“Jack Devine on the Afghan War’s Financial Disaster,” Bloomberg Radio, September 11, 2021

Bloomberg Opinion columnist Barry Ritholtz speaks with Jack Devine, a 32-year veteran of the Central Intelligence Agency and the founding partner and president of the international risk consulting firm The Arkin Group. Devine is also the author of “Spymaster’s Prism: The Fight Against Russian Aggression” and “Good Hunting: An American Spymaster’s Story.”

Jack Devine on the Afghan War’s Financial Disaster

In Other News – Terrorism After 9/11 & More – 9/10/2021

September 10, 2021

Terrorism after 9/11 and the potential impact of the Taliban’s reemergence.

Many of us can still remember where we were twenty years ago on September 11, scrambling to contact and locate loved ones as we watched the Twin Towers transform into smoky, foreboding chimneys rapidly approaching collapse. The attacks were highly personal, not only for those who tragically lost family members or friends that day but for anyone who cherished the value of freedom. Thousands of lives were taken on 9/11, and thousands more in the subsequent weeks and years as our nation retaliated against myriad terrorist threats ranging from al-Qaeda attacks on US interests to the advent of ISIS and its attempted caliphate.

Over the past two decades the threat of terrorism has evolved and shifted but it has never disappeared. Terrorist groups continue to exploit local grievances to assert regional control, strengthening their presence in parts of South Asia, the Middle East and Africa. Even where groups don’t have a physical foothold, they can claim an ideological one and in the years since 9/11 the internet has significantly disrupted the way that terrorist groups recruit, organize and operate. The recent attack on Karzai airport in Afghanistan, attributed to regional ISIS affiliate ISIS-K, demonstrates the resilience of a diffuse movement whose members are motivated by shared ideology.

Indeed, in Afghanistan, groups like ISIS-K and most notably the Taliban itself, have been able to maintain or develop a certain degree of power despite years of foreign military intervention. It can be debated whether a continued US presence would have contained these violent elements, and for how long and at what cost, but as it stands now the Taliban has gained control and it’s going to try to keep it. The Taliban is presently focused on establishing itself as a legitimate governing entity with firm command over the Afghan people and an eye towards acquiring regional power.

But as part of this effort the Taliban will need to figure out how to use its connections to al-Qaeda and Pakistan to thwart rivals like ISIS-K, potentially expanding its reach into, and further destabilizing, South Asia in the process. While it remains to be seen how much the Taliban and al-Qaeda will ultimately unite to support each other’s regional power grab, the Taliban likely recognizes that any attack on the United States cultivated on Afghan soil would come at an extremely high cost‒ resulting in a rapid US military response, and again weakening the ambitions of both groups in the process.

UAE establishing specialized court for money laundering as part of larger effort to strengthen nation’s standing as an international financial center. Over the past several years the UAE has been making a concerted effort to enhance its anti-money laundering (AML) regime and its progress was recognized in the latest Financial Action Task Force (FATF) assessment that lauded many of the nation’s improvements. But given the stature of the UAE as a major business and financial hub dealing with a large volume of diverse, high-risk inputs, the number of annual money laundering prosecutions nationwide hasn’t lined up with the degree and type of activity. Recognizing this disparity, in late August, the government of Dubai announced the establishment of a new court within the Court of First Instance and the Court of Appeal that will be focused on prosecuting money laundering offenses, further building out the UAE’s efforts to prevent financial crime after the Executive Office of AML and Countering the Financing of Terrorism (CFT) was approved by the cabinet in April. Abu Dhabi established a similar court last fall which has already been instrumental in prosecuting financial crimes that often require specialized expertise. While the UAE’s AML/CFT efforts are increasingly important and commendable, the success of the courts will still depend on inputs from financial institutions, regulators, and invested citizens who must all play a role in identifying criminal activity and alerting authorities to the illicit behavior.

In Other News – Terrorist Attack in Kabul, Africa’s Sahel and terrorist attacks, & More – 8/27/2021

August 27, 2021

Terrorist attacks in Kabul kill numerous US service members, civilians and Afghans, harbinger of challenges to come. Thursday’s tragic attacks near Kabul airport were coordinated, complex, and effective at challenging the Taliban’s authority in a high-profile act of destruction. The attacks have been claimed by regional ISIS-affiliate, ISIS-Khorasan “ISIS-K”, which was officially established in early 2015 and is primarily comprised of Taliban defectors, former Pakistani Tehrik-i-Taliban members, and former members of the Islamic Movement of Uzbekistan. For several years ISIS-K has been fighting against the Taliban, particularly in the Nangarhar province of Afghanistan where both groups want to rule the drug trade. ISIS-K has also remarked that the Taliban was in partnership with the US military and has abandoned the jihadist battlefield for a national, not universal, cause. A UN Security Council report from February 2021 indicates that ISIS-K was responsible for the deaths of about 600 civilians and 2,500 Afghan security forces from early 2020-2021, and even though the group had lost territory it maintained sleeper cells in Kabul. Thursday’s ISIS-K attacks are likely indicative of violent unrest to come as the Taliban navigates how to govern a country that is impoverished, economically dependent on illegal narcotics sales and foreign aid, rife with dissenting violent jihadists groups, and devoid of many competent civil society and service members who recently fled the nation.

In Africa’s Sahel, steady stream of terrorist attacks demonstrates continued breadth and brutality of al-Qaeda and ISIS-linked militants. Last week, two armed militant attacks on villagers in southwestern Niger resulted in more than 50 deaths, and on Wednesday over 16 Nigerien soldiers were killed in a southeast attack by terrorist group Boko Haram. Niger, which borders seven countries and is among the world’s poorest, has seen an uptick in terrorist attacks over the past year. According to Niger’s newly elected President Mohamed Bazoum, his country is struggling to contain the insurgency and can’t afford to purchase the airplanes necessary to secure multiple vulnerable areas. Despite more than eight years of military intervention led by the French, armed groups affiliated with al-Qaeda and ISIS in the region persist, and French President Emmanuel Macron recently announced plans to withdraw about half of the French troops, explaining that France doesn’t have the vocation or the will to stay eternally in the Sahel. France will, however, continue to be instrumental in leading specialized counterterrorism efforts in the region in collaboration with other local and international partners. In addition to ongoing attacks in the Sahel, some jihadists are moving south into deeper parts of sub-Saharan Africa, and continue to exploit porous borders, ethnic tensions, criminal networks, political instability, and weak or corrupt security forces.

Big Oil investing heavily in offshore oil projects in Brazil, Latin America, diversification important for long term economic health. During 2020, while demand for oil plummeted in many parts of the world, Brazil was increasing its output and production shows little sign of stopping. According to Brazil’s energy minister, the nation will be pumping 5.3 million barrels daily by 2030 and could be among the top five oil producers in the world. Brazil has been offering high quality, low-priced oil at a time of strife and competition among OPEC+ countries, making its projected 75% increase over the next 10 years a more realistic target. Further, Brazil’s offshore pre-salt fields are appealing because they offer crude oil with low carbon intensity, making them a slightly greener option during the transition to decarbonize the global economy. In addition to Big Oil’s investments in Brazil, leading companies are also putting significant funds into offshore projects and exploration in Guyana and Surinam. Venezuela, too, is hoping for easing of sanctions in the upcoming months that might help the nation reclaim its spot as a dominant producer. While Latin America is poised to take a leading role in oil production over the next five to ten years, simultaneous economic diversification will be critical given the increasing global efforts to reduce carbon dependance.

In Other News – Taliban at the helm & More – 8/20/2021

August 20, 2021

Taliban at the helm, regional actors engage new Afghan leadership for geostrategic gains. While the international community grapples with how, if, and to what extent it should engage with the Taliban, regional powers Russia, China, Iran, and Pakistan – who all laid the groundwork for relations with the Taliban and continue to safely operate their embassies in Kabul − are working with the new leadership to secure their geostrategic positions. Russia, who initially welcomed the Taliban’s downfall back in 2001, has steadily changed course over time, seemingly concluding that it could better negotiate with the Taliban than a US-supported Afghan government. But Russia, who is eager to be the dominant military power in Central Asia, will need the Taliban to effectively keep narcotics trafficking and militant activity in the neighborhood at bay. China, like Russia, wants to prevent transnational militant groups from encroaching, namely those with ties to China’s Muslim population in the Xinjiang region that borders Afghanistan. China will also pressure the Taliban to limit its influence on extremist groups within Pakistan where Beijing has invested substantial funds in the Chinese-Pakistan Economic Corridor infrastructure projects. China’s own investment in Afghanistan is a possibility, but Beijing will likely be cautious due to both the Taliban’s yet-undetermined governing direction and past experiences losing money in similar Afghan initiatives. Iran cares most about getting rid of the US, protecting its Afghan border, and making sure that the Afghan Shi’a population isn’t persecuted. The Iranian Supreme Leader is willing to set aside substantial differences between himself and the Taliban leadership to achieve these goals and is reportedly in discussion with the Taliban to develop a more inclusive government representative of all Afghan ethnicities. Pakistan, who already has a well-established relationship with the Taliban, will now be looking to contain its own extremist and separatist groups from inspiration or influence. And despite the complicated nature of working with a nation who has arguably kept the Taliban alive for the past two decades, the US will need to collaborate with Islamabad if it wants to have any substantial impact on the Taliban’s actions. In addition to each nation’s engagement with the Taliban, shifting dynamics are at play between the nations themselves: China and Pakistan are close allies, Russia might be somewhat warming to Pakistan after decades of siding with India, and China and Russia have been conducting joint military exercises.

Venezuelan negotiations underway with limited expectations, investors watching closely. Last week in Mexico City representatives of Venezuelan President Nicolás Maduro came together with representatives of the US-backed democratic opposition to initiate negotiations aimed at ending the five-year political stalemate. In a seemingly goodwill gesture, during the week Maduro released Freddy Guevara, an opposition leader who was imprisoned for over a month due to alleged involvement in a violent attack against security forces, so that he can participate when the talks begin in earnest in early September. In a new twist, both Maduro and the opposition will be represented by a primary negotiator of their choice: Maduro’s camp will be represented by Russia, and the opposition will be supported by the Netherlands- their second choice to the United States who will instead be part of a broader team of 10 international negotiators. The talks will be facilitated by Norway’s Ministry of Foreign Affairs, and seven critical issues ranging from human rights to economic policies will be on the table. Maduro, whose primary goal is to get the US to ease sanctions, is entering the negotiations in a strong position and has succeeded in the past even when coming from a weaker one; but opposition leaders appear cautiously optimistic that they might be able to reach partial agreements on issues like Covid-19 vaccine imports and ensuring fair conditions for the upcoming regional elections in November. Some international investors too, seem to think that partial sanctions relief could be a possibility, and several private equity funds and companies have demonstrated a renewed interest in Venezuela‒ angling to profit from the first phase of a potential economic recovery.

“A Look At Events Unfolding In Afghanistan,” Jack Devine on Bloomberg Radio, August 16, 2021

Jack Devine, former Chief of the CIA’s worldwide operations and Founding Partner, President of The Arkin Group, discusses the events unfolding in Afghanistan. Hosted by Paul Sweeney and Matt Miller.

A Look At Events Unfolding In Afghanistan

In Other News – Taliban offensive complicates Pakistan’s position, Multiple nations explore weather-modification technology, & More – 8/13/2021

August 13, 2021

As the Taliban offensive continues, Pakistan’s position grows increasingly complicated. Of the many nations who met this week in Qatar to discuss Afghanistan’s future, including the United States who will remain a major player even after the troop withdrawal, Pakistan is best positioned to impact what happens next. Pakistan officially denies supporting the Taliban, but for years it has provided the group with operating space, ideological recruits, medical treatment, money, and weapons– transfers further enabled by cross-border ethnic and tribal ties. On Monday, US Defense Secretary Lloyd Austin spoke to Pakistani Army chief General Bajwa about the need to eliminate safe havens for the Taliban along the Afghan-Pakistan border, but the outcome of such talks is unclear and Pakistani Prime Minister Imran Khan has stated that Islamabad is not taking sides. The international community is overwhelming against a complete Taliban takeover: China, Russia, and the United States have all put pressure on Pakistan to convince the Taliban not to take Kabul, and other key regional players like Iran have long opposed Taliban rule. But if the Taliban is rapidly capturing territory without substantial opposition, most strikingly in the northern region historically resistant to the group, it’s also uncertain whether Pakistan could even convince the Taliban to stop if it tried. Pakistan’s stance on the Taliban is increasingly complicated by its alliance with China who wants to keep Taliban influence far from its Muslim Xinjiang region. Further, a Taliban-led state might give Pakistan a stronger position against India, but a devastating civil conflict in Afghanistan also means an excessive inflow of refugees and the threat that Pakistani extremist groups are invigorated by the establishment of an Islamic Emirate next door. For our take on the important role of covert actions in the region, please see Jack Devine’s 2010 WSJ op-ed that remains relevant today: Jack Devine: The CIA Solution for Afghanistan – WSJ

Multiple nations seriously exploring weather-modification technology as climate change worsens. A new report by the UN’s Intergovernmental Panel on Climate Change (IPCC) indicates that the world is heating up much more quickly than previously assessed, and water-related disasters like drought and flooding are becoming more prevalent as a result. Water security and access, long a cause of territorial disputes, is increasingly important, and according to the World Meteorological Organization more than 50 countries have been pursuing weather modification programs. The UAE, in collaboration with researchers from the UK, is actively testing a new system of cloud seeding that creates artificial rain by flying drones into clouds and delivering an electric shock. The new system is reportedly safer for the environment than previous methods involving salt flares, and “rain enhancement science” is gaining traction worldwide. In January, China conducted its first successful unmanned weather-modification drone “sweet rain” flight- part of Beijing’s larger plan to extend its artificial rain program to over 60% of the country’s landmass by 2025. Some countries like Thailand and Indonesia are pooling resources on weather modification initiatives, and similar alliances are anticipated. Although the technology itself is still under debate, both for its effectivity and potential impact on the greater surrounding environment, the conversation will only increase and calls for international regulations are likely on the horizon.

Private digital asset platform is selected by US government to manage seized cryptocurrency. Criminals have been increasingly demanding cryptocurrency payments for a myriad of illicit activities, including notably lucrative ransomware attacks, but the government has simultaneously become much more adept at tracking and seizing the digital assets and now holds millions in recovered crypto. The US Marshals Service, a division of US DOJ who oversees asset recovery, used to deal with the seized crypto the same way it did with items like real estate or art- auctioning it off to the highest public bidder. But with larger amounts of crypto being recovered in an extremely volatile environment, the government wants a better solution. Since at least 2018 the Marshals have been looking to partner with a private sector company to help manage the crypto assets, and public records indicate that by June 2020, 15 companies were vying for the contract. Anchorage Digital, the first federally chartered bank for crypto as of January 2021, has won the five-year contract after closely edging out a competitor deemed too large to win a small business deal. The contract comes at a time of heated crypto debate; national and international governmental bodies are grappling with related issues on how to regulate the currencies and how and if to implement national digital currencies.

In Other News – Philippines & U.S. recommit to defense agreement, Belarusians have had recent extraterritorial attacks, & More – 8/6/21

August 6, 2021

Philippines recommits to defense agreement with the United States after China comes up short. Last week Philippine President Rodrigo Duterte retracted his threat to end the longstanding Visiting Forces Agreement (VFA) with the U.S., a critical component of the larger Mutual Defense Treaty between the two nations that’s been in place for over 70 years. The decision was announced at a joint news conference between U.S. Defense Secretary Lloyd Austin and his Manila counterpart Delfin Lorenzana, and signals frustration with China and a renewed warming towards Washington. For five years of his presidency, Duterte has advocated for an “independent foreign policy” while simultaneously courting China. But China hasn’t come through on many of Duterte’s aspirations – investments on infrastructure projects have been minimal and produced disappointing results, and China continues to challenge the Philippines’ exclusive economic zone in the South China Sea (SCS). Further, in 2021 polling conducted by the ISEAS-Yusof Ishak Institute in Singapore, ~87% of Filipinos expressed that China’s encroachment into exclusive zones and continental shelves was their top concern in the SCS, with the same percentage demonstrating they would prefer to align with the United States. In July, the U.S. publicly stated that it would aid the Philippines should China attack its aircrafts or ships, and with the recent renewal of the VFA Duterte is indicating that he’s newly appreciative of the collaboration.

Recent extraterritorial attacks on Belarusians aligns with dangerous trend of transnational repression. Over the past decade, transnational repression, roughly defined as the coercion perpetrated overseas by authoritarian governments against citizens of their own countries, has been on the rise – recently demonstrated most egregiously by Belarus. This type of coercion isn’t new, but technology has propelled it forward and authoritarian regimes are increasingly threatened by the ongoing social media activity around exiled dissidents. Technology has also made it easier than ever to locate and surveil expats. This week, an active Belarusian dissident living in the Ukraine was found dead, hanging in a public park near his home. Last week U.S. Secretary of State Antony Blinken accused Belarus of an “act of transnational repression” when it tried to force a dissenting Olympic athlete back to Belarus after threatening her with punishment upon return. In May, in an extreme event that defied international protocol, a Ryanair flight was hijacked to capture a Belarusian journalist who was on the plane. Indeed, traveling poses unique risks to dissidents and the mobility controls and mechanisms designed to prevent criminals from crossing borders continue to be abused by authoritarian states for repressive purposes.

Easing of Covid restrictions primes law enforcement for potential criminal exploits at international borders. Furloughed port and airport workers could be targeted by organized criminals upon returning to their positions according to recent messaging by the U.K.’s National Crime Agency (NCA). Individuals stationed at the borders, delivery centers and other hubs have historically been exploited by organized criminal groups who want to traffic in weapons, drugs, or people without detection. But trafficking is a constant, under-the-radar threat and during the pandemic the attention of national governments has been diverted to the more immediate concerns of its citizens. The NCA acknowledged that many employees have suffered during the pandemic but cautioned against the temptation to sell border-related information because it could have outsized ramifications for the safety of all citizens. Exasperating the situation, the pandemic has pushed millions of people worldwide into extreme poverty and criminals are recruiting the most vulnerable for illicit trafficking schemes, often involving children. The recent NCA alert indicates that individuals working the border are being recruited both in-person and online, sometimes under seemingly legitimate pretenses. The issue isn’t unique to the U.K., and with law enforcement focused on domestic issues heightened during the pandemic, it is likely that transnational, organized criminals will continue to exploit unstable situations to recruit both victims and accomplices.

In Other News – European Union and a new anti-money laundering authority, Russia and it’s ambiguous game in Syria, & More – 7/30/2021

July 30, 2021

European Union proposes new anti-money laundering authority with strong focus on reducing anonymity. Last week the European Commission proposed a new legislative package to curb the threat of money laundering and terrorist finance throughout the European Union (EU). The United Nations Office on Drugs and Crime estimates that between 2 and 5% of global GDP – between $800 billion to $2 trillion, is laundered annually. To ameliorate this risk, the EU now wants to establish a 250-member Anti Money Laundering (AML)-Combatting the Financing of Terrorism (CFT) authority to increase coordination among regional financial intelligence units and better identify seemingly unconnected illicit actors. The authority will be responsible for both formulating clear AML-CFT regulations as well as enforcing violations with financial penalties. The new EU proposal comes after the U.S. adopted a tougher AML law at the start of 2021 and will likewise require financial institutions to pay greater attention to transparency- both of its customers base and their transactions. Over the past several years, customers have increasingly maintained anonymity via unchecked beneficial ownership filings and cryptocurrency transactions. The EU proposal requires more stringent due diligence and Know Your Customer (KYC) requirements of its member states and prohibits financial institutions to transact with anonymous cryptocurrency wallets. There will also be an EU-wide limit of €10,000 on cash payments.

With new leadership in Israel and Iran, Russia is playing a deliberately ambiguous game in Syria. According to a top Russian military official, Israeli missiles launched against Iranian-backed targets in Syria have recently been downed on several occasions by Syrians using Russian-supplied air defense systems. These developments have not been corroborated by U.S. or Israeli officials, but the allegations are nonetheless telling. Putin and Netanyahu had an agreement that the Israelis could conduct strikes in Syria against Iranian-backed targets provided they first deconflicted. But with Netanyahu no longer in power, and a leadership change in Iran, a shift in Russian policy is possible or at least more believable. Several weeks ago, U.S. media reports also indicated that Russia was vying to sell an advanced spy satellite to the Iranians, which Putin vehemently denied. Earlier this week, two Iranian ships that have been under watch since late May due to suspected travel to Venezuela, instead wound-up participating in the Russian Navy’s 325th anniversary celebration. Whether the Russians are looking to limit Israeli actions in Syria, or if they are simply hedging bets with Iran, reporting on intercepted Israeli missiles also serves as a convenient advertisement for Russian-made military equipment.

Chinese operations in Pakistan could be increasingly targeted as the U.S. withdraws from Afghanistan. This week in Karachi two masked assailants reportedly shot at a car transporting two Chinese nationals employed at a nearby factory. Earlier this month, nine Chinese and four Pakistani workers were killed in a bus bomb attack while traveling to the $4.2 billion Dasu hydropower dam, part of the broader U.S. $65 billion China-Pakistan Economic Corridor (CPEC) project. The Pakistanis initially denied that the bus was targeted by terrorists, but eventually conceded and an investigation is underway. In April, several people were killed in a hotel attack in Quetta that is believed to have targeted the Chinese ambassador; this attack was claimed by Pakistani Taliban. Beijing and Islamabad are close allies collaborating on regional infrastructure projects opposed by both separatist insurgents and Islamist terrorist organizations. Grievances range from lack of economic opportunity for the local population to the Chinese treatment of its Muslim, Uighur population. Baloch separatists at war with the Pakistani state have also attempted to undermine the Chinese – targeting the Chinese consulate in Karachi and hotels housing Chinese workers. Further, with the U.S. withdrawal from Afghanistan China is the new face of the large, external power acting in the region. The Chinese recently met with the Taliban and expressed interest in maintaining regional peace, but with increasing economic inequity in the region, further exasperated by Covid-19 and political unrest, the Chinese are likely to remain a ready local target.

In Other News – Russia’s strategy in Southeast Asia, Pedro Castillo is declared President of Peru, & the meaning of the United Nations Global Compact – July 22, 2021

July 22, 2021

Russia’s multi-pronged support of Myanmar is a microcosm of its strategy in Southeast Asia. In the months since Myanmar’s February military coup, Russia and China have been the junta’s most powerful allies, but Russia has exploited regional instability to position itself as a third path between China and the West. While China was closer with the former Myanmar government than the military, it was also concerned about the government’s ties with the West and potential interference in its development efforts, particularly its Belt and Road Initiative. Russia, on the other hand, doesn’t depend on stability in Southeast Asia to the same degree as China and can instead take advantage of warring factions. Last month, on his first trip outside of the immediate region since February, Myanmar’s junta leader Min Aung Hlaing went to Moscow to meet with high-level Russian defense officials instead of heading to Beijing. Hlaing has reportedly visited Russia seven times within the past decade and previously stated that over 6,000 Myanmar officers have studied at Russian military academies. According to data from the Stockholm International Peace Research Institute (SIPRI), Russia was responsible for almost 40% of arms sales to Myanmar from 1999-2018, second only to China. SIPRI data further indicates that Russia has been Southeast Asia’s largest arms supplier over the past two decades, counting Vietnam and Laos as top customers. But Russia is offering the region more than arms and has promised Myanmar two million Covid-19 vaccines and assistance in the nation’s own vaccine production efforts. Russia has also been trying to expand free trade agreements between its Eurasian Economic Union (EAEU) and Southeast Asian countries, most recently getting Indonesia to sign on to the deal. Stepping even further into soft power efforts, last week Russia’s foreign minister met with his Bangladeshi counterpart and agreed to encourage Myanmar to engage in dialogue with Bangladesh on the Rohingya crisis.

Leftist, former schoolteacher Pedro Castillo is declared President of a divided Peru, projected economic growth could play in his favor. Peru, like many of its neighbors, has been battling the triple and interwoven threat of Covid-19, social unrest, and severe economic downturn. But for the past several years Peru has also been challenged by sharp divisions between its executive and legislative powers. Last November, Peru’s unicameral legislature voted to impeach then-President Martín Vizcarra, citing mismanagement of the pandemic and corruption, in a move that outraged thousands. The June presidential elections were likewise fraught. Castillo’s right-wing rival Keiko Fujimori, who is also under investigation for corruption, alleged electoral fraud and the Peruvians initiated a six-week long investigation, eventually finding Castillo the rightful victor. The EU, U.S. and 14 electoral missions deemed the elections legitimate, and the U.S. called the election a “model of democracy” for the region. Castillo, who previously worked as an elementary school teacher and has never held public office, will be greeted by a political establishment that is almost entirely against him. Peruvian citizens are also deeply divided, and many urban elites reportedly moved their money overseas out of fear for Castillo’s economic policies. But Castillo’s Peru Libre party holds fewer than 40 of 130 seats in the legislature and Castillo has already recruited several moderate advisors. Further, he has backed away from talk of nationalizing Peru’s lucrative multinational mining, oil, gas, and hydrocarbon companies, instead pledging to raise taxes on mining firms. Prices of copper and gold, two of Peru’s most critical exports, remain high and Covid-related trade obstacles are expected to ease over the coming months. While it is uncertain how effective Castillo will be, or where he will ultimately fall on his policies, positive projections for Peru’s export-based economy will likely play in his favor.

Enjin becomes first blockchain platform to gain acceptance into the United Nations Global Compact, signaling widespread range of corporate sustainability efforts. On Tuesday, Enjin, an innovative blockchain technology company focused on non-fungible tokens (NFTs), became the first such company to join the United Nations Global Compact. Upon admission, Enjin stated that it hopes to use NFTs to promote sustainability and equality in line with the UN pact that encourages businesses and firms worldwide to adopt more environmentally friendly and socially responsible practices. NFTs have surged in popularity in the past two years, and during the first quarter of 2021 NFT sales reportedly exceeded US$2 billion. In essence, an NFT is a way to prove ownership of a unique virtual item. It’s a unit of data that’s stored on a blockchain, or digital ledger, that certifies exclusive ownership of digital files ranging from photos to sports trading cards. Enjin, which is headquartered in Singapore, has focused its NFT efforts on games and apps and is reportedly able to operate with a lower carbon footprint than Bitcoin due to a slimmed-down verification model that requires less energy. This week, the UN Global Compact not only included Enjin as a member, but gave the company its highest membership rank, sending a signal that it’s interested in promoting such an environmental effort by crypto and blockchain entrepreneurs. For its part, Enjin has stated that it wants to employ the technology in carbon capture companies, fighting climate change in the process. The Head of the UN AI and Robotics Center remarked that during the global struggle to recover from the pandemic we should take advantage of new technologies like AI and blockchain to better equip ourselves for the future.

TAG anticipates that a wider range of industries will be evaluated and held accountable on sustainability efforts moving forward. While environmental impact is still a key component of sustainability, the broader concept has evolved into the realm of human rights, labor, and anti-corruption among other socially responsible issues. Moreover, shareholders in diverse industries are increasingly demanding proof and measurements of sustainable practices of both the primary company and associated businesses along its supply chain. TAG is available to assist in conducting these valuable self-due diligence assessments on corporate sustainability issues, including assessments of associated second tier businesses.

In Other News – Simmering unrest in Cuba, Ransomware Attacks, & More – July 16, 2021

July 16, 2021

Simmering unrest in Cuba erupts in collective protest, Venezuela watching closely. Last weekend thousands of anti-regime protestors took to the streets across the island nation in some of the largest protests since the Cuban Revolution. In 2020, Cuba’s national GDP dropped by 11% – the worst regression since 1993, and medicine and medical supply shortages are now peaking during the height of the nation’s Covid crisis. On July 11, in a rare moment of collective public outcry, thousands of Cubans mobilized to protest government policies and the increasing lack of food, electricity, and basic goods. Cuban authorities tried to restrict internet access during the protests, a now-common authoritarian tactic to contain live dissent, but rapid social media dissemination of the imagery made denial of the events difficult. Reports from NGOs indicate that at least 100 protestors, activists and independent journalists have been detained nationwide. On Monday, Venezuela, who is a close political ally of Cuba’s and is likewise deep into a humanitarian crisis that it blames on U.S. sanctions, arrested former opposition deputy Freddy Guevara, charged him with terrorism and treason, and surrounded the home of opposition chief Juan Guaido. While Venezuelan officials attribute the actions to self-defense against a purported opposition criminal gang plot, some U.S. politicians have suggested that Venezuela was taking precautionary measures to prevent any spillover effects from Cuba. In late June, the United States, Canada, and the EU promised to review sanctions policies if Venezuela moved towards free elections for its upcoming November race, but Monday’s actions run contrary to this effort.

As ransomware attacks continue at a pricey and rapid clip, cyber insurance is a heated topic of debate. The dramatic uptick in sophisticated ransomware attacks since 2019 has transformed what was once an IT issue into one of business viability. Curbing the greater threat will require some combination of international agreements and industry-specific measures, but in the meantime many companies have opted to purchase cyber insurance to help them manage and recover the losses of cyberattacks. While it may have previously been cheaper just to pay the ransom than to deal with insurance, the ransoms are so high now that for some the calculus has shifted. A recent report on cyber insurance by the Royal United Services Institute (RUSI) argues that cyber insurance could theoretically help prompt policy holders to set up stronger defenses and that implementing “minimal ransomware controls”- such as quickly patching vulnerabilities, requiring multi-factor authentication, segmenting data compartments and access, and saving regular backups, should be a requirement of any insurance coverage. These minimal requirements are also in the interest of the insurance companies whose profitability has been challenged by the exorbitant payouts for ransomware attacks over the past year. But while the idea is hopeful, RUSI finds that so far cyber insurance hasn’t done much to improve cybersecurity practices. Further, criminals try to learn if, and how much, cyber insurance coverage exists before choosing their victims, and criminals are also targeting the insurance companies themselves. The issue of whether cyber insurers will be required by law to halt reimbursements for ransom payments, or if they will even have enough funds to do so, remains to be seen.

India-China border conflict exposes distrust of diplomatic measures. In recent weeks, India moved an additional 50,000 troops and significant military equipment to its Chinese border Line of Actual Control (LAC), bringing the total number of Indian troops to about 200,000. On Wednesday, the Chinese and Indian foreign ministers met and reportedly agreed to work on a mutually acceptable solution, but China and India have never seen eye to eye on their 3,488 km border line, and each nation’s infrastructure projects in the immediate region are increasingly viewed as security threats. A dispute in 2017 was triggered when the Chinese started to build a road within the Doklam region, and in mid-2020, in the most violent confrontation along the border in decades, fighting erupted in the Galwan Valley not long after India was working on a strategic road bridge. Further, Indian defense officials have remarked that the 2020 conflict prompted New Delhi to accelerate the construction of roads, tunnels, and bridges to provide for the quick movement of troops along the border. In addition to better road connectivity with Pakistan and Tibet, regional Chinese infrastructure developments are strongly guided by a desire to secure water access. China is planning to build a mega-dam in Tibet spanning the Brahmaputra River which would have potential environmental and access consequences for downstream countries like India. China has also previously withheld critical water-level data about the Brahmaputra from India during times of political tension. While boosting troops along the LAC is one defensive measure, Indian Prime Minister Modi, who recently slighted China in a rare move by publicly wishing the Dalai Lama happy birthday, is also re-invigorating the Quad Security Dialogue with the U.S. and allies, further indicating that India isn’t counting on a purely diplomatic solution with China moving forward.