“Russia is entering its third year of war in Ukraine with an unprecedented amount of cash in government coffers, bolstered by a record $37 billion of crude oil sales to India last year, according to new analysis, which concludes that some of the crude was refined by India and then exported to the United States as oil products worth more than $1 billion.
This flow of payments, ultimately to Moscow’s benefit, comes from India increasing its purchases of Russian crude by over 13 times its pre-war amounts, according to the analysis by the Centre for Research on Energy and Clean Air (CREA), exclusively shared with CNN. It amounts to US strategic partner New Delhi stepping in to replace crude purchases by Western buyers, reduced by sanctions over Russia’s invasion of Ukraine, the analysis said.”
“many Russian banks, including some key ones involved in energy transactions, have not been barred from SWIFT. According to the Atlantic Council, “most of Russia’s regional and smaller banks, over 300, still have access to SWIFT, enabling Russia to conduct cross-border payments and transactions for imports and exports.”
“The fact that the shut out was not universal has left ample scope for Russian banks to continue to benefit from SWIFT messaging services,” said Keatinge of RUSI Europe.”
“Which company is the leading maker of the so-called “high-priority battlefield items” trafficked to Russia that the Western coalition wants to interdict?
If you said Intel, then go to the top of the class: According to the sanctions team at the Kyiv School of Economics, the U.S. semiconductor giant again leads the pack this year. It’s followed by Huawei of China. Then come Analog Devices, AMD, Texas Instruments and IBM — all of which are American.
Russian imports of microelectronics, wireless and satellite navigation systems and other critical parts subject to sanctions have recovered to near pre-war levels with a monthly run rate of $900 million in the first nine months of this year, according to a forthcoming report from the Kyiv School’s analytical center, the KSE Institute.
All of this indicates that, while Western sanctions imposed over Russia’s full-scale invasion on February 24, 2022, had a temporary impact, Moscow and its helpers have largely succeeded in reconfiguring supply chains — with the help of China, Hong Kong and countries in Russia’s backyard like Kazakhstan and NATO member Turkey.”
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“In our investigations, we showed how U.S.-made sniper ammunition finds its way into Russian rifles, and how China has positioned itself as Russia’s go-to supplier of nonlethal, but militarily useful, equipment.”
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“Russians with close ties to Putin — and their money — continue to be more than welcome in Europe despite the death and destruction his regime has unleashed. His former wife, Lyudmila, and her new partner have splashed the cash on luxury property investments in Spain, Switzerland and France, as a POLITICO investigation found at the start of the year.
And when the European Council — the intergovernmental branch of the EU — does sanction Russian business leaders suspected of aiding and abetting the Putin regime, it has often relied on slipshod evidence that makes the decisions easy to challenge in court, POLITICO has also found.
Nearly 1,600 Western multinationals continue, meanwhile, to do business in Russia. Many that announced they would pull out have struggled to do so, as POLITICO discovered when it investigated Western liquor companies that said they had quit Russia — only to find that their booze was still freely available. And some companies that did stay, like Danone and Carlsberg, have been shaken down by Putin and his cronies — a case of Russian roulette, if ever there was one.”
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“With the EU apparently lacking the means, or the political will, to do more to economically isolate Russia, the bloc is sending its sanctions envoy, David O’Sullivan, on a mission to apply moral suasion to countries that are, as he diplomatically puts it, “not aligned” on sanctions.
On the high-priority battlefield technology, Sullivan told POLITICO’s EU Confidential podcast last month that the EU has had “a limited success — but in an area which is absolutely critical to the defense of Ukraine.”
More broadly, he said: “The sanctions are a sort of slow puncture of the Russian economy. Perhaps not the blowout that some people initially predicted, but … the air is escaping from the tire and sooner or later the vehicle is going to become impossible to drive.”
To be fair, O’Sullivan isn’t overselling the efficacy of sanctions. And he may ultimately be proven right.
But he only will be vindicated if Western governments do a better job of holding their own businesses to account in stemming the flows of technology, equipment and spare parts that sustain Putin and his war of aggression.
That will come down to whether they have the will to enforce their decisions. And the evidence so far is that they don’t.”
“Chinese middlemen launder the proceeds of North Korean hackers’ cyber heists while Chinese ships deliver sanctioned North Korean goods to Chinese ports.
Chinese companies help North Koreans workers — from cheap laborers to well-paid IT specialists — find work abroad. A Beijing art gallery even boasts of North Korean artists working 12-hour days in its heavily surveilled compound, churning out paintings of idyllic visions of life under communism that each sell for thousands of dollars.
That’s all part of what international authorities say is a growing mountain of evidence that shows Beijing is helping cash-strapped North Korea evade a broad range of international sanctions designed to hamper Pyongyang’s nuclear weapons program, according to an Associated Press review of United Nations reports, court records and interviews with experts.
“It’s overwhelming,” Aaron Arnold, a former member of a U.N. panel on North Korea and a sanctions expert at the Royal United Services Institute, said of the links between China and sanctions evasion. “At this point, it’s very hard to say it’s not intentional.””
“The United States on Wednesday imposed sanctions on at least four Turkey-based entities it said violated U.S. export controls and helped Russia’s war effort, in the biggest U.S. enforcement action in Turkey since the invasion of Ukraine last year.
The designations – which included an electronics company and a technology trader alleged to have helped transfer “dual-use” goods – were part of a global sanctions package on more than 120 entities announced by the U.S. Treasury.
Washington and its allies imposed extensive sanctions on Russia after its invasion, but supply channels from Black Sea neighbour Turkey and other trading hubs, including Hong Kong and the United Arab Emirates, have remained open.
A U.S. administration official told Reuters the sanctions targeted entities and people in Turkey’s maritime and trade sectors that were “primarily” Russia-owned or Russia-linked.
“It’s meant as a warning shot in the evolving phase of enforcing export controls,” the official said, requesting anonymity.”
“U.S.-Nicaragua links began unraveling more than a decade ago as it became clear that Ortega — a former rebel who fought another Nicaraguan dictator — wouldn’t leave the presidency. Relations worsened over the past five years as Ortega and Murillo strengthened their grip.
The Trump administration imposed economic sanctions and other penalties, mainly targeting individuals such as Murillo, in 2018, a year when the regime brutally cracked down on widespread protests.
In June 2021, Secretary of State Antony Blinken told his Nicaraguan counterpart that the United States could ease up on those penalties if Nicaragua were to move back toward democracy and improve its human rights record. (Abuses such as torture and extrajudicial executions in Nicaragua may constitute crimes against humanity, a U.N. investigative panel said earlier this month.)
Blinken’s message failed to sway the ruling power couple. Over the next few months, Ortega and Murillo imprisoned more dissidents ahead of an election.
The U.S. responded by slapping sanctions on a Nicaraguan state-owned mining company and banning visas for hundreds of Nicaraguan officials and their relatives. Biden also issued orders in October that authorized his administration to impose future sanctions on various economic sectors in Nicaragua, as well as trade and investment.”
“The U.S. cannot adequately address its national security challenges related to China, which are increasingly driven by technology, without the help of a potentially surprising partner: the Department of Commerce.
Unfortunately, the department itself lacks the critical support needed for these efforts. Most crucial: Commerce needs its own intelligence agency.”
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“The cases that come before CFIUS are privileged and not publicly disclosed. But I can say this: The most challenging ones usually revolved around issues of advanced or dual-use technology, an area in which the Department of Commerce plays a critical role given its international trade and export control responsibilities.
Today, the Department of Commerce is an agency unexpectedly on the frontlines of vital U.S. national and economic security challenges, most prominently demonstrated by its leading role on ensuring critical access to semiconductors, and as evidenced by the CHIPS Act and recent rules promulgated by the department to protect against even knowledge transfers between the United States and China.
But these efforts are certain to be a beginning for Commerce, not an end. And a dedicated in-house intel agency can better identify emerging threats and challenges from China that Commerce needs to tackle, including potential spyware and other intrusions embedded in foreign technology. For instance, in late November, the U.S. issued a ban on new Huawei and ZTE equipment — along with that of three other Chinese companies — for fear it would be used to spy on Americans. Last month, Congress proposed limiting U.S. exposure to Chinese 5G leaders, including Huawei, by restricting their access to U.S. banks, adding them to Treasury’s Specifically Designated Nationals List.
In fact, Commerce’s current position is not unlike that of the Treasury Department’s in 2004.
That year — as part of the Intelligence Authorization Act — Congress established the current iteration of Treasury’s intelligence agency, the Office of Intelligence and Analysis, and formally made it part of the broader intel community. Since then, OIA has played a critical role for almost two decades combating terrorist financing, helping support sanctions efforts and providing financial intelligence to Treasury policymakers.
OIA’s successes would simply not have been possible without it being a full, integrated member of the intelligence community. Indeed, its assessments often find their way to the White House and to other senior policymakers across town, even as its primary focus is supporting the Treasury Department.
In the same way, the Commerce Department cannot be expected to play a more fulsome role in U.S. national security if its leaders are not fully informed of the strategic goals and illicit tactical efforts of U.S. adversaries. To meet that expectation, requires the launch of a new, 19th intel agency to be housed at the department.”
“There is one key factor explaining why imports to the EU from Russia haven’t fallen further: energy — and its price. During the five years that preceded the war, energy-related products represented two-thirds of all imports from Russia, in monetary terms.
European countries needed to find alternative providers before they could stop buying from Moscow — and even when they reduced their energy purchases, soaring prices meant that cash flows to Russia did not decrease proportionally.”
“These are some of the biggest sanctions to date, as Europe — once the destination for about half of Russia’s oil exports — further weans itself off Russian energy. And Europe, along with the United States and other major economies, like the United Kingdom, Japan, Canada, and Australia, have agreed to a maximum of $60 per barrel on Russian seaborne oil, which means anyone who still wants to buy Russian oil has to pay that price or less, if it wants to ship cargo through operators or insurers based in the EU or other countries who signed on to this price cap.”
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“There are a lot of unknowns, but this is a dramatic and unprecedented move by the US and its partners — especially given how dependent Europe was on Russian energy. “If anyone told you a year ago that the EU is going to effectively eliminate its dependence on fossil fuel imports from Russia, over a period of a year, you would have thought they’re a complete lunatic,” said Lauri Myllyvirta, lead analyst at the Centre for Research on Energy and Clean Air.
It’s true that Europe continued to buy a lot of Russian oil and gas in the first half of the year, even after Russia invaded Ukraine. It’s also true that Moscow itself cut off supplies of natural gas, giving Europe little choice but to find alternatives. But even so, it’s a real and rapid scrambling of a relationship, and the EU has largely (if not perfectly) been decreasing its Russian fossil fuel imports with the expectation of the ban and other measures. Starting in February, the EU will also ban oil product imports from Russia.”
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“There are already caveats. Though Russia isn’t exactly going to be transparent about this, the $60 price cap appears to be about what Russia is already selling its oil for, which means Russia’s oil revenues are unlikely to nosedive immediately. Some countries, like Poland, pushed for a much lower cap, and Ukraine has also said this doesn’t go far enough. There are also some questions around enforcement, as shippers have to attest they are abiding by the price cap, and negotiators ended up weakening some of the penalties for violators.
But the US and its allies were trying to strike a balance through a mechanism that hasn’t been attempted before. They wanted to avoid completely disrupting global oil markets while applying more pressure to Russia’s oil profits. The cap is not firmly set, and is subject to a review every two months. That means it — and its enforcement mechanisms — are likely to be tinkered with depending on how this all plays out.
“This is about balance. It was never about not having any Russian oil on the market. It was about balancing supply and demand but also balancing the need to limit Mr. Putin’s ability to profit. And again, we think that $60 per barrel will do that,” National Security Council coordinator for strategic communications John Kirby said on a press call Monday.
“It doesn’t mean that that cap can’t be adjusted going forward as we see the way it’s being implemented, and as we see how the Russians might react to it,” Kirby added.”
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“Here’s how it’s supposed to work in practice: Any actor in a jurisdiction of the price-cap coalition that transports, insures, or finances the shipment of Russian oil by sea, can only do so if the price per barrel is $60 or less.
The reason the coalition thinks it could work is because a lot of maritime operators, insurers, and reinsurers are based in Europe and the United Kingdom — or as Myllyvirta put it: “The two big things are Greek ships and UK insurers.” That market domination would make it costly and cumbersome to insure your ship against an oil spill, say, or find an available tanker that doesn’t fall under a jurisdiction that’s adopted the price cap.”
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“Russia has said it will not sell oil subject to the price cap, even if it has to scale back production. But this is easier said than done because Russia still needs oil buyers, like China and India, who now have a lot of leverage. “Am I going to buy [oil] at anything above 60 bucks, knowing that’s the only option Russia has? Are you going to do Putin a solid and say, ‘No, I’ll pay you $65, I’ll pay you $70.’ I’m not sure why they would, especially because they have all the cards,” Smith said.”
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“Russia is under unprecedented financial and energy sanctions, especially for an economy of its size. Russia has weathered a lot of that pressure so far, and its energy and resource exports are a huge reason why. Still, sanctions are undoubtedly having an effect. Russia’s economy has shrunk. Import bans on advanced technology are forcing Russian manufacturers to scale back features — no airbags in cars, for example — because they can’t get parts. That is also affecting Russia’s ability to make advanced weapons. And even if Russia was buoyed by its oil and gas sales, those are declining, and Russia has been heavily taxing some of its oil and gas industries to try to raise more revenues. That can’t work forever, either.”
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“there are still more sanctions to impose on Russia — we’re not at the level of an Iran or a North Korea yet — but that would come with repercussions for the United States, Europe, and the rest of the world, all of which is struggling with inflation and rising food and fuel prices.”