Today's
Insight
Dialing Up Controversy with China | Will Edwards, The Cipher
Brief
With a single congratulatory phone call, President-elect Donald Trump
and Taiwan President Tsai Ing-wen have set off a wave of controversy
over the future of cross-strait relations among Beijing, Taipei, and
Washington.
Expert Commentary
Catching China Off Guard | Dennis Wilder, Former Special Assistant to the
President and Senior Director for East Asian Affairs
China was caught off-guard by the phone call and has sent many
diplomats and academics to New York and Washington in the past few days
trying to understand the implications. Beijing probably has
concluded that this is an opening salvo by those advisers around Trump
who are advocating a ”get tougher” policy with China.
Playing the Taiwan Card | Gordon Chang, Author, The
Coming Collapse of China
On November 25th, six Chinese aircraft—two nuclear-capable H-6K
bombers, two Su-30 fighters, and two surveillance planes—participated
in an exercise near Taiwan’s airspace. Four of the craft, in an especially
provocative move, circled the island. This was the first time China’s
planes had done so.
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The Cipher Brief's Executive Producer and Reporter Leone sat
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instrumental in bringing down Colombian drug lord Pablo Escobar.
Murphy and his partner Javier Pena were depicted in the Netflix
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during their hunt for Escobar. Leone asks Murphy how much of the
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[A word of
warning, if you’re still watching Narcos, here’s your spoiler
alert!]
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The Cipher
Take
South Korean President Impeached
234 of the 300 members of the South Korean National Assembly -
including members of her own party - voted Friday to impeach President
Park Guen-Hye for a number of constitutional violations, including
dereliction of duty and abuse of power. Ms. Park's ruling authority now
passes to the Prime Minister, while her case will be turned over to the
constitutional court to make a final determination on the
impeachment. Ms. Park apologized for negligence over her alleged
misdeeds but, as she has in the past, refused to admit any wrongdoing.
The Cipher Take:
Though it has six
months to rule, the constitutional court is likely to approve the
impeachment swiftly - Ms. Park is deeply unpopular and the scandal has
struck a nerve with the South Korean populace. The controversy revolves
around Park's relationship with Choi Soon-sil, a friend and
confidante recently arrested for allegedly defrauding Korean companies
for as much as $70 million. President Park has previously admitted that
she showed classified documents to Choi, who was not allowed to see or
give advice about such information, and it has inflamed a citizenry
that has never shied away from protesting government scandal.
North Korean Official: No Provocations Until We Know
More About Trump Policy
On Wednesday,
North Korea’s foreign ministry director of North American affairs said
that North Korea does not intend to engage in any nuclear or ballistic
missile tests that would be construed as provocations until it learns
more about President-elect Trump’s intended policy toward Pyongyang.
The ministry director, who was also at a meeting in Geneva with U.S.
experts and officials in November, had previously remarked that North
Korea was surprised that Trump won the election. The U.S. experts at
that meeting report that the North Korean delegation was curious to
know how long it would take the Trump transition team to review its
initial North Korea policy.
The Cipher Take:
While this sounds
like encouraging news out of North Korea, the director’s statements
give no indication as to what North Korea would consider satisfactory
or objectionable U.S. policy. Historically, we know that North Korea
has demanded the removal of U.S. forces from South Korea and the
removal of nuclear weapons within range of North Korea in exchange for
its own denuclearization. These are demands that the U.S. will not
meet. While North Korea has voiced its willingness to engage with the
new administration, and this is welcome news after a lackluster track
record with the Obama administration, policy makers are sure to be wary
of the price of North Korean compliance with international norms.
Crowds Threaten to Overrun First UN Aid Station in Mosul
On Thursday,
residents mobbed the first UN aid distribution center in Mosul. The
center had been designed to serve some 45,000 residents in and around
Mosul’s Zuhour neighborhood; the disturbance today suggests that demand
for aid may far outstrip supply. After crowds broke through the line of
aid workers and entered the distribution center, police were forced to
fire shots in the air to restore order. Mosul, a city of 2 million,
currently faces dire food, water, and fuel shortages as the month-long
campaign against ISIS in the city continues.
The Cipher Take:
The UN and other aid
agencies have long warned of the massive humanitarian crisis that could
follow the battle for Mosul. Despite
preparing for such a crisis for nearly a year, funding has consistently
fallen short of targets. Now, these dire predictions appear to be
materializing - first in the flood of displaced people seeking aid and
refuge from the towns and suburbs outside of Mosul, and now from within
the city itself. As Iraqi forces open a second front in the southwest –
to join counterterrorism forces that have liberated a large swathe of
territory in the eastern neighborhoods – and winter approaches, the
stress on aid resources will only increase.
U.S. Estimates 50,000 Islamic State Fighters Have Been
Killed
The U.S.
military estimated that more than 50,000 ISIS fighters have been killed
since the U.S. started battling the group more than two years ago, with
officials calling the number a “conservative estimate.” The number is
an uptick from the 45,000 figure provided in August by Lieutenant
General Sean MacFarland, commander of the task force overseeing the war
against ISIS.
The Cipher Take:
In the last two
years, the U.S. has conducted more than 16,000 airstrikes against ISIS
targets and has worked with allies and partners in the region to root
ISIS out from its bases in Syria and Iraq. The U.S. has also played a
role in eliminating several top ISIS officials
including propaganda chief Mohammad al-Adnani, minister of war Omar
al-Shishani, and finance minister Haji Iman. As ISIS is pushed out of
its stronghold in Mosul and eventually its de facto capital in Raqqa,
it is possible the organization could double down on its external
operations’ capabilities and focus its efforts on both coordinated and
lone-wolf inspired terrorist attacks.
UniCredit Rumored to Announce Major Cash Call
According to
sources from Reuters, UniCredit, Italy’s
largest lender, will announce a giant cash call early next week. The
share issuance will reportedly look to raise 13 billion Euros to shore
up confidence in both UniCredit and the Italian banking system at
large, which has suffered after the crushing “No” vote against
constitutional reform on Sunday as well as Prime Minister Matteo
Renzi’s imminent resignation. UniCredit runs operations in 17 countries
and is the only Italian bank that is considered systemically vital to
the health of the global financial system.
The Cipher Take:
If successful, this
cash call will go a long way toward soothing fears that the Italian
banking system might fall into crisis following the No vote. That vote
quashed any hope for significant economic reform in the near future and
most analysts believe that it will hinder the ability of the distressed
Tuscan bank, Monte dei Paschi (MPS) – Italy’s 3rd largest
lender – to raise the 5 billion Euro it needs to survive. If MPS falls,
other Italian banks will likely follow and EU rules may prevent the
government from bailing them out, which will transfer the losses onto
common depositors. However, UniCredit is the only bank that could
spread financial contagion from Italy to the rest of the EU – or
possibly further. This cash call could head off that threat, but MPS
and Italy’s numerous regional and local banks may not be so lucky.
Russia Proposes Prison for Authors of Malware Used in
Hacks
The Russian
government introduced a draft bill this week proposing prison sentences
for hackers and criminals who design or disseminate malicious software
or know-how that is used to target critical Russian infrastructure -
even if the authors do not deploy the malware themselves. Those found
to have participated—including simply writing or disseminating the
exploits used—could face fines and up to five years in prison, or ten
if the attack leads to serious outcomes like physical destruction or
major financial loss. Hackers helping others obtain unauthorized access
to protected data could also face fines, five years forced labor, and
six years in prison.
The Cipher Take:
The proposed bill
comes after Russian President Vladimir Putin signed an updated doctrine
on Russia’s information security, which aims to reinforce the country’s
sovereignty, maintain political and social stability, and protect
critical infrastructure. The doctrine seeks to rein in the cross-border
circulation of data, which puts Russian citizens' data on servers
abroad—something that many countries such as China and even the U.S.
are worried about as well, as it makes it difficult for national courts
to issue search warrants for data hosted in other national
jurisdictions.
Turkish Group Crowdsourcing Disruptive Cyber Attacks
A Turkish
hacking group has turned distributed denial of service (DDoS) attacks
into a competition, offering prizes for the execution of disruptive
attacks against a list of predetermined targets. This DDoS-for-Points
platform, dubbed Sath-I Mudaffa, which means Surface Defense, has been
advertised on local discussion forums like Turkhackteam and Root
Developer, urging visitors to download the DDoS tool Balyoz, translated
as Sledgehammer, and deploy it against the designated targets. In
return, the group promises the attackers a series of hacking tools as
prizes. For every 10 minutes of continuous attack on the targeted
website, the participant receives a point, which can then be exchanged
for the hacking tools.
The Cipher Take:
The language of the
hacking group in the forums resembles that of your average hacktivist,
condemning authority and Internet censorship. But the list of
predetermined targets as well as hidden backdoors attached to the
Balyoz DDoS tool—essentially allowing the hacking group to hack the
crowdsourced hackers—raises questions over the group's actual motives.
The list of predetermined targets includes Kurdish websites like the
PKK, as well as organizations affiliated with NATO, Kurdish radio and
TV stations, the Armenian Genocide website, German Chancellor Angela
Merkel’s Christian Democratic Party’s website, as well as a number of
Israeli sites. While it is still unknown who is behind the
DDoS-for-Points ploy, it should be noted that governments have in the
past have imitated hackivists groups to conceal their own involvement.
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