We Already Have 18 Intelligence Agencies. We Still Need 1 More.

“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.”

“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.”

The delayed impact of the EU’s wartime sanctions on Russia

“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.”

What to know about the $60 price cap, the plan to limit Russia’s oil revenues

“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.”

“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.”

“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.”

“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.”

“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.”

“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.”

“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.”

Despite sanctions, Russian fuel is still selling — here’s who’s buying

“Petroleum shipments are still relatively stable for Russia, as nations like China and India have picked up some slack from EU countries weaning themselves off oil, and Russia still has LNG, coal, and nuclear energy to help the economy float, too.

In order to make petroleum products more appealing to customers like India and Indonesia, Russia has offered fairly steep discounts — an average of $30 per barrel — against Brent crude oil, which has also been a benefit for Sri Lanka, Pakistan, Bangladesh, and Cuba, all emerging economies struggling with inflation, as Business Insider reported. Although according to S&P the discounts on Russian crude oil are decreasing, some analysts believe they’ll persist, making Russian crude oil imports highly palatable for poorer countries.”

“Countries like China, India, and Turkey are proving eager partners for the Russian fuel industry, with Turkey doubling Russian oil imports this year and vying to become a hub for Russian LNG transfers into Europe after damage to the Nord Stream pipelines.”

“Even with the Nord Stream 1 pipeline out of commission — and setting aside the transfers to China, now Russia’s biggest natural gas buyer — European countries are importing record amounts of Russian LNG at market prices, according to Bloomberg. France has purchased about 6 percent more Russian LNG between January and September of this year than it did all of last year; Spain has already broken its record for Russian LNG imports this year, and Belgium is on track to do the same.

The stakes for natural gas imports are somewhat different than they are for Russian petroleum, in a number of different ways; for one, the EU hasn’t imposed sanctions against it as it has against petroleum products, though the bloc does intend to eliminate its reliance on Russian fossil fuels by 2027. Second, Russia has already used Europe‘s reliance on its natural gas as a weapon; Russia cut access to many European countries which refused to pay for LNG in rubles, and cut total output to Europe by 60 percent in June and by 80 percent in July, Reuters reported last month.”

“Russia continues to invest heavily in its nuclear technology, and nuclear facilities in many nations are dependent on Russian technology and cooperation to function, even if they’re not directly importing Russian nuclear fuel, according to a report by Robert Ichord for the Atlantic Council.”

“Russia has several illicit strategies to evade western sanctions on its energy products and financial system. Because these transactions are, by their nature, often difficult to track, it’s hard to know how effective and how widespread they are — not to mention how much the Russian economy is benefiting from them.”

Smugglers’ secrets: How Russia can beat EU sanctions

“as the export bans bite over the coming months, Russia will start to crave banned goods that are essential for its military and domestic economy. The Kremlin will also want to replenish its war chest with revenue from sales of sanctioned products — from coal and oil to caviar — to willing buyers overseas.

That means, sooner or later, Moscow will go sanctions busting.”

Russia’s territory in Europe is the latest source of Ukraine war tensions

“What set off the spat this time was Lithuania’s enforcement of EU sanctions against Russia after a months-long transition period. Because Kaliningrad isn’t directly connected to the rest of Russia, it gets most of its supplies by land routes or by sea. Lithuania’s state rail operator announced last week that it would no longer allow the transit of sanctioned goods — like steel products and construction materials — through Lithuania to Kaliningrad.

Russia accused Lithuania of staging a blockade, with Russia’s foreign ministry warning of “practical” retaliation. “Both Lithuania and the EU have been notified through their diplomatic missions in Moscow that such actions are inadmissible and that the steps taken should be overturned and the situation put back on the legal, legitimate track,” Russian Foreign Ministry spokeswoman Maria Zakharova said Wednesday, according to state-run media. “If this fails to be done, then, of course, retaliatory moves will be inevitable.”

Lithuania has said this is not a blockade, and they are just doing additional checks and following the sanctions rules that all EU states agreed on. “First, any talk of a blockade of Kaliningrad is a lie. Second, Lithuania is complying with the sanctions imposed by the European Union on Russia for its aggression and war against Ukraine,” said Lithuania Prime Minister Ingrida Šimonytė. Only sanctioned items are targeted; food and medicine can still move, and passenger travel continues. Plus, Kaliningrad can get goods from Russia by sea.

The European Union, meanwhile, has tried to de-escalate and is working on guidelines to implement checks “in a clever and smart way,” said Josep Borrell, the EU’s foreign policy chief. “[There are] two objectives: to prevent circumvention of the sanctions; and not to block the traffic. Both things should be possible, and we are working on that,” Borrell said.”

Biden Is Right: We Shouldn’t Restrict Americans in the Name of Liberating Cuba

“The move reinstates the Cuban Family Reunification Parole Program, which from 2007 to 2016 allowed up to 20,000 Cubans per year to come and stay in the U.S. while applying for permanent legal resident status. It also removes the $1,000-per-quarter restriction on how much money Americans can send to family, friends, and private entities across the Florida Straits.”

“Lifting government prohibitions on the movement and trade of Americans is a good policy in and of itself, regardless of impact on captive peoples abroad. But is the impact of increased travel and remittances on balance good or bad for Cubans?

Menendez argues that “nothing changed” as a result of Barack Obama’s decision to ease restrictions. By the unreasonable standard of regime change or even significant liberalization, the senator is correct. But by the standard of measurable differences in living conditions and relationship with the government, things indeed changed. As I wrote after visiting the island in 2016 for the first time in 18 years:

“A noticeable segment of the population has gained at least some financial and experiential independence from the police state. They are not, in my observation, spending that extra money on flower arrangements for the Revolution. As Sen. Jeff Flake (R–Arizona) told us during our visit, “You have about 25 percent of Cubans who work fully in the private sector….The big change is the number of Cubans being able to not have to rely on government and therefore can hold their government more accountable.”””

“Menendez’s statement nods toward the potential universality of his foreign policy vision: “Today is another reminder that we must ground our policy in that reality, reaffirm our nation’s indiscriminate commitment to fight for democracy from Kyiv to Havana, and make clear we will measure our success in freedom and human rights and not money and commerce.”
That logic, applied evenly, suggests at minimum the dismantling of the World Trade Organization and the imposition of travel restrictions on Americans seeking to visit not just Havana but the more than 60 countries categorized by Freedom House as “not free.” Menendez would never openly advocate such an approach, because that approach would be both politically suicidal and logically insane.

Cuba has long been the crystallization of America’s worst foreign policy instincts. Good on the Biden administration for easing that somewhat.”

The Biden experts waging war without weapons

“an economy the magnitude of Russia’s, the 11th largest in the world, has never been sanctioned so comprehensively. Going after a central bank of this size, a major economy’s connections to international banking systems, and many of its sectors, is indeed unprecedented. And to target an economy that large unleashes unintended consequences on Russia, the US, and the globe.

Russia is a major energy exporter, and energy prices are rising and sending inflation even higher. Russia also exports significant amounts of grains, cooking oils, and fertilizer. So sanctioning the country — even with carve-outs and waivers for humanitarian purposes — could have a devastating impact on vulnerable people in poor countries. The United Nations says that economic sanctions will impact Russian and Ukrainian food production, which is exacerbated by the war and Russia’s blockade of Ukrainian ports. One possible outcome, the UN reports, is that “the global number of undernourished people could increase by 8 to 13 million people in 2022/23.””

““We all worry about the overuse of sanctions, but I think that this is clearly not a case of overuse,” an administration official who spoke on condition of anonymity told me. “This is a case of responding to a clear and egregious violation of basic tenets of international law and human rights. I think this is a case of indisputable agreement that the world needs to respond and sanctions are an appropriate tool.””

How Game Theory Explains Why We Have to Sanction Putin — Even If It’s Costly

“The point of sanctioning is that, if we don’t, the norm against territorial incursions will collapse. Preserving this norm — and working to prevent similar abuses in the future — is worth the cost of sanctioning. But why is norm collapse an inexorable consequence of failing to sanction? Fortunately, a bit of game theory can help us answer this question.

Let’s call this the Repeated Sanctions Game, which has two players. In each round of the game, Player 1 (i.e., an adversary such as Putin) chooses whether to transgress, then Player 2 (i.e., NATO) chooses whether to sanction. Transgressing benefits Player 1 (Putin would like to annex Ukraine) but costs Player 2 (NATO would prefer that Ukraine be free). As in real life, sanctioning is costly not just to Player 1 but also to Player 2, who might prefer not to, for example, suffer higher prices or lose revenue from Player 1’s products and businesses as a result. Then Player 2 plays the game again and again — perhaps with the same Player 1, perhaps with another (Putin now, maybe Xi next time).

For Player 2 to deter future transgressions in this game, she would have to threaten to sanction Player 1 whenever he transgresses. This threat has to be credible, otherwise Player 1 will simply call Player 2’s bluff. Player 2 must, if called upon, reliably follow through on her threat.

How can this be worth it for Player 2, given that, as already acknowledged, sanctioning is costly? To see, we must factor future expectations into the cost-benefit calculation. When a transgression isn’t met with sanctions, everyone would reasonably expect that future transgressions may also go unpunished. This is the norm collapsing. So long as Player 2 cares enough about the costs of all those future transgressions, she’ll prefer the collateral costs of punishing the transgressor today to increasing the likelihood of future transgressions. It’s not preventing or stopping the current transgression that’s motivating Player 2 to sanction, it’s the fact that without sanctions as a response, there will inevitably be more transgressions.”

“what the international community is really trying to avoid is other, more rational actors, such as Putin’s eventual successor or Xi, inferring that future invasions will not be punished.”

“So, yes, it’s true that sanctions will hurt our economy, and it’s true that they may even push Putin to further escalate Russia’s aggression against Ukraine. That’s all really bad, but it’s not as bad as a future where national sovereignty is not respected. For the norm against territorial incursion to survive, everyone must forever know that we are willing to pay the cost to sanction.”

Are sanctions against Russia working?

“The United States and its allies imposed unprecedented economic sanctions on Russia in the wake of its full-scale invasion of Ukraine. The swiftness and intensity of the penalties crashed the ruble, forced the Russian stock market to close, and sent Russians to line up at ATMs to withdraw dollars from their bank accounts.

The Russian economy was in free fall. Until it wasn’t, exactly.

The country’s central bank responded by sharply hiking interest rates to 20 percent and imposing strict capital controls. Those interventions, along with Russia’s still-intact ability to sell its oil and gas abroad, helped create a buffer against the economic chaos after the initial sanctions shock. The measures were “straight out of the country’s economic crisis playbook,” said Adam Smith, a partner at Gibson, Dunn & Crutcher, who worked on sanctions during the Obama administration.

The economic crisis playbook did its job, and calmed the immediate crisis. The ruble stabilized. That allowed Russia to declare victory over the sanctions onslaught. “The strategy of the economic blitz has failed,” Russian President Vladimir Putin said in April.

At least, that is what Russia would like to claim. Russia’s efforts to shore up its currency mask the profound economic disruptions and transformations that sanctions are unleashing within Russia right now. The West’s sanctions are isolating Russia, cutting it off from key imports that it needs for commercial goods and its own manufacturing to make its economy work. That means high-tech imports like microchips, to develop advanced weaponry. But it also means buttons for shirts.

Right now, there is “this false sense of stability,” said Maria Shagina, a visiting fellow at the Finnish Institute of International Affairs.

Russia is facing a deep recession, one the Bank of Russia says will be “of a transformational, structural nature.” The Finance Ministry has predicted the Russian GDP will shrink by about 8.8 percent in 2022. Inflation is expected to clock in as high as 23 percent this year. Russia is looking at a looming debt default. All of this will mean hardship for ordinary Russians, who are already seeing their real incomes shrink. Some tens of thousands have tried to flee, especially those in tech, prompting a potential “brain drain.” And these are the things we know; Russia will cease publishing a lot of economic data, a tactic, experts said, Moscow has used before to obscure the effects of sanctions.

These sanctions, said Yakov Feygin, a political economy expert at the Berggruen Institute, are pushing Russia — a modern economy, integrated around the globe — back decades and decades.

“They’ve stabilized it, they’ve taken emergency measures. That was to be expected. But that’s not going to help them in the long run,” Feygin said of Russia. “You’re not going to see people queuing for food for quite a bit. But with the current course of things, it’s still very possible.”

The US and European allies have continued to pile on more penalties, refining and sharpening the sanctions, all in an effort to ratchet up the pressure on Moscow. The EU has proposed a phase-out of Russian oil products, and depending on the final details, that might further erode the Kremlin’s lifeline. And the US could take additional steps, like threatening secondary sanctions that go after countries like China or India, to deter them from buying cheap Russian energy. That comes at a cost, and not just for Russia.

Even without more escalation, the sanctions regime against Russia is one of the most aggressive in history, untested on an economy of Russia’s size and as entangled in the global financial system.

Whether the sanctions are “working,” then, depends on what they are intended to achieve. One thing is clear: Over time, these sanctions will likely make it harder for Russia to rebuild its tanks, manufacture cruise missiles, and finance a war. It will also make it harder to produce food and make cars. And it still may not stop Russia from pursuing its campaign against Ukraine, all with unpredictable consequences for the rest of the world.”