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Cyberattacks against US helped fund North Korea weapons program: Treasury



President Donald Trump meets with North Korean leader Kim Jong Un at the demilitarized zone separating the two Koreas, in Panmunjom, South Korea, June 30, 2019.

Kevin Lamarque | Reuters

The U.S. Treasury Department said Friday that North Korean state-sponsored hacking groups attacked critical infrastructure, drawing illicit funds that ultimately funded the country’s weapons and missile programs.

The groups launched ransomware campaigns among other types of attacks, according to Treasury’s announcement. The direct link to North Korea’s missile program creates further ethical hurdles for companies, insurers and municipalities that must decide whether or not to pay ransoms to criminal groups that have locked up their files.

Treasury says three hacking groups are responsible for North Korea’s malicious cyber activity on critical infrastructure.” The groups were sanctioned by Treasury’s Office of Foreign Assets Control.

One of the groups was responsible for the infamous WannaCry ransomware attacks of 2017, which cost companies and governments hundreds of millions of dollars.

“Treasury is taking action against North Korean hacking groups that have been perpetrating cyber attacks to support illicit weapon and missile programs,” Sigal Mandelker, Treasury under secretary for terrorism and financial intelligence, said in the release.

“We will continue to enforce existing U.S. and UN sanctions against North Korea and work with the international community to improve cybersecurity of financial networks,” Mandelker said.

Ethics of ransomware

The three hacking groups — known as “Lazarus Group,” “Bluenoroff,” and “Andariel” — are controlled by North Korea through their relationship to a United Nations-designated intelligence bureau, according to Treasury.

The Lazarus Group’s WannaCry attacks two years ago caused widespread havoc globally, shutting down hospitals and ambulances run by Britain’s National Health Service, halting car manufacturing by companies like Nissan and Renault and stopping shipments by FedEx, among numerous other companies.

Bluenoroff has stolen more than $1 billion from global financial institutions since 2014 through a variety of tactics, including attacks against the SWIFT messaging system. Anadriel “was observed by cyber security firms attempting to steal bank card information by hacking into ATMs to withdraw cash or steal customer information to later sell on the black market,” according to Treasury.

The move is another step in the federal government’s initiatives to identify the financial trail of cybercrimes, particularly those perpetrated by hostile nations. The fact that these illicit funds were used for North Korea’s weapons programs will put further ethical pressure on any organization dealing with breaches or ransomware. A recent ProPublica investigation called into question the ethics of paying ransom demands or even having insurance products that cover the costs of the ransom, when the funds may be going into the hands of criminals or, in these cases, North Korea’s military.

The Trump-Kim relationship

The sanctions come days after President Donald Trump fired national security advisor John Bolton, who was known for taking a more hawkish stance against North Korea than the commander-in-chief. Trump has cultivated a cordial relationship with North Korea’s dictator, Kim Jong Un, and in July became the first sitting U.S. president to set foot on North Korean soil.

Experts believed Bolton’s firing could lead to further softening of relations between the U.S. and North Korea.

Since 2011, Kim has fired more than 90 missiles and had four nuclear weapons tests, which is more than what his father, Kim Jong Il, and grandfather, Kim Il Sung, launched over a period of 27 years.

North Korea, the only nation to have tested nuclear weapons this century, spent most of Trump’s first year in office perfecting its nuclear arsenal. While North Korea has paused nuclear tests that prompted Trump’s threat to bring “fire and fury” upon that country, it had already made significant progress before the historic dialogue with the U.S. started. The nation has also launched tests of various projectiles in recent months.

Under the third-generation North Korean leader, the reclusive state has conducted its most powerful nuclear test, launched its first-ever intercontinental ballistic missile and threatened to send missiles into the waters near the U.S. territory of Guam.

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Tokyo area shuts down as powerful typhoon lashes Japan



A heavy downpour and strong winds pounded Tokyo and surrounding areas on Saturday as a powerful typhoon forecast to be Japan’s worst in six decades made landfall and passed over the capital, where streets, nearby beaches and train stations were long deserted.

Store shelves were bare after people stocked up on water and food ahead of Typhoon Hagibis. The Japan Meteorological Agency warned of dangerously heavy rainfall in Tokyo and surrounding prefectures, including Gunma, Saitama and Kanagawa, and later expanded the area to include Fukushima and Miyagi to the north. A coastal earthquake also rattled the area.

“Be ready for rainfall of the kind that you have never experienced,” said meteorological agency official Yasushi Kajihara, adding that areas usually safe from disasters may prove vulnerable.

“Take all measures necessary to save your life,” he said.

Kajihara said people who live near rivers should take shelter on the second floor or higher of any sturdy building if an officially designated evacuation center wasn’t easily accessible.

Hagibis, which means “speed” in Filipino, was advancing north-northwestward with maximum sustained winds of 144 kilometers (90 miles) per hour, according to the meteorological agency. It was traveling northward at a speed of 40 kph (25 mph).

It reached Kawasaki, a western part of greater Tokyo, late Saturday and headed to Tsukuba city to the north about an hour later, before it was expected to swerve toward the sea, the agency said.

The storm brought heavy rainfall in wide areas of Japan all day ahead of its landfall, including in Shizuoka and Mie prefectures, southwest of Tokyo, as well as Chiba to the north, which saw power outages and damaged homes in a typhoon last month.

Under gloomy skies, a tornado ripped through Chiba on Saturday, overturning a car in the city of Ichihara and killing a man inside the vehicle, city official Tatsuya Sakamaki said. Five people were injured when the tornado ripped through a house. Their injuries were not life-threatening, Sakamaki said.

The heavy rain caused rivers to swell, and several had flooded by late Saturday. The wind flipped anchored boats and whipped up sea waters in a dangerous surge along the coast and areas near rivers, flooding some residential neighborhoods and leaving people to wade in ankle-deep waters and cars floating. Some roads were so flooded they looked like muddy ditches.

An earthquake shook the area drenched by the rainfall shortly before the typhoon made landfall in Shizuoka prefecture Saturday evening. but there were no immediate reports of damage. The U.S. Geological Survey said the magnitude 5.3 quake was centered in the ocean off the coast of Chiba, near Tokyo, and was fairly deep, at 59.5 kilometers (37 miles). Deep quakes tend to cause less damage than shallow ones.

In Shizuoka, one of two men who went missing in the Nishikawa River was rescued, Gotemba city official Fumihiko Katsumata said. Firefighters said the two men were working at a river canal to try to control overflowing when they were swept away.

The nationally circulated Yomiuri newspaper put the storm’s casualty toll at two people dead, three missing and 62 injured. More than 170,000 people had evacuated, the paper said.

More than 370,000 homes suffered power outages as a result of the typhoon, according to Tokyo Electric Power Co.

Yusuke Ikegaya, a Shizuoka resident who evacuated ahead of the storm, said he was surprised that the nearby river was about to overflow in the morning, hours before the typhoon made landfall.

“In the 28 years of my life, this is the first time I’ve had to evacuate even before a typhoon has landed,” he said.

Authorities also warned of mudslides, common in mountainous Japan.

Two dams began to release some of their waters and other dams in the area may take similar measures, as waters were nearing limits, public broadcaster NHK reported. An overflooded dam is likely to cause greater damage, and so releasing some water gradually is a standard emergency measure, but the released water added to the heavy rainfall could be dangerous, causing rivers to flood.

Rugby World Cup matches, concerts and other events in the typhoon’s path were canceled, while flights were grounded and train services halted. Authorities acted quickly, with warnings issued earlier in the week, including urging people to stay indoors.

Some 17,000 police and military troops were called up, standing ready for rescue operations.

Residents taped up their apartment windows to prevent them from shattering. TV talks shows showed footage of household items like a slipper bashing through glass when hurled by winds.

Evacuation centers were set up in coastal towns, and people rested on gymnasium floors, saying they hoped their homes were still there after the storm passed.

The typhoon disrupted a three-day weekend in Japan that includes Sports Day on Monday. Qualifying for a Formula One auto race in Suzuka was pushed to Sunday. The Defense Ministry cut a three-day annual navy review to a single day on Monday.

All Nippon Airways and Japan Airlines grounded most domestic and international flights at the Tokyo, Osaka and Nagoya airports, and some Sunday flights have also been canceled.

Central Japan Railway Co. canceled bullet-train service between Tokyo and Osaka except for several early Saturday trains connecting Nagoya and Osaka. Tokyo Disneyland was closed, while Ginza department stores and smaller shops throughout Tokyo were shuttered.

A typhoon that hit the Tokyo region in 1958 left more than 1,200 people dead and half a million houses flooded.

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Germany bans exports of arms to Turkey after Syria offensive



German Foreign Minister Heiko Maas

MICHAL CIZEK | AFP | Getty Images

Germany has banned arms exports to Turkey over its assault against Kurdish YPG militia in Syria, a foreign ministry spokeswoman said on Saturday.

Turkey launched the military operation on Wednesday after U.S. President Donald Trump withdrew some U.S. troops who had been backing Kurdish forces in the fight against Islamic State.

The United States and European Union have already warned Turkey of possible sanctions over the offensive.

“Against the backdrop of the Turkish military offensive… , the Federal Government will not issue any new permits for all military equipment that could be used by Turkey in Syria”, Foreign Minister Heiko Maas said, according to the spokeswoman.

The comment confirmed a report in weekly Bild Am Sonntag.

Turkey’s foreign minister Mevlüt Cavusoglu said that his country was undeterred by bans or embargoes.

“No matter what anyone does, no matter if it’s an arms embargo or anything else, it just strengthens us,” he told German radio station Deutsche Welle ahead of the publication of Maas’ statements.

“Even if our allies support the terrorist organisation, even if we stand alone, even if an embargo is imposed, no matter what they do, our fight is against the terrorist organisation”, Cavusoglu said.

Germany exported arms worth 243 million euros ($268 million) to Turkey in 2018, accounting for almost one third of its weapons exports, according to Bild Am Sonntag.

In the first four months of 2019, Turkey received weapons from Germany worth 184 million euros, making it the biggest recipient country, the paper said.

Defence Minister Annegret Kramp-Karrenbauer said on Friday that Germany expected all NATO partners – which include Turkey – to contribute towards stabilizing the region.

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We really don’t know where the US is on Syria



Win McNamee | Getty Images

ABU DHABI — The foreign policy of the United States in places like Syria has been “contradictory” for several years, according to the former chief of Saudi Arabia’s intelligence services.

Speaking to CNBC’s Hadley Gamble in Abu Dhabi Saturday, Saudi Arabian Prince Turki Al-Faisal said: “The situation in Syria, we really don’t know where the United States is, for example, is it in or is it out?”

Trump recently announced that U.S. forces in northeastern Syria would move aside, clearing the way for a Turkish offensive that is now in its fourth day. The Turkish operation is aimed at moving the U.S.-backed Kurdish militia, the People’s Protection Units (YPG), away from its southern border with Syria.

Ankara views the group as terrorists and stresses the YPG’s ties to a separatist Kurdish group in Turkey, the PKK, which has carried out a decades-long violent insurgency against the Turkish state. Nonetheless, Kurdish forces were a strategic partner to the U.S. and played a crucial role in defeating the so-called Islamic State.

Trump’s controversial move has received widespread criticism in the international community. The U.S. administration has also been accused of sending mixed messages by, at times, distancing itself from the Kurdish militia but also preparing sanctions on Turkey if it steps over the line.

Al-Faisal noted his concern at the American troop withdrawal, telling CNBC that for U.S. forces “to all of a sudden, fold up their tents and silently fade away is, I think, not the right thing to do.” But he added that these contradictory statements from the White House didn’t start under the Trump regime.

“That’s been the case not just since Trump but since Obama. You remember the ‘red lines’ of Obama, nothing coming through on that. Subsequently, Mr. Trump’s contradictory statements about the removal of American forces,” he said.

In 2012, former President Barack Obama warned the Syrian government not to cross a red line by using or moving chemical or biological weapons. In 2013, Syrian President Bashar Assad killed over an estimated 1,000 citizens in Eastern Ghouta with Sarin gas.

Trump originally announced the full withdrawal of U.S. troops in Syria in December 2018. He directed the U.S. military to remove all remaining 2,200 American ground troops from Syria within 30 days. Trump, at the time, went on to tweet that IS had been defeated.

US troops to Saudi Arabia

Also this week, the U.S. administration said it will send more forces into Saudi Arabia after attacks on its oil production facilities, which was blamed on Iran. This came despite Trump stating that he wants to reduce military involvement in the region.

Al-Faisal told CNBC that he wasn’t surprised that the U.S. would be engaging with the Saudi kingdom by sending troops, while also withdrawing forces away from its allies in Syria.

“Well, It’s always been about energy since hasn’t it. Since 1945.”

He went on to add: “The oil market binds the world together and what happens in Saudi Arabia does not stay in Saudi Arabia.”

“It has somehow an ability to affect other countries. So I am not surprised the U.S. would be interested in engaging with the kingdom on defending the oil industry. It is surprising that America would abandon her allies in Syria. That is something for Mr. Trump to decide.”

The U.S. president recently stated that the country had become such a large producer that it no longer needed oil from the Middle East, but added that it was still willing to back its allies.

A spokesperson for the White House wasn’t immediately available for comment when contacted by CNBC.

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