Treasury’s No. 2 on depriving Russia of military tech

From: POLITICO's National Security Daily - Thursday Oct 13,2022 07:58 pm
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By Alexander Ward and Matt Berg

Deputy Treasury Secretary Wally Adeyemo speaks during an interview in his office.

Deputy Treasury Secretary Wally Adeyemo speaks during an interview in his office at the Treasury Department in Washington, Tuesday, April 12, 2022. | Andrew Harnik/AP Photo

With help from Phelim Kine, Connor O’Brien and Lee Hudson

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The Biden administration aims to shorten the timeline for when Russia runs out of the weapons and components its military needs in Ukraine, Deputy Treasury Secretary WALLY ADEYEMO told NatSec Daily in an interview.

Adeyemo, alongside Deputy Secretary of Commerce DON GRAVES and Deputy Director of National Intelligence MORGAN MUIR , is preparing to host an extraordinary meeting Friday of 30 nations with the goal of identifying spots in Russia’s military industrial complex to economically strangle, thus complicating the country’s ability to rearm.

“Given the stage we are in at the war, the key for us is to keep going after critical things that we know they need right now, that we want to make sure they can't get over time, to be able to reinforce their military and continue to wage this war,” Adeyemo said — giving a preview of what the U.S. hopes to get out of tomorrow's gathering.

It’s an important time for the first meeting of its kind between U.S. Treasury, Commerce and intelligence officials with their allies and partners. Eight months into the war, the Russian military is exhausted and is struggling to replace spent ammunition and artillery . The U.S. and its allies have taken aim at cracking the Russian supply chain and weakening its military, which has already faced issues with morale and material shortages. The effects have shown through Ukraine’s significant battlefield gains in recent weeks.

The West has already had success curtailing Russia’s access to semiconductor technology and parts for tanks and helicopters. Now the focus is on identifying and targeting areas where Russia already has a critical shortage.

Sanctions by the global coalition have caused Russian factories to close, depleted the military’s arsenal and forced the Kremlin leader to increasingly rely on North Korea and Iran as arms suppliers, per the Treasury Department — signs that the collective action is working.

“My goal, and the goal of the 30 countries that will be gathered tomorrow, is to do everything we can to make sure that anything that's been said in terms of how long they have is shortened by the efforts that we take using sanctions and export controls,” Adeyemo told NatSec Daily.

Russia’s ability to evade sanctions will also feature prominently in Friday’s multinational discussion. Moscow has had some success circumventing Western penalties, partly because some of the nations that will attend tomorrow’s meeting have little to no experience countering those moves. One reason U.S. intelligence officials will be in attendance is to share the information the Biden administration has and its best practices.

After the meeting, the anti-Russia coalition should be better coordinated and better equipped to erode the Kremlin’s ability to float its economy and arm its military.

“The thing that I worry about is them having success over time because they're not stopping,” Adeyemo said. “They're going to keep trying.”

 

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The Inbox

NATO AIR DEFENSE: The U.S. and its NATO allies are racing to assemble air defense shields both for Ukraine and for Europe as a whole, facing down complex issues from timing to getting systems to work together, as bombs rain down on civilians in Kyiv, our own PAUL McLEARY reports from Brussels.

The response from NATO allies was swift. Germany announced the first delivery of a new air defense system, and France and Spain pledged new donations to knock Russian missiles and new Iranian-made suicide drones out of the sky.

At the same time, 14 members of the alliance — plus Finland — announced an ambitious effort on Thursday to build a new, interlinked missile defense system that spreads across the continent, something officials said was critical after seeing the violence Russia has loosed on Ukrainian cities.

“This commitment is even more crucial today, as we witness the ruthless and indiscriminate missile attacks by Russia in Ukraine, killing civilians and destroying critical infrastructure,” NATO Deputy Secretary General MIRCEA GEOANA said after the announcement.

RUSSIAN AIRSTRIKES CONTINUE: Russia used Iranian-made kamikaze drones to strike near Kyiv and Odesa while pummeling other areas in Ukraine with missiles on Thursday, the Associated Press’ SABRA AYRES reports .

A strike near Makariv, a small city west of Kyiv, demolished critical infrastructure, Ukrainian officials said. It wasn’t immediately known if the drone attacks caused any casualties.

The attacks mark the fourth day of Russian retaliation against Sunday’s truck bomb explosion on a bridge to Crimea. Though Ukraine hasn’t claimed responsibility for the explosion, State Duma speaker VYACHESLAV VOLODIN on Thursday threatened an “even tougher” response to “the Kyiv regime” should there be future attacks.

KHERSON EVACUATION: Russia will help evacuate citizens from occupied Kherson, an indicator that Ukraine’s advance on the southern region has been effective.

“The announcement by Russian Deputy Prime Minister MARAT KHUSNULLIN came shortly after the head of the Moscow-backed administration in Kherson, VLADIMIR SALDO, appealed to the Kremlin for help moving residents out of harm’s way, in the latest indication that Russian forces were struggling in the face of Ukrainian advances,” CNN reports.

Residents will be moved elsewhere from the region, though it’s unclear where they will end up.

RUSSIA REPRIMANDED: The vast majority of countries on Wednesday voted to rebuke Russia for claiming to have annexed Ukrainian territory in September, our own NAHAL TOOSI and RYAN HEATH reported late Wednesday.

After heavy lobbying by the U.S., Britain and the European Union, 143 countries voted in favor of the critical U.N. resolution. Only five countries — Russia, North Korea, Syria, Belarus and Nicaragua — voted against.

It was a stronger showing of support than many U.S. officials anticipated, with notable yes votes including Bangladesh, Iraq and Morocco, all of which had previously abstained or did not vote to condemn the Russian invasion of Ukraine in February.

FIRST IN NATSEC DAILY –– HALIFAX DELEGATION: Six senators are headed to the Halifax International Security Forum in November, NatSec Daily has learned.

Sen. JIM RISCH (R-Idaho), the top Republican on the Senate Foreign Relations Committee, will lead the delegation alongside Sen. JEANNE SHAHEEN (D-N.H.). The other four members include Sens. KIRSTEN GILLIBRAND (D-N.Y.), ROGER WICKER (R-Miss.), CHRIS COONS (D-Del.) and TIM KAINE (D-Va.).

“I’m proud to once again lead the United States’ bipartisan congressional delegation to Halifax with Senator Risch, which underscores the meaningful commitment among lawmakers in the Senate to find common ground and work together to address our most pressing national security challenges,” Shaheen said in a statement.

“From Putin’s brutal war against Ukraine to China’s escalating aggression against Taiwan, there is no shortage of issues for us to discuss this year,” Risch added.

IT’S THURSDAY: Thanks for tuning in to NatSec Daily. This space is reserved for the top U.S. and foreign officials, the lawmakers, the lobbyists, the experts and the people like you who care about how the natsec sausage gets made. Aim your tips and comments at award@politico.com and mberg@politico.com, and follow us on Twitter at @alexbward and @mattberg33.

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Flashpoints

READY FOR WAR: North Korean leader KIM JONG UN warned enemies that his nuclear forces are ready for “actual war” via an announcement in state media on Thursday, CNN’S BRAD LENDON and YOONJUNG SEO report.

“Our nuclear combat forces … proved again their full preparedness for actual war to bring the enemies under their control,” Kim said in a report by the state-run Korean Central News Agency.

According to state media, Kim’s statement came after overseeing the authoritarian regime’s latest long-range cruise missiles west of the Korean Peninsula, the latest string of tests that have spurred tension with South Korea and the U.S.

Hours after his statement, a group of 10 North Korean military aircrafts flew along the South Korean border, prompting South Korea to deploy fighter jets in response, Yonhap News Agency reported . Seoul's Joint Chiefs of Staff said the aircrafts were spotted about 15 miles north of a de facto inter-Korean border in the Yellow Sea.

Keystrokes

HACKER NO HACKING: Feds are trying to figure out how to deal with the Russian-speaking hacktivist group Killnet, which has been a “nuisance” by frequently targeting state government websites and just being… annoying, our friend JOHN SAKELLARIADIS over at Morning Cybersecurity reports (for Pros!).

There’s a fine line to walk between alerting potential victims, avoiding unnecessary alarm and playing into the hacktivists’ desires of garnering attention, Sakellariadis writes. The balancing act came into the public eye Wednesday when JEN EASTERLY, director of the Cybersecurity and Infrastructure Security Agency, unveiled new efforts to protect against the group’s favored method of disruption: distributed denial of service attacks.

On the group’s Telegram channel, Killnet has revealed intentions to continue to “attack” critical U.S. infrastructure entities, which may have motivated CISA to up their protection efforts.

The Complex

GREEN MACHINE: Army and industry leaders are eyeing hybrid power for combat vehicles as the service looks to reduce its reliance on fossil fuels, our friends over at Morning Defense (for Pros!) report.

At the Association of the United States Army’s annual conference and exhibition on Wednesday, service officials said they are working to incorporate newer tech, including hybrid power and artificial intelligence, into some marquee platforms.

The Army is prepping for a series of hybrid electric vehicle tests next year that is being driven by the service’s new climate strategy released last week. Earlier this year, the Army tested a hybrid electric engine on the Bradley Fighting Vehicle and awarded contracts to integrate the technology into the Joint Light Tactical Vehicle and the Humvee.

HBD, U.S. NAVY!: A happy 247th birthday to the U.S. Navy! Expect sailors around the world to celebrate how the Navy has been on call 24/7 for 247 years. POLITICO’s DAVE BROWN would appreciate it, though, if the people wishing the service a HBD would make sure to use images of American ships.

 

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On the Hill

HASC CHAIR SMITH ON MODERNIZATION: HASC Chair ADAM SMITH (D-Wash.) listed his military modernization priorities to help the Biden administration fulfill its goals in the National Security Strategy of competing with China and Russia.

“Information systems,” he told NatSec Daily in a Thursday interview — namely JADC2, which stands for Joint All-Domain Command and Control . That will help solve problems the military must consider in the information age: “How do you get the information you need, find in that information the most important stuff, get it to the people who need it in real time, and protect it while at the same time making the adversaries’ information vulnerable?” Smith said.

Smith also named missile and missile defense — namely boosting the production of ATACMS, GMLRS and Harpoons amid supply-chain problems — as well as unmanned systems in his priorities.

We spoke a bit about the NSS document, which he said “was pretty reflective of where national security strategy was under Trump.” It focused a lot on great-power competition and revitalizing the domestic economy. “There’s no big news here.” Still, he called the document a “coherent look” at the global landscape and said the administration did well to prioritize the threats it will tackle.

But…

Broadsides

NEGATIVE NSS REVIEWS: The NSS has also received some negative feedback. Here’s a sampling of the criticisms:

LIU PENGYU , spokesperson, Chinese Embassy in U.S.: "The China-related content of the U.S. National Security Strategy hypes up major-power competition, zero-sum game, and ideological confrontation. … The sole purpose is to contain and suppress China’s development and maintain the US hegemony. China deplores and rejects this.”

VAN JACKSON , former Pentagon official: "We must modernize the largest and most modern military in the world. We will restrain Russia, just don't ask us for our theory of restraint. We will outcompete China, but they are also our vital collaborator. We don't want a Cold War, but the post-Cold War is over."

EMMA ASHFORD , senior fellow, Stimson Center: “The NSS emphasizes the protection of a ‘liberal, rules-based order’ as the core goal of U.S. strategy, and commits the United States to ‘support every country, regardless of size or strength, in exercising the freedom to make choices that serve their interests.’ That’s a commitment to global goals, not simply to U.S. national security interests.”

JUSTIN LOGAN , director of defense and foreign policy studies, Cato Institute: “When the United States says it’s focused on competition with China but is easily and repeatedly distracted by wars with weak powers like ISIS or Russia, it commits another error: strategy is about priorities. If everything is a priority, nothing is a priority.”

SAUDI DEFENDS OIL MOVE: Saudi Arabia’s Foreign Ministry released a rare statement defending Riyadh against claims that OPEC+, the oil cartel it leads with Russia, cut oil production to help Moscow.

OPEC+’s decision was based on “economic considerations,” per the statement, adding that delaying the decision for a month, as U.S. officials wanted, “would have had negative economic consequences.”

The decision to cut oil production, thus raising the energy source’s price, has turned Washington against Riyadh. Lawmakers seek to cut off security assistance while President JOE BIDEN says he’s reevaluating the importance of the U.S.-Saudi relationship.

 

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Transitions

MATT SPENCE is the new managing director and head of venture capital banking at Barclays. Spence, who’s been in the tech world for a few years, previously served in the Pentagon and National Security Council.

— A congrats are in order for the Center for a New American Security’s JACOB STOKES , who just this week was promoted from a fellow to a senior fellow in the Indo-Pacific Security Program.

What to Read

 EDWARD FISHMAN, POLITICO: Making Russia Sanctions Sting

THOMAS J. CHRISTENSEN, M. TAYLOR FRAVEL, BONNIE S. GLASER, ANDREW J. NATHAN, and JESSICA CHEN WEISS, Foreign Affairs: How to Avoid a War Over Taiwan

 PAUL HOCKENOS, The Nation: Nuclear Power Is a Dead End. We Must Abandon It Completely.

Tomorrow Today

— The Middle East Institute, 10 a.m.: "The Future of the U.S.-Saudi Relationship”

— George Washington University AHS 2022 Tech Conference, 11 a.m.: "How is tech shaping international affairs?"

— The Center for Strategic and International Studies, 12:30 p.m.: "Posturing U.S. Space Operations for a Warfighting Advantage"

— The Quincy Institute for Responsible Statecraft, 1 p.m.: "Will Biden Finally Get Tough With Saudi Arabia?"

Have a natsec-centric event coming up? Transitioning to a new defense-adjacent or foreign policy-focused gig? Shoot me an email at award@politico.com to be featured in the next edition of the newsletter.

Thanks to our editor, Heidi Vogt, who “deplores and rejects” most of what we write in this newsletter.

And we couldn’t do this without our talented producer Kierra Frazier.

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