “tactical control” over the Philadelphi corridor that separates Gaza and Egypt.
  An Israel Defense Forces official told reporters that while Israel does not have “boots on the ground” there, it can interdict Hamas supplies via underground tunnels in the corridor. Israeli control of the Philadelphi Corridor could complicate Israel’s relations with Egypt, which has complained about Israel’s advance toward its border. Israel has countered that the corridor was riddled with tunnels used by Hamas to smuggle weapons and other goods despite a blockade imposed by Israel and Egypt.  Associated Press Wall Street Journal New York Times Washington Post Reuters

Israeli national security advisor says Israel’s war with Hamas will last through 2024 or longer. White House pushes for ceasefire and hostage deal.  "The fighting in Gaza will continue for at least another seven months,”  Tzachi Hanegbi, Prime Minister Benjamin Netanyahu’s national security advisor, told Israel's Kan public radio. “We expect another seven months of combat in order to shore up our achievement and realize what we define as the destruction of Hamas and Islamic Jihad’s military and governing capabilities,” he said. Hanegbi seemed at odds with Netanyahu, who said in April that the country was “on the brink of victory.”  The White House pushed back on the notion that Israel could string out its effort to destroy Hamas till New Year’s or longer.  “We’ve got hostages that are still in the hands of Hamas, and potentially other groups, under horrific circumstances,” White House spokesman John Kirby said.  “We got to get them home, and we want to get them home in a deal tied to a ceasefire — a ceasefire that we believe, if put in place, could lead to something more sustainable and a potential end of the conflict. And that’s where President Biden’s head is, trying to get this hostage deal done.”  He added that “another proposal now is on the table, a fresh one, and we are doing everything we can to see if we can’t get that advanced, because it could lead to the ceasefire in a temporary way that could also lead to something more sustained.”   Haaretz reported that an U.S. official told its reporter that waiting for a hostage deal until the end of the war would endanger the lives of many hostages, who might not survive that long in captivity.   New York Times BBC Haaretz Al Jazeera

Aid groups say Israel’s advance in Rafah is shutting them down.  The Palestinian Red Crescent, Doctors Without Borders, and World Central Kitchen are among the aid groups in Rafah that have ceased operations in the area this week.  “As Israeli attacks intensify on Rafah, the unpredictable trickle of aid into Gaza has created a mirage of improved access, while the humanitarian response is in reality on the verge of collapse,” 19 aid groups said in a joint statement on Tuesday. Some of the operations forced to move were in Al-Mawasi, which Israel had designated as a humanitarian safe zone but is still risky.  “Civilians are being massacred. They are being pushed into areas they were told would be safe only to be subjected to relentless airstrikes and heavy fighting,” Chris Lockyear, the secretary general of Doctors Without Borders, said in a statement.  New York Times

Brazil’s envoy to Israel won’t be coming back.  President Luiz Inacio Lula da Silva relocated Brazil’s ambassador to Israel after months of diplomatic tensions over the Gaza war.  Ambassador Frederico Meyer will move to a post in Geneva.  Meyer left Israel after Lula compared Israel’s military actions to the Holocaust.  The government of Prime Minister Benjamin Netanyahu declared Lula unwelcome and demanded apologies from both him and Meyer.  Bloomberg Associated Press Al Jazeera Times of Israel   

Israel may procure M61 Vulcan cannon to counter Hezbollah’s swarms of drones.  Israel is considering procuring the General Dynamics M61 Vulcan cannon to counter drones, according to the Israel Defense Forces.  Israeli media reported the cannons would be mounted atop armored personnel carriers deployed along the northern border between Israel and Lebanon. The Lebanon-based militant group Hezbollah has launched swarms of drones and missiles since the start of the Gaza war.  The Israel-based Alma Research and Education Center recently estimated that Hezbollah has more than 2,500 UAVs and that drone attacks on Israel increased from seven in February to 24 in March. The Israel Defense Forces has placed drone-detection systems across the northern border.  Even so, Hezbollah was reportedly able to send a drone into Israeli airspace in May to attack a military facility. The M61 is a six-barrel, electrically fired Gatling-style rotary cannon able to fire 6,000 rounds per minute. It has been in use on the U.S. military’s fixed-wing aircraft for decades.  Defense News

Netanyahu blasts Biden administration for refusing to support GOP plan to sanction ICC. Israeli Prime Minister Benjamin Netanyahu said he’s “surprised and disappointed” that the Biden administration won’t support a Republican plan to sanction the International Criminal Court, which is seeking the Israeli leader’s arrest for war crimes.  The White House on Tuesday said it would reject a GOP congressional effort to reprimand the ICC after its chief prosecutor filed arrest warrants for Netanyahu, his defense minister Yoav Gallant and Hamas leaders. It seemed a reversal of Secretary of State Antony Blinken’s stance, who said last week that the proposed arrest warrants were a “profoundly wrong-headed decision.”  Netanyahu blasted the new stance in an interview with Sirius XM’s “The Morgan Ortagus Show” set to air Sunday. Politico obtained a clip of the interview. “The United States said that they would, in fact, back the sanctions bill,” Netanyahu said in the interview. “I thought that was still the American position because there was bipartisan consensus just a few days ago.” Politico

The Ukraine Update

Pressure grows on Biden to allow attacks on Russian territory.  President Joe Biden faces mounting pressure to permit Ukraine to use U.S. weapons against Russian territory, reversing his previous ban due to fears of escalation with a nuclear-armed adversary. Allies and advisers argue that Ukraine needs the capability to counterattack Russian artillery and missile sites. Secretary of State Antony Blinken, in Moldova on Wednesday, hinted at a possible policy shift, saying that the U.S. would “adapt and adjust” its stance based on changing conditions on the battlefield. National Security Council spokesman John Kirby, following Blinken’s comments, also suggested a policy switch is under consideration. “Our support to Ukraine has evolved appropriately as the battlefield conditions have evolved, and that’s not going to change, but right now, there’s also no change to our policy.” Despite concerns about nuclear escalation, Biden's administration is reassessing the risks. A decision may come without public announcement, with a focus on maintaining unity among Western allies. Instead, American artillery shells and missiles could just start landing on Russian military targets. Even if Biden changes his view, the president is likely to keep placing some limits on how Ukraine can use U.S. weapons to strike targets inside Russia. New York Times New York Times Wall Street Journal Politico Bloomberg

Russian forces launch missiles on Kharkiv, four injured, Ukrainian officials say. On Thursday, Russian forces launched a missile attack on Kharkiv, Ukraine's second-largest city, injuring at least four people and damaging infrastructure. Mayor Ihor Terekhov reported a damaged gas pipeline and broken windows. Regional Governor Oleh Syniehubov stated that eight missiles were fired, also hitting a nearby community. Reuters 

Russia claims attack on Crimea damages ferries near Kerch Bridge. An overnight attack on Kerch in Crimea damaged two transport ferries, Crimea's Russian-installed transportation chief said on Thursday. Residents reported up to 20 explosions. The Russian Defense Ministry claimed that air defenses downed eight U.S.-supplied ATACMS missiles and eight drones with no casualties. Vehicle traffic on the Kerch Bridge was temporarily blocked. The bridge and ferries are crucial for transporting military supplies to Russian forces in Crimea and southern Ukraine. Kyiv Independent 

Ukraine destroys seven Russia-launched missiles, 32 drones overnight, air force says. Ukraine's air defense systems destroyed seven Russia-launched missiles and 32 drones overnight, its air force commander said on Thursday. On the Telegram messaging app, the air force official said Russia had launched a total of 51 missiles and drones. The commander said Russian forces attacked "military facilities and critical infrastructure in Ukraine" but did not provide additional details. Reuters Kyiv Independent 

NATO summit declaration in July to contain new language regarding Ukraine’s membership. According to U.S. Ambassador to NATO Julianne Smith, NATO's July summit in Washington will introduce new language regarding Ukraine's membership. Although Ukraine won't receive an invitation or firm deadline to join, further support for Kyiv is being discussed. Ideas include appointing a NATO representative to Ukraine and providing additional resources. The summit aims to create a roadmap for Ukraine's future NATO membership. Kyiv Independent  

ISW Russian Offensive Campaign Assessment for Wednesday, May 29, 2024. Ukrainian Presidential Advisor Mykhaylo Podolyak stated that U.S. military aid is arriving but will take weeks to reach critical volumes. Sweden announced its largest military aid package to Ukraine, worth $1.25 billion, including advanced surveillance aircraft and missiles. Western officials increasingly support Ukraine's right to strike Russian military targets using Western-provided weapons. Russian President Vladimir Putin appointed Alexei Dyumin as Secretary of Russia's State Council and continues preparing Russians for a prolonged war. Belarus suspended its participation in the Conventional Armed Forces in Europe Treaty. Russia blames Ukraine for halted POW exchanges amid reports of Russian abuses.

Battlefield updates: Russian forces marginally advanced north of Kharkiv near Lyptsi amid ground assaults. Russian troops advanced near Kreminna amid offensive operations along the Kupyansk-Svatove-Kremina line in the Luhansk region. Russian forces made marginal advances east and southeast of Chasiv Yar and advanced northwest of Avdiivka in the Donetsk region. Institute for the Study of War  

Pentagon Opens Ammunition Factory to Keep Arms Flowing to Ukraine. The Pentagon has opened a new ammunition factory in Mesquite, Texas, to address the arms shortage for Ukraine. The facility, the first major U.S. arms plant since Russia invaded Ukraine, will produce 30,000 artillery shells monthly, doubling current output. This move aims to meet the Pentagon's goal of 100,000 shells per month by 2025. The factory, built with Congressional funding and Turkish collaboration, highlights increased U.S. military production capabilities to support Ukraine. However, experts caution that this boost may fall short of matching Russian artillery output. “Let’s say a year and a half from now, both the U.S. and Europe are making, or buying, over a million shells each,” said Michael Kofman, an expert on the Russian military and a senior fellow at the Carnegie Endowment for International Peace. “That’s still probably less than Russia is going to produce this year.” New York Times 

Ukraine’s desperate draft dodgers drown in the river of death.  Thousands of Ukrainian men are risking their lives to escape conscription by swimming across the dangerous Tysa River to Romania. Many have drowned in the attempt, with at least 33 confirmed deaths. Smugglers charge between $3,000 and $12,000 to assist these perilous crossings. The Ukrainian border service has increased security measures, making escapes difficult. Despite the risks, men continue to flee, driven by fear and the hope of a better life in Europe. Matviy, a 24-year-old engineer, successfully crossed the river and vows never to return to Ukraine. The Economist

Delivery of U.S. weapons to Ukraine helping stabilize frontline, Blinken says. U.S. Secretary of State Antony Blinken said on Wednesday that U.S. weapons deliveries are stabilizing Ukraine's frontline against Russian attacks. In Chisinau, Moldova, Blinken emphasized efforts to supply more air defenses to Ukraine and highlighted U.S. support to counter Russian aggression. Blinken praised Moldova's resilience despite Russian interference and announced an additional $50 million in U.S. aid to Moldova. "What's so powerful here is the deep, deep-rooted commitment to democracy ... And this in the face of bullying from Russia, interference, efforts to spread misinformation, disinformation, weaponizing corruption, manufacturing anti-government protests," Blinken said. Reuters 

U.S. calls on China to stop weapon supply to Russia. U.S. Deputy Treasury Secretary Wally Adeyemo urged Chinese firms to stop supplying components for Russian weapons used in Ukraine or face sanctions. Speaking in Kyiv on Wednesday, Adeyemo emphasized the need to prevent Russia from acquiring key components. “The only way that Russia is able to build the weapons they want is that they can get dual-use goods from China,” Adeyemo said. “Russia’s economy has become a wartime economy where every means of production and industry is now focused on building weapons to fight their war of choice and aggression here in Ukraine. And we need to do everything that we can to go after that.’’ At the Kyiv School of Economics, Adeyemo met with Ukrainian officials and civil society groups, highlighting legislation allowing the seizure of $5 billion in Russian assets held in the U.S. Since Russia's 2022 full-scale invasion, the U.S. has sanctioned over 4,000 entities, including 80% of Russia's banking sector. Deputy Secretary of State Kurt Campbell also called on European and NATO countries to “send a collective message of concern to China” about its support for Russia. Bloomberg Reuters Politico Associated Press 

China could arrange Russia-Ukraine peace conference, Lavrov tells RIA. Russian Foreign Minister Sergei Lavrov suggested China could arrange a peace conference involving Russia and Ukraine. Lavrov emphasized addressing the conflict's root causes and protecting all parties' interests. He criticized U.S. support for Ukraine. Reuters 

Russia Has Taken Steps To Protect Its Oil Refineries. Ukraine Is Still Hitting Them. Ukraine has continued to target Russian oil refineries with drone strikes despite Russian efforts to enhance defenses. The attacks, including a May 19 one on the Slavyansk refinery, highlight Ukraine's drone capabilities and create challenges for Russia’s energy infrastructure. Ukraine has carried out more than 20 attacks on Russian refineries and energy infrastructure in 2024, temporarily knocking out 14% of capacity at the peak in late March. The strikes have not significantly disrupted Russia's oil industry or global markets. Russia, on average, refines more than 5 million barrels of oil a day, far outstripping domestic demand. Russia has also repaired damage quicker than many expected. The U.S. has urged Ukraine to cease such attacks, but Kyiv views refineries as legitimate targets, with the strikes serving as a morale boost. RFERL

Zelensky says Russia putting pressure on countries to shun peace summit. Ukrainian President Volodymyr Zelensky accused Russia of pressuring countries to avoid Switzerland's June 15-16 peace summit. Zelensky aims for the summit to support his peace plan, which includes Russian troop withdrawal and restoring Ukraine's 1991 borders. Despite Russia's attempts to disrupt the event, nearly 100 countries and organizations are participating. Russia dismisses the summit as pointless without its involvement and insists any talks must take into account the “new realities” of its control over almost 20% of Ukraine. Reuters 

Explainer: What is the NATO chief's proposal for military aid for Ukraine? At their meeting on Friday, NATO foreign ministers will debate a military support package for Ukraine proposed by Secretary General Jens Stoltenberg. The proposal includes a long-term military aid commitment and a multi-year financial pledge, potentially 100 billion euros over five years. NATO would also coordinate international military aid and training for Ukrainian forces. However, differences among NATO members, including Hungary's opposition, must be resolved before the Washington summit in July. Reuters 

Turkey to assist in rebuilding Ukraine's power grid. Ukrainian Energy Minister Herman Halushchenko and Turkish Ambassador Mustafa Levent Bilgen met to address Russia’s attacks on Ukraine’s energy systems, focusing on repairing damage in Kharkiv and Odesa. They discussed increasing power system flexibility and electricity generation, including distributed and mobile generation capabilities. Turkish companies expressed readiness to install mobile power plants. Russian strikes have caused over $1 billion in damage to Ukraine's energy infrastructure. Kyiv Independent 

Argentina joins coalition for the return of kidnapped Ukrainian children. Argentina has joined the international coalition for returning Ukrainian children abducted by Russia, Ukraine's chief ombudsman Dmytro Lubinets said on Wednesday. Since Russia's invasion, over 19,500 Ukrainian children have been confirmed abducted, with less than 400 returned. A Ukrainian delegation visited Argentina, led by presidential adviser Daria Herasymchuk, as part of the Bring Kids Back UA project. Argentina's President Javier Milei may visit Kyiv in June, marking a first for a South American leader. Kyiv Independent 

Americas

Key Republican calls for ‘generational’ increase in defense spending to counter US adversaries.  Senator Roger Wicker, the top-ranking Republican on the Senate Armed Services Committee, is advocating for a substantial increase in U.S. defense spending over what the Biden administration has called for.   He proposes an additional $55 billion over the existing budget limits — aiming to raise military spending to 5% of the U.S. GDP, up from the current 3% — to counter threats from adversaries like Russia, Iran, and China.  Wicker's proposal, detailed in a 52-page document, emphasizes the need for modernizing the U.S. military arsenal and infrastructure to take on today’s new Cold War. The call for increased defense spending comes at a politically sensitive time, with divisions in Congress over military support for Ukraine and the broader role of the U.S. in global conflicts.  Associated Press Defense News

U.S. Army opens new 155mm artillery munitions plant in Texas.  The U.S. Army inaugurated its new Universal Artillery Projectile Lines Facility in Mesquite, Texas on Wednesday.  The plant is managed by General Dynamics Ordnance and Tactical Systems and will support U.S. efforts to produce more 155mm artillery shells and more widely expand and modernize domestic munitions production capabilities.  The opening of the facility comes amid increased demand for 155mm artillery rounds due to the Ukraine war.  Reuters

Navy ‘Botched’ Design Oversight of $22 Billion Program, Audit Finds. A congressional audit found that the U.S. Navy mishandled oversight of a $22 billion frigate program meant to replace the much-criticized and more vulnerable Littoral Combat Ship. The Navy awarded the initial construction contract for the first vessel and an option for nine more in April 2020 despite an incomplete design, resulting in growing weight and crucial subsystems that could fail at sea. The service failed to ensure the vessel's "functional design" was ready before awarding the project to a Wisconsin-based subsidiary of Fincantieri SpA, with "inadequate functional design review practices and botched metrics" contributing to prematurely starting lead ship construction.  Neither the Navy or the shipbuilder commented on the new report according to Bloomberg.   Bloomberg 

Asia and Oceania

In Asia, Pentagon chief Austin seeks to reassure allies and cool China tensions. U.S. Defense Secretary Lloyd Austin will reassure Asian allies of the U.S. commitment to countering China during the annual Shangri-La Dialogue in Singapore and a brief visit to Cambodia. A senior U.S. defense official said that Austin will use his speech at the summit to highlight alliances and achievements in the region, such as the AUKUS defense project and expanded basing agreements with the Philippines. He will also seek to ease tensions with China when he meets Chinese Defense Minister Dong Jun on the sidelines of the meeting. Austin, who last met in person with a Chinese defense minister in 2022 but spoke with Dong by phone this year, will address "regional and global security issues" and stress the importance of military dialogue to avoid miscommunications.  Reuters

China, Japan agree to restart ruling party talks after six-year hiatus. China and Japan have agreed to resume regular talks between their ruling parties for the first time in six years, according to officials from Japan's coalition government. The agreement comes after Chinese Premier Li Qiang praised a restart in relations with Japan and South Korea following their leaders' first three-way summit in four years on Monday. Toshimitsu Motegi, Secretary-General of Japan's ruling Liberal Democratic Party, reached an agreement with Liu Jianchao, head of the Communist Party's foreign relations body, during Liu's visit to Tokyo on Wednesday. The details of how and when the talks will start are yet to be finalized.  Reuters

China’s Xi  woos Arab leaders in Beijing.  “China will work with the Arab side as good partners to make our relations a model for maintaining world peace and stability,” Chinese leader Xi Jinping  said Thursday at the China-Arab States Cooperation Forum in Beijing. Heads of state from Egypt, the United Arab Emirates, Bahrain and Tunisia were among the VIP attendees, listening as Xi spoke of collaboration in artificial intelligence, green tech and finance.  “War should not continue indefinitely, justice should not be absent forever,” he said of the Gaza conflict. He said China supports U.N.membership for Palestine and a peace conference to help end the fighting with Israel.   Bloomberg   Reuters Associated Press

North Korea fires short-range missiles, deploys jammers.  North Korea fired multiple suspected ballistic missiles Thursday and also tried to jam South Korea’s communications.  South Korea’s military detected about a dozen projectiles suspected to be short-range ballistic missiles launched from near Pyongyang’s international airport toward the east from around 6:14 a.m., the Joint Chiefs of Staff said in a text message to reporters. North Korea’s missiles flew about 217 miles before landing in the eastern waters, South Korea’s JCS said.  South Korea also said its military detected North Korean attempts to jam GPS signals near the western maritime border between the two countries  Thursday morning. The action didn’t disrupt South Korea’s military operations, the Defense Ministry said.  Reuters Bloomberg    

UN Security Council to meet Friday on failed North Korea satellite launch.  The U.N. Security Council will hold a public meeting on Friday to discuss North Korea’s failed attempt to launch a new military reconnaissance satellite.  Pyongyang confirmed that the rocket carrying the satellite exploded mid flight on Monday.  The U.S. has called the attempted launch “reckless and destabilizing behavior.”  Nate Evans, spokesperson for the U.S. Mission to the U.N., said, “Relevant Security Council resolutions must be fully implemented, and the DPRK must be held accountable for violating them.”  While the U.S. has pushed for such action,Russia and China have said more sanctions will not help curb North Korea’s military and nuclear activities.  Reuters 

Four Pakistanis killed, 2 injured by Iranian forces in southwestern Pakistan.  Iranian forces opened fire near the Pakistan-Iran border, in Washuk District, killing four Pakistanis and injuring two others on Tuesday night.  Officials said they are investigating the reason for the shooting.  Iran and Pakistan exchanged rocket fire in January, with Islamabad saying it hit bases of the separatist Baloch Liberation Front and Baloch Liberation Army, while Tehran said it targeted the Jaish al Adl (JAA) militant group.  Both sides quickly moved to de-escalate tensions afterwards.  Reuters Associated Press  

Taiwan says China is 'nibbling away' at its space, trying to create a new normal. Taiwanese Foreign Minister Lin Chia-lung expressed concern on Thursday about China's efforts to "nibble away" at Taiwan's space and create a new normal through military drills and other pressure tactics.  Lin's comments come after Taiwan reported that Chinese warplanes and warships carried out a "joint combat readiness patrol" on Wednesday. China has been employing various tactics to pressure Taiwanese airspace, such as unilaterally opening new air routes close to Taiwan-controlled islands near the Chinese coast and sending coast guard ships to Taiwan's east coast during recent exercises.  Reuters 

Fourteen Hong Kong democrats found guilty in landmark subversion trial. In a landmark subversion trial in Hong Kong, 14 pro-democracy activists were convicted while two were found not guilty on Thursday. The court's decisions come more than three years after 47 democrats were apprehended in early morning raids throughout the city and accused of conspiring to commit subversion under a national security law imposed by Beijing. Those convicted will face sentencing at a future date, with punishments ranging from three years to life imprisonment for this crime, while 31 defendants admitted guilt and four of them turned into witnesses for the prosecution. Several countries, including the U.S., have denounced the trial as politically driven, demanding the immediate release of those charged.  Reuters CNN Associated Press 

Myanmar's ethnic factions consolidate strongholds as junta weakens, reports say. Two reports on the conflict in Myanmar indicate that the ruling junta has lost control over large areas, including key international borders, allowing ethnic armed groups to expand their influence. The Special Advisory Council for Myanmar (SAC-M) notes that the junta lacks effective control over townships covering 86% of the territory and 67% of the population. An SAC-M briefing paper says that the junta cannot fulfill core state duties and has been forced into a defensive stance in many regions. Operation 1027, an offensive by three ethnic armies in October, highlighted the military's weakened position, resulting in the loss of significant borderlands in the north.  Reuters 

Europe

NATO calculates it has just 5% of air defenses needed to protect its eastern flank.  NATO is only able to provide less than 5 percent of air defense capabilities deemed necessary to protect its central and eastern European members from a full-scale attack, according to people familiar with confidential defense plans.  One senior NATO diplomat said defense against missile and air strikes is a “major part of the plan” to defend eastern Europe, “And right now, we don’t have that.”  Another NATO diplomat said, “[Air defense] is one of the biggest holes we have.”  Russia’s use of missiles, drones, and “glide bombs” in its invasion of Ukraine has heightened the urgency for NATO to bolster air defenses.  Europe’s inability to provide air defense equipment to Ukraine underscores the continent’s limited ability to field the systems.  Financial Times 

Italy developing new armored fighting vehicle.  Italy aims to design a new €5 billion ($5.4 billion) armored fighting vehicle program by year-end, partnering with European firms for expertise, with Italy's Leonardo and Iveco Defense leading the initiative.  The A2CS program plans 1,050 tracked vehicles to replace Dardo models, making it Europe's largest land warfare project. Designs are due by Christmas, with prototypes by 2027-2028 and deliveries by 2041.  Defense News

Poland buys Lockheed Martin cruise missiles.  The Polish Ministry of National Defense has signed a $735 million deal to purchase Lockheed Martin's JASSM-ER cruise missiles. This acquisition is part of a broader effort to enhance Poland's defense capabilities, building on recent purchases of aerostat-based radar systems for $1 billion and F-35 combat jets. The missiles, with a range of about 1,000 km, will complement the radar systems by enabling long-range strikes.  Deputy Prime Minister and Defence Minister Władysław Kosiniak-Kamysz said that several hundred missiles will be delivered over five years starting in 2026. The move aligns with Prime Minister Donald Tusk's "East Shield" initiative, aimed at strengthening Poland's defenses along its borders with Russia and Belarus.  Defense News

U.S. pledges $135 million in aid to Moldova to boost energy security, counter Russian influence.  U.S. Secretary of State Antony Blinken pledged $135 million in new aid to Moldova to enhance energy security and combat Russian disinformation.  Blinken announced – broken down to $85 million for energy infrastructure and $50 million to improve the energy and farming sectors and counter disinformation – during a visit to Chisinau.  This support aims to help Moldova resist Russian interference, hold free elections, and integrate with the EU.  Prior to this, the U.S. had provided $774 million in aid to Moldova since the Ukraine war began, with $300 million for energy security. President Maia Sandu thanked the U.S. for its support, highlighting how it helped Moldova move off from “total dependence on the Russian power resources.”   Associated Press U.S. Department of State

Hungary’s foreign minister visits Belarus despite E.U. sanctions.  Hungarian Foreign Minister Peter Szijjarto visited Belarus on Wednesday and talked of deeper ties despite E.U. sanctions against Minsk.  Szijjarto asserted “sanctions don’t work” and suggested the benefit of fewer sanctions, and also noted that Hungary is “increasing economic cooperation with Belarus in areas not affected by sanctions.”  During his visit, Belarusian and Hungarian officials signed an agreement on cooperation in nuclear energy, including arrangements for training and handling radioactive waste.  Belarusian Foreign Minister Sergei Aleinik added that he hoped Hungary taking over the E.U.’s rotating presidency will encourage “healthy trends” in Europe.  The E.U. sanctioned Belarus over repression of mass protests following the 2020 presidential election, and in response to Belarus allowing Russian troops to use its territory to invade Ukraine.  Associated Press

Azerbaijan to start resettling capital of Karabakh region in September.  Azeri President Ilham Aliyev said Azerbaijan will begin to resettle the Khankendi, the capital of the Nagorno-Karabakh region, from September.  Azeri forces captured the region and took full control of it in September 2023.  The roughly 100,000 ethnic Armenians living there then fled, saying they did not feel safe under Azerbaijan’s rule.  Armenia has accused Azerbaijan of ethnic cleansing, which Baku has denied, saying that ethnic Armenians are still welcome in the region.  Reuters

Middle East

Iran opens registration for presidential election.  Iran on Thursday opened a five-day registration period for prospective candidates who want to run in the June 28 presidential election to replace the late Ebrahim Raisi, who died in a helicopter crash earlier this month.  The election comes amid heightened tensions with the U.S., regional impacts from the ongoing war in Gaza, and protests in Iran, including over the death of Mahsa Amini in 2022.  Iran’s Supreme Leader Ayatollah Ali Khameneni is likely seeking a trusted hardliner to become the next president.  The succession for president is of significant importance as it will likely decide the succession for the next supreme leader.  Associated Press Reuters

Africa

Sudan's army rejects US call to return to peace talks. Sudan’s army on Wednesday rejected a U.S. call to return to peace talks with the paramilitary Rapid Support Forces.  Malik Afar, a former rebel leader and General Abdel Fattah al-Burhan’s number two on the Transitional Sovereign Council, said the army will not go to talks in Saudi Arabia “and whoever wants us to should kill us in our country and take our bodies there.”  The remarks come after Burhan spoke with Secretary of State Antony Blinken about the need to end the war and resume ceasefire talks in Jeddah, which have stalled for months.  The RSF has said it is open to talks, but neither it nor the army has abided by commitments made in past talks.  Reuters

THE CYBER AND TECH RUNDOWN

Authorities arrest Chinese national allegedly running ‘likely world’s largest ever’ cybercrime botnet.  An international law enforcement team arrested a Chinese national, Yunhe Wang, and disrupted the “911 S5” botnet which officials said he ran for almost a decade.  The U.S. Justice Department, quoting FBI Director Christopher Wray, said the botnet infected computers in nearly 200 countries, making it likely that it was the world’s largest.  Wang, who amassed at least $99 million in profits by reselling access to compromised systems, was arrested in Singapore, with search warrants executed there and in Thailand, according to FBI’s deputy assistant director for cyber operations, Brett Leatherman.  He added that authorities seized $29 million in cryptocurrency.  U.S. Attorney General Merrick Garland said Wang sold access to 19 million hijacked Windows computers, over 613,000 of which were in the U.S., to a variety of cybercriminals.  Associated Press Al Jazeera

Four arrested in sprawling European sting on malware network.  Europol said it arrested four people in Ukraine and Armenia and took down or disrupted over 100 internet servers in a major sting operation targeting international cybercrime.  The operation, dubbed Operation Endgame, took place between May 27 and May 29.  France, Germany, and the Netherlands led the operation, and Britain, the U.S., Ukraine and others participated.  Europol called it the “largest every operation against botnets, which play a major role in the development of ransomware.”  Dismantled botnets included IcedID, Smokeloader, SystemBC, Pikabot and Bumblebee.  German Interior Minister Nancy Faeser said the operation disrupted significant infrastructure used to launch massive ransomware attacks worldwide.  Reuters

Inside a DoD project to create specialized chip production for sensitive projects. The $3.5 billion diversion of CHIPS Act funding to the secret Secure Enclave project sparked disagreements between agencies over financing a specialized chip manufacturing facility for the Pentagon. While proponents like Intel CEO Pat Gelsinger argue it will portion off commercial capability to produce chips for defense and intelligence needs, critics question its necessity given existing programs like the Trusted Foundry. Concerns have been raised about the project giving adversaries a single target, lacking justification for the specific threats it addresses, and facing sustainability challenges due to potentially narrow demand and high upgrade costs, as evidenced by the shutdown of a previous NSA chip plant. Further concerns around the project also relate to the security of defense system microelectronics that may originate in the global commercial sector. Doug Kirkpatrick, a former DARPA chief scientist, said that unlike some routine military equipment that use commercial technology, “there’s a real challenge when you’re dealing with classified systems.” Former Pentagon official Christine Michienzi noted that the needs of the DoD for certain state-of-the-art chips cannot be met through conventional procurement processes like “the Trusted Foundry model,” where government inspectors certify commercial plant products for military use.  Politico

Chinese firms on U.S. ‘Entity List’ use rebranding, affiliates to evade restrictions. Chinese firms blacklisted by Washington on security grounds increasingly are circumventing restrictions by creating subsidiaries in the U.S. under different names. An example cited by the Wall Street Journal is registered in Michigan as “American Lidar” although its parent company is the Chinese tech firm, Hesai Group.  Resorting to rebranded entities may allow Chinese companies to operate and sell products in the U.S. while creating openings for American businesses eager to work with producers of popular Chinese consumer products. Derek Scissors, a former U.S.-China Economic and Security Review Commission official, observed that these moves allow “Chinese firms (to) take a blow but then adjust business strategy and are able to move in another direction.”  The world’s largest drone manufacturer, China’s SZ DJI Technology, has tried to get ahead of a possible ban by reaching agreement with an American firm to sell its drones in the U.S. The Massachusetts affiliate of a Chinese biotech company recently rebranded, removing BGI, the name of its parent company, from its corporate title. A congressional aide conducting research into Chinese firms active in the U.S. explained, “as the U.S. government turns to blacklists as a means of identifying problematic Chinese companies and as a means for imposing restrictions, the shell game is going to intensify.”  Wall Street Journal

U.S. sanctions Chinese nationals, entities for role in ‘anonymizing’ proxy network.  The U.S. Treasury imposed sanctions on a cybercrime group with Chinese connections for its operation of a proxy network used to anonymize malicious traffic and mask threat actor operations. The Treasury's Office of Foreign Assets Control (OFAC) announced sanctions against three Chinese citizens and entities. Treasury Under Secretary Brian Nelson announced the sanctions were imposed for the use of “malicious botnet technology to compromise personal devices, enabling cybercriminals to fraudulently secure economic assistance intended for those in need and to terrorize our citizens with bomb threats.” According to a Treasury press release, the sanctioned botnet operation “compromised approximately 19 million IP addresses and facilitated the submission of tens of thousands of fraudulent applications related to the Coronavirus Aid, Relief, and Economic Security Act programs.” The cost to the U.S. government amounts to billions of dollars, officials said, adding that the network was also active in South Korea, Peru, and Japan.  CybernewsBleepingComputerArs Technica

Telegram app maneuvers around EU content moderation safeguards.   In the wake of the failed assassination attempt on Slovak Prime Minister Fico, Slovak authorities allege Russian intelligence used Telegram to encourage acts of criminal sabotage in European capitals. Former Slovak Interior Ministry Director Daniel Milo said the messaging app is “popular among various pro-Russian actors as well as individuals who have been spreading disinformation for a long time” because it is not currently subject to content moderation laws. According to Estonian Prime Minister Kallas, requests by Estonian authorities to Telegram to remove offensive content are ignored. Telegram evades EU content moderation regulations as it reports a user base of 41 million – far enough under the 45 million-user threshold set by the EU Digital Services Act that otherwise requires social platform media to moderate content. However, Telegram’s user count methodology is under increasing scrutiny by European Commission regulators as part of an effort to determine if the messaging app should be treated as a major online platform under EU content moderation law. Bloomberg

EU announces June launch of AI Office for technology oversight, development.  The EU announced the launch of its new AI Office, an oversight body authorized by the community’s landmark AI Act, starting June 16. The new oversight body will help shape Europe’s AI landscape in coming years as it takes responsibility in regulating AI risks and promoting adoption and innovation of the technology. The AI Office will also aim to influence global approaches to AI governance. The five units of the new regulator will address regulation, safety and enforcement, technological excellence, social benefits, and policy coordination. While the full AI Act legal requirements are phased in by the EU, the AI Office will also develop interim codes of practice and best practices for AI developers. European Commission Euronews TechCrunch

Leading Russian delivery company operations hobbled by cyberattack — One of Russia’s largest delivery companies, CDEK, was hit by a cyberattack that disrupted services for several days. A Russian-speaking hacking group called Head Mare claims to have encrypted CDEK servers and destroyed backup data files. CDEK said over the weekend that service disruptions were due to a “massive technical failure” impacting website operation and mobile applications. The company said it has made “significant progress” in restoring operations and assured customers that it is “doing everything necessary to ensure that they reach you as quickly as possible.” Russia’s State Duma confirmed the CDEK disruption was caused by a cyberattack. Meanwhile, the hacker group posted on X that it “did not give CDEK time to defend itself. The system administrators turned out to be too weak. The security policies did not justify themselves.” Head Mare is an obscure hacker group that previously claimed to have carried out attacks on Russian companies, including internet providers, government agencies, factories, and oil and gas companies.  The Record

Failed North Korean rocket launch likely used Russian-supplied kerosene propellant.  South Korean experts believe Russia provided North Korea with safer fuel for its latest rocket launch, which suffered a first-stage explosion on Tuesday.  Pyongyang’s Korean Central News Agency (KCNA) reported that Tuesday’s mission involved a "new-type satellite carrier rocket" operating with a newly developed engine burning liquid oxygen and petroleum fuel. A senior researcher at the Korea Institute for National Unification in Seoul speculated that KCNA’s reference to petroleum indicates kerosene, a propellant widely used in U.S. and Russian rockets. In such an event, the change would signal a shift from hydrazine-based fuel, which observers believe has been used in North Korea’s ballistic missile tests. Hong noted that hydrazine "is highly toxic and killed or injured people during the fueling process, which led to a shift to safer kerosene." Chang Young-keun, a professor at Korea Aerospace University, said "North Korea likely acquired this engine from Russia and conducted several test firings prior to the launch."  Nikkei

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The data cutoff for this product was 7:00 a.m. E.T.

Brad Christian, Kasia Kucharski, Ethan Masucol, Elaine Shannon, Allison Brown, Brian Bonner, Ken Hughes, Leighton Durham, Katharine Campbell contributed to this report.

Read deeply-experienced, expert-driven national security news, analysis, and opinion in The Cipher Brief