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Tuesday, June 20, 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

Blinken and Xi Stress Need to Stabilize US-China Relations.  U.S. Secretary of State Antony Blinken said his trip to Beijing fulfilled its goal of restoring high-level engagement between the U.S. and China. Blinken said he had “candid, substantive and constructive” talks with his counterparts, Foreign Minister Qin Gang and China’s top diplomat Wang Yi, and Chinese President Xi Jinping, in which he conveyed that communication is the best way to manage relations and keep competition from escalating into conflict.  Xi echoed his comments, saying Blinken’s trip brought “very good” progress on U.S.-China ties.  Regarding specific issues, Blinken said he invited China to contribute to a “just peace” in Ukraine and help encourage North Korea to stop its belligerent actions.  On Taiwan, Blinken reiterated that the U.S. continues to uphold the one-China policy and that it does not back changes to the status quo in the Taiwan Strait, including Taiwanese independence.  Moving forward, the main outcome was the pledge for further talks, including plans for Qin to visit Washington and signals for a potential summit between Xi and President Joe Biden.  There were not many concrete developments; the U.S. was unable to reestablish senior-level military communications, which China cut last August after then-House Speaker Nancy Pelosi’s visit to Taiwan. The Cipher Brief  Bloomberg Deutsche Welle Reuters South China Morning Post Wall Street Journal

Beijing in Advanced Stages of Talks to Open New Joint Military Base in Cuba.  The Wall Street Journal is out with a new report, citing current and former US officials and US intelligence that says China and Cuba are in advanced stages of discussions for Beijing to open a new joint military training facility in Cuba.  The move has reportedly resulted in the Biden administration contacting Cuban officials to try and stall the plan, which could see Chinese military troops stationed just 100 miles from the US.  The project is reportedly part of China’s Project 141, an initiative by the People’s Liberation Army (PLA) to expand its global network of military and logistics hubs.  In an interview on Monday Secretary of State Antony Blinken said that Chinese activities in Cuba were a ‘serious concern’ and that he had raised the issue during his meetings in Beijing.  Wall Street Journal 

Massive Search Underway for Submersible Vessel Missing Near Titanic Wreck.  A tourist submarine visiting the wreck of the Titanic went missing on Monday.  The submersible is reportedly carrying five people, including a British investor and members of a prominent Pakistani business family.  The U.S. and Canadian coast guards launched a search operation for the submersible 900 miles off the coast of Cape Cod after its command ship said contact had been lost.  The vessel has 96 hours of “sustainment capability,” which is estimated to be down to around 70 hours left and is thought to be operating in an area that is about 13,000 ft deep.   Bloomberg Financial Times New York Times Wall Street Journal

India’s Modi Visiting the U.S. With Focus on Defense, Tech.  Indian Prime Minister Narendra Modi is visiting the U.S. this week.  He is set to meet with President Joe Biden and address the Joint Session of the U.S. Congress on Thursday.  He is also set to meet with Indian American Congressmen and top Indian American CEOs, including the heads of Microsoft, Google and FedEx.  Top of mind during Modi’s visit will be plans for General Electric to produce jet engines in India, New Delhi’s purchase of armed drones from the U.S., and other arrangements for the U.S. and India to bolster defense industry cooperation and technology sharing.  Reuters

Canada Sanctions Iranian Judges Over Human Rights Abuses.  Canada on Monday imposed sanctions on seven Iranian judges over alleged human rights abuses and human rights violations in Iran’s criminal Justice system.  Canada said the targeted judges has issued "notorious" death sentences and harsh prison terms following "sham trials and based on evidence gathered under torture."  Government of Canada Reuters

Western Europe

Germany Reportedly Only Has 20,000 High Explosive Artillery Shells Left in Stocks.  German magazine Der Spiegel reported on Monday, citing confidential defense ministry papers, that Germany’s armed forces only have approximately 20,000 high explosive artillery shells left in its stocks.  The confidential papers were drafted to convince the German budget committee of the need for massive restocking.  According to Der Spiegel, Germany’s military needs to build up an inventory of 230,000 shells by 2031 to comply with NATO goals and be able to weather 30 days of intensive combat. Germany, as well as many other European countries, have scrambled to supply Ukraine with artillery shells and other military equipment to combat Russia’s invasion, depleting their own stockpiles for defense.  Reuters

Chinese Premier Visits Germany.  Chinese Premier Li Qiang is in Germany to start his visit to Europe, which is his first official trip overseas.  Li dined with German Chancellor Olaf Scholz on Monday, ahead of the seventh China-Germany intergovernmental consultation on Tuesday.  Also on Monday, Li met with Germany’s top CEOs, including the heads of Mercedes-Benz and Siemens Energy.  He called on the corporate leaders to take the lead on “de-risking” decisions, reminding them to not “artificially exaggerate ‘dependence’, or even simply equate interdependence with insecurity” and that “lack of cooperation… [and] development is the biggest insecurity.”  His comments come in response to moves by the U.S. and European allies to “de-risk” by shifting trade and manufacturing from China to lessen dependence on Beijing for critical supply chains.  Li’s visit to Berlin comes as Germany finalizes its China strategy, which is due to be released next month.  Later this week Li will visit Paris as part of his Europe tour.  Bloomberg Deutsche Welle South China Morning Post 

Britain to Keep Russian Assets Frozen Until Moscow Compensates Ukraine.  The British government announced on Monday that it plans to tighten sanctions against Russia and is considering legislation to keep Russian assets frozen until Moscow agrees to rectify its invasion of Ukraine by paying compensation to Kyiv.  Britain added that it is implementing a new route for frozen Russian assets to be donated to the reconstruction of Ukraine. The plans come as the UK is hosting a Ukraine recovery conference this week. Britain has frozen more than $23 billion in assets and sanctioned over 1,550 individuals over Russia’s invasion of Ukraine last year.  The World Bank, United Nations, European Commission, and Ukraine estimate that currently, the estimated cost of reconstruction and recovery in Ukraine is more than $400 billion.  Reuters RFE/RL

France Bans Iran Opposition Rally Over Attack Threat.  France banned the annual rally of National Council of Resistance of Iran (NCRI), a Paris-based Iran opposition group, over risk of an attack.  A letter from French authorities to NCRI said the decision for the ban came due to the “tense context” from recent anti-government protests in Iran, which they said has created “very significant security risks” to NCRI gatherings.  Paris police later confirmed there was a terrorist attack to the rally due to the “geopolitical context.”  NCRI condemned the ban, saying it shows a “brazen disregard for democratic principles, caving in to the ruling religious tyranny’s blackmail and hostage-taking.”  The ban came after Belgium released Iranian diplomat Assadolah Assadi, who was arrested for links to a failed plot to bomb a NCRI rally in 2018, in exchange for four Europeans held in Iran.  Reuters

Belgium Foreign Minister Under Fire For Allowing Iran, Russia Delegations.  Belgian Foreign Affairs Minister Hadja Lahbib is facing calls for her resignation after granting visas to delegations from Iranian and Russian cities for an all-expenses paid trip to a mayors convention in Brussels last week.  The “Brussels Urban Summit” included mayors from over 300 international cities, from Brussels to Kyiv to Bogota, and members of the European Commission and the European Parliament in a gathering focused on urban challenges.  The Belgian state secretary for external relations and foreign trade, who approved the all-expenses paid trip, has since resigned over the Iranian and Russian participation in the summit.  Both Iran and Russia are under numerous international sanctions; Iran’s inclusion in the summit was particularly criticized since only three weeks ago, a Belgian NGO worker was released from jail in Iran in a prisoner swap for an Iranian diplomat who had been imprisoned in Belgium in connection to a failed bomb plot.  Reuters

Central and Eastern Europe

Ukraine Says 'Biggest Blow' Yet to Come, Claims Recapture of Eight Villages.  Ukraine claimed Monday that its forces have retaken eight villages from Russian troops in its two-week counteroffensive. Deputy Defence Minister Hanna Maliar says that Ukrainian troops had recaptured the settlement of Piatykhatky during an advance by Kyiv of nearly 4.3 miles into Russian-held territory in two-weeks, where they took 44 square miles of land. Maliar said that "the enemy will not easily give up their positions, and we must prepare ourselves for a tough duel,” though she remained confident that Ukrainian forces are “moving as they should be moving” and that the “biggest blow is yet to come.”  She added that the eastern and southern regions of Ukraine have seen the most intense conflict, with the military staving off Russian air assault troops in the east.  Ukrainian President Volodymyr Zelenskiy said in his nightly video speech, "we have no lost positions, only liberated ones. And they have only losses." Two videos released by the Ukrainian military appear to show the recapture of Piatykhatky, with smoke rising from the village, armored trucks driving down a remote road, and soldiers from the 128th separate assault brigade claiming to have liberated the small town.  Al Jazeera Reuters

Russian Drones and Missiles Hit Kyiv, Lviv.  Russia launched dozens of attack drones on the Ukrainian capital Kyiv and western city of Lviv in strikes early Tuesday.  Ukraine’s Air Force said Russia launched 35 Iranian-made drones, with most targeting the capital region, and that Ukranian defenses intercepted 32 drones, including over two dozen near Kyiv.  At least one drone hit a facility in Lviv described as “critically important”, though there were no reported injuries.  The drone attack was the first on Kyiv in over two weeks.  Separately, Ukraine’s military said there were also Russian missile attacks in the Zaporizhzhia region.  New York Times Reuters

Russia Transferring Troops from Elsewhere in Ukraine to Zaporizhzhia.  Ukraine and the U.K. say that Russia is transferring forces from different parts of Ukraine to the frontline in the southern Zaporizhzhia region.  Local Ukrainian officials reported the transfers, and the U.K. Ministry of Defense said in an intelligence assessment that Russia is relocating forces from the east bank of the Dnipro river to reinforce positions in Zaporizhzhia and Bakhmut.  The ministry said these transfers potentially involve “several thousand troops” and suggest that Russia no longer believes Ukraine will launch a major attack across the Dnipro due to flooding from the collapse of the Kakhovka Dam.  Ukrainian officials say that fighting in eastern Ukraine, from Kharkiv to Donetsk, remains difficult.  Analysts say Ukraine’s counteroffensive is likely to slow as Ukrainian forces engage in heavy combat with Russian troops.  CNN

Ukraine Claims Hungary Ignoring Requests to Contact Ukrainian POWs.  Ukraine’s Foreign Ministry is demanding consular access to 11 Ukrainian prisoners of war being held in Hungary.  The Russian Orthodox Church previously said the Ukrainian POWs are of “Zakarpattia origin” — referring to Ukraine’s westernmost Zakarpattia Oblast, which is home to around 150,000 ethnic Hungarians — and that it transferred the soldiers to Hungary without involving Ukrainian authorities.  Hungarian Deputy Prime Minister Zsolt Semjen confirmed on June 9 that the Ukrainian POWs were in Hungary as “free people.”  Ukraine’s foreign ministry and intelligence services say it is unaware about the whereabouts of the Ukrainian soldiers and that Hungary is ignoring requests for contact.  Kyiv added that Moscow may be preparing to use the Ukrainian prisoners for a Russian propaganda stunt linked to the Russian Orthodox Church.  Kyiv Independent Kyiv Post Reuters

Western Arms Makers in Talks to Start Production in Ukraine.  Ukraine is reportedly in negotiations with Western arms manufacturers on a potential deal that could allow Ukraine to produce weapons and parts in Ukraine itself.  Deputy Minister for Strategic Industries in Ukraine, Sergiy Boyev, said that moves by arms makers from Germany, Italy, France and Eastern Europe to expand production in Ukraine will help Kyiv secure more munitions and military equipment to counter Russia’s invasion.  Ukraine has already engaged with weapons makers on the matter; Ukrainian President Volodymyr Zelensky said Kyiv is working with British defense company BAE Systems to set up a Ukrainian base to produce and repair weapons, and Germany’s Rheinmetall has set up a joint venture with Ukraine’s Ukroboronprom to build and repair tanks in Ukraine.  Boyev said such efforts underscore that “the future deterrence of aggression will require a strong defense industry in Ukraine, a strong Ukrainian armed forces”. In particular, Boyev said Ukraine is courting drone manufacturers as they have been utilized extensively by both Russia and Ukraine in the war.  Reuters

Ukraine Missing Arms Deliveries, Receiving Defective Equipment.  A New York Times report has found that Ukraine paid over $800 million for military equipment that was never delivered or was deemed unfit for use and cannibalized for spare parts in 2022.  Sources said that some missing equipment was eventually delivered and some brokers refunded some funding, but millions have still been paid for weapons that Ukraine never got.  Ukrainian defense officials say Kyiv is assessing past military purchases and identifying problematic contractors.  In addition to bad business deals, experts say much of the Ukrainian military’s problems also come from Western aid pulled from stockpiles and in need of extensive overhauls.  In one case, Ukraine recently received 33 defective self-propelled howitzers from Italy, which had decommissioned them years ago and claimed Ukraine wanted them anyway.  Kyiv sent the howitzers to a U.S. company for repair, but they were still “not suitable for combat missions” when returned, according to Ukrainian government documents.  Ukraine has largely avoided criticizing Western allies for such mishaps, but officials say Kyiv is growing increasingly frustrated with arguments that it has enough Western weapons, even though some are never delivered or are in poor condition.  New York Times

Over 80% of Foreign Components in Russian Missiles of U.S.-Origin.  A new report has found that up to 81% of foreign components in Russian missiles used in Ukraine originate from the U.S.  According to a document from the Yermak-McFaul Expert Group on Russia Sanctions, these components, such as microcircuits and chips, come from U.S. firms including Vicor, XILNX, Intel Corporation, Texas Instruments, ZILOG, Maxim Integrated, and Cypress Semiconductor.  Ukraine has expressed concern to the U.S. and other allies that foreign-produced components are still being used to build Russian missiles amid the Ukraine war.  Kyiv has called for sanctions against companies involved in the supply chain for Russian missiles, as well as stronger export controls on critical components.  Kyiv Independent

Japanese-Made Chips Still Entering Russia.  An investigation by Nikkei has found that semiconductors made in Japan are still entering Russia despite sanctions linked to the Ukraine war.  According to the report, Russian customs data shows that between February 2022 to March 2023 there were at least 89 transactions of semiconductors involving Japanese manufacturers worth a total of around $11 million.  Over 70% of shipments came from China and Hong Kong, followed by South Korea and Turkey.  Japan says it has aligned with U.S. sanctions on semiconductor exports to Russia since March 2022, but Tokyo’s controls only cover direct exports from Japan and not chip trade through other countries.  Nikkei has previously reported on how even U.S. chips are still making their way to Russia through indirect channels.  Nikkei Asia

Moldovan Court Bans Pro-Russian Party.  Moldova’s constitutional court has banned pro-Russian party SHOR.  The SHOR party has led pro-Russia and anti-government protests in Moldova since 2022 and has been sanctioned by the U.S. and Canada.  SHOR has only five members in the 101-member Moldovan Parliament, and though those representatives will be allowed to serve the remainder of their terms, they are barred from joining another party. According to the ruling disbanding SHOR, the ban on the party cannot be appealed.  The ban on SHOR comes amid rising tensions between Moldova and Russia amid the Ukraine war.  CNN

Asia and Oceania

Taiwan Experts Joining U.S.-Japan War Games for First Time.  Taiwanese military and security analysts are joining upcoming war games led by the U.S. and Japan.  It will be the first time Taiwanese experts join such drills.  The exercise will be held in Tokyo in mid-July and focus on how U.S. and Japanese forces can deter Chinese forces in a cross-Strait conflict.  Participants note that the simulations do not mean a conflict is imminent, but are instead risk management efforts by those involved.  Past war game exercises have shown a war over Taiwan would be catastrophic; while most drills show Taiwan’s allies could prevent China from taking the island, both sides would suffer heavy losses and Taiwan would be devastated.  South China Morning Post

China Launches High-Resolution Satellites.  China launched 41 Jilin-1 satellites into orbit on Thursday, further expanding the world’s largest high-resolution satellite constellation.  The launch set China’s national record for most satellites it has launched with a single rocket.  The satellites were mostly the Jilin’s latest Gaofen 06A iteration, which weigh less and are cheaper than previous models, and were launched on China’s Long March 4D carrier rocket.  The launch brought the number of satellites in the Jilin constellation to 108, which China seeks to increase to 300 by 2025.  The Jilin satellites offer daily close-up imaging of the Earth’s surface at a resolution of between 50-75 cm (1 ft. 6 ins. - 2 ft. 4 ins.).  South China Morning Post 

New Zealand PM to Meet with President Xi.  New Zealand’s Prime Minister Chris Hipkins said Monday that he will visit China from June 25th to the 30th to lead a trade delegation with some of the nation’s largest companies. During the visit, he is expected to meet with Chinese President Xi Jinping and other senior Chinese officials. Hipkins said in a statement that he looks “forward to meeting with China's leadership through various face-to-face bilateral meetings” and discussing subjects such as “climate change, economic stability, regional and global security, human rights, and the war in Ukraine."  Chinese Foreign Ministry spokeswoman Mao Ning declined to confirm the planned visit but told journalists that “China values its relations with New Zealand and looks forward to strengthening cooperation with New Zealand in various fields, including the economy and trade."  Nikkei Asia 

U.N. Official Warns of Gender Apartheid in Afghanistan.  U.N. Special Rapporteur on the situation of human rights in Afghanistan, Richard Bennett, told the Human Rights Council in Geneva that the Taliban’s discrimination against Afghan women and girls could amount to “gender apartheid.”  The U.N. defines gender apartheid as “"economic and social sexual discrimination against individuals because of their gender or sex.”  Bennett said more work needs to be done investigating gender apartheid, which is not currently an international crime.  A Taliban spokesperson said Bennett’s comments are part of “propaganda” from the West.  Reuters United Nations

Middle East and Northern Africa

Israel Military Raid in West Bank Kills Five Palestinians, Injures Over 90.  Israeli forces, backed by the rare use of helicopters, conducted a raid in the West Bank city of Jenin on Monday, killing at least six Palestinians and injuring over 90 others.  Eight Israeli personnel were wounded in the operation.  The Islamic Jihad armed terror organization claimed three of the dead as members.  The Israeli Army said that due to heavy fire and the use of explosive devices, the military had to mount an extraction mission using the helicopter to pull out wounded troops and vehicles blocked in the fighting.  The use of a helicopter is typically unusual and underlines the intensity of the fighting in Jenin.  Israeli media stated that it was the first time in 20 years for helicopters to be used in the West Bank.  Al Jazeera Reuters

Sub Saharan Africa

U.S. Urges Orderly Withdrawal of UN Forces from Mali.  The U.S. State Department said Monday that the U.S. “regrets” the decision of Mali’s government to ask a United Nations peacekeeping force to leave the country but is urging an “orderly and responsible” drawdown.  Mali requested on Friday that MINUSMA, the UN mission in Mali, exit the nation due to a "crisis of confidence" between Malian officials and the peacekeeping mission.  A State Department spokesperson said that the drawdown of MINUSMA should be organized, “prioritizing the safety and security of peacekeepers and Malians." He also said that the US is “concerned about the effects this decision will have on the security and humanitarian crises impacting the Malian people," particularly due to the country’s struggle in countering an Islamist insurgency and mounting insecurity in the wake of military coups in 2020 and 2021.  Reuters

International Donors Pledge $1.5 Billion in Sudan Aid.  International donors on Monday promised $1.5 billion in aid for war-struck Sudan.  The amount is only around 50% of the $2.6 billion in funds requested by the U.N. to address the nation’s worsening humanitarian crisis, which has killed thousands and displaced 2.2 million people. Both Khartoum and other regions such as West Darfur have been transformed into war zones as the Sudanese army and the paramilitary Rapid Support Forces (RSF) battle for control.  U.N. Secretary-General Antonio Guterres said Monday that “without strong international support, Sudan could quickly become a locus of lawlessness, radiating insecurity across the region.” Ceasefire breaches, bureaucratic controls, and looting have hindered the efforts of a fundraising conference in Geneva, hosted by the United Nations, Germany, Egypt, Saudi Arabia, and Qatar.  U.N. aid chief Martin Griffiths stated that donors pledged nearly $1.5 billion in aid, though the date for the dispersal of funds is unclear. Germany pledged $218 million, and the United States committed $171 million. 190 million euros will come from the EU, while Qatar pledged $50 million.  Reuters Deutsche Welle

Nigeria Reshuffles Defense Leadership.  Nigerian President Bola Tinubu on Monday replaced his security chiefs and the head of police in a major defense leadership shakeup early in his administration.  Tinubu appointed new commanders for the navy, army, and air force, and a leader for the Nigeria Customs Service. He named Major General Christopher Musa as the new Chief of Defense Staff and Nuhu Ribadu as his National Security Adviser.  The move is apparently part of Tinubu’s effort to reshape the nation’s overwhelmed security forces, which struggles to counter abductions and ransoms by gangs as well as Islamic insurgencies in the northeast.  Reuters

Uganda Detains 20 Over Student Killings.  On Monday, Ugandan authorities said that they had detained 20 people for questioning about their possible role in a school attack by the Allied Democratic Forces (ADF), an extremist Islamic group, which killed 42 people, including 37 students.  Those detained included the school’s headteacher.  ADF was founded in Uganda in the 1990s and for years, combated the Ugandan government. Eventually, the Ugandan military pushed the ADF into the dense jungles of eastern Congo where they still operate. ADF fighters still carry out attacks within Uganda including the bombings in Kampala in 2021.  Deutsche Welle Reuters 

Cyber and Tech

​​European Commission To Offer High-Tech Export Strategy for EU Consideration.  The European Commission plans to release proposed measures this week to block the flow of high-value EU technology to countries like China, especially to prevent it from being used in military applications.  Among the measures being considered are screening investments in foreign markets and strengthening export controls.  The Commission’s Economic Security Strategy will be presented as a “communication” to EU legislators.  Leaders of EU member states are scheduled to discuss relations with China when they meet in Brussels next week.  The Commission strategy is not a formal legislative proposal, but describes approaches the EU could consider in “de-risking” relations with China and preventing “leakages” through foreign-bound investments and technology transfers.  Export licenses and decision making on security risks are the prerogatives of individual EU states.  Recently, the Netherlands took a unilateral action to bar Chinese companies from acquiring ASML advanced lithography tools used in chip-making.  Dutch authorities requested that the restrictions be extended throughout the EU, but there is no community-wide provision for such an action.  However, the EU does exercise control over specific “dual-use” technologies that may have military uses although “emerging technologies” are not included in this authority.  One EU diplomat commented, "EU member states are not ready to hand over export controls as a whole but we will probably see something more along the lines of greater cooperation."  Reuters

Alibaba Names New Chairman, CEO.  Chinese e-commerce giant Alibaba Group Holding Ltd. is replacing Daniel Zhang as chairman and CEO.  Joseph Tsai, executive vice chairman and co-founder of Alibaba, will take over as chairman, while Eddie Wu, chairman of Taobao and Tmall Group, will take over as CEO.  Tsai and Wu will take their new positions in September.  Zhang will continue to be chairman and CEO of Alibaba’s cloud unit.  The leadership shakeup comes amid the company’s restructuring following China’s regulatory crackdown on technology companies.  CNBC CNN Reuters

Chinese Chip Expert Calls for ‘Re-Globalization’ of Semiconductor Market.  Noting that the share of domestically made chips increased from 13 to 41.4 percent of total chip sales over a 10-year period ending in 2022, a Chinese technology expert called for actions “to shatter the blockade (of Western chip technology) and containment to achieve self-sufficiency.”  Wei Shaojun, director of the Institute of Microelectronics of Tsinghua University and an official at the China Semiconductor Industry Association, told a Guangzhou technology gathering over the weekend that China has a number of advantages to exploit, including its “super large” chip market.  Wei called for “re-globalization” of the chip market, which has been constrained by U.S. and Western technology restrictions and sanctions.  He observed that “self-sufficiency doesn’t mean to close ourselves off [to the rest of the world].”  Wei said foreign companies anywhere in the chip supply chain can “benefit” from being in China, which will remain a mega-sized market.  He also endorsed China’s embrace for suggested developing chips for AI applications, which he described as “an extravaganza that cannot be missed.”  South China Morning Post

Reuters Investigation Reveals Lively Chinese Underground Market for High-End Chips.   The most advanced Nvidia AI chips are not supposed to be available in China, but a Reuters investigation has revealed that small numbers of the sought-after A100 AI chips can be found – for twice the normal price.  Reuters found that the Huaqiangbei electronics area in Shenzhen is “a good bet” to find the chips that are not advertised but discreetly available.   Last September the Biden administration blocked exports to China of Nvidia’s most advanced AI chips, the A100 and H100.  The sale and purchase of advanced U.S. chips is not illegal in China, but Reuters notes that vendors are wary of drawing attention from authorities, creating a “de facto underground market” for the technology.  Reuters reports that it spoke with 10 vendors in both mainland China and Hong Kong who said they could easily obtain small numbers of A100 chips.  According to Reuters, the vendors’ confidence underscored the “intense demand” in China for advanced chips as well as the “relative ease” with which U.S. sanctions can be evaded, at least for “small-batch transactions.”  The vendors told Reuters that “app developers, startups, researchers or gamers” are typical buyers for the sanctioned chips.  One vendor said buyers include local Chinese authorities.  Reuters

Britain Will More Than Double Funding for Ukraine Cyber Program.  Britain’s Ukraine Cyber Program will undergo a “major expansion” with new funding to provide forensic capabilities to Ukraine’s cyber teams responsible for analyzing system compromises and identifying threat actors.  Prime Minister Rishi Sunak has announced that the UK will more than double funding for the program to $20 million.  Sunak pointed out that Russia’s “appalling attacks” on Ukraine are not limited to kinetic operations, but “involve sickening attempts to attack their cyber infrastructure that provides vital services, from banking to energy supplies, to innocent Ukrainian people.”  The increased funding, Sunak said, will contribute to “hardening Ukraine’s cyber defenses and increasing the country’s ability to detect and disable the malware targeted at them.”  The prime minister’s office said Sunak also will urge the private sector to support Ukraine’s current counteroffensive through investments in the country’s damaged critical infrastructure.  TheRecord

NATO Launches Innovation Accelerator Pilot Focused on Next-Generation Technology.  NATO’s initiative to boost the defense alliance’s “innovative edge” — the Defense Innovation Accelerator for the North Atlantic (DIANA) – will go operational this week as it launches its first pilot challenge.  The DIANA program will support about 30 startups in the initial funding year with awards of 100,000 euros in a first-phase grant, with the possibility of obtaining up to 300,000 euros in a second phase.  Deeph Chana, DIANA’s managing director, told DefenseScoop that the program will generate “better situational awareness of where talent and innovation sits” across the alliance.  DIANA leaders expect to have a multi-million euro budget this year, and annual budgets of 50 million euros in the future.  Beyond funding, the alliance is offering a multi-site, dual-use accelerator program in various parts of the world.  Chana explained that “by ‘dual-use,’ we are very explicitly encouraging startups to have applications in the more traditional tactical military domain.”  The initial DIANA pilot program will focus on three technology sectors — persistent and resilient energy supplies; next-generation detectors and sensor systems to probe areas that are difficult to see, sense, and explore; and persistent and efficient secure information sharing.  DefenseScoop

Despite Conflict, Ukraine Tech Sector Adapts & Thrives While Seeking Global Opportunities.  A Ukrainian investment director participating in the London Tech Week conference last week pointed to the “extraordinary resilience” of the country’s tech sector and called for continued global support and opportunities.  Indicators such as Ukrainian IT companies’ ability to maintain 95 percent of their contracts and to expand exports last year were cited as reasons for optimism.  According to the National Bank of Ukraine, the IT sector was the country’s only export industry showing growth last year, “a bright spot” in Ukraine’s economy, which shrunk by almost 30 percent in 2022.  Russia’s invasion of Ukraine has stimulated the creation of startups focusing on emerging technologies, including AI for its potential in increasing organization’s operational efficiency and countering disinformation.  Another opportunity to showcase Ukraine’s technology prowess will occur this week as Britain and Ukraine co-host the Ukraine Recovery Conference in London.  Participants from 61 countries will gather to discuss “in very practical and granular terms” Ukraine’s steps to reconstruction, according to an event organizer.  Danae Dholakia, the UK special envoy to the conference, noted that Ukraine’s tech sector “is a real illustration of precisely why Ukraine is going to survive and thrive.”  The IT sector was key to the digitization of government services led by the Ministry of Digital Transformation, which could spur Kyiv’s transformation into a leading European tech hub.  CyberNews

BlackCat Ransomware Gang Threatens Release of ‘Confidential’ Reddit Data.  The BlackCat ransomware gang is threatening to leak 80 GB of “confidential data” it claims it stole during a breach of Reddit systems in February.  The gang has set two conditions for deleting the information – that Reddit pay a $4.5 million ransom and reverse the company’s API price increases.  Reddit had announced new pricing for Application Programming Interface (API) access, which provoked a “digital strike” by Reddit users that closed down subreddits and Reddit-based forums.  In an earlier statement concerning the system breach, Reddit earlier confirmed that hackers had accessed employee information and internal documents in a phishing attack.  BlackCat has not disclosed evidence of the data it claimed to have extracted.  The ransomware gang is reported by security researchers to be responsible for about 12 percent of all attacks last year.  TechCrunch CyberNews

Intel Plans ‘Landmark’ $33 Billion Expansion of Chip Facilities in Germany.  The Intel chip company will spend about $33 billion to build two chip-making plants in Magdeburg, Germany, the largest foreign investment in the republic’s history.  The German government has agreed to provide nearly $11 billion in subsidies for the plants’ construction.  German Chancellor Olaf Scholz described the development as "an important step for Germany as a high-tech production location – and for our resilience."   Over the last several days, Intel has announced plans for a $4.6 billion chip plant in Poland, and a $25 billion facility in Israel.  According to Intel, the first plant in Magdeburg will be operational 4-5 years after approval of the plan by the European Commission.  The company also noted that combined with Intel facilities in Ireland and Poland, the new Magdeburg site will create “an end-to-end semiconductor manufacturing infrastructure” that will promote the EU’s goal of creating a more resilient supply chain.  Reuters Bloomberg

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