Fdd's overnight brief

August 17, 2023

In The News


Food-safety and veterinary-products company Neogen said the U.S. Treasury Department’s sanctions enforcer concluded an investigation into the company’s business dealings with entities in Iran with a cautionary letter but without imposing a fine or any other enforcement action. – Wall Street Journal

Iran Foreign Minister Hossein Amirabdollahian will visit Saudi Arabia on Thursday, Iran state TV reported on Thursday. In June, Saudi Arabian Foreign Minister Prince Faisal bin Farhan met with Iranian officials in Tehran on his first visit to the country after the resumption of diplomatic ties with the Islamic republic in March. – Reuters

U.S. lawmakers from both political parties have urged President Joe Biden and members of his administration to resolve a months-long delay in the transfer of a cargo of oil from a seized Iranian tanker off Texas. – Reuters

A 90-year-old man is among dozens arrested in past weeks in a new crackdown by Iranian authorities against Baha’is, Iran’s largest non-Muslim religious minority, a group said Wednesday. – Agence France-Presse

As western governments struggle to keep a lid on fuel prices, the leadership of Iran faces a very different problem: its petrol is just too cheap. Heavy state subsidies ensure that Iranian prices start at just $0.03 a litre, a fraction of the $1.10 paid at US pumps or the $1.88 that motorists in the UK are charged to fill their cars. – Financial Times

The US and Iran are engaged in broad but largely unacknowledged efforts to reach agreements on everything from prisoner exchanges to oil revenue to nuclear capabilities — while avoiding deals that could be swatted down by opponents on either side. – Bloomberg

The man who led the Biden administration’s negotiations with Iran before having his security clearance suspended is now joining the faculty of an elite Ivy League school as a visiting professor and lecturer. – Algemeiner

Tom Rogan writes: The Biden administration is showing deliberate weakness by failing to seize a sanctioned Iranian oil shipment that is sitting off the coast of Texas. […]On the flip side, however, the U.S. should not claim the nuclear and terrorist issues are separate, as the Biden administration is now doing, and then treat them as parts of the same negotiating bargain. Iran must understand that its terrorist campaigns have consequences — and that U.S. concerns over its nuclear program cannot be used as leverage to protect its oil sanctions evasion. This is not complicated. – Washington Examiner

Russia & Ukraine

Officials here said a first ship carrying Ukrainian agricultural cargo set sail Wednesday from the southern port of Odessa — despite threats by Russia to forcibly stop vessels in the Black Sea after Moscow unilaterally terminated a U.N.-sponsored agreement allowing safe passage of Ukrainian grain shipments. – Washington Post

The Russian central bank’s jumbo interest-rate increase to halt a tumbling ruble this week points to a new reality for the Kremlin: Russia’s economy has reached its speed limit. The government has flooded the Russian economy with money to keep its troops in Ukraine supplied and insulate its businesses and citizens from the war. – Wall Street Journal

After more than two weeks stuck in a Black Sea traffic jam of cargo ships waiting their turn to enter the Danube River delta to pick up Ukrainian grain, the Egyptian seamen finally reached solid ground last weekend and replenished their diminishing stock of fresh water and food. – New York Times

Ukrainian forces have retaken the tiny village of Urozhaine, moving farther into the Mokri Yaly River Valley in the south of the country, after more than a week of battling Russian troops, as Kyiv pushed on with a grinding counteroffensive that has struggled to break through entrenched Russian lines. – New York Times

U.S. Secretary of State Antony Blinken spoke by phone on Wednesday with American citizen Paul Whelan, who is being held in a Russian prison, according to a source familiar with the call. – Reuters

Eva Hartog, POLITICO Europe’s reporter in Moscow, has been expelled from Russia after 10 years reporting in the country. Russia’s foreign ministry told Hartog last Monday that her visa would not be extended and gave her six days to leave the country. Hartog was told the decision had been made by the “relevant authorities,” but was given no additional information about how the ruling was made. – Politico

In the first of a striking pair of developments, a senior NATO official has suggested that Ukraine could gain admittance to the military alliance in exchange for ceding territory to Russia. – New York Sun

Anna Nemtsova writes: Since Russia launched its full-scale invasion in February of last year, Ukrainians have buried their political disputes in the name of national unity. But some are starting to believe that the tacit ban on discussion of controversial topics has outlived its usefulness. – Washington Post

Marietje Schaake writes: Technologies are playing a prominent role on Ukraine’s battlefields as the country continues to defend its homeland — and European destiny — against Russia’s war of aggression. Civilian and military technologies are being tested and used in new ways. Drones inform troops about the frontier, AI labels targets, and facial recognition systems identify fallen Russian soldiers. Some corporate leaders can hardly hide their excitement about the war as an opportunity. – Financial Times

Maxim Starchak writes: Russian society exhibits no moral or political red lines. It is simply passive and conformist, willing to submit to decisions made by the authorities. This obedience is dictated not only by passivity but also by fear of reprisals from the employer and the state. Citizens are keenly aware of this and those willing to consider protest has remained at just 12% over the past few months. Participation in such demonstrations is now punishable by heavy fines and imprisonment. […]It is safe to conclude that Russians will not turn out even if Putin launches a nuclear bomb.  – Center for European Policy Analysis 

Volodymyr Dubovyk writes: In Jeddah, the peace summit produced no final statement. This absence undermines the meeting’s value. Even so, officials said the mere mention of respect for territorial integrity and sovereignty must be seen as a positive outcome for Ukraine. The Saudis vow to present a plan for further talks, with working groups to discuss issues such as global food security, nuclear safety, and prisoner releases. No one should be under the illusion that this war’s outcome will be decided anywhere except on the battlefield. But Ukraine must prove itself open to multilateral peace efforts. At Jeddah, it did so. – Center for European Policy Analysis 

Can Kasapoğlu writes: Ukrainian advances in Kozachi Laheri, along the occupied bank of the Dnipro River in Kherson Oblast, mark an interesting development worth watching. The Ukrainian military is keen to hold the tactically important bridgehead it has established there. Finally, Russia’s offensive action around Kharkiv has intensified but has failed to result in major territorial changes. The Russian military leadership likely considers these combat operations in the north an effort to distract Ukraine from its main effort in the south. – Hudson Institute  


The United States approved a $3.5 billion sale of Israel’s Arrow-3 missile defence system to Germany on Thursday, in what will be Israel’s biggest-ever defence deal, the Israeli Defence Ministry said. – Reuters

An escalating war of words between Israel and Iran-backed Hezbollah in Lebanon echoes heightened tension at the border, with each vowing to return the other to the “stone age” and preparing for a possible conflict even as they deny seeking one. […]The tensions come against the backdrop of a political crisis in Israel that has emboldened its enemies. Hezbollah, relishing the sight of some reservists refusing to serve, says Israel is now weaker. Israel says its foes are overestimating the impact. – Reuters

Israeli forces raided a home above a bakery in a militant stronghold in the occupied West Bank on Thursday, killing one man in a gunbattle in Jenin, a city that has seen some of the worst bloodshed in the current round of Israeli-Palestinian fighting. – Associated Press

US Joint Chiefs of Staff chairman Mark Milley will travel to Israel next week and will reportedly use his meetings with Israel’s security brass to assess the extent of damage to the army’s readiness caused by some volunteer reservists’ refusal to report for duty in protest of the judicial overhaul. –  Times of Israel

Uruguay will open a diplomatic mission in Jerusalem, Foreign Minister Eli Cohen announced Wednesday during his visit to the South American country. – Times of Israel

The United Nations Interim Force in Lebanon (UNIFIL) has announced that senior officers from the Israeli Defense Forces and the Lebanese Army held a meeting on Wednesday at the UN position on the border between the two countries. – Haaretz

Editorial: But these sinister attacks on the IDF’s commanders must stop. Casting blame on the higher echelon of Israel’s military services – individuals who have devoted their lives to defending the country – is a disgrace. We expect it from Israel’s enemies, not from government ministers or those close to the prime minister. – Jerusalem Post

Rafael Castro writes: The responses of Israeli elites to statements from New York Times columnist Thomas Friedman and the White House concerning the potential recognition of Israel by Saudi Arabia reveal a fundamental misunderstanding of the Middle Eastern mindset. Instead of recognizing the intricacies and complexities of diplomatic relations, they hastily emphasized the benefits of such recognition, benefits that are evident to the Saudi authorities themselves and require no endorsement from Israel. – Jerusalem Post

Bobby Rechnitz writes: A US ambassador who is able to bring peace with Saudi Arabia, the most important Arab and Muslim nation, will be forever remembered for the good. This game-changing moment could see the end of the more than 100-year Arab-Israel conflict for good. It can pit all of the moderate and pragmatic nations of the region on the same side against the extremists, openly and publicly. It can usher in a new era for Jewish and Arab relations which can have an enormous effect far beyond the Middle East. – Jerusalem Post

Eitan Dangot writes: Therefore, Prime Minister Benjamin Netanyahu will have to take critical decisions ahead of his meeting with President Biden in September. Does he want to return to being a legitimate leader on the international stage? If he accepts the terms of normalization, this could speed up the departure of the Ben Gvir-Smotrich alliance from his coalition and the demise of the full right-wing government, leading to the formation of a new government that could deal with these issues in a matter-of-fact manner. – Algemeiner

Amb. (ret) Yoram Ettinger writes: Is the State Department mindful of the fact that the Saudi Crown Prince is preoccupied with “Vision 2030,” aware of Israel’s potential contribution to this mega-vision, and therefore encouraged the Abraham Accords, while concluding unprecedented commercial and defense agreements with Israel? Is the State Department aware that Saudi frustration with the US diplomatic option toward Iran is pushing the Saudis closer to China and Russia? – Arutz Sheva

Dr. Mordechai Kedar writes: In this statement Biden implicitly ascribes the responsibility for the chaos in Israel to Netanyahu, thus siding with the opposition in the Knesset. I am not sure if any other state would accept such intervention. – Arutz Sheva

Gulf States

After years of grim warnings that this crippled supertanker, decaying a few miles off the coast of northern Yemen, threatened marine life, global shipping and the health and livelihoods of countless people, a frantic race to empty its perilous cargo — more than a million barrels of oil — was nearly complete. – Washington Post

Saudi Arabia on Wednesday executed an American citizen who had been convicted of killing his father. – Associated Press

Saudi Arabia sold down its holdings of US Treasuries in June to the lowest in more than six years, as the kingdom directs more funds to foreign equity and domestic investments. – Financial Times

Middle East & North Africa

Wracked by years of drought, Iraq is now experiencing its worst heat wave in decades. Water flows on the Euphrates and Tigris rivers are near record lows, leading to a cascading water crisis in the Iraqi countryside, where farming techniques have not kept pace with the times. Amber cultivation, which typically runs from the end of June to October, requires the rice to remain submerged in water throughout the summer. In 2021, the Iraqi Ministry of Agriculture made the “difficult” decision to prohibit most rice planting in an effort to conserve water. – Washington Post

Syria’s president early Wednesday doubled public sector wages and pensions as the war-torn country’s national currency spiraled further downwards, reaching a new low for the year. – Associated Press

The death toll in this week’s clashes between rival militias in Libya’s capital rose to 45 on Wednesday as troops fanned out across Tripoli to restore calm after a 24-hour bout of fighting that was the city’s most intense violence this year. – Associated Press

As Washington and Jerusalem officials fret over the battle-readiness of the Israeli Defense Forces, the Iranian-backed Hezbollah terrorist organization is accelerating its preparations for war and plotting to consolidate its control over Lebanon no matter the cost. – New York Sun

Korean Peninsula

President Biden will host his Japanese and South Korean counterparts at Camp David in Maryland on Friday, the first time the three nations’ leaders will hold a stand-alone meeting to discuss trilateral issues. – Washington Post

North Korea may launch an intercontinental ballistic missile or take other military action to protest a summit of the United States, South Korea and Japan, a South Korean lawmaker said on Thursday, citing the country’s intelligence agency. – Reuters

A group of people, thought to be North Korean Taekwondo athletes, have crossed the border into China. They are said to be heading to the Taekwondo world championships in neighbouring Kazakhstan. – BBC


About three weeks ago, at a meeting chaired by Xi Jinping, China’s leader, officials acknowledged that China’s economy was facing “new difficulties and challenges.” – New York Times

Chinese leader Xi Jinping has called for patience in a speech released as the ruling Communist Party tries to reverse a deepening economic slump and said Western countries are “increasingly in trouble” because of their materialism and “spiritual poverty.” – Associated Press

China appears to be constructing an airstrip on a disputed South China Sea island that is also claimed by Vietnam and Taiwan, according to satellite photos analyzed by The Associated Press. – Associated Press

Foreign investors have dumped Chinese stocks and bonds after losing confidence in Beijing’s promises of more help to shore up the country’s wobbling economy. – Financial Times

A team of researchers have identified likely locations of future Chinese naval bases not only in the Indo-Pacific but as far away as the Atlantic coast of Africa. China invested in a “whole swath of ports” through its decade-old Belt and Road Initiative, but it is not clear which one will be used for a future naval base, said Alexander Wooley, one of the study’s authors and director of partnerships and communications at AidData. – USNI News

Gordon G. Chang writes: Valerie Hudson and Andrea den Boer, in their much-discussed work “Bare Branches: Security Implications of Asia’s Surplus Male Population,” suggest a link between large numbers of unmarriageable males — the so-called “bare branches”— and the adoption of risk-taking foreign policies. Xi prides himself on being a student of his country’s past. He also knows he is now being blamed for domestic difficulties. His policies are deepening the country’s economic and other problems, and he is probably thinking his best option is to rally people with a war, fought by the legions of the unemployed. – The Hill

South Asia

Police arrested more than 100 Muslims in overnight raids from an area in eastern Pakistan where a Muslim mob angered over the alleged desecration of the Quran by a Christian man attacked churches and homes of minority Christians, prompting authorities to summon troops to restore order, officials said Thursday. – Associated Press

India is in talks with Russia to import wheat at a discount to surging global prices in a rare move to boost supplies and curb food inflation ahead of state and national elections next year, according to four sources. – Reuters

Derek Grossman writes: If India fails to prevent Chinese influence from deepening across South Asia, it could seriously jeopardize the U.S. Indo-Pacific strategy as well. In this scenario, New Delhi would be intensely focused on strategic competition in its neighborhood and less likely to have bandwidth to support U.S. objectives farther afield, whether in Southeast Asia or the Pacific. India might also prioritize its partnership with Russia in hopes that Moscow might convince Beijing to change its behavior. Finally, if India concludes that China is successfully encircling it, this raises the possibility of war between two nuclear-armed powers. None of these outcomes are desirable, and to avoid them, Washington should look to bolster New Delhi’s efforts to not only stay ahead of Beijing in South Asia, but further widen the gap. – Foreign Policy


Thailand’s Constitutional Court on Wednesday dismissed a petition to renominate Pita Limjaroenrat, a leading candidate, as the country’s next prime minister. – New York Times

Taiwan Vice President William Lai has promised during a visit to San Francisco to take peace as his “lighthouse” and democracy as his guide, on the final leg of a trip that China has condemned. – Reuters

The Biden administration believes that a seismic but fragile realignment is underway in East Asia: a deeper relationship between two close U.S. allies with a long history of mutual acrimony and distrust. The change would accelerate Washington’s effort to counter China’s influence in the region and help it defend Taiwan. U.S. President Joe Biden hopes to cement those ties with a summit at Camp David, the storied presidential retreat in Maryland’s Catoctin Mountains, this Friday. – Reuters

Japan’s exports fell in July for the first time in nearly 2-1/2 years, dragged down by faltering demand for light oil and chip-making equipment, underlining concerns about a global recession as key markets like China weakened. – Reuters

Armenia and Azerbaijan clashed at an emergency meeting of the U.N. Security Council Wednesday over the plight of the 120,000 people in the Nagorno-Karabakh region that Armenia says are blockaded by Azerbaijan and facing a humanitarian crisis. – Associated Press

The US, Japan and South Korea are to create a leader-level hotline and hold annual military exercises as part of a landmark trilateral agreement that will help Washington and its Asian allies boost deterrence against North Korea and China. – Financial Times

Editorial: The mountainous enclave of Nagorno-Karabakh, home to about 120,000 residents, most of whom are ethnic Armenians, has long relied on a single lifeline to Armenia: a road known as the Lachin corridor. Twice in the past three decades, Armenia and Azerbaijan have gone to war over the territory. Tensions are rising again because Azerbaijan has blockaded the corridor, effectively sealing off Nagorno-Karabakh and creating shortages of food and medicine. Azerbaijan should realize its move will achieve little beyond provoking more conflict. – Washington Post

Daniel Russel writes: Historical grievances between America’s two closest Asian allies, Japan and South Korea, have loomed as a potential Achilles’ heel for U.S. security interests in the region for far too long. Lingering Korean resentment over the legacy of Japan’s colonial occupation, and Tokyo’s perceived reluctance to own up to that past, have undermined American attempts to present a united allied front in the Pacific. – New York Times


NATO member Poland displayed its state-of-the-art weapons and defense systems at a massive military parade Tuesday, as war rages in neighboring Ukraine and ahead of parliamentary elections in two months. – Associated Press

Lithuania on Wednesday decided to temporarily close two of its six checkpoints with Belarus later this week amid growing tensions with its eastern neighbor, an ally of Russia. – Associated Press

The Czech Republic on Wednesday completed the ratification of a defense treaty with the United States that deepens military cooperation and makes it easier to deploy U.S. troops in Czech territory. – Associated Press

Switzerland’s government has lined up with the European Union’s 11th round of sanctions against Russia over its war in Ukraine. The Swiss executive branch decided Wednesday that the new measures adopted by the European bloc on June 23 would take effect later in the day in the Alpine country. – Associated Press

The German government has retreated from a plan to legally commit itself to meeting NATO’s 2% military spending target on an annual basis, a government source told Reuters on Wednesday. – Reuters

UK arrests part of wider western moves to disrupt Russian spy networks. Investigation under Official Secrets Act against five Bulgarian nationals ongoing. – Financial Times

Marc A. Thiessen writes: He then turned to my children, ages 17, 20 and 21: “That’s why I really care that your generation succeeds, because only your success will somehow guarantee my success, the success of Solidarity. … If you succeed, people will praise me. If you don’t succeed, they might curse me! So, my heritage, in a way, depends on your success.” Walesa and Solidarity gave my children and their generation the gift of a world growing in freedom, prosperity and peace; now it is in their hands to seize or squander that inheritance. – Washington Post

Stephen Bush writes: The politics of Northern Ireland throw up strange alliances and unexpected points of agreement. For example, republicans think that the British government has no place or interest in governing the place — and many British ministers, have, over the years, appeared to agree. – Financial Times


The military takeover in Niger has upended years of Western counterterrorism efforts in West Africa and now poses wrenching new challenges for the Biden administration’s fight against Islamist militants on the continent. – New York Times

BRICS leaders meet in South Africa next week to discuss how to turn a loose club of nations accounting for a quarter of the global economy into a geopolitical force that can challenge the West’s dominance in world affairs. – Reuters

Insurgents killed 17 soldiers and wounded nearly 24 in the first major attack in half a year against the army in Niger, where Western powers fear a coup by the elite presidential guard last month is weakening a rare ally against jihadi violence in West Africa’s Sahel region. – Associated Press

A Nigerian helicopter which had been sent to rescue military personnel from a deadly attack crashed after being fired on by gunmen in the northcentral region, killing those on board, witnesses said on Wednesday. – Associated Press

Ten days after soldiers took the president of Niger hostage and declared themselves the West African country’s new government, the second-ranking US diplomat visited the capital, Niamey. There have been half a dozen coups in the past three years in this stretch of the Sahel, an impoverished, arid strip south of the Sahara — but none brought out the likes of Acting Deputy Secretary of State Victoria Nuland, a close adviser to President Joe Biden. – Bloomberg

Nigeria’s president on Wednesday evening announced a cabinet of close advisers and political loyalists as he seeks to rejuvenate a faltering economy and respond to a crisis in neighbouring Niger that has dominated the first few months of his term in office. – Financial Times

Austin S. Matthews writes: Time is of the essence. Niger’s imprisoned president is calling for all support from the international community to return to democracy. Military juntas are a dangerous variety of authoritarian rule and one that is not positioned to protect the innocent. Failure to act with conviction could lead to worsening civilian casualties, insurgent violence, and entrenched autocracy. For these reasons, the Biden administration must act urgently to officially declare a coup in Niger and formulate a wave of sanctions against this military junta. – The Hill

Ben Fishman, Anna Borshchevskaya and Aaron Y. Zelin write: In Niger, the best approach for now may be to push intensively for a diplomatic resolution while using the threat of complete isolation to encourage some cooperation from the junta. An unconventional partner like Algeria may be helpful given its opposition to the coup and military intervention, not to mention its interests in preventing a jihadist surge. – Washington Institute


Latin America

A Nicaraguan court ordered the government seizure of the Jesuit-run Central American University, declaring that the school was a “center of terrorism.” President Daniel Ortega’s confiscation of the university is the latest blow to the Catholic church, universities and the remnants of Nicaragua’s battered civil society. The government has expelled and imprisoned priests, including a bishop, and many political opponents. – Wall Street Journal

Brazilian President Luiz Inacio Lula da Silva said on Wednesday he discussed with U.S. President Joe Biden efforts to fight climate change, as well as the outcome of a summit of rainforest nations held in Brazil last week. – Reuters

Guatemalan presidential candidate Bernardo Arevalo is seen winning an August 20 runoff election backed by 61% of valid votes, followed by former first lady Sandra Torres, according to a CID Gallup poll published on Wednesday. – Reuters

Argentina’s presidential frontrunner Javier Milei would freeze relations with China and pull South America’s second-biggest economy out of the Mercosur trade bloc with Brazil, foreign policy proposals that are as radical as his economics. – Bloomberg


New York City banned access to TikTok on government-owned phones, the latest in a string of US states and municipalities to block the popular video app from public employees’ devices over security concerns. – Bloomberg

Intel said on Wednesday that it was abandoning an attempt to purchase Israeli chipmaker Tower Semiconductor, after failing to secure regulatory approval in China for the $5.4bn deal. – Financial Times

A collaboration between the U.S.’s cybersecurity defense agency and private companies published its first plan to address security issues with remote monitoring and management (RMM) tools on Wednesday. – The Record


Israeli manufacturer UVision tested its Hero-120 loitering munition for the first time in the Arctic, as company officials say they are looking to expand their footprint in the region. – Defense News

JetZero, an aerospace startup focused on fuel-efficient jets, will build and fly a sleek new prototype aircraft that could one day join the Air Force’s mobility fleet, the service announced Wednesday. – Defense News

U.S. Army officials are seeking industry input on a fledgling initiative that would require companies to disclose the provenance of their artificial intelligence algorithms. – Defense News