Report for Wednesday, May 15, 2024

THE TOP STORIES

Putin visiting China this week

Blinken tells Ukraine ‘you are not alone’ as Russia’s military makes gains

Biden administration advances $1 billion in arms to Israel

Filipino activist flotilla headed to disputed shoal in South China Sea

CIPHER BRIEF EXCLUSIVES

SUBSCRIBER+EXCLUSIVE REPORTING — Amid Dire Warnings About Russia, Europe Has A Troop Problem.

THE ISRAEL HAMAS WAR

Gaza ceasefire talks stuck; tensions between Israel and mediators Qatar and Egypt rise.  Israel’s ceasefire negotiations with Hamas have gone “backward,” Qatar’s prime Minister Sheikh Mohammed bin Abdulrahman bin Jassim Al Thani told the Qatar Economic Forum in Doha   Tuesday.  Sheikh Mohammed, whose country is acting as a mediator between Hamas and Israel, said, “Especially in the past few weeks, we have seen some momentum building but unfortunately things didn’t move in the right direction and right now we are on a status of almost a stalemate.  Of course, what happened with Rafah has set us backward.” Tensions between Israel and Egypt, the second Arab mediator, heightened yesterday when Israeli Foreign Minister Israel Katz tweeted, “Yesterday, I spoke with UK Foreign Secretary David Cameron and German Foreign Minister Annalena Baerbock about the need to persuade Egypt to reopen the Rafah crossing to allow the continued delivery of international humanitarian aid to Gaza…The key to preventing a humanitarian crisis in Gaza is now in the hands of our Egyptian friends.” In a statement, Egyptian Foreign Minister Sameh Shoukry shot back, “Israel is solely responsible for the humanitarian catastrophe that the Palestinians are currently facing in the Gaza Strip.”  He blamed Israel’s seizure of the Rafah border crossing from Gaza into Egypt and its military operations in the area for choking off aid.  Israeli newspaper Haaretz reported that Egypt had been refusing to move humanitarian aid to Gaza as long as Israel controlled the Palestinian side of the Rafah crossing. Israeli officials speculated that Egypt might withdraw from the hostage negotiations, Haaretz reported, quoting an Israeli official as saying, "The situation with Egypt right now is the worst it's been since the war started.”  Al Jazeera Haaretz Al Arabiya

Biden administration preparing to ship $1 billion in arms to Israel.  The Biden administration notified Congress Tuesday that it was moving forward with a new weapons deal valued at $1 billion, the Wall Street Journal reported Tuesday. The latest weapons package includes $700 million in tank ammunition, $500 million in tactical vehicles and $60 million in mortar rounds. The arms will not move immediately because the Congressional approval process will take some time. The administration’s announcement signals that Biden has not taken the drastic step of freezing all weapons transfers to Israel because of his disagreement with Prime Minister Benjamin Netanyahu over the Israeli military’s Rafah operation.  Wall Street Journal  Reuters  Associated Press

U.N. officials say Israeli tank fire killed UN security worker in southern Gaza. The shots that killed U.N. security worker Waibhav Anil Kale, 46, an Indian national, and wounded a Jordanian woman in southern Gaza Monday “came from a tank in the area,” Farhan Haq, deputy spokesman for UN Secretary General António Guterres, on Tuesday. “I don’t think at this stage we are in doubt about where the shots came from as much as what the circumstances were,” Haq said. UN. officials said the fire hit a white UN van that was flying a UN flag.  They said its movement — enroute to the European hospital in Khan Younis — had been cleared in advance with the Israeli military.  A spokesperson for the Israel Defense Forces said Monday that the IDF had “not been made aware” of the van’s route and said it was hit “in an area declared an active combat zone.” The incident is under investigation. Meanwhile, the Jerusalem Post reported Tuesday that during military operations in eastern Rafah Saturday, Hamas fighters were spotted and photographed inside the UN aid unit UNRWA’s central logistics compound, standing alongside UN vehicles. The Israeli defense ministry’s Coordinator of Government Activities in the Territories has called for an investigation of this incident and UNRWA’s involvement. It is not related directly or indirectly to what happened in Khan Younis.  Still, the timing of the disclosure raises the question, will the IDF again mount a defense of mistaken identity and faulty communications, as happened after Israeli air strikes killed 7 World Central Kitchen aid workers on April 1?  Washington Post Jerusalem Post

Rafah border closure strands American medical team in Gaza hospital.  An international team of medical workers, including around 20 Americans, are stranded in the European Hospital in Khan Younis. They were supposed to leave Gaza Monday, but now they do not know if that’s possible after Israel on May 7 seized and closed the Rafah crossing to Egypt, which aid organizations use. The trip from the hospital to the crossing became more perilous when a UN worker was killed and another was wounded by fire as they rode in a UN van from the European Hospital to the crossing.  “Right now we are stuck in Gaza,” Monica Johnston, a nurse who works at a burn trauma center in Oregon and is among the volunteers at the hospital, told  The Post. “No safe way to get out and no new help or supplies coming in.”  Washington Post

US-military-built Gaza pier could open for aid deliveries this week. Calmer seas will enable a U.S. Army construction team to anchor a causeway onto the beach for the Gaza aid pier this week, Pentagon deputy press secretary Sabrina Singh said Monday. Aid ships will then travel from Cyprus to the floating pier, where cargo will be offloaded into smaller U.S. Army boats that will go to the causeway onshore. Trucks driven by non-American contractors will drive off the Army boats onto the causeway and down to the beach. At a news conference, Cyprus’ Foreign Minister Constantinos Kombos said he hopes aid could start flowing into Gaza through the sea corridor this week.  “All these issues will be basically resolved in the next few days,” he said.  Military Times Associated Press  

Biden administration skeptical of Israel’s military objectives in Gaza.  Politico reports that President Joe Biden’s national security team long ago reached a consensus that Israeli prime minister Benjamin Netanyahu’s promise of “absolute victory” was unrealistic. Israel has achieved tactical military victories, at great cost to Gazans. A military victory that undermines Hamas’ capability to launch a spectacular attack is achievable, Politico’s sources said, but Hamas can’t be eliminated entirely, and Israel’s current operations in Gaza feed the anti-Israel, anti-West movement that spawned Hamas.  “You can degrade, you can disrupt, but the underlying things that enable them to form and develop and grow remains: The architecture and the support from outside groups remains,” a U.S. official said, according to Politico. “That’s how it works — that’s why we’re still in Iraq and Syria.” For the Biden team, the dilemma is how to support Israel on a course that seems doomed to fail.  Politico 

THE UKRAINE UPDATE

Blinken tells Ukraine ‘you are not alone’ as Russia’s military makes gains. U.S. Secretary of State Antony Blinken arrived by train in Kyiv on Tuesday morning as Russian troops continued their assault in northeastern Ukraine towards Kharkiv.  “You are not alone,” Blinken told Ukrainians while conceding that the delay in U.S. aid “left you more vulnerable to Russia’s attacks.” Blinken met with Ukrainian President Volodymyr Zelensky and heard new pleas for military assistance, particularly for stronger air defenses. “We need, today, two Patriots for Kharkiv,” Zelensky told Blinken, referring to the highly effective U.S. air missile defense system.

Blinken met with Prime Minister Denys Shmyhal, Foreign Minister Dmytro Kuleba, and leaders of Ukraine’s civil society. He gave a major speech outlining U.S. policy on Ukraine at Kyiv Polytechnic Institute, where he praised Ukraine’s strategic successes and said the U.S. would offer “tangible steps’’ to advance Ukraine’s NATO membership ambitions at a July summit of the 32-nation alliance in Washington. And he found time in the evening to sing with a local band and play a few chords of Neil Young’s 1989 hit “Rockin’ in the Free World” at the popular Barman Dictat club on Kyiv’s main Khreshchatyk Street.  Despite some criticism, the New York Times wrote that the moment “appeared to serve its purpose. A policy address by Mr. Blinken earlier in the day about long-term support for Ukraine was something less than a hit on social media. By Tuesday afternoon, however, his politically tinged rocking was going viral.

Blinken acknowledged the hard realities of Ukraine’s outgunned and outnumbered forces at each stop. "Putin is ramping up yet another offensive against Ukraine in Kharkiv and across the east, sending wave after wave of Russian soldiers, Iranian drones, North Korean artillery, and tanks, missiles, and fighter jets built with machines and parts supplied by China," Blinken said. Blinken also announced that the U.S. will give another $2 billion in military financing to Ukraine.  He also planned more meetings for Wednesday before departing by train to Poland and returning to Washington. Blinken’s visit is his fourth to Ukraine since Russia’s full-scale invasion in 2022 and the first by a senior official in U.S. President Joe Biden’s administration since the April approval of a $60.8 billion aid package.  New York Times New York Times Wall Street Journal Washington Post Bloomberg Bloomberg Reuters Associated Press Kyiv Independent State Department 

Ukraine pulls back in two areas of Kharkiv region, warns of Russian buildup near Sumy region.  Ukraine's military has retreated to new positions in the northeastern Kharkiv region amid a Kremlin offensive while warning of a Russian troop buildup near the Sumy region.  According to Ukraine's National Security and Defense Council Secretary, Oleksandr Lytvynenko, around 30,000 Russian troops are involved in the new ground offensive launched on May 10, mainly focusing on border settlements in Kharkiv Oblast.  Moscow's forces have reportedly captured a 10th border village, Buhruvatka, and intensified attacks in Vovchansk, only 3 miles from the Russian border, forcing over 7,500 evacuations.  Russian forces carried out multiple air strikes against Kharkiv city on Wednesday, injuring at least 21 people, including three children, local authorities reported. Ukrainian spy chief Kyrylo Budanov reported a stabilization trend, though the situation remains fluid. “The situation isn’t catastrophic as of now,” Budanov said. He added that Ukrainian forces are preparing a counteroffensive to repulse the advance north of Kharkiv.  The United Nations voiced concern over civilian casualties in Kharkiv, with at least eight killed and 35 injured since Friday. Russian glide bombs weighing half a ton each have been dropped repeatedly from aircraft on Vovchansk and neighboring border towns for days.  Evacuees say the current assault is worse than in 2022 at the start of Russia’s full-scale invasion.  Reuters Bloomberg Washington Post Kyiv Independent Kyiv Independent Kyiv Independent

ANALYSIS - Mapping Russia’s sudden push across Ukrainian lines. Russian forces are advancing on multiple fronts in Ukraine. They have surged across the northern border, opening new attacks near Kharkiv, capturing at least 10 settlements, and forcing thousands to flee. In the east, Russia has created a 15-square-mile bulge near Avdiivka, complicating the defense of the Donetsk region. Delays in U.S. aid, high casualties, and ammunition shortages are straining Ukraine's defenses. Russian advances aim to divert Ukrainian troops from key battles, such as in the Donetsk region’s Chasiv Yar. Ukrainian forces are stretched thin, with all reserves already deployed. The story includes detailed maps.  New York Times

ANALYSIS - In Ukraine, Russia is beginning to compound advantages. Russia's summer offensive has begun, with renewed attacks on Kharkiv and other fronts. With 510,000 troops, Russia has numerical superiority over Ukraine’s forces, compensating for its undertrained army by stretching Ukrainian defenses along a 1,000-kilometer (620-mile) front. Russian attacks span multiple regions, including Donbas and Zaporizhzhia, forcing Ukraine to spread out its artillery and munitions. Analysts say that the strategy aims to deplete Ukrainian resources and commit their reserves while deteriorating Ukrainian air defenses have allowed Russia to increase air strikes and UAV surveillance. Immediate international support in artillery and air defense supplies is critical to slowing Ukraine's territorial losses and stabilizing the front. Long-term success depends on Ukraine expanding its forces and training new units, again with assistance from international aid. Despite the challenging outlook, timely and robust support from Ukraine's allies can help counter Russia’s advances and allow Ukraine to regain the initiative. RUSI

Russia says it downed 10 Ukraine-launched ATACMS missiles over Crimea. Russia’s defense ministry said on Wednesday that its air forces destroyed 10 long-range ATACMS missiles launched by Ukraine at Crimea.  The ministry did not say if the attack caused damage, but the Russia-installed governor of Sevastopol said missile debris hit residential areas.  Reuters Kyiv Independent

Drones reportedly strike oil depot in Rostov Oblast.  Two drones hit an oil refinery in Russia’s Rostov Oblast Wednesday morning, causing two explosions, according to Governor Vasily Golubev.  He said the attack did not cause a fire and that there were no casualties.  Ukraine has targeted military infrastructure and energy facilities in Russia to undermine Russian military movements and its war economy.  Kyiv Independent

Latvia allocates $11 million to Czech artillery initiative for Ukraine.  Latvian officials say that Latvia’s government is allocating an additional 10 million euros (around $11 million) to the Czech-led initiative to buy up to 1.5 million artillery rounds for Ukraine.  Latvian Defense Minister Andris Spruds said support from Latvia will pay for over 3,000 rounds of 155 mm shells.  Latvia is also part of a drone coalition to get unmanned aerial vehicles to Kyiv.  Kyiv Independent

U.K. won’t force Ukraine into ceding land for peace deal, defense secretary says.  U.K. Defense Secretary Grant Shapps said in a Times Radio interview on Tuesday that the U.K. will never “persuade” or “strong-arm” Ukraine into a peace deal that includes “giving up some of their territory.”  Shapps said, “That’s a decision entirely for Ukraine.”  Shapps’s comments came after the Sunday Times reported that U.K. Foreign Secretary David Cameron personally proposed a peace plan to presumptive Republican presidential candidate Donald Trump that would have “both sides holding their lines” to give the “best possible conditions” for Trump to mediate a peace deal.   Kyiv Independent 

Germany’s Scholz, Nordic leaders urge more Ukraine aid.  German Chancellor Olaf Scholz expressed strong support for Ukraine during a meeting with Nordic leaders in Stockholm on Monday. He emphasized solidarity in countering Russian aggression, underscored by Germany's decision to send a third Patriot air defense system to Ukraine. Scholz emphasized the need for European countries to follow suit in providing more military aid to Ukraine.  Nordic leaders raised concerns about growing security challenges related to Russia and called for operational cooperation to counter threats.  Deutsche Welle 

Ukraine peace plan summit eyes minimal goals to woo skeptical Global South.  The summit on Ukraine’s peace plan to be held near Lucerne, Switzerland in mid-June is focusing on minimal goals to ensure participation from China and other Global South nations. Key topics include nuclear safety, grain exports, prisoner exchanges, and the prohibition of nuclear weapons. German Chancellor Olaf Scholz emphasized that the summit was not meant to negotiate the war's end. Efforts are underway to secure broader support, including engaging diplomats on key United Nations principles. Russia has not been invited, but discussions will consider its future involvement in the peace process. Attendance from non-Western allies remains uncertain. Bloomberg

Ukraine, Russia race to shield battle tanks from exploding drones.  Ukrainian and Russian forces are racing to protect tanks from threats posed by one-way attack drones.  The drones are effective weapons against tanks since they can precisely target weak points and follow tanks into concealed areas.  The U.S. has reportedly requested Ukraine to not use donated Abrams tanks on the front lines until new countermeasures are developed.  Russian tanks have been observed with improvised armor, dubbed "turtle tanks" and "Tsar Mangal," to counter drone attacks, although effectiveness varies. Both sides are employing electronic warfare measures, like multi-frequency jammers, to disrupt enemy drones. Experts say both sides are playing a "constant cat and mouse game" as they develop drone countermeasures.  Defense News 

Ukraine needs money to fight. Can seized Russian assets help? As much as $300 billion in frozen Russian assets in the West has accrued significant interest, prompting discussions on whether to use these funds to support Ukraine's military and reconstruction.  While the United States and Britain have favored confiscations, legal and diplomatic objections have come from countries like France, Germany, Indonesia, Italy, Japan, and Saudi Arabia, as well as from officials like Christine Lagarde, the head of the European Central Bank. A European plan involves using 90% of the interest from these assets to buy arms for Ukraine, with the remaining 10% for reconstruction and nonlethal purchases. An American plan proposes transferring future interest profits upfront to quickly provide substantial aid to Ukraine, potentially bypassing future political delays. Both plans are being debated ahead of next month’s Group of 7 summit in Italy, with differing views on financial responsibility and long-term risks. While outright confiscation remains unlikely, proponents argue it would force Russia to contribute to Ukraine's reconstruction without causing market instability.  New York Times 

Sergei Shoigu’s sacking points to yet more attrition in Ukraine. Russian President Vladimir Putin's dismissal of Sergei Shoigu, Russia’s defense minister for 12 years, and replacement with Andrei Belousov, a economist with no security background, signals a shift in strategy amid the Ukraine war.  Experts say the reshuffle suggests Putin's focus on a long-term war-of-attrition strategy, aiming to outproduce Ukraine and its Western allies in military supplies. Despite Shoigu's dismissal due to inefficiencies and corruption, his reappointment is not expected to affect combat operations. Putin continues to rely on direct communication with top general Valery Gerasimov to make operational decisions.  Economist

Putin Is selling victory, and many Russians are buying it.  Vladimir Putin's narrative that Russia is fighting against the entire Western world and emerging victorious resonates with many Russians. In Moscow, the word "victory" dominates public spaces, from LED screens to exhibits of captured Western weapons. Putin has framed the war in Ukraine as a broader conflict against the West, which he claims Russia is winning. This message has gained traction, particularly after his recent inauguration for a fifth term and the May 9 celebration of Victory Day, which commemorates the Soviet Union's World War II triumph. Despite ongoing economic challenges and casualties, state propaganda has fostered a sense of unity and support for the war, with many Russians accepting the narrative and even expressing confidence in Putin's leadership. The Kremlin's portrayal of Russia as a nation under siege but prevailing has strengthened public support for the government and the military efforts in Ukraine. New York Times

The Americas

China ‘open’ to working with U.S. on illegal migration. China has signaled a potential openness to reviving cooperation with the United States on cracking down on cross-border smuggling and the repatriation of illegal Chinese immigrants. In a statement on Monday, the Chinese Embassy in the U.S. said that China "firmly opposed" illegal immigration and had taken stringent measures, including cracking down "hard" on such crimes and maintaining "high pressure" against smuggling organizations. The Embassy also criticized U.S. media and politicians for "hyping up" the issue of illegal Chinese immigrants in the country and accused them of using it as a "pretext to smear and scapegoat China."  South China Morning Post

Biden's new China tariff wall faces leakage via Mexico and Vietnam. The Biden administration's new tariffs on Chinese electric vehicles and other strategic sectors aim to bolster U.S. manufacturing. However, they may push Chinese production to countries like Mexico and Vietnam to avoid the tariffs. Trade experts warn that without strict measures, Chinese goods will still reach U.S. markets through transshipment. Mexico has surpassed China as the top source of U.S. imports, raising concerns about becoming a hub for Chinese products.  The tariffs could also lead to an increase in Chinese exports to Europe.  Reuters Associated Press

House panel releases defense bill.  The House Armed Services Committee's $883.7 billion annual defense policy bill caps federal spending for fiscal 2025 at 1 percent of the 2024 level, amounting to $874.2 billion.  It authorizes partial funding for a second Virginia-class submarine for the Navy but authorizes 10 fewer F-35 fighter jets than the Air Force requested. It establishes a chief talent management officer to enhance recruitment and retention.  It fends off extensive downsizing of the U.S. nuclear arsenal. It permits the sea-launched cruise missile program to develop a new warhead and conditions retirement of the W76-2 warhead on the status of Russian and Chinese warheads. It requires reports on the impact of a nuclear detonation in space, and on lessons learned from the impact of the coup in Niger on U.S. troops stationed there.  Defense News Defense News 

Space Force should consider alternative launch sites, lawmakers say.  House lawmakers are urging the Defense Department to explore alternative sites for launching space payloads over concerns that the Pentagon’s most in-demand spaceports — Cape Canaveral Space Force Station in Florida and Vandenberg Space Force Base in California — do not have the capacity to meet surging military and commercial needs.  In the House Armed Services Committee’s draft fiscal 2025 defense policy bill, lawmakers are asking Space Force to consider the feasibility of increasing launches at other sites, including Wallops Island in Virginia, Pacific Spaceport Complex in Alaska, and Spaceport America in New Mexico, as soon as 2025.  Lawmakers are also asking what infrastructure investment is needed to process more payloads.  The committee also raised concerns about the vulnerability of Eastern and Western ranges to natural disasters and adversaries in the event of a conflict.  Defense News

U.S. to boost output of bomb designed to hit targets deep underground.  The U.S. military is expanding the McAlester Army Ammunition Plant in Oklahoma to significantly increase production of the 30,000-pound Massive Ordnance Penetrator, a large “bunker-buster” bomb used for penetrating deeply buried targets.  The bomb is often considered in debates about potential attacks on deeply buried nuclear facilities in Iran and North Korea. China also has an advanced underground facility program to protect its military forces.  The expansion plans to at least triple monthly production of the bomb, with completion scheduled for late spring to early fall.  Gen. Frank McKenzie (Ret.), former commander of U.S. Central Command and a Cipher Brief Expert, said the bomb “is a very important weapon” that “ensures that we can target extremely well-protected underground facilities, wherever they are located.”  He added that it “contributes significantly to our ability to achieve deterrence against nations such as Iran.”  Bloomberg 

US imposes sanctions after aborted sale of Russian tycoon stake.  The United States Treasury imposed sanctions on Russian tycoon Oleg Deripaska and three companies for their involvement in a scheme to evade sanctions on Andre Raigorodskiy. Raigorodskiy, is accused of helping Russian entities evade restrictions imposed over the annexation of Crimea.  These measures are part of broader efforts by the U.S. to enforce sanctions against Russia and deter evasion of these measures. Reuters

US Air Force prosecutors seek court-martial for leaker Jack Teixeira.  U.S. Air Force prosecutors are calling for Jack Teixeira, a former U.S. Air Force analyst accused of leaking classified Pentagon documents on a Discord server, to face a trial by court-martial.  The case underscores the military's efforts to address leaks and uphold security protocols amid evolving digital threats.  Reuters ABC Washington Post

U.S. State Department sending international advisors to American cities. The U.S. State Department is launching a new initiative to deploy international advisers, including foreign service officers and mid-to-senior civil servants, to five American cities for a one-year assignment. These advisers will be embedded within mayors' offices to provide guidance on international issues, facilitate connections between local authorities and relevant State Department bureaus, and foster relationships with local business communities. The program hopes to build local capacity for international engagement by connecting city leaders with tangible benefits of foreign policy, such as foreign direct investment opportunities and student exchange programs.  Nikkei Asia 

Venezuela moves troops, builds up military base near Guyana border.  Venezuela's military has reportedly mobilized troops and equipment near Guyana’s Essequibo region, according to the Center for Strategic and International Studies (CSIS). Satellite images from mid-March to late April reveal ongoing construction and expansion of a military base near Anacoco Island, close to the Guyanese border.  CSIS analysts say Venezuelan President Nicolás Maduro may manufacture an “imminent threat of invasion” related to Essequibo to manipulate or postpone upcoming elections, which are scheduled for July 28.  Bloomberg Center for Strategic and International Studies

Asia and Oceania

Taiwan confident on sea drone defense, China dismisses as “meaningless.”  Chinese state media has dismissed Taiwan's plan to develop its own sea drones, aimed at enhancing the island's defensive capabilities, as "meaningless." Taiwan's "Project Rapid & Surprising" envisions the development of uncrewed vessels capable of carrying out kamikaze attacks on warships, inspired by Ukraine's successful use of sea drones against Russian ships in the Black Sea.  A program aired by Chinese state media on May 5th called the project "empty talk on paper" with little practical battlefield utility.  According to Chinese Military Analyst Shao Yongling, the People's Liberation Army would likely neutralize all drone bases in Taiwan before launching any naval operations, rendering the sea drones ineffective.  Taiwan remains steadfast in the drone project as part of the buildup of island defenses.  South China Morning Post

Taiwan, barred from most international organizations, urges WHO to let it attend all meetings.  Taiwan is urging the World Health Organization (WHO) to allow its full participation in all meetings. Currently, Taiwan is only allowed to attend meetings on technical issues, not those involving policy. Taiwan argues that its exclusion hinders global health efforts, especially in light of its successful COVID-19 response. The issue highlights ongoing tensions between Taiwan and China, which claims sovereignty over the island and rejects Taipei’s full participation in international organizations.  Reuters

Filipino activists launch massive flotilla to shoal disputed with China.  A flotilla of approximately 100 fishing boats led by Filipino activists sailed to the  disputed Scarborough Shoal in the South China Sea, where Chinese coast guard and militia ships are accused of using water cannons and ramming maneuvers on Filipino vessels.  The activists are planning a peaceful protest to assert Manila’s sovereignty and protest China’s control over the shoal.  China has positioned and sent coast guard and maritime militia vessels to the shoal to counter the flotilla.  The Philippine Navy and coast guard said they are escorting the civilian Philippine flotilla.  Associated Press

Japan expanding capacity to service U.S. fighter jets. The Japanese Government plans to expand its capacity to service and repair U.S. fighter jets stationed at bases in Japan, including the F-15 and F-16 models, to enhance bilateral defense cooperation in East Asia. This initiative aims to shorten the time and eliminate the cost involved in flying these jets to South Korea for full servicing, which is currently done by Korean Air Lines every few years. The decision to take on the servicing of F-15s and F-16s marks a shift from Japan's previous reluctance to do so and is part of its rethink of national security arrangements. Tokyo's move aligns with the recently finalized Japan-U.S. Defense Industrial Cooperation, Acquisition and Sustainment (DICAS) agreement, which facilitates the full servicing of U.S. military aircraft in Japan.  Nikkei Asia

North Korea laundered $147.5 mln in stolen crypto in March, U.N. says.  According to UN experts, North Korea laundered $1.475 million in stolen cryptocurrency in March.  The stolen cryptocurrency was reportedly laundered through various means, including mixing services and peer-to-peer exchanges. These findings underscore the challenges in regulating cryptocurrency and preventing illicit activities. North Korea's use of stolen cryptocurrency demonstrates its reliance on cybercrime to generate revenue for its weapons programs amidst international sanctions.  Reuters

North Korean leader oversees tactical missile weapons system test.  North Korean leader Kim Jong Un has reportedly overseen a test of a new tactical missile weapons system, according to state media KCNA.  Kim's involvement suggests the strategic importance of the new weapons system to North Korea's defense posture.  The test underscores North Korea's ongoing development of its military capabilities despite international sanctions and diplomatic efforts to denuclearize the Korean peninsula.  Reuters

Europe

DEVELOPING — Slovak PM Fico injured in shooting.. Stay tuned for updates in tomorrow's Open Source Report.  Associated Press

Patrushev made Putin’s aide.  Russian President Vladimir Putin has made Nikolai Patrushev an aide assigned to shipbuilding matters.  The move appears to be a demotion.  Putin gave Patrushev’s old job of secretary of Russia’s Security Council to Sergei Shoigu, who was replaced by Andrei Belousov as defense minister.  Kremlin spokesman Dmitry Peskov said Patrushev’s new position is “of course somewhat of a different nature. But it is absolutely a strategic sphere, huge and very complicated.”  Patrushev’s son, Dmitry Patrushev, has notably been promoted from agriculture minister to deputy prime minister.  Former Kremlin speechwriter Abbas Gallyamov said, “It looks like Putin has decided that by appointing the younger Patrushev as deputy prime minister, he’s fulfilled his obligation and can now with a peaceful mind send off his father to honorable retirement.”  Politico BBC Reuters 

Putin visiting China this week.  Russian President Vladimir Putin will embark on a two-day state visit to China starting Thursday. During the visit, Putin and Chinese leader Xi Jinping are expected to discuss bilateral cooperation across various domains and address international and regional issues of mutual concern, according to the Chinese Foreign Ministry.  The Kremlin confirmed the trip, which will be Putin's first foreign trip since beginning his fifth term as president, saying that it welcomes at Xi's invitation and signals China's ongoing political backing of Russia amid the conflict in Ukraine.  Putin's visit may serve as a test of Xi's risk appetite, as the Russian leader aims to deter Western support for Ukraine.  Associated Press New York Times Financial Times Reuters Reuters 

French, Dutch seek EU sanctions on financial institutions helping Russia military.  France and the Netherlands are urging the European Union (EU) to impose sanctions on financial institutions that provide assistance to the Russian military.  The proposed sanctions target banks and other financial entities that facilitate transactions benefiting the Russian armed forces.  This initiative reflects EU member states' efforts to strengthen their response to Russian aggression and maintain pressure on Moscow amid its invasion of Ukraine.  Reuters Kyiv Independent

Russia recruits ‘misfits’ to spy on the West. The Wall Street Journal reports that Russia is recruiting unconventional individuals, including criminals and those with mental health issues, to spy on the West. This strategy aims to bypass traditional security measures. Russian intelligence agencies allegedly target individuals who are easily manipulated or have access to sensitive information. The recruitment of such "misfits" raises concerns about the effectiveness of Western counterintelligence efforts and underscores Russia's willingness to use unconventional means to gather intelligence and advance its geopolitical objectives.  Wall Street Journal

Moldova, E.U. to sign security pact.  Moldova is set to sign a security pact with the European Union (EU) aimed at bolstering defense cooperation and countering security threats. The agreement, to be signed in Brussels, signifies Moldova's commitment to closer ties with the EU amid threats from Russia. The pact includes provisions for military assistance, intelligence sharing, and joint exercises. This development underscores the EU's role in promoting security and stability and fostering closer ties in Eastern Europe.  Financial Times Kyiv Independent 

U.K. summons Chinese ambassador for reprimand amid rising tensions.  The U.K. summoned Chinese Ambassador Zheng Zeguang to protest against alleged cyberattacks, human rights abuses, and spying activities. This move comes after U.K. authorities charged three individuals for allegedly assisting Hong Kong intelligence. The U.K.'s reprimand highlights concerns about China's actions undermining global stability and violating international norms. This diplomatic confrontation reflects broader unease over China's assertive behavior and its impact on bilateral relations.  New York Times BBC Politico 

U.K. picks companies for billion-dollar hypersonic missile program.  The U.K. selected several companies, including MBDA UK Ltd, QinetiQ Group PLC, and others, to participate in a billion-dollar hypersonic missile program. This program aims to develop cutting-edge hypersonic missile technology for the British armed forces. The chosen companies will collaborate to design and manufacture these advanced missiles. The U.K.'s investment in hypersonic missiles reflects its commitment to modernizing its military capabilities and maintaining a competitive edge in defense technology.  Bloomberg

U.K. charges 2 men accused of plotting Islamic State-inspired attack against Jews in England. U.K. authorities charged two men for allegedly plotting an ISIS-style attack against the Jewish community in England.  The men allegedly planned to use firearms and explosives in the attack on Jewish communities and religious institutions.  Authorities arrested the suspects following an extensive investigation into their activities. The plot underscores ongoing concerns about terrorism and rising antisemitic and anti-Muslim threats amid the Israel-Hamas war.  Associated Press Times of Israel Jerusalem Post BBC

Middle East

Jordan foils Iran-backed arms plot.  Jordan has reportedly thwarted a suspected Iranian-led plot to smuggle weapons into the country for opponents of the ruling monarchy to commit acts of sabotage. The weapons, reportedly sent by Iranian-backed militias in Syria, were seized from a cell of the Muslim Brotherhood in Jordan that has links to Hamas.  Sources say the sabotage plot aimed to destabilize Jordan, a key U.S. ally in the region hosting a military base and sharing borders with Israel, Syria, and Iraq.  The King of Jordan faces challenges in balancing support for Palestinians with maintaining relations with the U.S. and Israel, all while countering influence from Tehran.  Reuters

Terrorist groups suspected of funneling money to Dubai real estate.  A joint investigation by 74 media organizations across 58 countries has uncovered that numerous individuals linked to groups targeted by U.S. sanctions as terrorist organizations, such as Hezbollah and Houthi rebels, appear to have purchased real estate in Dubai. The findings, based on data relating to hundreds of thousands of properties obtained by the Center for Advanced Defense Studies, point to a potential hole in sanctions aimed at curbing terrorist financing. Among those listed in the property data are real estate developer and alleged Hezbollah member Adham Tabaja, Qatari-based funder Ali al-Banai, believed to be part of an international network financing Hezbollah's operations, and Ali Osseiran, who was sanctioned for allegedly facilitating money laundering for Hezbollah through art businesses.   Nikkei Asia

UK seeks closer Saudi ties with 450-strong business delegation. The U.K. and Saudi Arabia hosted a joint summit in Riyadh on Tuesday, aimed at strengthening economic ties between the two countries as negotiations continue for a broader trade deal between Britain and the Gulf states. The two-day summit saw the participation of more than 450 British businesses , including executives from firms like HSBC Holdings Plc and British Airways Plc, described as the largest business delegation in over a decade. The U.K. is hoping to leverage its diplomatic relationship with Saudi Arabia to win business for British companies, while also attracting investment back in Britain, with a particular focus on AI.  Bloomberg 

Africa

Kenya rallies police officers for Haiti deployment.  Kenya is preparing to send a contingent of police officers to Haiti as part of a U.N.-backed peacekeeping mission. The deployment aims to support efforts to stabilize Haiti amid rampant gang violence. Kenyan police officers are expected to assist in maintaining law and order, as well as providing security during the upcoming presidential elections in Haiti.  New York Times The Cipher Brief

THE CYBER AND TECH RUNDOWN

U.S. and U.K. warns of china cyber threat, Russia intelligence links to hacktivists.  U.S. and U.K. officials are warning about the growing cyber threat posed by China.  Anne Keast-Butler, director of signals and cyber intelligence agency GCHQ, stated that China poses a "genuine and increasing cyber risk to the U.K.," and that responding to Beijing's activities is GCHQ's top priority.  U.S. National Cyber Director Harry Coker likewise warned that Chinese military hackers are circumventing U.S. cyber defenses and targeting U.S. interests at an “unprecedented scale.”  He warned that in the event of a conflict, “China could use their pre-positioned cyber capabilities to wreak havoc in civilian infrastructure and deter U.S. military action.”

Keast-Butler also warned that British officials are “increasingly concerned about the growing links between the Russian intelligence services and proxy groups to conduct cyberattacks.”  Keast-Butler said that there has been an alarming shift in the relationship between Russian intelligence and cybercriminals and hacktivists, noting that “before, Russia simply created the right environments for these groups to operate, but now they are nurturing and inspiring” them.  Her comments come after Britain took measures against Russian intelligence operations, including arrests of individuals accused of working on behalf of Russian spies.  The Record Reuters The Cipher Brief

Southeast Asia scammers steal $64 billion annually. A new research report found that online fraud operations in Southeast Asia, driven by organized scamming syndicates, are netting an estimated $64 billion annually on a global scale. In Cambodia, Laos, and Myanmar alone, these criminal groups are stealing around $43.8 billion each year through scams, accounting for approximately 40% of the three nations' combined formal GDP. A common scam tactic employed is known as "pig butchering," where potential victims are approached on messaging platforms or dating apps, and scammers develop relationships with them before eventually convincing them to make fraudulent investments that are siphoned off by the criminals. The report says that the scams resulted in losses of around $3.5 billion in the U.S., $413 million in Canada, and over $750 million in Malaysia last year.  The Record 

TSMC says ASML’s top chip machines too expensive.  ASML Holding NV's latest advanced chip manufacturing machines, known as high-NA extreme ultraviolet (EUV), come with a daunting price tag, according to Taiwan Semiconductor Manufacturing Co. (TSMC), one of ASML's major clients.  Kevin Zhang, Senior Vice President at TSMC, expressed appreciation for the high-NA EUV's capabilities but criticized its exorbitant cost, stating, "I like the high-NA EUV's capability, but I don't like the sticker price." These state-of-the-art machines can imprint semiconductors with lines as thin as 8 nanometers, 1.7 times smaller than the previous generation, but each machine costs $380 million and weighs as much as two Airbus A320s. While Intel has already placed orders for the high-NA EUV machines, with the first one shipped to Oregon in late December, TSMC has not yet committed to purchasing the equipment, as Zhang stated their upcoming A16 node technology can rely on TSMC's existing EUV capability. Zhang acknowledged that adopting ASML's high-NA EUV technology would depend on economic feasibility and achieving a technical balance, but he declined to comment on when TSMC might start ordering the machines, reflecting the rising costs and complexity of advanced chip making.  Bloomberg 

Chinese firms make headway in producing high bandwidth memory for AI chipsets. Chinese firms are making progress in producing high-bandwidth memory (HBM) AI chipsets. These chipsets are crucial for powering artificial intelligence applications and require advanced manufacturing capabilities.  This development highlights China's ambitions to become a leader in semiconductor technology and reduce reliance on foreign suppliers.  Reuters

FCC designates first robocall threat actor.  The Federal Communications Commission (FCC) has coined "Royal Tiger" as the first “robocall threat actor” for making fraudulent robocalls across international networks.  According to the FCC, Royal Tiger has been engaging in deceptive robocall campaigns impersonating government agencies, banks, and utility companies, as well as offering fake credit card interest rate reductions and soliciting unauthorized purchase authorizations.  The group operates in India, the U.K., the United Arab Emirates, and the U.S.  The group’s leader, Prince Jashvantlal Anand, runs three U.S.-based robocall companies.  Despite being the target of several enforcement actions by the FCC, the Federal Trade Commission, and law enforcement agencies, Royal Tiger has persistently defrauded consumers through illegal robocalls.  It is the first group targeted through the FCC’s new threat analysis and designation system.  The FCC's new Consumer Communications Information Services Threat (C-CIST) classification aims to help the agency track shadowy entities in the robocall ecosystem, streamline information sharing with partner agencies, communicate threats to industry, and identify known threats before they reach U.S. networks.  The Record Bleeping Computer SC Magazine

Rheinmetall civil unit hit by cyberattack that cost $10 million.  Rheinmetall, a German arms manufacturer that sends arms to Ukraine, suffered a cyberattack on its civil unit in April last year, costing the company $10.80 million. Chief Financial Officer Dagmar Steinert's said that the company is exposed to numerous cyberattacks on a daily basis and is typically able to fend off most of them.  Reuters 

ANALYSIS — Tech companies flock to Middle East. Tech founders and investors are increasingly pursuing deals with the sovereign wealth funds of Persian Gulf states, driven by the costly ambition of the AI arms race and attracted by the abundant capital available in the region.  This shift is exemplified by Microsoft's recent $1.5 billion investment in G42, the UAE's flagship tech firm, and Andreessen Horowitz's talks to raise $40 billion from Saudi Arabia for a dedicated AI fund.  While some tech entrepreneurs and venture firms previously shunned Middle Eastern funding due to concerns over human rights abuses and industry disdain for "dumb money" from oil states, the region's financial might has become a powerful geopolitical force in the tech industry.  The U.S. government is steering this shift, using the tech industry to push the region away from China's orbit and focusing particularly on the UAE, a key security partner, with the White House facilitating meetings between tech executives and Emirati officials. However, concerns remain among some tech executives and security researchers about working with countries that commit human rights abuses and could potentially use American technologies for surveillance, including targeting U.S. citizens.  Washington Post 

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