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Wednesday, May 31, 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

U.S. Sanctions Syrian Businesses Linked to Assad Regime, Partners.  The U.S. on Tuesday imposed sanctions on two Syrian money exchange companies and three affiliated individuals that have secretly supported Syrian President Bashar al-Assad’s regime and its partners, including Hezbollah and Iran’s Islamic Revolutionary Guard Corps-Quds Force.  The U.S. Treasury Department said the sanctions deny Assad’s regime and its regional partners from financial resources they need; the designations freeze any U.S.-based assets owned by the targeted entities and individuals and prohibits Americans from doing business with them.  The latest move marks the second time the Biden administration has issued new Syria-related sanctions under the Caesar Act.  U.S. Department of State U.S. Department of the Treasury

U.S. Sanctions China, Mexico Individuals Over Fentanyl-Laced Pill Production.  The U.S. Treasury Department on Tuesday imposed sanctions on 17 individuals and entities in Mexico and China that are allegedly involved in the manufacturing of fentanyl-laced pills. The Treasury Department said that those sanctioned linked to the sale of equipment used to “impress counterfeit trade markings of legitimate pharmaceuticals onto illicitly produced pills” which are often laced with fentanyl and intended for U.S. markets.  Under Secretary of the Treasury for Terrorism and Financial Intelligence Brian Nelson emphasized that the latest sanctions “target every stage of the deadly supply chain” for fentanyl.  Secretary of State Antony Blinken confirmed that the sanctions against three individuals and one entity in Mexico were arranged in coordination with the Mexican government, adding that the measures target specific criminal individuals and entities, “not specific countries.”  The Hill U.S. Department of the Treasury

White House Dealing With Increase in AI Deep Fakes.  The White House press shop is increasingly dealing with images and videos altered with artificial intelligence (AI).  A fake image of a bombing at the Pentagon and doctored footage of a purported call between an anti-Kremlin activist and former Ukrainian president calling for the easing of sanctions on Russia are two of many recent deep fakes the White House has had to review and deny.  Administration officials say the White House and other media outlets are having to invest more resources into managing potential misinformation from AI, underscoring calls by experts for greater regulation of AI to counter abuses of the technology.  Politico

NASA’s UFO Panel Holding First Public Meeting.  A new NASA panel tasked with studying “unidentified aerial phenomena” (UAP), more commonly known as UFOs, is holding its first public session on Wednesday to hold final discussions before it publishes a report in the coming weeks.  The panel is the first set up under the U.S. space agency to investigate UAPs and is separate from a new formalized Pentagon-based inquiry into the phenomena.  Reuters

House to Vote on Debt Ceiling Suspension. In what amounts to a nearly-last-hour negotiation, President Joe Biden and House Speaker Kevin McCarthy’s deal to raise the $31.4 trillion U.S. debt ceiling advanced to the full House of Representatives for an expected vote on Wednesday. If passed, the bill will be sent to the Senate, just days ahead of a June 5th deadline, when the Treasury Department is set to historically run out of funds. Reuters

Colombia, Venezuela to Cooperate on Finding Remains of Victims Killed by Paramilitaries.  Colombia President Gustavo Petro said on Tuesday that Venezuela and Colombia have committed to searching for the bodies of Colombian victims killed by paramilitary forces and allegedly buried in Venezuela during Colombia’s nearly-six-decade long internal conflict. The agreement came after recent admissions by former paramilitary leader Salvatore Mancuso of involvement in secret burials during the conflict. Hundreds of thousands of people have died in fighting between Colombian paramilitaries and government troops. Reuters

Mexico Highway Shootout Kills 10.  Mexican officials reported Monday that a shootout on a north Mexican highway left four officers wounded and ten alleged criminals dead.  Police said the officers were assaulted on the Monterrey-Nuevo Laredo highway on Monday afternoon and killed 10 “heavily armed suspected criminals.” Authorities confiscated three armored trucks, a hundred pieces of ammunition and 12 large-caliber weapons after the shootout.  Reuters

Western Europe

Blinken Urges Turkey to Back Sweden’s NATO Membership Bid.  U.S. Secretary of State Antony Blinken on Tuesday urged Turkey to approve Sweden’s application to join NATO, saying “the time is now” for the Nordic country’s accession into the alliance.  Speaking in Sweden alongside Swedish Prime Minister Ulf Kristersson, Blinken said that Sweden is qualified to join NATO and that it has taken steps to address Turkey’s “legitimate” security concerns, which have kept it from backing Sweden’s membership. Hungary and Turkey are the only NATO members who have yet to ratify Sweden’s accession.  Ankara resists Sweden’s membership over concerns that the country harbors members of groups that Turkey deems terrorist organizations — Turkey says that Sweden has not held up its part of a deal agreed in last June about the groups.  Blinken added that the F-16 request should be separated from the Sweden’s NATO bid, though he acknowledged some U.S. lawmakers do link the issues together; chairman of the Senate Foreign Relations Committee, Bob Menendez, told reporters on Tuesday that he will continue to oppose the F-16 transfer unless Turkey becomes “less belligerent” towards NATO allies.  Al Jazeera Reuters The Cipher Brief

NATO Assessing Ukraine’s Status in Alliance.  NATO foreign ministers are gathering for an informal meeting in Oslo, Norway to discuss Ukraine’s future with the alliance.  Ukraine has long sought to join NATO and both sides want to upgrade Kyiv’s relationship with the alliance, but NATO cannot grant Ukraine membership now without being dragged into a direct war with Russia.  Several former Soviet bloc NATO members have called for formal pledges such as a pathway or timetable for Ukraine’s membership in the alliance.  Others have suggested that the current NATO-Ukraine Commission be upgraded into a “NATO-Ukraine Council” where Kyiv would become an equal partner at a higher level of dialogue with the alliance.  Ukrainian officials have also suggested NATO members could offer individual security commitments to Ukraine, similar to promises given to Israel.  NATO leaders like the US, France and Germany have continually stated their commitment to NATO’s “open door” policy that allows Ukraine’s eventual accession, but they have not moved closer to any formal promises, with experts saying they are balancing Kyiv’s NATO aspirations with domestic political demands and the desire not to completely isolate Russia in the future.  Deutsche Welle

Moldova Hosting European Leaders for Major Summit.  More than 40 European leaders, including the EU's 27 member states and 20 other European nations, are meeting in Moldova on Thursday in a symbolic display of unity. The summit is the second meeting of the European Political Community and will offer participants the chance to discuss issues including regional migration, cybersecurity, and energy security, as well as the violence in Kosovo, tensions between Azerbaijan and Armenia, and the Ukraine war.  Moldova, which applied to join the EU last year, says it hopes to use the summit to showcase reforms it has undertaken in a bid to encourage EU leaders to start talks for Moldova’s accession into the bloc.  Moldovan President Maia Sandu’s foreign policy advisor, Olga Rosca, said the summit is “the biggest foreign policy event Moldova has ever hosted” and asserted that “it's our way of anchoring our future in Europe and in the EU.”  Reuters Kyiv Post

Germany Orders Closure of Four of Russia’s Five Consulates.  Germany is revoking the licenses of four of five Russian consulates in the country in response to Russia’s decision to limit the number of German diplomats in Russia to 350.  The German foreign ministry said Russia will only be allowed to continue operations at its embassy in Berlin and one consulate in Germany and that all other consulates must cease operations by the end of the year.  At the same time, Germany will only keep the Germany embassy in Moscow and its consulate in St. Petersburg in operation, closing its consulates in Kaliningrad, Yekaterinburg and Novosibirsk.  The moves mark a downgrade in bilateral ties between Germany and Russia amid wider tensions since the start of the Ukraine war.  Deutsche Welle Reuters

Central and Eastern Europe

Ukraine, Allies Planning Peace Summit Without Russia.  Ukraine and its allies are reportedly planning a peace summit that will not include Russia to bolster support for ending the Ukraine war on Kyiv’s terms.  Andriy Yermak, a senior Ukrainian presidential aide, told the Wall Street Journal about plans for the gathering, which aims to recraft the Ukrainian peace plan in a way that will be more acceptable to countries who have sided with Russia or remained neutral in the conflict, including India, Brazil, Saudi Arabia and China.  Yermak said the peace process cannot happen without the “whole world, including the leaders of the global south.”  He also reiterated that Ukraine will not negotiate with Russia as long as Russian troops remain on Ukrainian territory.  Sources say that NATO leaders, such as French President Emmanuel Macron, who reportedly called for such a conference, are open to the meeting and that Western diplomats hope it will take place before NATO’s annual summit in July.  Officials involved with the negotiations say they are hopeful that Saudi Arabia’s Crown Prince Mohammed bin Salman and Indian Prime Minister Narendra Modi will attend, though it is uncertain if Chinese President Xi Jinping would show up.  Experts say the meeting would place Ukraine and its allies back to the center of international diplomacy aimed at ending the Ukraine war — an effort that countries closer to Moscow have sought to take the lead on.  Wall Street Journal

Putin Says Moscow Drone Attack Was Ukrainian Scare Tactic.  Russian President Vladimir Putin said that Tuesday’s drone attack against Moscow was an attempt by Ukraine to “frighten” Russians.  Putin said that the attack, which came as Russia launched drone and missile strikes on Kyiv, was a Ukrainian “response” to a Russian strike on Ukraine’s army intelligence headquarters, though he did not provide evidence for this claim.  He added that Moscow’s air defenses adequately dealt with the attack, which he called “terrorist activity” that is aimed at “provoking” Russia to respond in kind.  Russia’s defense ministry said the Moscow drone attack involved eight drones that were all intercepted and caused only minor damage in a western district of Moscow, where some top Russian officials live.  The head of Russia’s Wagner Group, Yevgeny Prigozhin, has blamed the attack on the officials who live in the area.  Ukraine maintains that it was not involved in the attack.  BBC South China Morning Post The Hill

Russia Reports Towns Shelled, Oil Refineries Hit by Drones.  Russia says Ukrainian artillery hit the Russian town of Shebekino on Wednesday, injuring four people and damaging residential areas.  Regional officials said Ukrainian strikes hit the town previously on Monday and Saturday.  Elsewhere, Russian-installed officials in Ukraine’s eastern Luhansk region said Ukraine launched U.S.-made HIMARS rockets on a farm in Karpaty village on Tuesday night, killing five people and wounding 19. Meanwhile, Russian officials reported that drones attacked two oil refineries – the Afipsky refinery and the Ilsky refinery – within 50 miles of the Black Sea port of Novorossiisk, a major oil export terminal, in Russia’s southwestern Krasnodar region.  Fires reportedly broke out at both terminals.  Moscow did not say who was responsible for the alleged drone attacks.  Russian officials also reported 10 drones were shot down while attacking Russia’s Bryansk region, and Kremlin spokesman Dmitry Peskov said the situation in Russia’s Belgorod border region is “rather alarming” as there is allegedly continued shelling there.  CNN Reuters

Russia, Ukraine Fail to Implement IAEA Deal on Zaporizhzhia Nuclear Plant.  Neither Russia nor Ukraine have committed to following the IAEA’s five principles aimed at protecting the Russian-occupied Zaporizhzhia nuclear power plant.  IAEA chief Rafael Grossi laid out the principles to the UN Security Council on Tuesday, which include an understanding that there should be no attacks on the plant and that there should be no heavy weaponry or military personnel housed at the plant.  Grossi said these principles aim to prevent fighting in or around the plant that could damage the facility and cause a nuclear disaster.  He added that the IAEA will increase monitoring of the plant to track violations of these principles.  Russia’s UN Ambassador Vassily Nebenzia maintains that Russia has “already been implementing” such principles at the plant, while Ukraine’s UN Ambassador Sergiy Kyslytsya said that the principles must also include a demand for the “full demilitarization and de-occupation” of the plant.  Fighting continues around the facility and has consistently disrupted its power supply and staffing.  New York Times Reuters 

Poland Buys 800 Hellfire Missiles from U.S.  Poland has bought 800 Hellfire II missiles from the U.S. in a $150 million deal.  The missiles will be delivered starting this year and through 2029 and are meant to arm Poland’s 32 new AW149 support helicopters and, eventually, 96 AH-64E Apache Guardian attack helicopters, which Warsaw has requested to purchase.  Defense News

As Unrest Grows in Kosovo, NATO Expected to Deploy More Troops.  NATO Secretary-General Jens Stolteberg announced that the alliance is deploying 700 more peacekeeping troops to Kosovo and has placed another battalion on high alert amid escalating violence in northern Kosovo, where Serbs are protesting the election of ethnic Albanian mayors.  Clashes at town halls in the region have injured around 30 NATO soldiers and around 50 Serb protesters.  Serbia has placed its army on full combat alert and continues to move more troops closer to its border with Kosovo.  Serbian President Aleksandar Vucic reportedly told Western countries that he wants the Albanian mayors in north Kosovo removed from office, but Kosovo Prime Minister Albin Kurti said Wednesday that he will not take such action and blamed Serbian-backed gangs for the unrest in the region.  Bloomberg Reuters Yahoo Associated Press

Asia and Oceania

Chinese Fighter Jet Buzzes U.S. Surveillance Plane Over South China Sea.  The U.S. military has released footage of a Chinese J-16 fighter jet darting in front of a U.S. Air Force RC-135 surveillance plane on Friday.  The Pentagon said the Chinese J-16 aircraft’s “unnecessarily aggressive” maneuver forced the American RC-135 plane to fly in its wake turbulence.  U.S. Indo-Pacific Command said the U.S. will “continue to “fly, sail, and operate — safely and responsibly — wherever international law allows” and that American aircraft will fly in the Indo-Pacific region in accordance with international law.  China’s military said the US spy plane “deliberately intruded” into a training area for Chinese aircraft, and China’s foreign ministry rejected US accusations that the Chinese jet flew recklessly, saying that the US is the one posing a “serious danger” by deploying reconnaissance aircraft and vessels in the region.  CNN Politico Reuters

North Korea Satellite Launch Fails.  North Korea launched a rocket meant to place its first military spy satellite into orbit on Wednesday, but the launch failed, sending the booster and its payload into waters west of the Korean peninsula.  North Korean state media confirmed the failure of the “Chollima-1” satellite launch, reporting that it was caused by instability in the rocket’s engine and fuel system.  Pyongyang said it will investigate these “serious defects” and conduct a second launch in the coming days.  South Korea’s military says it has recovered some debris from the crashed rocket.  The launch prompted alerts and brief evacuation warnings in Seoul and Okinawa that were later withdrawn.  The White House and UN Secretary-General Antonio Guterres condemned the launch, which violated Security Council resolutions prohibiting Pyongyang from conducting any launch using ballistic missile technology.  Japan likewise lodged a complaint to North Korea through diplomatic channels in Beijing.  Al Jazeera BBC The Hill New York Times Reuters 

South Korea to Increase Aid and Collaborate More with Pacific Islands.  South Korea on Tuesday committed to increasing aid and bolstering security cooperation with Pacific island nations at the end of the Korea-Pacific Islands Summit in Seoul.  South Korea specifically pledged that it will double development assistance to Pacific Islands over the next four years and support the preservation of maritime zones in the region.  In the last week, Pacific Island leaders have met with the US, India, and South Korea, underscoring international interest in the Pacific Island nations and growing concern amongst Western countries about China’s influence over them.  Reuters

Middle East and Northern Africa

Qatar Prime Minister, Taliban Chief Hold Secret Talks.  Qatari Prime Minister Mohammed bin Abdulrahman al-Thani held secret talks with Taliban supreme leader Haibatullah Akhunzada on resolving tensions between Taliban-ruled Afghanistan and the international community.  Sources say Sheikh Mohammed discussed the humanitarian crisis in Afghanistan and the Taliban’s efforts to counter a local Islamic State affiliate.  Sources added that Sheikh Mohammed also raised the need to end the Taliban’s ban on Afghan girls’ education and women’s employment.  The meeting suggests the Afghan Taliban is open to taking steps that will end its isolation and increase the flow of international aid and relief.  The Biden administration said it is aware of the talks and is “coordinating on all issues discussed,” including continuing and expanding dialogue with the Taliban.  Reuters

Sub Saharan Africa

Fighting Continues in Sudan Despite Extended Ceasefire.  Fierce battles in Khartoum and other cities between Sudan’s army and paramilitary Rapid Support Forces continued into Tuesday, despite an agreement to extend a ceasefire by five days. The United States and Saudi Arabia, who negotiated the deal to extend the pause in fighting in order to provide humanitarian aid, say the armistice has been breached by both sides. In a rare video message, Sudan’s General Abdel Fattah al-Burhan said that the army had accepted the ceasefire to allow Sudanese citizens access to necessary service, though he also warned that his “army hasn’t used its full deadly power [and] it will be forced to do so if the enemy does not obey or listen to the voice of reason.”  Al Jazeera Reuters

South Africa to Allow Putin to Attend BRICS Summit Despite ICC Arrest Warrant.  South Africa will allow Russian President Vladimir Putin to attend a BRICS summit in Cape Town in August despite the International Criminal Court (ICC) having issued a warrant for his arrest.  Putin will be allowed to attend as South Africa has issued diplomatic immunity to all officials participating in the summit, a move that the South African foreign ministry said is “standard” at all such international events.  Despite this, South Africa may still be legally obligated to arrest Putin as the country is a signatory to the ICC.  South Africa’s main opposition party, the Democratic Alliance (DA), said it has taken legal action to try and force the government to carry out the ICC’s arrest warrant and detain Putin if he visits.  Kremlin spokesman Dmitry Peskov said Russia will participate in the summit at the “proper level” and hopes South Africa and other partners will not be guided by “illegal decisions” like implementing the arrest warrant for Putin.  The ICC issued an arrest warrant for Putin in March over his links to the alleged forced deportation of Ukrainian children in Russian-occupied territory in Ukraine.  CNN Politico Reuters

Cyber and Tech

Russian Bureaucracy, Changing Tactics Erode Moscow’s One-Time Edge in Drone Warfare.  A new study out from the Center for Naval Analyses (CNA) argues that the decisive advantage Russia boasted in drone warfare in its 2014 campaign in Ukraine has changed dramatically.  While Ukraine has made critical use of UAV’s in its reconnaissance and aerial strike missions, Russia has failed to adapt and match Kyiv’s battlefield success.  The CNA report credits Western aid, skillful reuse of off-the-shelf technology, and grassroots innovation for Ukraine’s comparative advantage.  Russia, on the other hand, has lagged behind, bogged down by a defense ministry that is slow-moving and cumbersome, requiring “a long while to move in the right direction.”  Samuel Bendett, a co-author of the report, cited other reasons for the shift, including that the technology environment itself has changed, with the easy availability of large numbers of “easy and affordable to acquire commercial-type quadcopters.”  While Russian forces, when adequately equipped and trained, have made effective use of drones, the availability of drone systems has been hit hard by the intensity of combat since Russia’s invasion began in February 2022.   According to CNA, Russian drone manufacturers have not been slow to resupply Moscow’s forces with military models or with commercial versions adapted to battlefield use.  Western technology and component sanctions have hurt Russian efforts to keep pace with demand, which has been exacerbated by “poor coordination” among Russia’s domestic producers.  BreakingDefense

U.S.-EU Trade & Technology Forum Opens in Sweden with AI, China Trade on Agenda. U.S. and European representatives to the EU-U.S. Trade and Technology Council (TTC) opened a meeting in Sweden Tuesday with an agenda that focuses on artificial intelligence, data transfers, technology supply chains, and trade with China.  The group’s meeting last year was hampered by a transatlantic disagreement over U.S. subsidies to the clean-tech sector.  Expectations for the current meeting center on addressing key concerns such as international data transfers and easing barriers to market entry on both sides of the Atlantic.  Business organizations, including the U.S. Chamber of Commerce, have stressed the importance of reaching agreement on transatlantic data transfers, which would create the framework for personal data exchanges from Europe to the U.S.  A previous deal was scuttled due to European privacy. concerns.  A number of leaders will participate in the TTC forum, including Secretary of State Antony Blinken and European Commission Vice President Margrethe Vestager.  A draft joint statement on the meeting indicated that work toward establishing minimum standards for generative AI algorithms will be a key topic of discussion.  Export controls and investment monitoring, which previously focused on Russia, will also be featured in the agenda alongside trade relations with China.  Reuters Wall Street Journal 

Xi Jinping Calls for Overhaul of Technology Education to Achieve S&T ‘Self-Reliance.’ Speaking before a Politburo study session, Chinese leader Xi Jinping has called for improvements in China’s technology education programs and for enhancements that will attract more foreign students.  China’s party congress last October advocated approaches that would promote the country’s S&T talent pool and would remove obstacles to the development of the tech sector, especially in semiconductor and chip development.  Following up on those endorsements, Xi described educational programs as a “strategic precursor” for attaining self-sufficiency in S&T areas.  Xi underscored student understanding and commitment to socialist values and to the country’s success.  He called for enhanced oversight of textbooks in order to establish correct political direction in the education system.  System priorities, Xi said, include accelerating the development of “world class universities” and advancing cross-discipline research to meet China’s “major national strategic needs.”  Looking beyond China’s borders, Xi emphasized the need to improve the appeal of Chinese educational opportunities to foreign students to strike a balance in the outflow of Chinese students studying abroad.  Xi said China must be an active participant in global education and “vigorously promote the ‘study in China’ brand, tell better stories about China, spread China’s experience and make our voices heard.”  South China Morning Post

State Dept. Official Illustrates Surveillance Law Value with North Korea Cyber Crimes. Speaking at an event organized by the Center for Strategic and International Studies (CSIS), Brett Holmgren, a State Department intelligence official, said Section 702 surveillance authority was critical to the department’s understanding of North Korea’s digital fraud operations, which generated revenue for Pyongyang’s nuclear program.  Holmgren joins other administration officials in advocating for renewal of the controversial program as he shed light on how it aids U.S. diplomatic efforts, including keeping key partners informed of important developments.  Holmgren, who serves as assistant secretary of the State Bureau of Intelligence and Research, told the CSIS audience that reporting derived from Section 702 authorities provides analysts with unique information on “foreign influence and cyber threats” involving Russia, China, Iran, and North Korea.  Holmgren also noted the law’s usefulness in uncovering and documenting human rights violations, citing Section 702 intelligence used in 2021 to confront a Middle Eastern state that was surveilling and tracking dissidents abroad.  He said the law also has helped the department to monitor “Russian atrocities” in Ukraine.  CyberScoop

French Digital Minister Joins EU Warning to Twitter if Content Rules Not Followed. French Digital Minister Jean-Noel Barrot repeated a warning to Twitter that it would be banned from operating in Europe if it did not follow the EU’s digital content rules.  Twitter received a similar message last week from Thierry Breton, the EU’s Internal Markets Commissioner.  Speaking on French radio, Barrot explained that "disinformation is one of the gravest threats weighing on our democracies."  Consequently, “Twitter, if it repeatedly doesn’t follow” rules set out by the European Digital Services Act, would be banned from the EU.  At the moment, a number of social media platforms are abiding by a voluntary “code of practice” that outlaws disinformation and anticipates measures that will become mandatory under the incoming Digital Services Act.  Politico

Italy Plans AI Fund for Startups to Promote ‘National Capacity’ and Independence. Italy’s state lending agency, Cassa Depositi e Prestiti (CDP), is planning to back an Italian government investment fund to provide resources for startup companies investing in artificial intelligence.  The fund will support initiatives pursuing “study, research, and programming” in the AI sector.  An Italian cabinet official confirmed the government is seeking out opportunities to promote AI R&D while noting it is “an area where a balance must be struck between human rights and technological evolution.”  Cabinet undersecretary Alessio Butti said the government seeks to expand Italy’s “national capacity” and independence in research and development in the strategic sector.  The government plans to invest $165 million in the startup fund and CDP is expected to contribute its own resources through its venture capital arm.  Reuters

Israel’s NSO Group Under New Ownership Following U.S. Blacklisting. New owners have taken control of the NSO Group, the manufacturer of Pegasus spyware that was blacklisted by the U.S. for its sale of hacking tools to authoritarian governments.  The company’s creditors compelled the cybersecurity company to change leadership when they foreclosed on Northpole, NSO’s parent company, and worked with an NSO co-founder to bring about a change in leadership.  NSO’s lenders reportedly believe the software manufacturer has intellectual property that merits its continued operation and have held off declaring a default on loans by the company.  Court filings indicate that a number of directors and officers across the NSO corporate umbrella have been fired.  Wall Street Journal

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