11/21/17

Counterfeit Operations, Iran and North Korea

By: Denise Simon | Founders Code

It is a global business and a nasty one.

U.S. officials have long accused Iran of supplying arms to rebel Houthi forces battling for control of Yemen. But Monday’s sanctions help highlight the scope of what Western officials commonly describe as the IRGC’s far-reaching and malign activities.

“Iran itself, together with its proxy, Lebanese Hezbollah, is knee-deep and has been knee-deep in the counterfeit business for quite some time,” said Matthew Levitt with the Washington Institute for Near East Policy. “Exposing this is kind of a two-for one, both exposing the organization’s terrorist activity and also exposing the nature of the criminal activity that it engages in.” More here.

Treasury Designates Large-Scale IRGC-QF Counterfeiting Ring

11/20/2017

Iranian Network Prints Counterfeit Yemeni Bank Notes for IRGC-Qods Force

WASHINGTON – Today, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) designated a network of individuals and entities involved in a large-scale scheme to help Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF) counterfeit currency to support its destabilizing activities.  This network employed deceptive measures to circumvent European export control restrictions and procured advanced equipment and materials to print counterfeit Yemeni bank notes potentially worth hundreds of millions of dollars for the IRGC-QF.  The IRGC-QF was designated pursuant to the global terrorism Executive Order (E.O.) 13224.

“This scheme exposes the deep levels of deception the IRGC-Qods Force is willing to employ against companies in Europe, governments in the Gulf, and the rest of the world to support its destabilizing activities.  Counterfeiting strikes at the heart of the international financial system, and the fact that elements of the government of Iran are involved in this behavior is completely unacceptable,” said Treasury Secretary Steven Mnuchin.  “This counterfeiting scheme exposes the serious risks faced by anyone doing business with Iran, as the IRGC continues to obscure its involvement in Iran’s economy and hide behind the façade of legitimate businesses to perpetrate its nefarious objectives.”

Reza Heidari and Pardazesh Tasvir Rayan Co.

Reza Heidari (Heidari) is being designated today for having acted for or on behalf of the IRGC-QF and having assisted in, sponsored, or provided financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF.

Pardavesh Tasvir Rayan Co. (Rayan Printing) is being designated today for being controlled by Heidari; for having acted for or on behalf of the IRGC-QF; having assisted, sponsored, or provided financial, material, or technological support for, or financial or other services to or in support of, the IRGC-QF; and being owned by Tejarat Almas Mobin Holding, another Iranian company also being designated today.

Heidari played a key role in procuring secure printing equipment and materials for the IRGC-QF in support of the group’s currency counterfeiting scheme.  Heidari served as the managing director of Iran-based Rayan Printing, a company involved in printing counterfeit Yemeni rial bank notes potentially worth hundreds of millions of dollars for the IRGC-QF, as of late 2016.  Heidari used front companies to obfuscate the actual end user and facilitate deceptive transactions when dealing with European suppliers of secure printing equipment and materials.

ForEnt Technik and Printing Trade Center

ForEnt Technik GmbH is being designated today for being owned or controlled by Heidari, while Printing Trade Center GmbH (PTC) is being designated for having acted for or on behalf of, and assisted in, sponsored, or provided financial, material, or technological support for, or financial or other services to or in support of, Heidari.

Heidari used German-based ForEnt Technik GmbH and PTC as front companies to deceive European suppliers, circumvent export restrictions, and acquire advanced printing machinery, security printing machinery, and raw materials in support of the IRGC-QF’s counterfeit currency capabilities.  These raw materials included watermarked paper and specialty inks from European suppliers.  Heidari is the Managing Director and sole shareholder of ForEnt Technik Gmbh.

Mahmoud Seif and Tejarat Almas Mobin

Mahmoud Seif is being designated today for having assisted, sponsored, or provided financial, material, or technological support for, or other services to or in support of, the IRGC-QF.  Tejarat Almas Mobin Holding is being designated today for being controlled by Seif.

Seif is the managing director of Tejarat Almas Mobin, the parent company of Rayan Printing.  Heidari and Seif coordinated on the procurement of raw supplies and equipment that enabled the IRGC-QF counterfeiting capabilities.  Seif was involved with the logistics of importing materials for the counterfeiting project into Iran.  Additionally, Seif has previously been involved in the procurement of weapons for the IRGC-QF.

For identifying information on the individuals and entities listed today, click here: https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20171120.aspx

*** So, did Iran teach North Korea to counterfeit or was it the other way around? North Korea has been counterfeiting and participating in illicit activities going back decades. North Korea is not especially fretful over the newly applied sanctions or being listed again as a terror state by President Trump. While it should be done, the regime has proven methods to finesse the system.


Ri Jong Ho had simply had enough. He’d seen too many executions.

Ri, a high-profile North Korean defector, spent years working for what is essentially a slush fund for one of the most notorious regimes on the planet, Kim Jong Un and his compatriots.

Life was good. Ri helped bring in somewhere between $50 million and $100 million for North Korean elites, and was handsomely rewarded with luxuries most North Koreans couldn’t dream of in years past: a car, a color TV and some extra cash on the side, once rarities in the communist state but more commonplace now in the capital, Pyongyang.

But he watched the regime kill his peers and their families, even children.

“It was not just high level officers, officials, but their families, their children (and) their followers,” Ri told CNN in his first interview to a major US broadcast network. “It was not just once or twice a year — it was ongoing throughout the year, thousands of people being executed or purged.”

Ri said the final straw came in late 2013, when Kim Jong Un executed his own uncle, Jang Song Thaek, with an anti-aircraft gun.

“It was a cruel and crude method of execution,” he said. “After all these years living in the socialist system, I never witnessed anything like that.”

Ri was living in China at the time, and in 2014 was able to safely defect with his family.

And just like that, Kim lost one of his top money makers.

Office 39

Ri said he worked for decades in what’s known as “Office 39.”

The office is in charge of bringing in hard currency for the regime. Ri calls it a “slush fund for the leader and the leadership.”
Ri told CNN “Office 39” is not engaged in illicit activities, but the US Treasury Department says otherwise.

The US government accused the office of engaging in “illicit economic activities” to support the North Korean government. It has branches throughout the nation that raise and manage funds and is responsible for earning foreign currency for North Korea’s Korean Workers’ Party senior leadership through illicit activities such as narcotics trafficking.

North Korea has been accused of crimes like hacking banks, counterfeiting currency, dealing drugs and even trafficking endangered species.

Workers who help bring in cash for the regime are granted access to the outside world — especially China — in order to establish networks that are crucial to making money, analysts say. They often have diplomatic privileges that allow them to evade their host country’s domestic laws, experts say.

Ri said he was not involved in illegal activities and that they were not under the purview of Office 39, but did not deny they occurred. He said much of North Korea’s hard cash is earned through exporting labor — the country sends workers across the globe and collects much of their pay, according to the UN — and exporting natural resources like coal, which China used to buy but has since stopped.

Illicit activities make a lot of money, though. The Congressional Research Service estimated in 2008 that North Korea could earn anywhere from $500 million to $1 billion from these types of illicit activities.

That money helps fund the lavish lifestyles of the North Korean elites while sanctions limit the country’s ability to make money. That keeps North Korea’s leadership happy and helps Kim prevent coup attempts, analysts say.

“They (North Korean leaders) are focused on maintaining their ruling power, and they are working on making this dynasty-like system lasting for a long time,” Ri said. “So instead of focusing on their economic development or better life, they are more focused on maintaining their system.

Some of Office 39’s profits also go to the country’s nuclear and missile programs, which crossed an important threshold this month with the testing of two intercontinental ballistic missiles, weapons that experts say likely put the United States homeland in North Korea’s range.

CNN reached out to the North Korean mission at the United Nations for a response to the interview with Ri. An official at the mission said Ri was lying to “make money and save his own life.”

‘Hundreds of fishing boats’

Analysts say Office 39 is likely now in the cross hairs of US President Donald Trump’s administration.

The Trump team has made it clear that one of the ways it plans to deal with North Korea is to squeeze its revenue streams across the globe in order to pressure them into negotiations over their weapons programs.

Who speaks for the United States on North Korea? Contradictions emerge

Ri is not sure if the tactic will work, as he says it’s easy to side-step sanctions and believes the international community has made strategic mistakes that could come back to bite them.

North Korean companies can just change their names once sanctioned, he says. North Korean leaders don’t keep much money abroad, so the sanctions against them are pointless, according to Ri. Smugglers are difficult to catch.

“Smuggling is conducted by any and every means you could imagine. Mostly larger items are done using ships, for example by filing a cargo list … where what’s written on the (list) is different from what is really being shipped,” he said. “On the open sea, the Yellow Sea, there are hundreds of fishing boats — both from China and North Korea — and all the smuggling is done by these so-called fishing boats.

Going after China

Ri believes that secondary sanctions — targeting those who do business with North Korea, like the United States did to China’s Bank of Dandong in June — is the way to go, especially in China.

Beijing accounts for about 85% of North Korean imports in 2015, according to UN data, though Ri revealed that Pyongyang does import some oil from Russia.

North Korean economist Ri Gi Song told CNN in February that China accounts for 70% of trade and that trade with Russia is increasing. More here from CNN.

11/19/17

A Wide Look at North Korea’s WMD Operations

By: Denise Simon | Founders Code

Primer:

South Korean surgeons operating on a North Korean defector who escaped across the Demilitarized Zone between the two countries under a hail of gunfire on Nov. 13 have found a parasite in the man’s stomach unlike any other they had seen.

The defector, who was shot five times, remained in critical condition after hours in two rounds of surgery, according to an article in the Korea Biomedical Review published on Nov. 15.

North Korean Cyber Operations: Weapons of Mass Disruption

Over the past 10 years, the escapades of various nation-state actors in the cyber realm have exploded onto the pages of top-tier media, and into prime time network news.Russian espionage against political targets during the 2016 US presidential election, wide reaching Chinese espionage against Western commercial targets, disruptive attacks against the US financial sector associated with Iran, and the destructive attacks against Sony Pictures Entertainment (SPE) are some of the premier examples of mainstream coverage of ‘cyber.’

Behind every single offensive cyber action conducted in the interest of the capable nation-states is a doctrine,[1] and North Korea, like many other nation-states, has incorporated cyber operations within their own broader military doctrine and has conducted numerous offensive operations in the furtherance of their national agenda. What is particularly alarming about DPRK operations is their willingness to initiate escalatory actions, such as their likely connections to the now infamous WannaCry ransomware, and their targeting of the global financial system.

North Korea’s disregard for the consequences of its actions sets them apart from other nation-states, and is particularly dangerous.

North Korean offensive cyber operations have been conducted to collect sensitive political and military intelligence information, to lash out at enemies who threaten their beliefs and interests, and most interestingly, to generate revenue.

This revenue generation aspect of North Korean operations was thrust into the international spotlight when, in early 2016, unauthorized transfers of funds from the Bangladesh Central Bank were issued using the Society for Worldwide Interbank Financial Telecommunication (SWIFT) network for global banking. The attempted transfers amounting to over $950 million USD sought to move funds to entities in locations such as Sri Lanka and the Philippines; ultimately $81 million USD in funds disappeared into the ether.

The subsequent investigation revealed that the perpetrators of the attack used tools to securely delete records from the SWIFT terminals that would alert Bangladesh Central Bank employees of the transfers. Commonly referred to as a “wiper,” this secure deletion tool contained code that was linked by many in the computer security industry to one used in attacks associated with North Korea, notably the attack on SPE through a US Computer Emergency Response Team (USCERT) alert. The revelation that a state would engage in such a flagrant violation of international norms came as a surprise to many in the information security arena. North Korea watchers were, of course, not surprised as the currency generation activities benefiting the Kim family and their isolated nation have been well understood for some time.

The 2016 SWIFT attacks associated with North Korea are part of the broader currency generation operations of DPRK cyber actors and intelligence organizations. Botnets associated with espionage activity targeting South Korea have been used to generate revenue through a variety of schemes for almost 10 years. Recent DPRK activity suggests an interest in obtaining cryptocurrency, such as bitcoin, through extortion and targeting of cryptocurrency exchanges.

In the third quarter of 2017, for instance, malicious emails containing weaponized documents were used to target international financial organizations, as well as bitcoin exchanges. The ultimate goal of these attacks, which were tracked by the information security community under names such as Stardust Chollima and BlueNoroff, is yet unknown, however theft and sabotage are likely.

Bitcoin provides attractive benefits to the isolated nation due to a lack of regulation and the ability to subvert international sanctions. In May 2017, ‘WannaCry’ exploded across the internet, encrypting sensitive material and holding the keys to decrypt the files for a ransom to be paid in bitcoin. This attack, too, had North Korean fingerprints embedded in the code used to execute the attack, as did the tools that were used to develop that code.

Attribution is a particularly sensitive subject in the cyber domain. Technical artifacts from the executable code that was used to conduct the WannaCry attack overlaps with code used in attacks against South Korean nuclear power plants and the SPE attack of 2014. While the technical artifacts can provide some measurable connections between the attacks, they require deep technical understanding to interpret. Other linkages, such as targeting and operational procedures, are the product of intelligence assessments and have been disputed by various parties muddying the water surrounding the assigning of attribution.

North Korea is an exception to the classical understanding of how most nations implement offensive cyber operations in that they incorporate espionage, disruptive/destructive attacks and financially motivated operations using the same computer code and infrastructure.

The value of cyber operations is likely recognized by North Korea’s most senior leadership through the State Affairs Commission (SAC), the General Staff of the Korean People’s Army, and Kim Jong Un himself. Subordinate units, notably the Reconnaissance General Bureau (RGB), Bureau 121, and the Command Automation Bureau (CAB), are likely responsible for executing the specific operations. The individual units may have a charter to self- finance their operations, or to contribute financial gains back to the regime, but it seems clear that various offensive operations are conducted by differing groups with their own approach and missions. For example, one group may have a primary focus on revenue generation, targeting South Korean banks and SWIFT and conducting extortive attacks, while another group might focus on intelligence collection, while a third conducts sabotage and destructive attacks.

Finally, the maturity of North Korean offensive cyber operations has been demonstrated through the integration of destructive attacks by cyber units during military exercises executed in the midst of escalating tension with South Korea. For instance, following the December 2012 launch of the Kwangmyongsong-3 satellite via the Unha-3 satellite launch vehicle, tensions on the Korean peninsula were high. That March, following the passing of UN Security Council Resolution (UNSCR 2087) and B-52 strategic bomber overflights in South Korea, North Korea responded with a particularly aggressive disruptive attack against South Korea.

This massive wiper attack targeted South Korea’s financial and media sectors and coincided with provocations by North Korean military and escalating political rhetoric. This pairing allowed for maximum psychological impact, while demonstrating North Korea’s ability to integrate offensive cyber activities into well-developed military doctrine. During these attacks, the Korea Broadcasting System (KBS), Munhwa Broadcasting Corporation (MBC), Yonhap Television News (YTN) and several Korean financial institutions reported disruptions. With the threat of military escalation on the table, many in South Korea would have depended on the media outlets for breaking news. Disruption of ATM networks and financial institutions would further add to the chaos as word of media disruptions began to spread.

As tensions are once again escalating between North Korea and the international community, more attacks perpetrated by DPRK cyber actors are likely. The recent increase in financial sector targeting associated with these actors may illustrate the potential for disruptive attacks to demonstrate both the capability of the North Korean actors, as well to achieve objectives in line with their broader military doctrine. While North Korea’s isolation may be detrimental to its economy and international relations, it is an effective shield from which to launch offensive cyber operations against a connected and delicate global system.


  1. [1]

    In order to establish some common definitions, we can look to the United States Department of Defense, who established Computer Network Operations (CNO) as a component of the broader Information Operations (Information Warfare) arena. CNO is further categorized into Computer Network Exploitation (CNE), Computer Network Attack (CNA), and Computer Network Defense (CND). Offensive cyber operations conducted by nation-states using this model would be considered CNE and CNA. The use of CNE can be roughly characterized as espionage, whereas CNA would be used to degrade, deny, disrupt, or destroy the network based systems of an adversary. This model can help provide a clear delineation of how various military, intelligence community, and law enforcement agencies with their authorities are able to conduct operations. China, Russia, Iran and virtually every nation-state in the world conduct CNE/CNA operations in accordance with their legal authorities and national interests.

    ***

    There are other weapons few discuss.

    Pyongyang has already achieved partial coverage of US territories. Last June, in a hearing before the US House Armed Services Committee, the head of the US Missile Defense Agency, Vice Admiral James Syring, said: “The advancement and demonstration of technology of ballistic missiles from North Korea in the last six months have caused great concern to me and others. It is incumbent on us to assume that North Korea today can range the US with an ICBM carrying a nuclear warhead.”

    This particular endeavor was likely assisted by Tehran. A February 2016 report by the Congressional Research Service concluded, “Iran has likely exceeded North Korea’s ability to develop, test, and build ballistic missiles.” Tehran might be, and probably is, helpful to Pyongyang with respect to technological aspects of the nuclear sphere as well.

    The nuclear component within the spectrum of North Korea’s weapons of mass destruction (WMDs) is evidently growing. The big question is whether the country’s despot, Kim Jong-un, will be the first person to use nuclear weapons since 1945.

    Quite recently, Kim elected to employ a highly lethal chemical weapon, the nerve agent VX, for a political assassination. This weapon was used last February by two female operatives, one Indonesian and the other Vietnamese, to murder Kim Jong-un’s estranged half-brother, Kim Jong-nam, in Malaysia. The victim died shortly after being assaulted by the two women, who wiped VX on his face as he prepared to board a flight to the Chinese territory of Macau. Traces of VX were revealed on swabs taken from his eyes and face.

    This deadly chemical agent was probably smuggled from North Korea to Malaysia, which in and of itself was an intriguing and risky move. Six of eight potential suspects were from Pyongyang’s Ministries of State Security and Foreign Affairs. The suspects flew from Kuala Lumpur on the day of the assassination, passing through Vladivostok on their way back to Pyongyang. South Korea’s request to detain four of the suspects was rejected by Russian officials on the grounds of lack of evidence.

    It can be assumed that Kim Jong-un was in on the plot from its inception. Symbolically, at least, this political assassination by VX can be regarded as an indication of Pyongyang’s chemical weapons (CW) capabilities. Whether the regime intended it to or not, the assassination signaled the readiness, usability, and deployability of North Korea’s VX, which can be used for guerrilla warfare, chemical terrorism, or wide-scale chemical attack.

    VX is also weaponized within warheads carried by ballistic missiles in Pyongyang’s  vast CW arsenal. The North Korean ballistic program constitutes the principal, though not the only, vehicle for all three WMD programs. The CW and biological weapons (BW) programs are fully matured and have marked operational offensive capabilities. Inadequate attention is being paid to Pyongyang’s large-scale offensive capacities in terms of CW and BW, but the VX political assassination incident was a wake-up call (if unintentional). More here.

11/19/17

Book Review: Harpoon: Inside the Covert War Against Terrorism’s Money Masters

By: Terresa Monroe-Hamilton

Purchase at Amazon.com

I had a very interesting book sent my way: HARPOON: Inside The Covert War Against Terrorism’s Money Masters by Nitsana Darshan-Leitner and Samuel M. Katz. I’m a military and counterterrorism wonk, so it peaked my interest. First off, this is a fascinating book and if you are analytical, it will really engross you. It comes at you from the stance of cutting off the money-flow to terrorists and that is definitely one of the primary tools we should be using in the war on terror. Plus, I just admire the heck out of the Mossad and Israel in general.

Think about it… terrorists have to have money to buy weapons to kill people. They get that money in many different ways… from the sale of drugs, to the sale of oil, investments, charities and foundations. We use our military might to keep ISIS and other enemies on the run, but to squash them, you have to strangle them financially. Israel is a master at this technique. For many years I have said we should emulate Israel in profiling and counterterrorism tactics, including border security. But I never really looked at how they cut off the lifeblood of terrorism… money. The US is now utilizing financial techniques like this to starve ISIS and it works. Europe should be using this weapon as well.

If the flow of money was cut off to ISIS and other terrorists, their Caliphate and networks would fall apart. This is why I was so furious when Obama gave millions to the Iranians, who are the biggest purveyor of terrorism on the planet. He knew what he was doing, he was funding a maniacal Islamic theocracy that will murder countless people with that money. Obama has blood all over his hands on that one.

Israel has learned the hard way, through blood and tears, that more than force is needed to take down her enemies. From 2000 to 2005, during the last Intifada, Palestinian suicide bombers relentlessly attacked Israel. The Israelis have one of the best fighting forces on the planet and they met the enemy head on. But no matter how hard they fought or how they won each encounter, the bombings continued. That was when Israeli leaders knew they needed a new game plan. So, they went after the money trail that financed everything from bomb-building factories to the cash bonuses issued to the families of suicide bombers.

Israel gave birth to a new multiagency task force codenamed Harpoon. It’s directive was to wage financial warfare against the enemies of the Jewish state. Harpoon tracked money to it source. That included charities in the US and multimillion-dollar transfers from Iran, the Gulf States and Saudi Arabia. In 2002, Harpoon expanded. It now focuses on not only intercepting the cash and the accounts, but taking them from their enemies and destroying them if necessary.

Nitsana’s book covers all of this and shows that counterterrorism is not just fought on the battlefield or through cloak and dagger, it is waged on the financial front out of necessity. Israel laser focused on this in every agency… and it worked. They even utilized lawfare in US courts and internationally to file lawsuits to stop state sponsors of terror in their tracks. The banks and the intermediaries that give life to these murderous demons are fair game and any method that can be employed to take them down is used by Israel. I applaud that wholeheartedly.

I vehemently disagree with those in the west and in the US that decry Israel’s tactics here. They raid banks etc. to stop terrorism before people die. That’s called survival. I have been less than thrilled with President George W. Bush lately. He criticized Israel’s actions as being “Wild West” in nature. Really? Because it looks to me like they work. Which is more than can be said for what the US was doing before President Trump took office. I’m not always thrilled with him either, but at least he’s kicking ISIS’ ass these days. The US has come around to Israel’s way of thinking. It’s about damn time.

From Nitsana at Fox News:

The Americans saluted Israeli spy chief Meir Dagan – the mastermind behind Harpoon – and his understanding that money was the oxygen that enabled the terror beast to live and thrive. Dagan was intent on suffocating this malignant creature through any and all means at his disposal.

In the wake of terrorist attacks in Britain, France, Spain Belgium, Germany and Sweden in recent years, Europeans will need to use the highly effective financial warfare template that Israel has already established if they hope to defeat ISIS and the terror armies that will follow.

The European intelligence services will have to cut through red tape and muster their resources to bankrupt ISIS, intercept its ability to move money from country to country, and stop it from funding fighters and operations throughout the continent.

Rendering a group like ISIS insolvent will yield victorious battlefield results.

As Nitsana put it (and I wish I had said this darn it), “A smart and successful war on terror requires James Bonds and General Pattons, as well as one or two Bernie Madoffs – and their services are needed immediately.” This woman truly gets it. Bankrupting the enemy destroys their supply lines and their killing machines. I admire this reasoning and I love this book.

From Amazon.com:

A revelatory account of the cloak-and-dagger Israeli campaign to target the finances fueling terror organizations–an effort that became the blueprint for U.S. efforts to combat threats like ISIS and drug cartels.

ISIS boasted $2.4 billion of revenue in 2015, yet for too long the global war on terror overlooked financial warfare as an offensive strategy. “Harpoon,” the creation of Mossad legend Meir Dagan, directed spies, soldiers, and attorneys to disrupt and destroy money pipelines and financial institutions that paid for the bloodshed perpetrated by Hamas, Hezbollah, and other groups. Written by an attorney who worked with Harpoon and a bestselling journalist, Harpoon offers a gripping story of the Israeli-led effort, now joined by the Americans, to choke off the terrorists’ oxygen supply, money, via unconventional warfare.

“It’s a cliche after Watergate that the key investigation in most circumstances is to ‘follow the money’ (in the words of Deep Throat). This is the story of how Mossad led this movement and substantially effected investigations of terrorism and similarly important matters and how this influenced the CIA’s later work in the same field. Bravo Mossad! Thanks for leading the way” – R. James Woolsey, CIA director (1993-1995)

And here is the press release for the book, that gives an inside look:

The haunting images of the hijacked airliners crashing into the World Trade Center, the pools of blood on the streets of Paris, and the aftermath of the horrific massacres in a nightclub in Orlando and on the streets of Barcelona, have been seared into our collective conscious, leaving us all feeling frustrated, vulnerable and afraid. Tragically, the universal approach to combating this ruthless global threat has been focused on the conventional responses anchored in dilatory military actions that have produced foreseeable and pedestrian results. However, with groups like ISIS bringing in billions of dollars annually to finance their attacks, and the Islamic Republic of Iran bankrolling its proxies Hamas and Hezbollah with an endless flow of cash, a small and covert group of intelligence operatives spearheaded a dynamic new front to combat terrorist armies by depriving them of the oxygen they require to breath: the money needed to carry out attacks around the world. This is a story of a pioneering and innovative method of fighting terrorism – financial warfare waged against the extremist organizations, their leadership and the rogue regimes that support them. It all began in Israel, the small and embattled nation that has become fabled for its cutting edge hi-tech creativity and the prowess of its espionage services. This is the previously untold tale of perhaps the greatest and most disruptive Israeli start-up of them all and its joint-venture with the United States’ counterterrorism community.

In HARPOON: Inside The Covert War Against Terrorism’s Money Masters, Israeli activist attorney Nitsana Darshan-Leitner and New York Times bestselling author Samuel M. Katz bring to light the previously classified account of how one nation, facing a tsunami of unstoppable suicide terrorism, forged its intelligence, military, law enforcement, and political leaders into a powerful task force, code-named Harpoon, to combat terror financing around the world.

Traveling back to the 1990s, Darshan-Leitner and Katz introduce Meir Dagan, a legendary soldier and spymaster, who spent a lengthy military career serving the State of Israel in the up-close-and-personal world of deadly special operations ultimately becoming the director of the Mossad, the Jewish State’s famed espionage service. Dagan’s reputation was that of a warrior, a man who moved silently behind enemy lines with a dagger between his teeth. But as a commanding general frustrated with the limitations and inefficiencies of the conventional approach to warfare that failed to stem the waves of bus-bombings, drive-by shootings and suicide attacks in Israel, Dagan sought new and imaginative strategies. He pieced together an outside-the-box solution to target the source of the terrorists’ power, a complex underground economy of “blood money” that enlisted banks and charities to distribute funds to the diabolical masterminds behind the suicide attacks and catastrophic murders. Dagan assembled a dream team of specialists from the intelligence services, the Israel Defense Force, the National Police, and even Israel’s IRS, to fight the ever transforming terrorist groups and their money across the Middle East, South America, Africa, and around the globe. In the process, Harpoon fused an operational alliance with the highest reaches of the United States government to fight terror on a truly global front.

This is the untold and remarkable story of modern day “Untouchables.” This elite and covert force intercepted banking records, perpetrated financial con games, unleashed invasive and destructive computer malware attacks, called in missile strikes against bankers, and violently eliminated financiers and bag men in foreign capitals. This is also the story of the private lawyers who pioneered the use of American counterterrorism suits to bring terrorist groups, and the countries and financial institutions that provided them material support, to their knees.

I have several new heroes here. This is just my kind of book. These are the good guys, make no mistake about it. If you want a peak into the real war on terror, this book is it. Pick up a copy at Amazon.com. I’m passing mine on to friends in the counterterrorism fields here in the US. It’s an epic read.

11/15/17

Secret Planes, Russia, China and the United States

By: Denise Simon | Founders Code

Primer:

Navigator Holdings Ltd., the shipping firm part-owned by U.S. Commerce Secretary Wilbur Ross, doubled the number of contracts it had with Sibur Holding PJSC just months after the U.S. imposed sanctions on a major shareholder of the Russian petrochemical company in 2014.

Sibur itself wasn’t subject to the restrictions, which the U.S. imposed over the Ukraine crisis, but they led to a broad chill in business ties between the two countries. Sibur’s shareholders have particularly close ties to the Kremlin. Gennady Timchenko, a billionaire energy trader, was cited as a member of the “inner circle” by the U.S. Treasury when it imposed a visa ban and asset freeze on him in March 2014, held a stake of as much as 32 percent by September of that year. Kirill Shamalov, who is married to Russian President Vladimir Putin’s younger daughter isn’t subject to U.S. restrictions, raised his Sibur stake to 21 percent in late 2014. He later sold all but 3.9 percent. More here.

***

Mikhelson is the founder and chairman of natural gas producer Novatek. He is also chairman of gas processing and petrochemical company Sibur; Billionaire Gennady Timchenko is his partner in both; Putin’s reported son-in-law, Kirill Shamalov, is a partner in Sibur. Over 2015 and 2016, Mikhelson sold a 16% stake in Sibur to China’s state-owned Sinopec and China’s Silk Road Fund for $2.1 billion. An avid art collector, he has sponsored museum exhibits in Russia and the U.S. His father headed the largest pipeline construction trust in the Soviet Union, and Mikhelson began his career as foreman for a construction company building a gas pipeline in Russia’s Tyumen region.

***

Related reading: The New Silk Road Will Go Through Syria

China and Syria have already begun discussing post-war infrastructure investment with a ‘Matchmaking Fair for Syria Reconstruction’ held in Beijing

From Utah, Secretive Help for a Russian Oligarch and His Jet

Records leaked from an offshore law firm show how the wealthy elite sidestep prohibitions on foreigners registering private planes in the United States.

SALT LAKE CITY — Bank of Utah has that all-American feel. Founded in the 1950s by a veteran of both world wars, it offers affordable mortgages and savings accounts, sponsors children’s festivals and collects coats for the poor.

But in addition to its mom-and-pop customers, the bank has a lesser-known clientele that includes Russia’s richest oligarch, Leonid Mikhelson, an ally of the country’s president, Vladimir V. Putin. The bank served as a stand-in so Mr. Mikhelson could secretly register a private jet in the United States, which requires American citizenship or residency.

The work on behalf of Mr. Mikhelson, whose gas company is under United States sanctions, is part of a discreet niche business for Bank of Utah that allows wealthy foreigners to legally obtain American registrations for their aircraft while shielding their identities from public view. The bank does this through trust accounts, in its own name, that take the place of owners on plane registration records.

Bank of Utah manages more than 1,390 aircraft trust accounts, most of them for foreigners, generating millions of dollars in fees and making it the second-largest holder of such accounts in the country. A trove of records leaked from an offshore law firm, Appleby, shows that the services offered by Bank of Utah, Wells Fargo and other American companies were sought after by rich jet owners in Russia, Africa and the Middle East.

The files were obtained by a German newspaper, Süddeutsche Zeitung, which shared them with the International Consortium of Investigative Journalists and other news organizations, including The New York Times. Among other things, the records reveal how Appleby often packaged trust arrangements with a tax avoidance scheme on the Isle of Man, a British crown dependency that serves as a haven for aircraft owners to sidestep taxes in the European Union. Together, businesses like Bank of Utah and Appleby provide a suite of money-saving tricks for the wealthy elite around the world.

Members of Congress and federal auditors have grown increasingly concerned that the opaque aircraft trust arrangements, which are not closely tracked by the Federal Aviation Administration, could allow terrorists and criminals a back door for evading sanctions, intelligence officials or law enforcement. Some 10,000 private planes are registered in the United States to noncitizen trusts.

“There are serious national security risks when the F.A.A. approves an aircraft registration but does not have all the information, particularly if an aircraft is owned by a shell corporation or a foreign entity,” Representative Stephen F. Lynch, a Massachusetts Democrat, said when he introduced legislation in July that would require the F.A.A. to obtain and regularly update records on the ultimate owners behind aircraft trusts.

An inspector general report in 2013 found that more than half of noncitizen trusts registered with the F.A.A. “lacked important information such as the identity of the trusts’ owners and aircraft operators.” As a result, the report said, the agency “has been unable to provide information on these aircraft to foreign authorities upon request when U.S. registered aircraft are involved in accidents or incidents.”

Another inspector general report, in 2014, cited specific cases that it said demonstrated the potential for national-security or legal problems. Among them was an episode in which an unnamed American bank had to cancel an aircraft trust after learning that its beneficiary, a Lebanese politician, had ties to a terrorist group. Another involved a jet registered to Wells Fargo that made an unscheduled landing in Libya in 2011 just as a no-fly zone was imposed by the United Nations.

In 2014, a plane registered to Bank of Utah was spotted at an airport in Iran, raising questions about whether its presence violated American sanctions.

And three years ago, a plane registered to Bank of Utah was spotted at an airport in Iran, raising questions about whether its presence violated American sanctions at the time. The bank told reporters it had “no idea” why the plane was there, and would not reveal who owned it; the Bombardier jet turned out to be owned by a Ghanaian company and had no Americans aboard.

That episode led to some soul-searching for Bank of Utah officials. In a recent interview at the bank’s corporate trust offices in Salt Lake City, Branden Hansen, the chief financial officer, said that the reputational risk of the trusts prompted the bank to consider whether “to shut this whole thing down.”

Ultimately the bank decided to continue the service, but with stronger due diligence and new staff to oversee it. Jon Croasmun, a trust officer who joined the bank last year, said that “knowing who the owners are is important,” adding that the bank searches public records, seeks passports and takes other steps to ensure it knows the background of aircraft owners.

Still, the Bank of Utah executives were surprised to learn that they had aided Mr. Mikhelson, the Russian oligarch. When told the name of the offshore shell company that Mr. Mikhelson used to manage his Gulfstream jet, Mr. Croasmun interrupted the interview to check the bank’s files. He confirmed that the shell company had been a client since 2013 — but information identifying Mr. Mikhelson as the man behind it “was nowhere that I saw in the files.”

“His name is not in there,” Mr. Croasmun said.

A Request From Moscow

Appleby, based in Bermuda, is one of the world’s largest offshore law firms. Its files offer a rare inside look at more than a dozen aircraft trusts structured by American financial institutions for privacy-seeking plane owners, primarily foreigners who otherwise would not be allowed to register with the F.A.A. There is a premium on American registration because it increases a plane’s resale value, the bureaucratic requirements are less costly and complex, and it is believed to draw less scrutiny as the aircraft moves around the world.

Among the plane owners seeking Appleby’s services were Shaher Abdulhak, a Yemeni businessman worth an estimated $9 billion whose investments included a Coca-Cola distributor in the Middle East; UPL, an Indian producer of industrial chemicals and pesticides; and Rashid Sardarov, a Russian oil billionaire and longtime client of Mossack Fonseca, the law firm whose leaked records in 2015 became known as the Panama Papers.

In serving these clients, files show, Appleby dealt with the two banks that are the most prolific creators of American aircraft trusts: Wells Fargo and Bank of Utah. It is easy to see how Wells Fargo, the third-largest bank in the United States, with nearly $2 trillion in assets and offices in 42 countries, might find a lucrative niche catering to the wealthy elite. Less obvious is how Bank of Utah, with 18 branches confined to one state, took the same path.

As it happens, a group of former Wells Fargo trust officers joined Bank of Utah about 10 years ago and created what would become a profitable part of the bank’s business. The bank collected $8.8 million in trust fees in 2016 — an increase of $1.1 million from the previous year, according to its most recent annual report.

Mr. Croasmun and Mr. Hansen took issue with the suggestion that they were exploiting a loophole to bypass restrictions on foreigners registering aircraft in the United States. By filling the role of “U.S. citizen” for registration purposes, the bank provided a valuable service for, say, multinational companies whose top executives might not be American, they said. The bank is clearly sensitive to concerns raised about the trusts. Its website carries a statement distancing itself from the planes it registers in its name, noting its only role is that of trustee.

In the case of Mr. Mikhelson, the trail leading from Russia to Utah began in September 2012, with an email to Appleby from the Moscow office of the accounting firm Ernst & Young. The firm wanted Appleby to set up a complex corporate structure for an unnamed client to purchase a Gulfstream jet, valued at roughly $65 million, and retain possession of it through a chain of companies in six countries.

From the outset, the goal was clear: “This structure,” wrote Svetlana Yakushina of Ernst & Young, “should allow registering the aircraft with the aviation authorities of the United States.”

The arrangement would also permit the owner to avoid certain taxes, most notably a value-added tax of 20 percent if the jet were registered and used in the European Union. A six-page memo prepared by Ernst & Young laid out a plan to exploit a tax loophole offered by the Isle of Man, where about 1,000 privately owned aircraft are recorded on a government registry for tax purposes. Appleby and other similar firms maintain offices there.

The Isle of Man allows owners to escape the value-added tax, or VAT, through a paper-shuffling scheme, wherein the jet is held by a company based there but leased to another company elsewhere, both controlled by the same owner. The tax is technically deferred into the future, through use of a special account managed by Ernst & Young, and then canceled out by the corporate structure. Research by the investigative journalists consortium suggests that Isle of Man-registered aircraft have escaped more than $1 billion in taxes.

According to a flow chart created by Appleby’s Isle of Man office for the Mikhelson account, the ownership chain for his jet began in Panama, with a company called Golden Star Aviation, which registered on the Isle of Man and then leased the aircraft to a Cayman Islands company called SWGI Growth Fund. Both companies were controlled by Mr. Mikhelson.

Mr. Mikhelson declined to answer questions about his plane. His representative released a statement saying, “Mr. Mikhelson acts strictly within the boundaries of the law and in compliance with applicable legislation at all times.”

By June 2013, lawyers at Appleby still had not learned of Mr. Mikhelson’s role, other than being told that the Gulfstream’s owner was Russian. Once the lawyers were informed of his identity by a Swiss firm that manages Mr. Mikhelson’s finances, they conducted a background check and concluded that, as with other clients from Russia, where the political and legal environment can be unstable, working for him would be “high risk.” But they decided to proceed.

Sanctions and ‘Citizenship’

A due-diligence report by Appleby noted Mr. Mikhelson’s source of wealth — valued currently at about $18 billion — from oil and gas investments, notably through Novatek, Russia’s largest nongovernment-owned gas company. Mr. Mikhelson’s main business partner is Gennady Timchenko, a close friend of Mr. Putin’s. The two businessmen are the primary investors in Sibur, a Russian gas-processing company.

Included in the report was a list of questions to determine if Mr. Mikhelson had any connections to the United States, including whether he had assets or maintained an address there. The answer to all of them was “no.” Flight records show that the plane has rarely, if ever, flown to the United States and instead makes trips within Russia or occasionally to cities in Europe and China.

Despite its lack of a connection to the United States, Mr. Mikhelson’s private jet was soon on its way to securing a registration with the F.A.A., thanks to Bank of Utah.

It is not clear if the bank was ever told, or inquired, about the identity of the owner of the aircraft. Mr. Croasmun said that files indicated the owner “was Russian” but that identifying details were missing.

Whatever the case, the trust agreement for Mr. Mikhelson’s Gulfstream, filed with the F.A.A., does not name him anywhere in the document. Instead, the owner is listed as Golden Star Aviation, the Panamanian company he used to buy the plane. Attached to it is an “affidavit of citizenship” signed by a bank officer, Brett King, attesting that the trustee — Bank of Utah — is a “citizen of the United States.”

Appleby’s conclusion that doing business with Mr. Mikhelson would be “high risk” began to look prescient by July 2014. That is when Washington hit a number of Russian individuals and companies with economic sanctions in response to Russian intervention in Ukraine.

Among those named by the Treasury Department’s Office of Foreign Assets Contro were Novatek, Mr. Mikhelson’s gas company, and Mr. Timchenko, his partner in other ventures. Mr. Mikhelson himself was not included in the sanctions, which tightly restricted Novatek’s access to American capital markets.

Almost immediately, lawyers at Appleby flagged the Novatek sanctions and began emailing one another, one of them seeking advice on “how this affects the structures that we manage.” Within a week, Appleby had sent a message to Mr. Mikhelson’s aide Igor Ryaskov explaining that the law firm was concerned about Mr. Mikhelson’s connections to a company subject to sanctions.

“Due to the ongoing issues and increased risk, it is with regret that I must advise that we will be looking to cease services in respect of these structures,” the note said.

Mr. Ryaskov protested, saying that Mr. Mikhelson was not on the sanctions list. Still, Appleby held fast, and referred Mr. Ryaskov to other firms; by 2015, Mikhelson’s aircraft account had been transferred to Fedelta Trust Limited, a financial services firm on the Isle of Man. Mr. Ryaskov did not respond to a request for comment.

As for Bank of Utah, it filed a registration renewal application with the F.A.A. in July last year, indicating that its trusteeship for the aircraft remained unchanged. During the recent interview, the bank executives suggested that Mr. Mikhelson’s case escaped scrutiny during an earlier period when their internal review process was less rigorous, and they vowed to review it.

“Russian involvement would score as a high risk by itself,” Mr. Hansen said. “It’s highly unlikely that something like this would have been approved in today’s climate.”

10/27/17

The Denise Simon Experience – 10/26/17

The Denise Simon Experience

Hosted by DENISE SIMON, the Senior Research / Intelligence Analyst for Foreign and Domestic Policy for numerous flag officers and intelligence organizations.

THIS WEEK’S GUESTS:  Ed Haislmaier /  Rachel Glezsler /  LTC Buzz Patterson  /  PLF SCOTUS Sports Betting

BROADCAST WORLDWIDE:
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WJHC – Talk 107.5FM
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And on her Digital Flagship Station:   TALK AMERICA RADIO –  The NEW Dominant Force in Conservative Talk Radio

VISIT DENISE’S OFFICIAL WEBSITE:  http://www.FoundersCode.com

10/26/17

3rd Carrier in Region as Mattis is in Seoul v. N Korea

By: Denise Simon | Founders Code

SEOUL, South Korea (AP) — Pentagon boss Jim Mattis arrived in South Korea on Friday to meet with the nation’s top defense officials and American military commanders on the front line in countering North Korea’s nuclear weapons program.

Mattis is emphasizing the Trump administration’s push for a diplomatic solution to the problem. But he also has said the U.S. is prepared to take military action if the North does not halt its development of missiles that could strike the entirety of the United States, potentially with a nuclear warhead.

Making his second trip as defense secretary to the U.S. ally, Mattis will meet with South Korean officials as part of an annual consultation on defense issues on the Korean peninsula. He’ll be joined in Seoul by the chairman of the U.S. Joint Chiefs of Staff, Gen. Joseph Dunford. President Donald Trump is scheduled to visit the city next month.

Related reading: Breakdown in North Korea Talks Sounds Alarms on Capitol Hill

US Navy sends a 3rd aircraft carrier to the Pacific after it completes mission against ISIS

  • The US has three aircraft carriers in the Pacific amid soaring tensions with North Korea.
  • The US Navy says the deployment of the USS Nimitz, the third carrier, was previously planned, but the US Navy has been busy near Korea.
  • The US, South Korea, and Japan just wrapped up a missile-defense drill in the region, and North Korea remains quiet for now.

The USS Nimitz aircraft carrier and its accompanying strike group of destroyers have left the Middle East, where they had launched airstrikes against ISIS, to back up US forces in the Pacific, the US Navy announced on Wednesday.

The Navy says the Nimitz is heading to the Pacific on a previously scheduled visit, but it will be the third carrier in the region joining the USS Ronald Reagan, which stays in Japan year-round, and the USS Theodore Roosevelt, which is currently in the Pacific well east of Japan.

According to the Navy, the Nimitz just finished three months fighting ISIS, with over 903 bombs dropped. ISIS fighters are now surrendering en masse as US-back ed regional forces close in on them.

Gen. Jeong Kyeong-doo, chairman of South Korea’s Joint Chiefs of Staff, and US Forces Korea chief Army Gen. Vincent Brooks met aboard the Reagan after the drills, with Jeong saying that the carrier sent a “strong warning” to North Korea “amid an unprecedentedly grave security situation,” according to Yonhap news.

The US, South Korea, and Japan just concluded a missile-defense drill near Korea with their cutting-edge naval-defense platforms. The drill focused on improving situational awarene ss and readiness while North Korea threatens to send more missiles flying over Japan.

The guided-missile destroyer USS Chung-Hoon fires an SM-2 missile during a live-fire exercise. Mass Communication Specialist 3rd Class Jonathan Jiang/USN

Despite North Korea’s talk of firing missiles at Guam or into the Pacific, the country remains quiet. Pyongyang hasn’t launched a missile in over a month, marking the longest period of relative quiet since its first missile launch in February.

But a recen t report states that North Korea has remained resolute and unwilling to talk to the US. Meanwhile, President Donald Trump seems intent on hinting at the possibility of war whenever possible.

***

North Korean official: Take hydrogen bomb threat ‘literally’

A senior North Korean official has issued a stern warning to the world that it should take “literally” his country’s threat to test a nuclear weapon above ground.

The official, Ri Yong Pil, told CNN in an exclusive conversation in Pyongyang that the threat made by North Korea’s foreign minister last month should not be dismissed. North Korea “has always brought its words into action,” Ri said, visibly angry. More here.

10/23/17

UN/Harvard Comprehensive WMD Programs in N. Korea/ISIS

By: Denise Simon | Founders Code

Primer:

A North Korean mining firm, reputed to be a front for Pyongyang’s weapons development programs, attempted to ship materiel to Syrian officials tied to the country’s chemical weapons program, according to a confidential United Nations assessment of international sanctions against the North.

Details of the U.N. findings, first reported by Reuters, found officials from Korea Mining Development Trading Corporation {KOMID) had sent a pair of shipments of unknown contents to members of Syria’s Scientific Studies and Research Centre or SSRC. The Syrian government organization has been responsible for developing chemical and biological weapons for regime in Damascus since the 1970’s.

The shipments never arrived in Syria after being intercepted by international authorities from U.N. partner nations, Reuters reports. “Two member states interdicted shipments destined for Syria. Another member state informed the panel that it had reasons to believe that the goods were part of a KOMID contract with Syria,” the U.N. review states.

KOMID has repeatedly trafficked in materials associated with ballistic missile development and other conventional arms programs, and was blacklisted by the U.N. security council as a result of those activities, Reuters reports.

As a result, the U.N. “is investigating reported prohibited chemical, ballistic missile and conventional arms cooperation between Syria and [North Korea],” the report states. More here.

Quoting the South Korean Defense Ministry, it said: ‘North Korea has 13 types of biological weapons agents which it can weaponize within ten days, and anthrax and smallpox are the likely agents it would deploy.’

***

Harvard produced a report with the summary in part that reads:

Amidst the growing threat of North Korea’s nuclear program, the assassination of Kim Jong-Un’s half-brother via VX nerve agent in February 2017 brought renewed interest in North Korea’s other weapons of mass destruction (WMD) programs—chemical and biological weapons. If used on a large scale, these weapons can cause not only tens of thousands of deaths, but also create panic and paralyze societies. Nevertheless, the vividness of the nuclear threat has overshadowed other weapons programs, limiting the attention and policy input that they deserve. This paper focuses on North Korea’s biological weapons (BW). Accurately assessing the threat from North Korea’s biological weapons is challenging. Whereas North Korea has publicly declared its will to become a nuclear power many times, it has been less overt about itsintention or capability for biological weapons. BW capabilities are inherently hard to detect and measure. While nuclear programs can be monitored by the number of nuclear tests and the success of missile tests, weaponizing and cultivating pathogens can stay invisible behind closed doors. Moreover, equipment used for BW production are often dual-use for agriculture, making external monitoring and verification virtually impossible. Limited information on North Korea’s BW program leads to a low threat perception that may undermine preparation and response efforts. The full 46 page report is here.

A German newspaper reported last week that at least one European intelligence agency has already warned that the Islamic State is exploring the use of chemicals for attacks in Europe. Such an eventuality would be a radical departure from prior attacks by the Islamic State in the West. In the past, the militant group has shown a strong preference for low-tech means of dispensing violence, such as firearms, vehicles and knives. But it has utilized chemical substances in Iraq and Syria, and its technical experts have amassed significant knowledge about weaponized chemicals.

Last week, several European and American counter-terrorism experts participated in a bioterrorism preparedness exercise in Berlin. Codenamed WUNDERBAUM, the exercise was one of several anti-terrorism drills that have taken place in the German capital this year alone. But last week’s drill was the first with an exclusive focus on preparing for a bioterrorist attack. German authorities insisted that the drill was not sparked by concrete intelligence of a pending biological or chemical attack. But the Berlin-based national newspaper Die Welt claimed on Friday that it had information about at least one such warning by a European intelligence agency. The paper did not name the agency, but said that “a foreign intelligence agency” had warned European security authorities of a possible terrorist attack by the Islamic State using chemical weapons. According to Die Welt, the warning was “explicit” and cautioned that the Sunni militant group may be preparing to use improvised bombs utilizing chemicals, including toxic gasses. The warning was communicated to European intelligence agencies, including Germany’s said Die Welt.

How likely is such a scenario? Terrorist groups tend to be conservative in their use of lethal technologies. They typically opt for time-tested methods using explosives or firearms, because these have a higher of success in comparison to more sophisticated, hi-tech weapons. The latter are also more expensive to build and require scientific and technical capabilities that are not typically available to terrorist organizations. Militants are usually strapped for cash, and are not science-savvy, so exceptions to this general trend are rare. But the Islamic State is different. Ever since it made its eventful appearance in 2013, the group has experimented with a variety of chemicals, including nerve agents. It is known that it initiated a modest chemical weapons program, headed by Iraqi engineers who were trained under Iraq’s late ruler, Saddam Hussein. One of them, Abu Malik, was killed in an American airstrike in early 2015. Another, Sleiman Daoud al-Afari, who headed the Islamic State’s chemical weapons program, was captured by US Special Forces in northern Iraq in March of last year.

The Islamic State’s rapid loss of territory in the past year has delivered serious blows to the group’s military infrastructure. Its chemical weapons program, which was targeted early on by the US, Iran and other belligerents, is now almost certainly defunct. But many of its engineers and technical experts are still at large, as are those who were trained by them during the group’s heyday in Iraq and Syria. Despite its continuing retreat, the Islamic State is still capable of employing chemicals that are relatively easy to procure, such as chlorine, hydrogen sulfide, or even various fertilizers, to construct explosives or nerve agents. Last summer, members of a terrorist cell with connections to the Islamic State were arrested in Sydney, Australia. By the time they were arrested, they had already procured significant quantities of hydrogen sulfide and had even tested the chemical, in an apparent preparation for a large-scale attack.

The Australian case shows that the Islamic State is not averse to the tactical use of chemical weapons in terrorist attacks. As the militant group’s self-proclaimed caliphate is disintegrating, and its leaders feel like they have nothing left to lose, the deployment of unconventional terrorist technologies should not be excluded as a tactical option for the organization. Western counter-terrorism officials should actively and immediately prepare for such an eventuality.

10/23/17

China Stays True To Marxism/Communism

By: Trevor Loudon | New Zeal

Many Westerners believe that because China has adopted a “state capitalist” model, it is therefore on the road to abandoning Marxism/communism.

That is a very dangerous mistake.

From the Communist Party USA’s People’s World:

Xi Jinping, General Secretary of the Communist Party of China (CPC) and President of the People’s Republic, recently told the Politburo that a profound understanding of Marxism on the part of the country’s leadership was essential. He warned his colleagues that any abandonment of Marxism would cause the CPC “to lose its soul and direction.”

Classical Marxism maintains that mankind goes through five stages of development.

  1. Primitive Communism – hunter-gatherer, communal subsistence living.
  2. Feudalism – an agricultural based economy, ruled over by strongmen and warlords.
  3. Capitalism – a highly productive, but eventually self-destructive industrial based economy, dominated by business leaders.
  4. Socialism – a centrally planned economy, where the wealth created by capitalism is re-distributed by government bureaucrats, lead by an elite.
  5. Advanced Communism – the centrally planned state withers away. Wealth is abundant and shared in common on the basis of need. This stage of course will never be achieved, because the socialist stage will destroy productive capacity and the bureaucrats and dictators will hoard as much of the remaining wealth as they can for themselves.

According to Marxist theory “socialism” was supposed to occur first in advanced industrialized countries like Germany, Britain and the United States, not in semi-feudal backward nations like Russia, China, Cuba and Vietnam.

By returning to an at least partially “capitalist” economy, China, Vietnam, Russia and now even Cuba are acknowledging that missing the “capitalist” stage and trying to jump straight from “feudalism” to “socialism” was a huge mistake.

By returning temporarily to “capitalism,” the communists believe they can re-build their economies and their military might to the point they can enforce “socialism” worldwide.

China and its allies Russia and Cuba are not abandoning the road to Marxian “communism.” They are re-affirming it.

10/23/17

N. Korea Months Away from Ability to Strike U.S. with Nukes

By: Denise Simon | Founders Code

Japan is taking defensive measures:

The Yomiuri Shimbun The government is considering equipping planned ground-based Aegis Ashore systems with the capacity to intercept cruise missiles, in addition to the ability to defend against ballistic missiles.

With Chinese bombers making repeated flights in areas around Japan, the government believes it should also prepare for attacks by cruise missiles, multiple government sources said.

The government intends to introduce two Aegis Ashore systems in Japan by around fiscal 2023 as part of the effort to boost the nation’s missile defenses.

These would be equipped with SM-3 Block IIA missiles, a new interceptor being jointly developed by Japan and the United States with the capacity to intercept ballistic missiles at altitudes exceeding 1,000 kilometers.

The government is also considering equipping the systems with SM-6 anti-air missiles, which are multifunction interceptors that also can take down cruise missiles.

United Nations (AP) — North Korea’s deputy U.N. ambassador said Tuesday the country plans to launch many more satellites and accused the United States of trying to block its efforts to help peacefully develop outer space.

Kim In Ryong told a U.N. General Assembly committee meeting on “International Cooperation in the Peaceful Uses of Outer Space” that the country’s five-year plan for 2016-2020 includes development of “practical satellites that can contribute to the economic development and improvement of the people’s living.”

As a party to several space treaties, North Korea’s space development activities are “all ground on legal basis in all aspects,” Kim said.

But he said the United States is “going frantic to illegalize our development of outer space,” claiming the effort violates U.N. sanctions.

“The U.S. is the country that launched the largest number of satellites and yet it claims that our launch of satellites is a threat to international peace and security,” Kim said. “This is a preposterous allegation and extreme double standards.”

The United Nations, the U.S. and other countries view the North’s space launch development project as a cover for tests of missile technology, as ballistic missiles and rockets in satellite launches share similar bodies, engines and other technology. North Korea is also openly working on developing nuclear-armed missiles capable of striking the U.S. mainland.

US: North Korea Months Away From Being Able to Hit US with Nuclear Missile

North Korea is likely just months away from being capable of striking the United States with a nuclear missile, according to two top U.S. officials.

CIA Director Mike Pompeo told a forum in Washington on Thursday he is “deeply worried” about the advancing threat from North Korea and the possibility it could spark a nuclear arms race across East Asia.

“We ought to behave as if we are on the cusp of them achieving that objective,” Pompeo said when asked about Pyongyang’s pursuit of missile technology that could launch a warhead to targets in the U.S.

“They are so far along in that it’s now a matter of thinking about how do you stop the final step?” he added.

McMaster: We’re running out of time

U.S. National Security Adviser, Gen. H.R. McMaster said later on Thursday that Washington was racing to resolve the situation, short of using military force.

“We’re not out of time but we’re running out of time,” McMaster said, speaking at the same event. “Accept and deter is unacceptable.”

The comments by Pompeo and McMaster come as tensions between the U.S. and North Korea have been steadily rising following Pyongyang’s latest nuclear test last month, it’s sixth overall, and repeated tests of what intelligence officials have assessed to be both intermediate and long range ballistic missiles.

But despite warning that North Korea is just months away from being able to target the U.S., the CIA’s Pompeo cautioned there are still questions about just how “robust” the North Korea nuclear threat has become, and whether Pyongyang will be able to deliver multiple nuclear warheads to nuclear targets.

“There’s always a risk. Intelligence is imperfect,” Pompeo said, adding there is evidence Pyongyang may be getting help from Iran, citing “deep conventional weapons ties as between the two countries.”

He also warned that each North Korean test makes an arms race ever more likely.

“You watch as North Korea grows ever closer to having its capability perfected, you can imagine others in the region also thinking that they well may need that capability,” he said.

Putin suggests force won’t work against North Korea

On Thursday, Russian President Vladimir Putin warned against the use of force to eliminate the North Korean nuclear threat, suggesting it would not work.

“Talks about a preventative, disarming strike — and we hear both hints and open threats — this is very dangerous,” Putin said during a speaking engagement in Sochi.

“Who knows what and where is hidden in North Korea? And whether all of it can be destroyed with one strike, I doubt it,” he said. “I’m almost sure it is impossible.”

North Korean officials have also repeatedly warned the U.S. against any provocations.

Pyongyang’s deputy envoy to the United Nations, Kim In Ryong, warned Monday that war could break out at any moment.

Other North Korean officials have accused the U.S. of making preparations for war, citing the presence of the USS Ronald Reagan, a nuclear-powered aircraft carrier, conducting exercises to the east of the Korean Peninsula.