January 9, 2025

The Readbook is Kharon's weekly roundup of our published pieces, upcoming events, and the best-curated news feed on the intersection of international security and global commerce. Subscribe to the email version.

/EVENTS

Advanced Topics in Customs Compliance Conference

This year at ATCC, Kharon's Ethan Woolley will be participating in the panel "Proactively Identifying and Mitigating UFLPA Risk" on February 5th at 2:15 PM. Tune into the panel and engage with Kharon team members at our booth. [Learn More]

Descartes Innovation Forum for Global Trade Intelligence

Kharon is sponsoring the Descartes Innovation Forum this February. Visit our booth and tune into our partner session, where we will delve into the evolving complexity of third-party due diligence requirements for supporting compliant global trade activities. [Learn More]

/THIS WEEK IN THE BRIEF

Treasury Sanctions Publicly Traded Cyber Firm With Ties To Malicious Chinese Hackers

The U.S. Treasury sanctioned Beijing-based Integrity Technology Group for supporting Chinese cyber group Flax Typhoon, which has exploited known vulnerabilities to target U.S. critical infrastructure and breach networks globally since 2021. [Read More]?

Uzbekistan’s Cellulose Kingpin Supplies Russian Arms Factories

Two Uzbek factories linked to a Russian national have supplied over USD 170 million worth of cellulose to Russian arms makers since the 2022 invasion of Ukraine, fueling the war effort and selling critical materials to sanctioned military suppliers. [Read More]

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/MEDIA ROUNDUP

SANCTIONS        

The U.S. is expected to introduce new sanctions against the Maduro regime in Venezuela, an Axios reporter said, citing two U.S. officials. [Reuters]

President Joe Biden is expected to unveil new sanctions targeting Russia's economy, according to a U.S. official, as part of measures to bolster Kyiv's war effort against Moscow before Donald Trump takes office. [Reuters]

The U.S. Department of the Treasury sanctioned a senior Hungarian government official for his involvement in corruption in Hungary. [U.S. Treasury]

The U.S. Department of the Treasury sanctioned a Beijing-based cybersecurity company for its role in multiple computer intrusion incidents against U.S. victims. [U.S. Treasury]

The U.K. Government announced a full asset freeze against Blood and Honour, an entity it has reasonable grounds to suspect of being involved in terrorist activities through promoting and encouraging terrorism, seeking to recruit people for that purpose, and making funds available for the purposes of its terrorist activities. [U.K. Government]

The Charity Commission for England and Wales is seeking information from the U.K.’s voluntary sector and wider civil society to help identify and understand potential vulnerabilities, trends, and threats in respect of the risk of terrorist financing abuse. [U.K. Government]

An Iranian company has shipped millions of barrels of oil around the world in circumvention of Western sanctions, illustrating how Iran relies on a shadow fleet of tankers as well as willing buyers in Asia to keep its oil industry alive. [Reuters]

The U.S. Department of the Treasury issued a general license to expand authorizations for activities and transactions in Syria and to ensure that U.S. sanctions do not impede activities to meet basic human needs, including the provision of public services or humanitarian assistance. [U.S. Treasury]

Berlin is leading a push for the EU to ease Assad-era sanctions on Syria as part of a western drive to support the country’s political transition and aid reconstruction after 13 years of civil war. [FT]

France’s foreign minister said that sanctions in Syria that obstruct the delivery of humanitarian aid and hinder the country's recovery could be lifted swiftly. [Reuters]

The U.S. Department of the Treasury sanctioned the leader of Sudan’s Rapid Support Forces (RSF), as well as seven companies and one individual linked to the RSF, for their gross violations of human rights in Sudan. Concurrently, the U.S. Department of State determined that the RSF has perpetrated genocide in the Darfur region of Sudan during the course of the war. [U.S. Treasury] [U.S. State]

The chair of the U.S. House Foreign Affairs Committee introduced legislation to sanction the International Criminal Court (ICC) after it issued an arrest warrant for Israeli Prime Minister Benjamin Netanyahu last year. [U.S. House Foreign Affairs Committee]

U.S. President Joe Biden signed a new executive order with respect to the situation in the Western Balkans to provide additional prongs for targeting persons for designation and deter individuals from attempting to evade U.S. sanctions. [U.S. White House]

The U.K. will develop the world’s first standalone sanctions regime dedicated to targeting irregular migration and organized immigration crime, which will allow the U.K. to target individuals and entities enabling dangerous journeys. [U.K. Government]

COMPLIANCE + ENFORCEMENT        

The U.K. Government published two guidance documents to help U.K. industry counter and combat current and emerging trends relating to Russian sanctions circumvention. [U.K. Government - Countering Circumvention] [U.K. Government - No-Russia Clause]

The U.S. Department of Justice announced that it secured the forfeiture of two luxury Miami condominiums that were maintained, transferred, and leased in violation of U.S. sanctions against a Russian national. [U.S. Justice]

A Canadian national was sentenced to prison in the U.S. for conspiring to commit export control violations by masterminding a global procurement scheme on behalf of sanctioned Russian companies, including Russian military companies. [U.S. Justice]

Recognition of foreign proceedings has historically been a routine matter in U.S. courts, bound by treaties and federal law, but some of the cases involve now-sanctioned Russian banks and billionaires, forcing judges into a balancing act. [Bloomberg]

The U.S. Department of Defense released an update to its list of “Chinese military companies” operating directly or indirectly in the U.S., including the additions of Chinese tech giant Tencent Holdings and battery maker CATL. [U.S. Defense]

Tencent and CATL are planning legal action to challenge being placed on a Pentagon list as “Chinese military companies” if talks with the U.S. Department of Defense fail to get their new designations dropped. [FT]

Two Indian chemical companies and a senior executive were indicted for conspiring to distribute and import fentanyl precursor chemicals to the U.S. [U.S. Justice]

A Japanese Yakuza leader pleaded guilty to conspiring with a network of associates to traffic nuclear materials, including uranium and weapons-grade plutonium, from Myanmar to other countries, as well as to international narcotics trafficking and weapons charges. [U.S. Justice]

The U.S. Department of Justice announced that it entered into an agreement to share forfeited assets with Estonia in recognition of Estonia’s assistance in the successful prosecution of a Danish bank for fraud regarding its AML controls. [U.S. Justice]

TRADE CONTROLS + SUPPLY CHAIN        

The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) added 13 entities to the Entity List for providing support to either Myanmar’s military regime, China’s military modernization, or Pakistan’s ballistic missile program. [U.S. Federal Register]

U.S. lawmakers introduced the Comprehensive Outbound Investment National Security (COINS) Act, which would restrict U.S. investments that fuel China’s military, technological development, or human rights abuses. [Select Committee on the CCP]

U.S. lawmakers urged the U.S. Secretary of Commerce to impose strict redlines in a soon-to-be-published “Export Control Framework for AI Diffusion,” which would establish the protocols in which high-end U.S. technology used in AI can be exported abroad. [Select Committee on the CCP]

HUMAN RIGHTS        

U.S. Customs and Border Protection is tapping advanced chemical forensic techniques to screen for goods that may have been made with forced labor in China. [WSJ]

A representative of an online fast-fashion retailer declined to provide a direct answer when asked by a British parliamentary committee whether it uses cotton from China or from its Xinjiang province, a key issue for potential investors concerned about its supply chain. [Reuters]

The Southern Shrimp Alliance is asking the U.S. Forced Labor Enforcement Task Force (FLETF) to add a Chinese seafood processor based in Shandong province to the Uyghur Forced Labor Prevention Act (UFLPA) Entity List. [SeafoodSource]

CRYPTO + CYBER        

Japan linked more than 200 cyberattacks over the past five years targeting the country’s national security and high technology data to a Chinese hacking group, MirrorFace, detailing their tactics and calling on government agencies and businesses to reinforce preventive measures. [AP]