April 20, 2023

The Kharon Readbook highlights the week's most important stories on risk, compliance, sanctions, and export controls.

UPCOMING EVENTS

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MEDIA ROUNDUP

SANCTIONS        

The U.S. Department of the Treasury targeted an individual and six entities in a sanctions evasion network that has facilitated?Iran’s?procurement of electronic components for its destabilizing military programs, including those used in unmanned aerial vehicles. [U.S. Treasury]

Three Nicaraguan judicial officials were designated by the U.S. Treasury for their involvement in human rights abuses conducted by the regime of?Nicaraguan?President Daniel Ortega and the broader oppression of Nicaraguan citizens who oppose his government. [U.S. Treasury]

The U.S. Department of the Treasury unveiled sanctions on a vast international money laundering and sanctions evasion network over the payment and shipment of cash, precious gems, and luxury goods for the benefit of a?Hizballah?financier.?[U.S. Treasury]?

Two entities in?China?and five individuals, based in China and?Guatemala, were targeted by the U.S. Treasury for supplying precursor chemicals to?drug cartels in Mexico?for the production of illicit fentanyl intended for U.S. markets.?[U.S. Treasury]

The Biden administration is readying plans to roll out new sanctions on members of rival military factions in?Sudan, as a power struggle between two rival generals erupted into a full-scale conflict across the capital of Khartoum in recent days. [FP]

Germany is pushing for the European Union to include the civilian nuclear sector in the bloc's new sanctions package against?Russia, the Economy Ministry said.?[Reuters]

The chief of the U.S. Justice Department unit charged with seizing assets connected to violators of sanctions against?Russia?said the program “cuts the purse strings from the Kremlin,” and that Congress could help it do more.?[Bloomberg]

The U.S. Treasury issued an alert to warn U.S. persons about possible evasion of the price cap on crude oil of?Russian?origin, particularly involving oil exported through the Eastern Siberia Pacific Ocean (ESPO) pipeline and ports on the eastern coast of Russia.?[U.S. Treasury]

Some of Ukraine’s key allies including the U.S. are considering moving closer to an outright ban on most exports to?Russia, a potentially significant tightening of economic pressure on President Vladimir Putin over his war.?[Bloomberg]

A Swiss commodity trader’s has been able to buy tens of millions of dollars of?Russian?gold despite a ban on Swiss entities undertaking such activity, the latest evidence of a gap in western sanctions against Moscow.?[FT]

Ukrainian forces are finding a growing number of components from?China?in?Russian?weapons used in Ukraine, according to a senior adviser in President Volodymyr Zelenskiy's office, as Western supplies are squeezed by sanctions.?[Reuters]

Five countries have expanded imports of?Russian?oil in the wake of the Ukraine invasion and refined it into products they are selling to countries that have sanctioned Russian oil.?[Forbes]?

An oligarch accused of financing pro-Russian?separatists in eastern Ukraine appeared to continue moving millions of dollars through the global banking system with the help of a?financial services firm after he was placed under sanctions by western governments.?[Guardian]

Russian?oil company Rosneft has filed a lawsuit against the German government's extension of a trusteeship on its German subsidiaries and control of the Schwedt refinery.?[Reuters]

COMPLIANCE + ENFORCEMENT        

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) imposed a USD 300 million civil penalty against an American data storage company for shipping hard disk drives to Huawei in violation of U.S. export control laws.?[U.S. BIS]

The U.S. Supreme Court gave Turkey's state-owned lender Halkbank another chance to avoid criminal charges in the United States for allegedly helping Iran evade American economic sanctions, but rejected a key defense mounted by the bank.?[Reuters]

The U.S. Justice Department announced the indictment of the president of an American steel trading company for engaging in a three-year scheme to violate U.S. sanctions against oligarch Sergey Kurchenko and two of Kurchenko’s companies by providing those sanctioned parties with over USD 150 million in return for steelmaking materials.?[U.S. Justice]

Forty officers of China’s national police were charged in the U.S. for allegedly perpetrating transnational repression schemes targeting U.S. residents whose political views and actions are disfavored by the Chinese government.?[U.S. Justice]

Two international business organizations pleaded guilty and were sentenced in the U.S. for their participation in a criminal conspiracy to violate U.S. export laws and sanctions by sending U.S.-origin goods to Iran.?[U.S. Justice]

A criminal complaint was unsealed in the U.S. charging Russian national Natalia Burlinova, who was sanctioned by the U.S. Treasury last year, with conspiracy to act as an agent of the Russian Federation in the United States.?[U.S. Justice]

The New York State Department of Financial Services said it would start charging cryptocurrency firms registered in the state for the costs of annual supervision and examination, aligning the crypto sector more closely with how the agency assesses insurance and banking firms.?[WSJ]

EXPORT CONTROLS + SUPPLY CHAIN        

The U.S. Commerce Department is cracking down on companies that discover potential export control violations but choose not to disclose them to the government.?[WSJ]

American and EU officials traded information on millions of dollars’ worth of banned technology, including eight particularly sensitive categories of chips and other electronic devices, that have been slipping through the cracks of their defenses and into Russian territory.?[NYT]

U.S. lawmakers scrutinized possible “loopholes” in an anti-forced labor law blocking many imports from China’s Xinjiang region, expressing bipartisan support for cracking down on companies with supply chains stemming from the region.?[WSJ]

The U.S. and its allies are grappling with how to pare their economic relationships with China, attempting to limit ties in certain sectors they view as strategic while preserving broader trade and investment flows with the world’s second-largest economy.?[WSJ]

China is seeking to acquire equipment and knowledge in the Dutch space sector, sometimes in circumvention of export restrictions, the Netherlands' military intelligence agency said.?[Reuters]

A Chinese battery maker is set to expand its footprint in Europe to as many as five factories, with talks to supply the region’s carmakers well underway.?[Bloomberg]

China’s MGI Tech said it would press ahead with the U.S. rollout of its gene sequencing machines as it was “completely different” from its former parent group, which has been blacklisted in the United States. [FT]

A billionaire founder and chief executive of one of the world’s biggest computing groups is “intently focused” on buying components from outside China due to growing concern over supply-chain disruptions.?[FT]

CRYPTO        

The Central Bank of Russia is building a system of gateways with foreign payment networks and is now working with Turkey in this field. Russia’s monetary authority would also allow the experimental use of cryptocurrencies in foreign economic activities. [Bitcoin.com]