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  • Chip wars: How ‘chiplets’ are emerging as a core part of China’s tech strategy

    Chip wars: How ‘chiplets’ are emerging as a core part of China’s tech strategy

    July 13 (Reuters) – The sale of struggling Silicon Valley startup zGlue’s patents in 2021 was unremarkable except for one detail: The technology it owned, designed to cut the time and cost for making chips, showed up 13 months later in the patent portfolio of Chipuller, a startup in China’s southern tech hub Shenzhen.

    Chipuller purchased what is referred to as chiplet technology, a cost efficient way to package groups of small semiconductors to form one powerful brain capable of powering everything from data centers to gadgets at home.

    The previously unreported technology transfer coincides with a push for chiplet technology in China that started about two years ago, according to a Reuters analysis of hundreds of patents in the U.S. and China and dozens of Chinese government procurement documents, research papers and grants, local and central government policy documents and interviews with Chinese chip executives.

    Industry experts say chiplet technology has become even more important to China since the U.S. barred it from accessing advanced machines and materials needed to make today’s most cutting edge chips, and now largely underpins the country’s plans for self-reliance in semiconductor manufacturing.

    “U.S.-China competition is on the same starting line,” Chipuller chairman Yang Meng said about chiplet technology in an interview with Reuters. “In other (chip technologies) there is a sizeable gap between China and the United States, Japan, South Korea, Taiwan.”

    Barely mentioned before 2021, Chinese authorities have highlighted chiplets more frequently in recent years, according to a Reuters review. At least 20 policy documents from local to central governments referred to it as part of a broader strategy to increase China’s capabilities in “key and cutting-edge technologies”.

    “Chiplets have a very special meaning for China given the restrictions on wafer fabrication equipment,” said Charles Shi, a chip analyst for brokerage Needham. “They can still develop 3D stacking or other chiplet technology to work around those restrictions. That’s the grand strategy, and I think it might even work.”

    Beijing is rapidly exploiting chiplet technology in applications as diverse as artificial intelligence to self-driving cars, with entities from tech giant Huawei Technologies to military institutions exploring its use.

    More major investments in the area are on the way, according to a review of corporate announcements.

    CHINA’S CHIPLET ADVANTAGE

    Chiplets, or small chips, can be the size of a grain of sand or bigger than a thumbnail and are brought together in a process called advanced packaging.

    It is a technology the global chip industry has increasingly embraced in recent years as chip manufacturing costs soar in the race to make transistors so small they are now measured in the number of atoms.

    Bonding chiplets tightly together can help make more powerful systems without shrinking the transistor size as the multiple chips can work like one brain.

    Apple’s high-end computer lines use chiplet technology, as do Intel and AMD’s more powerful chips.

    About a quarter of the global chip packaging and testing market sits in China, according to Dongguan Securities.

    While some say this gives China an advantage in leveraging chiplet technology, Chipuller chairman Yang cautioned the proportion of China’s packaging industry that could be considered advanced was “not very big”.

    Under the right conditions, chiplets that are personalised according to the needs of the customer can be completed quickly, in “three to four months, this is the unique advantage China holds,” according to Yang.

    Needham’s Shi said according to import data published by China’s customs agency, China’s purchase of chip packaging equipment soared to $3.3 billion in 2021 from its previous high of $1.7 billion in 2018, although last year it fell to $2.3 billion with the chip market downturn.

    Since early 2021 research papers on chiplets started surfacing by researchers of the Chinese military People’s Liberation Army and universities it runs, and state-run and PLA-affiliated laboratories are looking to use chips made using domestic chiplet technology according to six tenders published over the past three years.

    Public documents by the government also show millions of dollars worth of grants to researchers specializing in chiplet technology, while dozens of smaller companies have sprouted throughout China in recent years to meet domestic demand for advanced packaging solutions like chiplets.

    CHIPLETS ON THE TABLE

    Against the backdrop of escalating U.S.-China tension, Chinese company Chipuller acquired 28 patents either owned by zGlue or invented by people whose names are on zGlue’s patents, according to an analysis using IP management technology firm Anaqua’s Acclaim IP database.

    The acquisition was through a two-step transfer, first through British Virgin Islands-registered North Sea Investment Co Ltd, according to documents seen by Reuters and confirmed by Yang.

    The Committee on Foreign Investment in the United States (CFIUS), a powerful Treasury-led committee that reviews transactions for potential threats to U.S. security, did not respond to a Reuters request for comment about whether such sales would require their approval.

    CFIUS lawyers Laura Black at Akin’s Trade Group, Melissa Mannino at BakerHostetler and Perry Bechky at Berliner Corcoran & Rowe say patent sales alone would not necessarily give CFIUS authority over the deal, as it depends whether the assets purchased constitute a U.S. business.

    Representative Mike Gallagher, an influential lawmaker whose select committee on China has pressed the Biden administration to take tougher stances on China, told Reuters zGlue’s case highlights the “urgent need to reform CFIUS”.

    “(People’s Republic of China) entities should not be able to act with impunity to take advantage of distressed U.S. firms to transfer their IP to China,” he said in an emailed statement.

    Chipuller’s Yang said zGlue’s lawyer communicated with both CFIUS and the Department of Commerce to ensure the sale to North Sea would not fall foul of export controls.

    These discussions did not include mention of Chipuller or the possibility of a Chinese entity ending up in possession of the patents, according to a Chipuller spokesperson.

    “Everything was done very transparently and in accordance with (U.S.) law,” Yang said.

    Yang said he considered himself a founder of zGlue as he became an investor in the company in 2015, soon after its formation, and later became a director and chairman.

    CFIUS visited zGlue offices in 2018 to conduct an investigation because the company’s largest non-U.S. investor, Yang, was from China, the chairman said.

    “So we have spent a lot of time communicating with CFIUS,” Yang said, adding that Chipuller currently does not supply any Chinese military or U.S.-sanctioned entities.

    Chipuller isn’t the only firm with chiplet technology.

    Huawei, China’s tech and chip design giant that has been put on the U.S.’s most restricted list, has been actively filing chiplet patents.

    Huawei published over 900 chiplet-related patent applications and grants last year in China, up from 30 in 2017, according to Anaqua’s director of analytics solutions Shayne Phillips.

    Huawei declined to comment.

    Reuters identified over a dozen announcements over the past two years for new factories or expansions of existing ones from companies using chiplet technology in manufacturing across China’s tech sector, representing an investment totalling over 40 billion yuan.

    They include domestic giants TongFu Microelectronics (002156.SZ) and JCET Group (600584.SS), as well as fast-growing startups such as Beijing ESWIN Technology Group, which spent 5.5 billion yuan on a factory for its chiplet-focused subsidiary that began operating in April.

    One article published in May by an outlet run by China’s Ministry of Industry and Information Technology (MIIT) urged big Chinese tech firms the use of domestic packaging companies such as TongFu to help build China’s self-sufficiency in computing power.

    “Use Chiplet technology to break through the United States’ siege of my country’s advanced process chips,” it said.

    MIIT did not respond to a request for comment.

    Chipuller chairman Yang puts it this way: “Chiplet technology is the core driving force for the development of the domestic semiconductor industry,” he said on the company’s official WeChat channel. “It is our mission and duty to bring it back to China.”

    ($1 = 7.2205 Chinese yuan renminbi)

    Reporting by Jane Lanhee Lee and Eduardo Baptista; Additional reporting by Echo Wang and Stephen Nellis; editing by Kenneth Li, Brenda Goh and Lincoln Feast.

    Our Standards: The Thomson Reuters Trust Principles.

    Reports on global trends in computing from covering semiconductors and tools to manufacture them to quantum computing. Has 27 years of experience reporting from South Korea, China, and the U.S. and previously worked at the Asian Wall Street Journal, Dow Jones Newswires and Reuters TV. In her free time, she studies math and physics with the goal …

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  • Musk’s Twitter rate limits could undermine new CEO, ad experts say

    Musk’s Twitter rate limits could undermine new CEO, ad experts say

    July 3 (Reuters) – Elon Musk’s move to temporarily cap how many posts Twitter users can read on the social media site could undermine efforts by new CEO Linda Yaccarino to attract advertisers, marketing industry professionals said.

    Musk announced Saturday that Twitter would limit how many tweets per day various accounts can read, to discourage “extreme levels” of data scraping and system manipulation.

    Users posted screenshots in reply, showing they were unable to see any tweets, including tweets on the pages of corporate advertisers, after hitting the limit.

    Ad industry veterans said the move creates an obstacle for Yaccarino, the former NBCUniversal advertising chief who started last month as Twitter’s CEO.

    Yaccarino has sought to repair relationships with advertisers who pulled away from the site after Musk bought it last year, the Financial Times reported last week.

    The limits are “remarkably bad” for users and advertisers already shaken by the “chaos” Musk has brought to the platform, Mike Proulx, research director at Forrester, said on Sunday.

    “The advertiser trust deficit that Linda Yaccarino needs to reverse just got even bigger. And it cannot be reversed based on her industry credibility alone,” he said.

    Lou Paskalis, the founder of advertising consultancy AJL Advisory and former marketing boss at Bank of America, said Yaccarino is Musk’s “last best hope” to salvage ad revenue and the company’s value.

    “This move signals to the marketplace that he’s not capable of empowering her to save him from himself,” he said.

    Under the new cap, unverified accounts were initially limited to 600 posts a day with new unverified accounts limited to 300. Verified accounts could read 6,000 posts a day, Musk said in a post on the site.

    Twitter logo and a photo of Elon Musk are displayed through magnifier in this illustration taken October 27, 2022. REUTERS/Dado Ruvic/Illustration

    Hours later, he said the cap was raised to 10,000 posts per day for verified users, 1,000 per day for unverified and 500 posts per day for new unverified users.

    A Twitter spokesperson did not reply to requests for comment and inquiries about how long the restrictions will last on Sunday.

    Capping how much users can view could be “catastrophic” for the platform’s ad business, said Jasmine Enberg, principal analyst at Insider Intelligence.

    “This certainly isn’t going to make it any easier to convince advertisers to return. It’s a hard sell already to bring advertisers back,” she said.

    Olivia Wedderburn, an executive at creative agency TMW Unlimited, said she was advising her clients to “stop investing in Twitter immediately,” because the platform was turning away heavily engaged users, which she said is the “sole reason” to advertise on Twitter.

    The limit came soon after Twitter began requiring users to log into an account on the social media platform to view tweets, which Musk called a “temporary emergency measure” to combat data scraping.

    Musk had earlier expressed displeasure with artificial intelligence firms like OpenAI, the owner of ChatGPT, for using Twitter’s data to train their large language models.

    Platforms including Reddit and major news media organizations have complained about AI companies using their information to train AI models as some have sought fees.

    Kai-Cheng Yang, researcher at Indiana University in Bloomington, said that the limits appeared to be effective in blocking third parties, including search engines, from scraping Twitter data like before.

    “It might still be possible, but the methods would be much more sophisticated and much less efficient,” he said.

    Reporting by Jody Godoy in New York, Sheila Dang in Dallas, Akash Sriram in Bengaluru and Martin Coulter in London; editing by Burton Frierson, Nick Zieminski and Marguerita Choy

    Our Standards: The Thomson Reuters Trust Principles.

    Jody Godoy

    Thomson Reuters

    Jody Godoy reports on banking and securities law. Reach her at jody.godoy@thomsonreuters.com

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  • How Sweden and Finland could help NATO contain Russia

    How Sweden and Finland could help NATO contain Russia

    TORNIO, Finland/KARLSKRONA, Sweden, July 3 (Reuters) – High above a railway bridge spanning a foaming river just outside the Arctic Circle, Finnish construction workers hammer away at a project that will smooth the connections from NATO’s Atlantic coastline in Norway to its new border with Russia.

    “We will be removing some 1,200 of these one by one,” says site manager Mika Hakkarainen, holding up a rivet.

    Until February 2022, the 37-million euro ($41 million) electrification of this short stretch of rail – the only rail link between Sweden and Finland – simply promised locals a chance to catch a night train down to the bright lights of Stockholm.

    After Russia invaded Ukraine, that changed.

    Now Finland is part of NATO, and Sweden hopes to join soon.

    As the alliance reshapes its strategy in response to Russia’s campaign, access to these new territories and their infrastructure opens ways for allies to watch and contain Moscow, and an unprecedented chance to treat the whole of northwest Europe as one bloc, nearly two dozen diplomats and military and security experts told Reuters.

    “PUT RUSSIA AT RISK”

    The Finnish rail improvements around Tornio on the Swedish border are one example. Due for completion next year, they will make it easier for allies to send reinforcements and equipment from across the Atlantic to Kemijarvi, an hour’s drive from the Russian border and seven hours from Russia’s nuclear bastion and military bases near Murmansk in the Kola peninsula.

    Among forces based there, Russia’s Northern Fleet includes 27 submarines, more than 40 warships, around 80 fighter planes and stocks of nuclear warheads and missiles, data collected by the Finnish Institute of International Affairs (FIIA) shows.

    In a military conflict with NATO, the Fleet’s main task would be to secure control of the Barents Sea and stop ships bringing reinforcements from North America to Europe through the waters between Greenland, Iceland and the UK.

    That’s something Finland can help NATO resist.

    “It’s all about containing those kinds of capabilities from the north,” retired U.S. Major General Gordon B. Davis Jr. told Reuters.

    Maps showing marine traffic through the Baltic

    Besides opening its territory, Helsinki is buying the right assets, particularly fighter jets, “to add value to (the) northeastern defence and, frankly, in a conflict put Russia at risk,” he said.

    Sweden’s contribution will, by 2028, include a new generation of submarines in the Baltic Sea that Fredrik Linden, Commander of Sweden’s First Submarine Flotilla, says will make a big difference in protecting vulnerable seabed infrastructure and preserving access – currently major security headaches, as the September 2022 destruction of the Nord Stream gas pipelines read more showed.

    “With five submarines we can close the Baltic Sea,” Linden told Reuters. “We will cover the parts that are interesting with our sensors and with our weapons.”

    Analysts say the change is not before time. Russia has been actively developing its military and hybrid capabilities in the Arctic against the West, partly under the cover of international environmental and economic cooperation, the FIIA’s Deputy Director Samu Paukkunen told Reuters. Russia’s defence ministry did not respond to a request for comment.

    Paukkunen’s institute estimates Western armed forces are militarily about 10 years behind Russia in the Arctic.

    Even with the losses that Russia has sustained in Ukraine, the naval component of the Northern Fleet and the strategic bombers remain intact, Paukkunen said.

    NATO-member Denmark phased out its submarine fleet in 2004, part of a move to scale back its military capabilities after the end of the Cold War, and it has yet to decide on future investments. Norway is also ordering four new submarines, with delivery of the first due in 2029.

    “It seems to me that we have some catching up to do, because we haven’t done it properly for the last 25 years,” said Sebastian Bruns, a senior researcher into maritime security at Kiel University’s Institute for Security Policy.

    Maps showing marine traffic through the Baltic

    “A WHOLE PIECE”

    Both developments show how the expanded alliance will reshape Europe’s security map. The region from the Baltic in the south to the high north may become almost an integrated operating area for NATO.

    “For NATO it’s quite important to have now the whole northern part, to see it as a whole piece,” Lieutenant Colonel Michael Maus from NATO’s Allied Command Transformation told Reuters. He chaired the working group which led Finland’s military integration into NATO.

    “With (existing) NATO nations Norway and Denmark, now we have a whole bloc. And thinking about potential defence plans, it’s for us a huge step forward, to consider it as a whole area now.”

    This became clear in May, when Finland hosted its first Arctic military exercise as a NATO member at one of Europe’s largest artillery training grounds 25 km above the Arctic Circle.

    The nearby town of Rovaniemi, known to tourists as the home of Santa Claus, is also the base of Finland’s Arctic air force and would serve as a military hub for the region in case of a conflict. Finland is investing some 150 million euros to renew the base to be able to host half a new fleet of 64 F-35 fighter jets, due to arrive from 2026.

    An undated artist’s rendition depicts divers and an unmanned vehicle exiting the A26 submarine. Saab AB/Handout via REUTERS

    For the May manoeuvres, nearly 1,000 allied forces from the United States, Britain, Norway and Sweden filled the sparse motorways as they joined some 6,500 Finnish troops and 1,000 vehicles.

    Captain Kurt Rossi, Field Artillery Officer of the U.S. Army, led a battery bringing in an M270 multiple rocket launcher.

    It was first shipped from Germany across the Baltic Sea, then trucked nearly 900 km to the north.

    “We haven’t been this close (to Russia) and been able to train up in Finland before,” Rossi said.

    If there was a conflict with Russia in the Baltic Sea area – where Russia has significant military capabilities at St. Petersburg and Kaliningrad – the shipping lane NATO used for that exercise would be vulnerable. Finland relies heavily on maritime freight for all its supplies – customs data shows almost 96% of its foreign trade is carried across the Baltic.

    The east-west railway link across the high north will open up an alternative, which could prove crucial.

    “I think the Russians can quite easily interrupt the cargo transportation by sea so basically this northern route is the only accessible route after that,” said Tuomo Lamberg, manager for cross border operations at Sweco, the Swedish company designing the electrification.

    Maps showing marine traffic through the Baltic

    “NOTHING BEATS THEM”

    But that risk, too, may recede when Sweden joins NATO.

    Down beneath the Baltic Sea waterline, the submarine commander Linden shows a reporter the captain’s quarters of the Gotland, one of four submarines currently in Sweden’s fleet, which will bring NATO’s total in the Baltic countries to 12 by 2028.

    The Kiel institute expects Russia to add one to three submarines in the coming years, to bring its Baltic submarine total to four, along with its fleet of around six modern warships. Its capabilities at Kaliningrad also include medium-range ballistic missiles.

    “This can be the loneliest place in the world,” says Linden, who captained the vessel for many years. On a typical mission, which lasts two to three weeks, there is no communication with headquarters, he said.

    The Gotlands, like Germany’s modern Type 212 submarines, will be among NATO’s most advanced non-nuclear submarines and can stay out of port for significantly longer than most other conventional models, the researcher Bruns said read more .

    “I would say, without a doubt, that the Gotland-class and the German Type 212 are the most capable non-nuclear submarines in the world,” said Bruns.

    “There is nothing that beats them, quite literally. In terms of how quiet they are, the engines they use, they are particularly quiet and very maneuverable.”

    In submarine warfare, Linden said, the primary question is where the adversary is. A careless crew member dropping a wrench or slamming a cupboard door can lead to detection.

    “We talk quietly on board,” Linden said. “You shouldn’t believe … films where orders are shouted.”

    The Gotland is based at Karlskrona, about 350 km across the Baltic from Kaliningrad. With an average of 1,500 vessels per day trafficking the Baltic according to the Commission on Security and Cooperation In Europe, it is one of the world’s busiest seaways – and there is really only one way out, the Kattegatt Sea between Denmark and Sweden.

    The shallow and crowded seaway can only be accessed through three narrow straits that submarines can’t pass through without being detected.

    LISTENING POWERS

    If any of the straits were to be closed, the sea freight traffic to Sweden and Finland would be hit hard and the Baltic states completely cut off. But with Sweden in the alliance, that becomes more preventable, because Sweden’s submarines will add to NATO’s listening powers.

    Linden says the Gotland’s crew can sometimes hear Russia’s vessels. The range of sound travel varies partly depending on the seasons. In winter, he said, you can hear as far as the island of Oeland – just a bit further than the distance between London and Birmingham in the UK.

    “You can lie outside Stockholm and hear the chain rattling on Oeland’s northern buoy,” Linden said. “In the summer you can hear maybe 3,000 meters.”

    By 2028, once Sweden takes delivery of a new design of vessel, this capacity will increase. The new design, known as A26, will allow submarine crews to deploy remotely operated vehicles (ROVs), combat divers or autonomous systems of some sort without putting the submarine or crew at risk, Bruns said.

    “Depending on the mission it could be an ROV that safeguards a pipeline or data cable, it could be combat divers that go ashore in the cover of darkness, it could be almost anything.”

    That capacity will increase Sweden’s scope to control comings and goings through the Baltic.

    “If you count all the forces, with Germany in the lead and Sweden and Finland coming on board, all those have really shifted the balance in the Baltic Sea quite significantly,” said Nick Childs, Senior Fellow for Naval Forces and Maritime Security at the International Institute for Strategic Studies.

    “It would make it very difficult for the Russian Baltic Sea fleet to operate in a free way,” he said. “But it could … still pose challenges for NATO.”

    Anne Kauranen reported from Tornio, Johan Ahlander from Karlskrona; additional reporting from Gwladys Fouche in Oslo, Jacob Gronholt-Pedersen in Copenhagen and Sabine Siebold in Brussels; Edited by Sara Ledwith

    Our Standards: The Thomson Reuters Trust Principles.

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  • Trump indictment: Reuters/Ipsos poll shows most Republicans think charges are politically motivated 

    Trump indictment: Reuters/Ipsos poll shows most Republicans think charges are politically motivated 

    WASHINGTON, June 13 (Reuters) – A vast majority of Republicans believe federal criminal charges against Donald Trump are politically motivated, according to a Reuters/Ipsos poll completed on Monday that also showed him far ahead of his nearest rival in the race for the Republican presidential nomination.

    The polling, which began on Friday, a day after Trump was indicted, found that 81% of self-identified Republicans said politics was driving the case, reflecting the deep polarization of the U.S. electorate. President Joe Biden, a Democrat, has repeatedly said he has no involvement in the case brought by the Department of Justice.

    The number of Republicans who believe the former president is being unfairly targeted vastly exceeds the 30-35% of Trump supporters who are estimated by political analysts to make up his core base.

    Some 62% of respondents in the Reuters/Ipsos poll, including 91% of Democrats and 35% of Republicans, said it was believable that Trump illegally stored classified documents at his home in Florida as alleged by prosecutors.

    The indictment did not appear to dent Trump’s standing in the Republican nominating contest for the 2024 presidential election. The specific charges, including obstruction of justice, became public on Friday afternoon when the indictment was unsealed.

    Some 43% of self-identified Republicans said Trump was their preferred candidate, compared to 22% who picked Florida Governor Ron DeSantis, Trump’s closest rival.

    In early May, Trump led DeSantis 49% to 19%, but that was before DeSantis formally entered the race.

    The rest of the Republican field, which includes former Vice President Mike Pence who declared his candidacy last week, had low single-digit levels of support.

    Trump flew to Miami on Monday to face federal charges of unlawfully keeping U.S. national security documents and lying to officials who tried to recover them. Trump, who will appear in court on Tuesday, has proclaimed his innocence and vowed to continue his campaign to regain the presidency in the November 2024 general election.

    Many Republican contenders in the 2024 race have accused the U.S. Justice Department of political bias and say it is being “weaponized” against Biden’s biggest Republican challenger. The department says all investigative decisions are made without regard to partisan politics.

    Trump also faces charges in New York in a state criminal case related to alleged hush money payments to a pornographic film star. A Reuters/Ipsos poll in March found that Republicans also saw that investigation as politically motivated.

    Biden’s approval rating stood at 41% last week, close to the lowest level of his presidency. Trump had a 40% approval rating at this point in his 2017-2021 presidency.

    The latest poll included responses from 1,005 adults nationwide and had a credibility interval, a measure of precision, of 4 percentage points for all voting-age Americans and between 6 and 7 percentage points for Republicans.

    Reporting by Jason Lange; Editing by Andy Sullivan, Ross Colvin and Howard Goller

    Our Standards: The Thomson Reuters Trust Principles.

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  • US colleges game out a possible end to race-conscious student admissions

    US colleges game out a possible end to race-conscious student admissions

    [1/3] Members of the University of North Carolina’s diverse student body mingle and make their way across campus as the Supreme Court weighs the issue of race-conscious admissions to colleges, in Chapel Hill, North Carolina, U.S., March 28, 2023. REUTERS/Jonathan Drake/File Photo

    WASHINGTON, May 24 (Reuters) – In 1998, the year a voter-approved measure barring the use of race-conscious admissions policies for public colleges and universities in California took effect, the percentage of Black, Hispanic and Native American students admitted at two of the state’s elite public schools plummeted by more than 50%.

    Those figures for UCLA and the University of California, Berkeley offer a cautionary tale as administrators at schools around the United States await a Supreme Court decision due by the end of June that is expected to prohibit affirmative action student admissions policies nationwide.

    That potential outcome in cases involving Harvard University and the University of North Carolina has brought new urgency to efforts by schools to maintain or increase racial and ethnic diversity in their student populations, according to interviews with senior administrators at a dozen colleges and universities.

    “We cannot afford as a nation to regress on our goals to create an educated and equitable society,” said Seth Allen, head of admissions at Pomona College in California. “So it’s incumbent on higher education to figure out how to work collectively together to ensure that we’re not furthering the enrollment gap among different groups of students.”

    Many selective U.S. colleges and universities for decades have used some form of affirmative action to boost enrollment of minority students, seeing value in having a diverse student population not only to offer educational opportunity but to bring a range of perspectives onto campuses.

    Affirmative action refers to policies that favor people belonging to certain groups considered disadvantaged or subject to discrimination, in areas such as hiring and student admissions.

    Schools are exploring numerous options. Administrators said they are drafting strategies to expand their recruitment of diverse applicants, remove application barriers and increase the rate of minority students who accept their admissions offers.

    An official at Rice University in Houston said the school will lean on student essay responses to ensure it admits students from diverse backgrounds. The U.S. Air Force Academy will focus on recruiting more students from diverse congressional districts.

    The president of Skidmore College in New York said connecting with high school counselors will become “more important than ever” to broaden the school’s applicant pool.

    Many schools said they already have waived fees, made standardized testing optional and are looking to improve financial aid offers – steps that could help boost minority enrollment.

    All of the administrators said their plans could change to comply with the scope of the Supreme Court’s reasoning in the Harvard and UNC cases. Some acknowledged that whatever steps schools take to circumvent a ban on race-conscious admissions policies might face legal challenges of their own.

    “We’re likely to see a whole new generation of lawsuits arise from the new admission standards that will be adopted by colleges and universities,” said Danielle Holley, current dean of Howard University School of Law in Washington and incoming president of Mount Holyoke College in Massachusetts.

    Lawsuits backed by an anti-affirmative action activist accused Harvard and UNC of unlawful discrimination in student admissions either by violating the U.S. Constitution’s promise of equal protection under the law or a federal law barring discrimination based on race and other factors.

    UNC was accused of discriminating against white and Asian American applicants. Harvard was accused of bias against Asian American applicants. The schools denied these allegations.

    GOING LOCAL

    Many of the school administrators said they plan to focus resources on recruitment, a part of the admissions cycle they do not expect the court will restrict.

    Admissions officers said they were broadening their outreach to high schools and community-based organizations in neighborhoods with lower incomes and educational attainment – places often populated by racial minorities.

    Yvonne Berumen, vice president of admissions at Pitzer College in California, said her team might run essay workshops at high schools in those targeted zip codes – postal regions – in hopes of generating applications.

    Chris George, dean of admissions at St. Olaf College in Minnesota, said high school data from national organizations like the College Board, which offers information on neighborhood income and housing stability, will help guide which high schools the college sends representatives to visit and the recruitment events they attend.

    Community-based organizations that identify local students who show academic promise and help them apply to college will be crucial partners for identifying and recruiting potential applicants from diverse backgrounds, the administrators said.

    “They become extensions of our recruiting and admissions team in many ways, and we’re seeing each year a bigger and bigger percentage of our students come from those community-based organizations,” said Kent Devereaux, president of Goucher College in Maryland.

    Administrators at schools located in or near major cities, including Pomona College near Los Angeles and Sarah Lawrence College in New York, said they would hope to draw more students from racially diverse local high schools and take more transfer students from local community colleges.

    Colonel Arthur Primas Jr., the U.S. Air Force Academy’s admissions director, said his racially diverse recruiting team will continue to visit schools in U.S. congressional districts with heavy concentrations of minorities and will try to encourage more students to seek nominations to the academy from their local members of Congress.

    “The Air Force Academy has had a long tradition of actively recruiting diverse candidates,” Primas said. “But we’re going to have to really be expansive.”

    Reporting by Gabriella Borter; Additional reporting by Donna Bryson; Editing by Will Dunham and Colleen Jenkins

    Our Standards: The Thomson Reuters Trust Principles.

    Gabriella Borter

    Thomson Reuters

    Gabriella Borter is a reporter on the U.S. National Affairs team, covering cultural and political issues as well as breaking news. She has won two Front Page Awards from the Newswomen’s Club of New York – in 2020 for her beat reporting on healthcare workers during the COVID-19 pandemic, and in 2019 for her spot story on the firing of the police officer who killed Eric Garner. The latter was also a Deadline Club Awards finalist. She holds a B.A. in English from Yale University and joined Reuters in 2017.

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  • Exclusive: Chinese hackers attacked Kenyan government as debt strains grew

    Exclusive: Chinese hackers attacked Kenyan government as debt strains grew

    • Cyber spies infiltrated Kenyan networks from 2019
    • Hit finance ministry, president’s office, spy agency and others
    • Sources believe Beijing was seeking info on debt

    NAIROBI, May 24 (Reuters) – Chinese hackers targeted Kenya’s government in a widespread, years-long series of digital intrusions against key ministries and state institutions, according to three sources, cybersecurity research reports and Reuters’ own analysis of technical data related to the hackings.

    Two of the sources assessed the hacks to be aimed, at least in part, at gaining information on debt owed to Beijing by the East African nation: Kenya is a strategic link in the Belt and Road Initiative – President Xi Jinping’s plan for a global infrastructure network.

    “Further compromises may occur as the requirement for understanding upcoming repayment strategies becomes needed,” a July 2021 research report written by a defence contractor for private clients stated.

    China’s foreign ministry said it was “not aware” of any such hacking, while China’s embassy in Britain called the accusations “baseless”, adding that Beijing opposes and combats “cyberattacks and theft in all their forms.”

    China’s influence in Africa has grown rapidly over the past two decades. But, like several African nations, Kenya’s finances are being strained by the growing cost of servicing external debt – much of it owed to China.

    The hacking campaign demonstrates China’s willingness to leverage its espionage capabilities to monitor and protect economic and strategic interests abroad, two of the sources said.

    The hacks constitute a three-year campaign that targeted eight of Kenya’s ministries and government departments, including the presidential office, according to an intelligence analyst in the region. The analyst also shared with Reuters research documents that included the timeline of attacks, the targets, and provided some technical data relating to the compromise of a server used exclusively by Kenya’s main spy agency.

    A Kenyan cybersecurity expert described similar hacking activity against the foreign and finance ministries. All three of the sources asked not to be named due to the sensitive nature of their work.

    “Your allegation of hacking attempts by Chinese Government entities is not unique,” Kenya’s presidential office said, adding the government had been targeted by “frequent infiltration attempts” from Chinese, American and European hackers.

    “As far as we are concerned, none of the attempts were successful,” it said.

    It did not provide further details nor respond to follow-up questions.

    A spokesperson for the Chinese embassy in Britain said China is against “irresponsible moves that use topics like cybersecurity to sow discord in the relations between China and other developing countries”.

    “China attaches great importance to Africa’s debt issue and works intensively to help Africa cope with it,” the spokesperson added.

    THE HACKS

    Between 2000 and 2020, China committed nearly $160 billion in loans to African countries, according to a comprehensive database on Chinese lending hosted by Boston University, much of it for large-scale infrastructure projects.

    Kenya used over $9 billion in Chinese loans to fund an aggressive push to build or upgrade railways, ports and highways.

    Beijing became the country’s largest bilateral creditor and gained a firm foothold in the most important East African consumer market and a vital logistical hub on Africa’s Indian Ocean coast.

    By late 2019, however, when the Kenyan cybersecurity expert told Reuters he was brought in by Kenyan authorities to assess a hack of a government-wide network, Chinese lending was drying up. And Kenya’s financial strains were showing.

    The breach reviewed by the Kenyan cybersecurity expert and attributed to China began with a “spearphishing” attack at the end of that same year, when a Kenyan government employee unknowingly downloaded an infected document, allowing hackers to infiltrate the network and access other agencies.

    “A lot of documents from the ministry of foreign affairs were stolen and from the finance department as well. The attacks appeared focused on the debt situation,” the Kenyan cybersecurity expert said.

    Another source – the intelligence analyst working in the region – said Chinese hackers carried out a far-reaching campaign against Kenya that began in late 2019 and continued until at least 2022.

    According to documents provided by the analyst, Chinese cyber spies subjected the office of Kenya’s president, its defence, information, health, land and interior ministries, its counter-terrorism centre and other institutions to persistent and prolonged hacking activity.

    The affected government departments did not respond to requests for comment, declined to be interviewed or were unreachable.

    By 2021, global economic fallout from the COVID-19 pandemic had already helped push one major Chinese borrower – Zambia – to default on its external debt. Kenya managed to secure a temporary debt repayment moratorium from China.

    In early July 2021, the cybersecurity research reports shared by the intelligence analyst in the region detailed how the hackers secretly accessed an email server used by Kenya’s National Intelligence Service (NIS).

    Reuters was able to confirm that the victim’s IP address belonged to the NIS. The incident was also covered in a report from the private defence contractor reviewed by Reuters.

    Reuters could not determine what information was taken during the hacks or conclusively establish the motive for the attacks. But the defence contractor’s report said the NIS breach was possibly aimed at gleaning information on how Kenya planned to manage its debt payments.

    “Kenya is currently feeling the pressure of these debt burdens…as many of the projects financed by Chinese loans are not generating enough income to pay for themselves yet,” the report stated.

    A Reuters review of internet logs delineating the Chinese digital espionage activity showed that a server controlled by the Chinese hackers also accessed a shared Kenyan government webmail service more recently from December 2022 until February this year.

    Chinese officials declined to comment on this recent breach, and the Kenyan authorities did not respond to a question about it.

    ‘BACKDOOR DIPLOMACY’

    The defence contractor, pointing to identical tools and techniques used in other hacking campaigns, identified a Chinese state-linked hacking team as having carried out the attack on Kenya’s intelligence agency.

    The group is known as “BackdoorDiplomacy” in the cybersecurity research community, because of its record of trying to further the objectives of Chinese diplomatic strategy.

    According to Slovakia-based cybersecurity firm ESET, BackdoorDiplomacy re-uses malicious software against its victims to gain access to their networks, making it possible to track their activities.

    Provided by Reuters with the IP address of the NIS hackers, Palo Alto Networks, a U.S. cybersecurity firm that tracks BackdoorDiplomacy’s activities, confirmed that it belongs to the group, adding that its prior analysis shows the group is sponsored by the Chinese state.

    Cybersecurity researchers have documented BackdoorDiplomacy hacks targeting governments and institutions in a number of countries in Asia and Europe.

    Incursions into the Middle East and Africa appear less common, making the focus and scale of its hacking activities in Kenya particularly noteworthy, the defence contractor’s report said.

    “This angle is clearly a priority for the group.”

    China’s embassy in Britain rejected any involvement in the Kenya hackings, and did not directly address questions about the government’s relationship with BackdoorDiplomacy.

    “China is a main victim of cyber theft and attacks and a staunch defender of cybersecurity,” a spokesperson said.

    Reporting by Aaron Ross in Nairobi, James Pearson in London and Christopher Bing in Washington
    Additional reporting by Eduardo Baptista in Beijing
    Editing by Chris Sanders and Joe Bavier

    Our Standards: The Thomson Reuters Trust Principles.

    Aaron Ross

    Thomson Reuters

    West & Central Africa correspondent investigating human rights abuses, conflict and corruption as well as regional commodities production, epidemic diseases and the environment, previously based in Kinshasa, Abidjan and Cairo.

    James Pearson

    Thomson Reuters

    Reports on hacks, leaks and digital espionage in Europe. Ten years at Reuters with previous postings in Hanoi as Bureau Chief and Seoul as Korea Correspondent. Author of ‘North Korea Confidential’, a book about daily life in North Korea. Contact: 447927347451

    Christopher Bing

    Thomson Reuters

    Award-winning reporter covering the intersection between technology and national security with a focus on how the evolving cybersecurity landscape affects government and business.

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  • Ukraine war: Belgorod incursion may stretch Russia’s defences

    Ukraine war: Belgorod incursion may stretch Russia’s defences

    • Two armed groups claim responsibility for attacks
    • Kyiv parodies past Kremlin denials of military involvement
    • Girding for counteroffensive against Russian invasion

    LONDON/KYIV, May 24 (Reuters) – A two-day incursion from Ukraine into Russia’s western borderlands could force the Kremlin to divert troops from front lines as Kyiv prepares a major counteroffensive, and deal Moscow a psychological blow, according to military analysts.

    Though Kyiv has denied any role, the biggest cross-border raid from Ukraine since Russia invaded 15 months ago was almost certainly coordinated with Ukraine’s armed forces as it prepares to attempt to recapture territory, the experts added.

    “The Ukrainians are trying to pull the Russians in different directions to open up gaps. The Russians are forced to send reinforcements,” said Neil Melvin, an analyst at the Royal United Services Institute (RUSI).

    Ukraine says it plans to conduct a major counteroffensive to seize back occupied territory, but Russia has built sprawling fortifications in its neighbour’s east and south in readiness.

    The incursion took place far from the epicentre of fighting in Ukraine’s eastern Donbas region and around 100 miles (160 km) from the front lines in the northern Kharkiv region.

    Reuters Image

    “They’ll have to respond to this and put troops there and then have lots of troops all along the border area, even though that may not be the way the Ukrainians are coming,” Melvin said.

    Russia’s military said on Tuesday it had routed militants who attacked its western Belgorod region with armoured vehicles the previous day, killing more than 70 “Ukrainian nationalists” and pushing the remainder back into Ukraine.

    Kyiv has said the attack was carried out by Russian citizens, casting it as homegrown, internal Russian strife. Two groups operating in Ukraine – the Russian Volunteer Corps (RVC) and Freedom of Russia Legion – have claimed responsibility.

    The groups were set up during Russia’s full-scale invasion and attracted Russian volunteer fighters wanting to fight against their own country alongside Ukraine and topple President Vladimir Putin.

    Mark Galeotti, head of the London-based Mayak Intelligence consultancy and author of several books on the Russian military, said the two groups comprised anti-Kremlin Russians ranging from liberals and anarchists to neo-Nazis.

    “They’re hoping that in some small way they can contribute to the downfall of the Putin regime. But at the same time, we have to realise that these are not independent forces … They are controlled by Ukrainian military intelligence,” he said.

    Ukrainian presidential aide Mykhailo Podolyak repeated Kyiv’s position that it had nothing to do with the operation.

    The United States says it does not “enable or encourage” Ukrainian attacks on Russian territory, but that it is up to Kyiv to decide how it conducts military operations.

    A view shows damaged buildings, after anti-terrorism measures introduced for the reason of a cross-border incursion from Ukraine were lifted, in what was said to be a settlement in the Belgorod region, in this handout image released May 23, 2023. Governor of Russia’s Belgorod Region Vyacheslav Gladkov via Telegram/Handout via REUTERS/File Photo

    Several similar incursions into Russia have occurred in recent months, and although this week’s was the largest known so far, it is still tiny when compared to frontline battles.

    ECHOES OF 2014?

    Alexei Baranovsky, a spokesperson for the political wing of the Freedom of Russia Legion, told Reuters in Kyiv that he could not disclose the number of troops involved in the operation, but that the legion had four battalions in total.

    Baranovsky denied there had been heavy losses, and he dismissed Russian reports of large casualties as disinformation.

    He said the unit was part of Ukraine’s International Legion and therefore part of its armed forces, but denied the incursion was coordinated with Ukrainian authorities.

    “These are the first steps in the main objective of overthrowing Putin’s regime through armed force. There are no other alternatives,” he said.

    Galeotti said the incursion looked like a Ukrainian battlefield “shaping” operation ahead of Kyiv’s planned counteroffensive.

    “… This is really a chance to do two things. One is to rattle the Russians, make them worried about the possibility of risings amongst their own people. But secondly, force the Russians to disperse their troops,” he said.

    Melvin noted that the operation also served to boost morale in Ukraine.

    Kyiv officials have mimicked the Kremlin’s rhetoric surrounding Russia’s annexation of Crimea in 2014 when it initially denied the troops involved were Russian.

    Podolyak blamed the Belgorod incursion on “underground guerrilla groups” comprising Russian citizens and said: “As you know, tanks are sold at any Russian military store.”

    The remark appeared to echo Putin’s response in 2014 when asked about the presence of men wearing Russian military uniforms without insignia in Crimea: “You can go to a store and buy any kind of uniform.”

    On social media, Ukrainians made reference to what they called the “Belgorod People’s Republic” – a nod to events in eastern Ukraine in 2014, when Russia-backed militias declared “people’s republics” in Ukraine’s Donetsk and Luhansk regions.

    Ukrainians also circulated a video of President Volodymyr Zelenskiy delivering his famous “I am here” video address from Kyiv at the beginning of the invasion in February 2022. But instead of the presidential office in Kyiv, the background showed the welcome sign to the city of Belgorod.

    Additional reporting by Max Hunder in Kyiv and Agnieszka Pikulicka-Wilczewska in Warsaw; editing by Mike Collett-White and Mark Heinrich

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  • Explainer: US debt ceiling focus on ‘discretionary spending’ means cuts ahead

    Explainer: US debt ceiling focus on ‘discretionary spending’ means cuts ahead

    WASHINGTON, May 24 (Reuters) – The central pillar of any debt-ceiling agreement between President Joe Biden and House Republican Kevin McCarthy is shaping up to be “discretionary spending” – the chunk of the United States’ roughly $6 trillion annual federal budget that is set annually by Congress.

    Talks are fluid as Biden and McCarthy work towards a deal to raise the $31.4 trillion debt ceiling and avoid a default as soon as June 1. But cuts to Social Security and Medicare programs that eat up most of the U.S. budget are already off the table.

    Instead, funds for programs from education to rail safety to law enforcement could be cut, trims that economists warn will slow U.S. economic growth.

    WHAT IS THE US DISCRETIONARY BUDGET?

    Congress sets funding levels for discretionary spending every year, which powers a wide swath of military and domestic programs.

    In 2022, discretionary spending reached $1.7 trillion, accounting for 27% of the overall $6.27 trillion spent, according to federal figures.

    Military spending typically accounts for roughly half of that total, though the amount varies from year to year.

    The other half is devoted to domestic programs like law enforcement, transportation, housing and scientific research.

    Estimated U.S. government discretionary spending for fiscal year 2023, in billion US dollars

    Discretionary spending as a share of U.S. gross domestic product peaked in the late 1970s, and cuts have served as the backbone for several landmark budget deals since the 1980s.

    Reuters Graphics

    HOW COULD DISCRETIONARY CUTS WORK?

    Biden and Democrats have offered to hold discretionary spending flat from the current 2023 fiscal year, a cut from Biden’s 2024 budget, and then cap spending in future years.

    House Republicans passed a plan last month that would save $3.2 trillion by capping growth at 1% annually for 10 years.

    Republicans say they will not accept a deal unless it results in the government spending less money than it did in the last fiscal year, and are pushing for cuts to 2022 levels.

    Both sides are also at odds over how long any spending caps should last, with Republicans now offering caps for six years, and the White House only two.

    Negotiators are avoiding the main driver of U.S. debt: rising retirement and health costs, driven by an aging population.

    The Social Security pension program is projected to increase by 67% by 2032, and the Medicare health program for seniors will nearly double in cost during that period, according to the nonpartisan Congressional Budget Office. Together, these programs account for roughly 37% of current federal spending.

    U.S. spending on health, retirement and other benefit programs has climbed steadily in recent decades, but negotiators in debt-ceiling talks look to cut other domestic and military spending.

    MORE BATTLES AHEAD

    If they can hammer out a general agreement on these levels and caps, if could help the United States avoid default, but would likely set up another series of budget battles, as lawmakers would still have to agree on funding levels for everything from fighter-plane construction to border enforcement.

    Republicans have said they do not want to cut spending on national defense and veterans’ care, which would require other programs to shoulder steeper cuts.

    The Republican-led House Appropriations Committee has unveiled legislation that would boost spending on veterans’ care, border security, and other priorities next year.

    That would likely require cuts of more than 13% in other areas like scientific research and environmental protection if they want to keep overall spending at the same level as this year, according to the Center on Budget and Policy Priorities, a left-leaning think tank.

    The Democratic-controlled Senate is not likely to accept those figures – which could lead to a government shutdown if the two sides do not reach agreement by Sept. 30, the end of the fiscal year.

    POLITICS OF CUTS

    While Republicans on the federal level have generally pushed for funding cuts to these discretionary items and Democrats to increase them, Republican-leaning states tend to benefit more from federal domestic spending, according to a Reuters analysis.

    “Spending restraint always sounds good in the abstract and sounds less good when you’re talking about specifics,” said Jan Moller, head of the Louisiana Budget Project, a nonpartisan think tank.

    Even if Biden and McCarthy agree to spending caps in the years ahead, Congress might not stick to the agreement.

    In 2011, Democratic President Barack Obama reached a deal with Republicans to save $1.8 trillion over 10 years through discretionary spending caps. But lawmakers opted to bypass those caps in the years that followed.

    In the end, the agreement only saved $1.3 trillion, according to Brian Riedl, a fellow with the conservative Manhattan Institute.

    Reporting by Jarret Renshaw and Andy Sullivan; Editing by Heather Timmons and Andrea Ricci

    Our Standards: The Thomson Reuters Trust Principles.

    Andy Sullivan

    Thomson Reuters

    Andy covers politics and policy in Washington. His work has been cited in Supreme Court briefs, political attack ads and at least one Saturday Night Live skit.

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  • Saudi embrace of Assad sends strong signal to US

    Saudi embrace of Assad sends strong signal to US

    • MbS sends reminder to US on who calls the shots in region
    • Mbs a player whom Washington can neither disregard nor disavow
    • He is forging ties with other powers, reshapes foes relations
    • He reasserts Saudi place as energy giant in oil-reliant world

    May 24 (Reuters) – Once labelled a pariah, Saudi Crown Prince Mohammed bin Salman took centre stage as master of ceremonies last week when Arab states readmitted Syria to the Arab League, signaling to Washington who calls the regional shots.

    His effusive greeting of President Bashar al-Assad at the Arab summit with kissed cheeks and a warm embrace defied U.S. disapproval at Syria’s return to the fold and capped a turnabout in the prince’s fortunes spurred by geopolitical realities.

    The prince, known as MbS, seeks to reassert Saudi Arabia as a regional power by using his place atop an energy giant in an oil-dependent world consumed by the war in Ukraine.

    Shunned by Western states after the 2018 killing of journalist Jamal Khashoggi by a Saudi hit squad, the prince has now emerged as a player whom Washington can neither disregard nor disavow, but must deal with on a transactional basis.

    Skeptical of U.S. promises on Saudi security and tired of its scolding tone, MbS is instead building ties with other global powers and, regardless of Washington’s consternation, remaking his relations with their shared foes.

    His blithe confidence on the world stage was not only visible in his reception of Assad. Ukrainian President Volodymyr Zelenskiy came to the Jeddah meeting and MbS offered to mediate between Kyiv and fellow oil producer Moscow.

    To be sure Saudi Arabia still depends militarily on the United States, which saved it from possible invasion by Saddam Hussein’s Iraq in 1990, monitors Iranian military activity in the Gulf and provides Riyadh with most of its weapons.

    Still, with Washington seemingly less engaged in the Middle East and less receptive to Riyadh’s anxieties, MbS is pursuing his own regional policy with less apparent deference to the views of his most powerful ally.

    “This is a strong signal to America that ‘we’re reshaping and redrawing our relations without you’,” said Abdulaziz al-Sager, Chairman of the Gulf Research Center, of the summit.

    “He is not getting what he wants from the other side,” Sager added, saying Saudi Arabia’s ententes with regional foes were based on Riyadh’s approach to regional security.

    DIPLOMATIC OFFENSIVE

    MbS’ position strengthened last year when Western economies turned to Saudi Arabia to help tame an oil market destabilized by the war in Ukraine. It created the opportunity for MbS to launch a diplomatic offensive that included high profile summit appearances.

    That effort was aided when Washington declared MbS immune from prosecution for Khashoggi’s killing despite his being directly implicated in it by U.S. intelligence.

    A visit by U.S. President Joe Biden last July had already demonstrated Riyadh’s returning influence: The American leader left empty handed while the prince enjoyed a public display of U.S. commitment to Saudi security.

    The Saudi pivot away from reliance on the United States was meanwhile evident when China mediated this year a settlement between Riyadh and its arch regional foe Iran after years of hostility.

    The deal was not made from a position of Saudi strength: Iran’s allies had come out stronger than those of the kingdom in Iraq, Syria and Lebanon, and held most of the populated territory in Yemen.

    Still, it showed Riyadh was able to cut its losses and work with U.S. rivals and foes to shore up its regional interests such as cooling the Yemen war where Saudi forces have been bogged down since 2015.

    Meanwhile the prince has improved ties with Turkey and ended a boycott of Qatar, a neighbour he considered invading in 2017 according to diplomats and Doha officials.

    “Over the past three years, the hatchet was buried and relations were repaired,” said Saudi columnist Abdulrahman Al-Rashed in Asharq Al-Awsat newspaper.

    TRANSACTIONAL RELATIONSHIP

    A Gulf official said the new, more directly transactional, relationship with the United States had replaced the old oil-for-defence model because of what Riyadh saw as a shakier security umbrella after the Arab revolts of 2011.

    A senior State Department official said the relationship is “an important eight-decade one that spans generations, across administrations in our own country and across leaders in Saudi Arabia”.

    “We have multiple interests when it comes to our relationship with Saudi Arabia…Our policy and engagement will seek to ensure that our relationship remains sound and able to meet our shared challenges of the future.”

    Riyadh thought Washington had abandoned old allies during the revolts and might abandon the Al Saud dynasty too. At the same time it believed the U.S. pursuit of a nuclear deal with Tehran had led Washington to ignore the growing activity around the region of Iranian proxies seen by Riyadh as a threat.

    That impression has strengthened. A Saudi source close to the ruling inner circle pointed to what he saw as lax enforcement of sanctions on Iran and a drawdown in Syria, where a small U.S. contingent has denied territory to Iran’s allies.

    “I think countries in the region, as a consequence, will do what is best for them,” he said.

    Meanwhile, Riyadh was annoyed that the U.S. pulled its support for Saudi operations in Yemen, launched after Washington repeatedly urged the kingdom to take responsibility for its own security.

    Without direct American intervention or support for its own military efforts, Riyadh had little choice but to strike a deal with Iran even if that annoyed Washington, the source said.

    “This is a consequence of the U.S. action,” he added.

    Each side has a list of requests that the other is not willing to grant, the Gulf official said.

    However both sides may have little choice but to put aside their grudges.

    The kingdom may see the U.S. security umbrella as weakened, but still views it as crucial to Saudi defence. Western states have meanwhile remembered that Riyadh’s influence in a volatile oil market requires them to banish their qualms and deal with its de facto ruler and future king.

    Writing by Samia Nakhoul; Editing by Angus McDowall

    Our Standards: The Thomson Reuters Trust Principles.

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  • Exclusive: Venezuela’s oil tankers at risk of sinking, fires, spills, report finds

    Exclusive: Venezuela’s oil tankers at risk of sinking, fires, spills, report finds

    PUNTO FIJO, May 4 (Reuters) – More than half of the 22 oil tankers in Venezuela’s fleet are so run down that they should be immediately repaired or taken out of service, according to an internal report from state-run oil company PDVSA that was shared exclusively with Reuters.

    The report by PDVSA’s maritime branch, entitled “Critical deficiencies and risks of PDV Marina’s tanker fleet,” said years of deferred maintenance had left the entire fleet with “low levels of reliability,” at risk of spills, sinking, fires, collisions or flooding.

    “The ships currently lack seaworthiness classification and certifications by flag nations,” the report said.

    PDVSA and PDV Marina did not respond to requests for comment.

    The report, dated March 2023, was among eight documents shared with Reuters describing the state of PDVSA’s tanker fleet from the oil company’s corporate office, trading division and maritime branch, as well as Venezuela’s maritime authority. The existence of the documents has not been previously reported.

    Dated from Jan. 2022 to March this year, the documents detail the condition of the company’s tankers; the costs of chartering third-party vessels and the status of shipbuilding contracts with companies in Argentina and Iran.

    The deterioration of the fleet has forced PDVSA to charter tankers to move its oil, which provides the bulk of Venezuela’s hard currency, the analysis by PDVSA’s trade division said.

    PDVSA and the oil ministry did not respond to requests for comment.

    The reports were prepared amid a wide-ranging anti-corruption probe ordered by Venezuela’s President Nicolas Maduro last October after the discovery of billions of dollars in missing payments for petroleum exports. More than 60 people have been arrested and PDVSA’s chief executive and the nation’s oil minister have been replaced.

    The report from PDV Marina recommended withdrawing five tankers from active use; sending seven to shipyards for major repairs and installing transponders, fire extinguishers and communication equipment in others. No actions have been taken as the audit on the company’s operations continues.

    Five of PDVSA’s tankers are at least 30 years old, past their recommended lifespan, according to the PDV Marina report. The last major maintenance work on the fleet was five years ago, the report said.

    “The tanker fleet is showing a decline in the quality of its operations due to advanced physical deterioration, which implies higher maintenance and repair costs. Planning for sending the tankers to dry docks has been very affected by lack of payment to shipyards and providers,” the PDV Marina report said.

    Reuters has previously reported on an increase in tanker collisions, spill risks and fires in Venezuela.

    PDVSA leased 41 vessels last year, the documents said, paying about double the market rate, between $14,000 and $36,500 per day, to tanker owners willing to work with Venezuela despite U.S. sanctions imposed in 2019.

    DELAYED SHIPS

    At least four tankers ordered from foreign shipyards have been held up because of payment delays, cost increases and sanctions, according to the documents reviewed by Reuters.

    The audits ordered by PDVSA’s new CEO Pedro Tellechea as part of Maduro’s anti-corruption probe could bring further delays, a PDVSA executive said.

    “All contracts are frozen,” the executive said on condition of anonymity due to fear of retaliation. PDVSA’s legal and supply and trade departments are asking PDV Marina for documentation on the contracts, he added.

    Venezuela has paid shipyards in Iran and Argentina at least $300 million for six new vessels ordered as far back as 2005.

    It has taken delivery of only two of them, according to the documents.

    PDVSA has paid almost 80% of the $160 million due for two tankers from Rio Santiago shipyard in Argentina, the documents showed.

    Rio Santiago said it was not authorized to give information about that particular contract.

    In addition, PDVSA paid almost 157 million euros (about $173 million), or 63% of a 248 million euros contract (about $272 million) to U.S.-sanctioned Iran Marine Industrial Company (Sadra) for four tankers, according to the documents.

    Two of the four vessels were delivered after payment delays, difficulties with parts supplies and problems with insurance and certifications, according to the documents.

    The payment delays generated extra costs for demurrage, the documents said.

    Sadra did not reply to a request for comment.

    Reporting by Mircely Guanipa; Additional reporting by Marianna Parraga in Houston, Eliana Raszewski in Buenos Aires and Parisa Hafezi in Dubai; Editing by Gary McWilliams and Suzanne Goldenberg

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  • It’s not 2020 anymore. Biden’s re-election campaign faces new challenges

    It’s not 2020 anymore. Biden’s re-election campaign faces new challenges

    WASHINGTON, April 23 (Reuters) – It won’t be a campaign from the basement this time.

    As U.S. President Joe Biden gears up for a bruising re-election battle, the realities of the 2024 race and differences with 2020 at the height of the coronavirus pandemic create new challenges for him.

    Biden, a Democrat, says he is running again and is considering a formal announcement via video as soon as Tuesday.

    In 2020, Biden kept a low profile as the spread of COVID-19 caused havoc to most aspects of American life, including the election campaign that pitted him against then-President Donald Trump, a Republican.

    Trump still spoke at big rallies, but Biden did much of his campaigning virtually from the basement of his home in Wilmington, Delaware, largely avoiding crowds to prevent the spread of disease and reduce his own risk of catching the virus.

    That will change this time around. Gone will be the aversion to public events, large and small, likely replaced by traditional campaign stops at diners, factories and union halls with handshakes, selfies, and crowds of people.

    The Democratic convention in Chicago will be in-person rather than online. And Biden, who at 80 is already the oldest president in U.S. history, will have his day job to do while he makes the case for four more years in office.

    Biden beat Trump in 2020 by winning the Electoral College 306 to 232, winning the close swing states of Pennsylvania and Georgia, and he bested Trump by more than 7 million votes nationally, capturing 51.3 percent of the popular vote to the Republican’s 46.8 percent.

    AGE FACTOR

    Republicans will watch closely for signs of a diminished schedule to suggest that age has made Biden less fit for the campaign trail, and for the White House.

    “It’s quite shocking that Biden thinks he would be able to fill a second term, let alone the rest of this term,” said Republican strategist Scott Reed.

    Trump, the early front-runner for the Republican nomination, is himself 76 years old.

    Biden’s reply to concerns about his age and running for re-election has been to say “watch me,” and the White House points to his record of legislative accomplishments as a sign of his effectiveness.

    “An extensive travel schedule is not the measure of a candidate’s ability to do the job,” said Democratic strategist Karen Finney. “There’s no scenario where the Republicans don’t try to make his age an issue. We know that. And so the focus has to be on … what is the most effective way to reach the American people. Some of that, yes, is going to be in-person events and travel, but there may be other innovations.”

    CAMPAIGN REINVENTED

    Biden campaign aides reinvented his 2020 campaign as COVID-19 spread across the country.

    Some of the innovations were regarded as a success, including star-studded virtual fundraisers done without the need for expensive travel.

    But other changes were more controversial, including a months-long prohibition on the use of door-knocking by campaign volunteers and the regular appearances by Biden in his home’s basement, which became a meme panned by right-wing voters.

    Having to get out more than in 2020 could help Biden, said Meg Bostrom, co-founder of Topos Partnership, a strategic communications firm.

    “Just look at the State of the Union (address.) That was the best I’ve ever seen. When Republicans started heckling him, he just lit up,” she said. Biden sparred ably with Republicans during his speech to Congress in February.

    But other issues may trip up the incumbent president on the campaign trail, including his handling of the economy.

    “The allure for voting for Biden in 2020 was sort of the quaint notion of getting back to normal,” said Republican strategist Ford O’Connell, referring to the chaos of Trump’s time in office.

    “The problem for Biden is that he’s been in power … and things are anything but normal, especially when it comes to the economy and inflation.”

    Reuters Graphics Reuters Graphics

    RECESSION CONCERNS

    Biden took office in January 2021 just as COVID vaccines were rolling out, and economic conditions gradually normalized during his early tenure after the shock of nationwide shutdowns. The United States now boasts 3.2 million jobs over the pre-pandemic peak.

    But Americans are concerned about a potential recession, and Biden may suffer from being on the wrong side of an economic cycle heading into 2024, with unemployment likely to rise as growth slows, interest rates remaining high and inflation potentially hovering above pre-pandemic levels.

    Reuters Graphics Reuters Graphics

    Trump, who has announced his re-election bid already and could be Biden’s opponent again, is expected to follow the strategy that he employed in 2016 and 2020 with multiple large rallies to energize his base.

    But he will first have to win what could be a grueling Republican nomination contest – something that Biden, as an incumbent without major opposition inside his party, will not face.

    “We don’t need fire and brimstone. We don’t need rah rah rallies,” said Democratic strategist Joe Lestingi. “We need the strength and conviction of our values and a steadiness not to move on them.”

    Biden, he said, would provide that steadiness.

    “I think he’ll get out more,” Lestingi said, praising Biden’s skill at traditional “retail” politics. “If you get an opportunity to be with him in a small intimate setting, he can make a real big difference.”

    Reuters Graphics Reuters Graphics

    Reporting by Jeff Mason; additional reporting by Trevor Hunnicutt, Steve Holland, Howard Schneider and Andrea Shalal; editing by Grant McCool

    Our Standards: The Thomson Reuters Trust Principles.

    Jeff Mason

    Thomson Reuters

    Jeff Mason is a White House Correspondent for Reuters. He has covered the presidencies of Barack Obama, Donald Trump and Joe Biden and the presidential campaigns of Biden, Trump, Obama, Hillary Clinton and John McCain.

    He served as president of the White House Correspondents’ Association in 2016-2017, leading the press corps in advocating for press freedom in the early days of the Trump administration. His and the WHCA’s work was recognized with Deutsche Welle’s “Freedom of Speech Award.”

    Jeff has asked pointed questions of domestic and foreign leaders, including Russian President Vladimir Putin and North Korea’s Kim Jong Un. He is a winner of the WHCA’s “Excellence in Presidential News Coverage Under Deadline Pressure” award and co-winner of the Association for Business Journalists’ “Breaking News” award.

    Jeff began his career in Frankfurt, Germany as a business reporter before being posted to Brussels, Belgium, where he covered the European Union.

    Jeff appears regularly on television and radio and teaches political journalism at Georgetown University. He is a graduate of Northwestern University’s Medill School of Journalism and a former Fulbright scholar.

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  • Exclusive: Chinese firm imported copper from Russian-controlled part of Ukraine

    Exclusive: Chinese firm imported copper from Russian-controlled part of Ukraine

    • Data shows Quzhou Nova bought $7.4 mln of ingots
    • Copper plant is in Russian-annexed part of Ukraine
    • Area is subject to U.S. sanctions against Moscow
    • Russian ally China does not abide by U.S. measures

    April 14 (Reuters) – A Chinese company bought at least $7.4 million worth of copper alloy ingots from a plant in a Russian-annexed region of Ukraine that is subject to Western sanctions, according to Russian customs data reviewed by Reuters.

    China has not imposed any restrictions on trade with Russia, but the United States has threatened to blacklist companies round the world for violating its sanctions and warned Beijing against supplying Moscow with goods banned by U.S. export rules.

    The customs information, drawn from one commercial trade data provider and cross-checked with two others, show some of the first evidence of Chinese trades with Russian-annexed regions of Ukraine since the war began on Feb. 24, 2022.

    The Chinese firm, Quzhou Nova, bought at least 3,220 tons of copper alloy in ingots worth a total of $7.4 million from the Debaltsevsky Plant of Metallurgical Engineering between Oct. 8, 2022 and March 24, 2023, according to the data.

    The plant is located in the Donetsk region of eastern Ukraine, close to the border with Luhansk. Both Donetsk and Luhansk were among four Ukrainian regions that President Vladimir Putin claimed last September as part of Russia.

    Quzhou Nova, a trading and manufacturing company based in the city of Quzhou in the eastern province of Zhejiang, told Reuters it does not have any import and export business related to the trade of copper alloy in ingots.

    When Reuters showed details of the exports in the customs data to Quzhou Nova, the company said on March 23 that it “finds hard to understand the document, because this document is not stamped and signed”, and suggested contacting customs about the issue.

    The database, which collects information on all shipments worldwide, does not display stamps or signatures on its information.

    The Chinese customs service did not provide detailed information on imports. It said that “company trade data are not disclosed in our public information”.

    China imported copper and copper alloys worth $852 million from Russia between October and February, according to public customs statistics.

    A source at the Debaltsevsky plant, who spoke on condition of anonymity, said there was a non-ferrous metallurgy workshop on the territory of the factory. The source declined to comment on the issue of copper alloy shipments to China, saying the information was a “trade secret”.

    Contacted for comment, the Russian Federal customs service told Reuters that information on companies is confidential and is not disclosed by the service.

    When asked about the matter on Friday, the Kremlin said it did not know whether the Reuters news story about the transaction was true or what proof was available. The Kremlin said it had no information about the subject itself.

    The Debaltsevsky Plant did not respond to Reuters requests for comments by phone and in writing.

    Ukraine, its Western allies and an overwhelming majority of countries at the U.N. General Assembly have condemned Russia’s declared annexation of the four regions as illegal.

    SANCTIONS

    U.S. sanctions imposed on Feb. 21, 2022, three days before Russia invaded Ukraine, prohibit U.S imports from or exports to the so-called Donetsk and Luhansk People’s Republics.

    Two days later, the European Union announced measures including an import ban on goods from the two regions.

    While Chinese companies are free as far as their authorities are concerned to trade with firms in Russian-controlled regions of Ukraine, they do risk being added to Western blacklists.

    Asked about the copper shipments data, the U.S. State Department said it was concerned about China’s alignment with the Kremlin.

    “We have warned the PRC (People’s Republic of China) that assistance to Russia’s war effort would have serious consequences. We will not hesitate to move against entities, including PRC firms, that help Russia wage war against Ukraine or help Russia circumvent sanctions,” it added in a statement to Reuters, listing some Chinese companies already sanctioned.

    The European Commision did not respond to Reuters’ questions as to whether Chinese companies cooperated with the Russian-annexed Ukrainian territories and what risks such activity posed.

    China’s Ministry of Commerce did not respond to Reuters’ requests for comment about the shipments of copper alloys from the Debaltsevsky Plant or cooperation with businesses in the Donetsk region.

    The data seen by Reuters is based on shipping and customs documents like bill of lading and shipping bills and collected from several customs departments, government bodies and other partners.

    Quzhou Nova says it specialises in the export of wrapping paper. According to its website, it manufactures and trades goods for the tobacco industry, including paper, aluminium foil and polypropylene film.

    Reuters could not establish what use the copper alloy was intended for.

    The Ukrainian plant, located in the city of Debaltseve 70 km (45 miles) from the Russian-controlled Ukrainian city of Donetsk, specializes in making equipment and spare parts for ferrous metallurgy, the mining industry and cement plants, and has steelmaking and metal casting workshops, according to its website.

    Reuters was not able to find any data about the financial state of the company. It was added to the Russian state tax register in December 2022 and has yet to report financial data.

    According to a Ukrainian register, the legal status of the plant in Debaltseve has been suspended by the Ukrainian authorities. The register does not indicate when or why this happened.

    As of early 2023, its only owner was the Ukrainian Donetsk regional state administration.

    The Ukrainian government, as well as the Russian-appointed Donetsk People’s Republic administration, did not immediately comment to Reuters about cooperation with Chinese companies and shipments of goods to China.

    The copper alloy shipments from the plant were carried out via the port of Novorossiysk in southern Russia, according to the customs data.

    Reporting by Filipp Lebedev and Gleb Stolyarov in Tbilisi; Editing by Mark Trevelyan and Andrew Cawthorne

    Our Standards: The Thomson Reuters Trust Principles.

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  • Explainer: What is solid-fuel technology, and why is North Korea eager to develop it?

    Explainer: What is solid-fuel technology, and why is North Korea eager to develop it?

    SEOUL, April 14 (Reuters) – North Korea says it has tested a new solid-fuel intercontinental ballistic missile (ICBM), its first known use of the propellant in a longer-range projectile, as it seeks the capability to launch with little preparation.

    Here are some characteristics of solid-fuel technology, and how it can help the North improve its missile systems.

    WHAT IS SOLID-FUEL TECHNOLOGY?

    Solid propellants are a mixture of fuel and oxidiser. Metallic powders such as aluminium often serve as the fuel, and ammonium perchlorate, which is the salt of perchloric acid and ammonia, is the most common oxidiser.

    The fuel and oxidiser are bound together by a hard rubbery material and packed into a metal casing.

    When solid propellant burns, oxygen from the ammonium perchlorate combines with aluminium to generate enormous amounts of energy and temperatures of more than 5,000 degrees Fahrenheit (2,760 degrees Celsius), creating thrust and lifting the missile from the launch pad.

    North Korea claims to have tested a new solid-fuel intercontinental ballistic missile (ICBM), the Hwasong-18

    WHO HAS THAT TECHNOLOGY?

    Solid fuel dates back to fireworks developed by the Chinese centuries ago, but made dramatic progress in the mid-20th century, when the U.S. developed more powerful propellants.

    The Soviet Union fielded its first solid-fuel ICBM, the RT-2, in the early 1970s, followed by France’s development of its S3, also known as SSBS, a medium-range ballistic missile.

    China started testing solid-fuel ICBMs in the late 1990s.

    South Korea said on Friday it had already secured “efficient and advanced” solid-propellant ballistic missile technology.

    SOLID VS. LIQUID

    Liquid propellants provide greater propulsive thrust and power, but require more complex technology and extra weight.

    Solid fuel is dense and burns quite quickly, generating thrust over a short time. Solid fuel can remain in storage for an extended period without degrading or breaking down – a common issue with liquid fuel.

    Vann Van Diepen, a former U.S. government weapons expert who now works with the 38 North project, said solid-fuel missiles are easier and safer to operate, and require less logistical support, making them harder to detect and more survivable than liquid-fuel weapons.

    Ankit Panda, a senior fellow at the U.S.-based Carnegie Endowment for International Peace, said any country that operates large scale, missile-based nuclear forces would seek solid-propellant missiles, which do not need to be fuelled immediately ahead of launch.

    “These capabilities are much more responsive in a time of crisis,” Panda said.

    WHAT NEXT?

    North Korea said the development of its new solid-fuel ICBM, the Hwasong-18, would “radically promote” its nuclear counterattack capability.

    South Korea’s defence ministry sought to downplay the testing, saying the North would need “extra time and effort” to master the technology.

    Panda said the North could face difficulties ensuring such a large missile does not break apart when the diameter of the booster becomes larger.

    Although the Hwasong-18 might not be a “game changer”, he said, it will most likely complicate the calculations of the United States and its allies during a conflict.

    “The most important interest the United States and its allies have is to reduce the risks of nuclear use and escalation stemming from North Korea’s possession of these weapons,” Panda said.

    Reporting by Hyonhee Shin; Additional reporting by Ju-min Park; Editing by Gerry Doyle

    Our Standards: The Thomson Reuters Trust Principles.

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  • Cash-loving Germans fret over exploding ATMs as cross-border crime wave hits

    Cash-loving Germans fret over exploding ATMs as cross-border crime wave hits

    RATINGEN, Germany, April 14 (Reuters) – In the German town of Ratingen, exploding cash machines are a hot-button topic.

    Two got blown up early on the same morning last month, at branches of Santander (SAN.MC) and Deutsche Bank (DBKGn.DE) across the street from each other close to the Duesseldorf suburb’s main square.

    A year ago, residents of the apartments above Santander unsuccessfully sued to have the machines removed due to concerns they could be raided – a gesture that might in retrospect be deemed prophetic in other countries.

    But in Germany, thieves are blowing ATMs up at the rate of more than one a day.

    Attacks are up more than 40% since 2019, according to the interior ministry, and investigators say two factors are driving the increase.

    Europe’s largest economy has 53,000 ATM machines, a disproportionately high number that reflects Germans’ preference for cash rather than bank cards. The country also boasts an extensive network of highways, or Autobahns, on much of which no speed limit is enforced.

    Ratingen lies just 70km (40 miles) from the Dutch border, and investigators say gangs from the Netherlands are the prime culprits for the attacks, which send glass flying, cause building facades to crumble and money cartridges to crack open.

    Raiders got away with nearly 20 million euros ($22.1 million) in 2021, when 392 ATM explosions were recorded, a tally that rose to 496 in 2022. Police in the state of North Rhine-Westphalia, where Ratingen lies and which has borne the brunt of the attacks, have recorded 47 incidents so far in 2023, up on last year’s rate.

    Reuters Graphics Reuters Graphics

    DUTCH RAIDERS

    Meanwhile the frequency of ATM attackers is falling in the Netherlands, partly due to security measures such as glue that makes blocks of cash inside ATMs unusable, Dutch police say.

    So Dutch cash machine raiders are crossing the border and, German police estimate, have carried out between 70% to 80% of attacks in Germany since 2018.

    Dutch police suspect around 500 men are responsible, working in ever-evolving groups as new recruits replace those who get caught. Prosecutors in Frankfurt this week charged six Dutch citizens with causing explosions, theft and property damage.

    Reuters Graphics

    Ratingen police are investigating a possible Dutch connection in last month’s twin raid too, having identified a small vehicle that sped from the scene to a nearby Autobahn.

    On Thursday, nearly a month after the attacks, Santander’s facade remained boarded up. Deutsche Bank’s sign was still damaged, and a sign asked for customers’ understanding that ATMs were out of order while under repair.

    In Germany, roughly 60% of everyday purchases are paid in cash, according to a Bundesbank study that found Germans, on average, withdrew more than 6,600 euros annually chiefly from cash machines.

    Germany is also working with officials in Belgium and France and at Europol to combat the cash machine crime wave. The partner authorities did not respond to requests for comment.

    Noting that ATM raids endangered lives, German Interior Minister Nancy Faeser this week urged banks to step up safety measures for ATMs.

    Both Santander and Deutsche said they prioritised safety and were continuously improving ATM security, but banks inside Germany are reluctant to adopt blanket measures, instead advocating a case-by-case approach depending on individual security risk.

    A spokesperson for Deutsche Kreditwirtschaft, a umbrella lobby group for the nation’s financial institutions, said: “Different locations come with different risks. There is currently no one-size-fits-all solution.”

    ($1 = 0.9044 euros)

    Additional reporting by Milan Pavicic; editing by John Stonestreet

    Our Standards: The Thomson Reuters Trust Principles.

    Tom Sims

    Thomson Reuters

    Covers German finance with a focus on big banks, insurance companies, regulation and financial crime, previous experience at the Wall Street Journal and New York Times in Europe and Asia.

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  • No China, no deal: Bid to break sovereign debt logjams gets weary thumbs up

    No China, no deal: Bid to break sovereign debt logjams gets weary thumbs up

    LONDON, April 13 (Reuters) – The latest bid by the world’s leading institutions and creditors to speed up debt restructurings and get bankrupt countries back on their feet has been greeted by a mix of cautious optimism and weary scepticism by veteran crisis watchers.

    Standoffs between major Western-backed lenders like the International Monetary Fund (IMF) and the world’s top bilateral creditor, China, have been blamed for keeping countries such as Zambia mired in default for nearly three years.

    The somewhat loose framework around sovereign restructurings has seen Beijing seek to influence the traditional rules of engagement in these processes.

    The renewed push to overcome the logjams came after a “roundtable” at the IMF Spring Meetings and included pledges from the Fund and World Bank to share assessments of countries’ troubles more quickly, provide more low-interest and grant funding and stricter timeframes on restructurings overall.

    The idea is that Beijing would then drop its insistence that the multilateral lenders take losses, or “haircuts”, on the loans they have provided or underwritten in crisis-hit countries.

    Beijing has not commented directly on the demand for multilateral lender haircuts, but in remarks published on Friday People’s Bank of China Governor Yi Gang reiterated China’s willingness to implement debt talks under the Common Framework, the platform introduced by leading G20 nations in 2020 to streamline talks with all creditors.

    “If the multilateral development banks are now making real commitments to provide fresh grants to distressed countries this is a breakthrough,” said Kevin Gallagher, director of the Boston University Global Development Policy Center.

    But he added that as the new plans lacked specific mention of China’s intentions it suggested the “lack of a strong and clear consensus” in Washington.

    The IMF’s managing director Kristalina Georgieva has stressed that with around 15% of low income countries already in debt distress and dozens more in danger of falling into it, far more urgency is needed.

    Besides members of the Paris Club of creditor nations such as the United States, France and Japan, cash-strapped nations now have to rework loans with lenders such as India, Saudi Arabia, South Africa and Kuwait – but first and foremost China.

    Beijing is now the largest bilateral creditor to developing nations, extending $138 billion in new loans between 2010 and 2021, according to World Bank data, and some estimates put total lending at almost $850 billion.

    Reuters Graphics

    HEADWINDS

    Global headwinds are about to get stronger too.

    Financially weaker countries with “junk”-grade sovereign credit ratings need to repay or refinance $30 billion worth of government bonds next year between them, compared to just $8.4 billion for the remainder of this one.

    The rise in global borrowing costs, though, means that many countries under the greatest stress are now unable to borrow in the international capital markets or, if they can, only at unsustainably high interest rates.

    The Chinese debt, meanwhile, is often opaque and muddied by arguments about whether the loans have been given by “official” entities – i.e by the government – or by “private” entities.

    Authorities in Beijing also prefer to roll over debt payments rather than write them off, and given it is an increasingly dominant creditor, it has little incentive to follow co-operative Paris Club-like principles.

    “It would be great to have China on board (with the push to speed up restructurings) but I don’t really have high hopes because there is a lot of geopolitics involved,” said Viktor Szabo, an emerging market debt manager at Abrdn in London.

    Select IMF loans to low and middle income countries by date of Board approval

    COMMON PROBLEMS

    Recent research by Boston University estimated that up to $520 billion in debt needs to be written off to help developing nations at greatest risk of default return to a sounder fiscal footing.

    But lengthy delays in Zambia, and more recently in Sri Lanka, have elicited widespread criticism of the Common Framework.

    Wednesday’s promises by the IMF to provide its assessments more quickly was an admission that the Common Framework was currently failing, Szabo added.

    “You have to make it functional. The fact that it’s been in place for three years and there is nothing to really show for it, that is really appalling.”

    Anna Ashton, director of China research at Eurasia Group, said this week’s developments underscored the benefits for China to give some ground on some of its concerns.

    “Being willing to compromise and facilitate debt restructuring right now is likely crucial to China’s continued credibility with the developing world writ large,” Ashton said.

    Patrick Curran, senior economist with Tellimer, added that China dropping demands for the big multilateral development banks (MDBs) to swallow losses on their loans could also be “a major breakthrough”.

    “There is likely to be broad support for the alternative proposal that MDBs mobilize their resources more aggressively, especially at a time when most low-income countries are locked out of the market,” Curran said.

    Germany’s finance minister Christian Lindner on Thursday too said all the talk now needed to be converted into action.

    The group that took part in Wednesday’s roundtable plans to meet again in coming weeks to address remaining issues, including how various creditors are treated, principles for cut-off dates and suspending debt payments.

    Ultimately, whether the new terms help Zambia, and countries like Sri Lanka, Ghana and Ethiopia that are also in the midst of bailout talks, finalise deals will be the only proof of whether the new terms work.

    “China is a difficult partner to talk to but we need China at the table for the solution of debt problems, because otherwise we won’t see any progress,” Lindner said.

    Reuters Graphics

    Additional reporting by Rodrigo Campos in New York and Joe Cash in Beijing
    Editing by Mark Potter

    Our Standards: The Thomson Reuters Trust Principles.

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  • Exclusive: India’s Bank of Baroda stops clearing payment for above-cap Russian oil – sources

    Exclusive: India’s Bank of Baroda stops clearing payment for above-cap Russian oil – sources

    NEW DELHI, April 4 (Reuters) – India’s Bank of Baroda (BOB.NS) has stopped clearing payments for Russian oil sold above the price cap set by the West from this month, three sources with direct knowledge of the matter said, a move that could expedite transition to a rupee trade mechanism.

    Some Indian refiners were paying in the United Arab Emirates dirham currency for Russian low-sulphur crude priced above the $60 a barrel cap using Bank of Baroda, mainly to Dubai-based traders, sources said.

    The Group of Seven economies, the European Union and Australia, set the price cap late last year to bar Western services and shipping from trading Russian oil unless sold at an enforced low price to deprive Moscow of funds for its Ukraine war.

    “Bank of Baroda is extremely cautious in settling payments for Russian oil bought (at levels) above the price cap,” one of the sources said.

    “They have told us no for settling payments for above-cap barrels,” the person said.

    The state-run lender told refiners last month that it would not settle payment from Russian barrels bought above the price cap, the three sources said.

    Bank of Baroda did not respond to requests for comment from Reuters.

    Before the Ukraine war, Indian refiners rarely bought oil from Russia due to higher freight costs. After Western sanctions on Moscow for its invasion of Ukraine, Indian refiners have been gorging on discounted Russian oil.

    Russia has replaced Iraq as the top oil supplier to India in the last few months, data from trade sources showed.

    Sources anticipate that prices of Russian sweet crude such as Sokol and ESPO Blend, which was sold near $60 a barrel in recent weeks, could breach the price cap due to a sharp spike in global oil prices triggered by Sunday’s OPEC+ decision to cut output.

    Some refiners, mainly private operators, have been clearing payments in dirhams for Russian crude through private lender Axis Bank (AXBK.NS), sources told Reuters last month. It was not clear if Axis Bank had also stopped settling trades for Russian oil sold above the price cap.

    Axis Bank did not immediately respond to Reuters’ request for comment.

    Although Indian refiners buy Russian oil on a delivered basis, copies of invoices reviewed by Reuters also show shipping charges, which helps in calculating the price of crude at Russian ports.

    Sources said that problems in settling trade for Russian oil could push sellers to accept rupee payments, at least for barrels that exceed the price cap.

    “We have neither stopped nor reduced purchases of Russian oil after Bank of Baroda’s decision … we will consider using rupees to pay for oil purchased above the price cap,” another source said.

    India does not recognise the Western price cap on Russian oil, a senior oil ministry source said last month.

    SETTLEMENT MECHANISM

    India set up a mechanism to settle its international trade in rupees last year. Some Russian banks later opened vostro accounts with banks in India to facilitate rupee trade.

    The mechanism has not yet started given the lack of Russian appetite for rupees and India’s trade deficit with Moscow.

    However, during a visit last week to India, Igor Sechin, chief executive of Russian oil major Rosneft, discussed ways to expand cooperation with India across the hydrocarbons value chain, including the possibility of making payments in national currencies.

    A switch to rupee payments would help wean Russia from dollars and would save foreign exchange for India.

    Reporting by Nidhi Verma; Additional reporting by Siddhi Nayak in Mumbai; Editing by Tony Munroe and Jacqueline Wong

    Our Standards: The Thomson Reuters Trust Principles.

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  • Ukraine’s tech entrepreneurs fight war on a different front

    Ukraine’s tech entrepreneurs fight war on a different front

    PRAGUE, April 4 (Reuters) – Eugene Nayshtetik and his five co-workers shuttered their company developing medical and biotech startups to join the defense forces days after Russia invaded Ukraine. Within two months, their commanders agreed it would be more useful if they swapped their military gear for computers.

    With the government’s blessing, Nayshtetik and his team of engineers moved to neighboring Poland where they raised initial funding from a Polish company, Air Res Aviation, to develop a new drone for the Ukrainian military.

    Jerzy Nowak, president and co-owner of Air Res Aviation, said his company’s initial investment in the drone project amounted to around $200,000.

    The Defender drone, now ready for testing, is designed to withstand strong winds to enable surveillance in bad weather, can fly vertically and carry big payloads. It’s an example of how some startups in Ukraine’s dynamic tech sector are switching to pursue military projects.

    “We had our own portfolio of medical and biotechnology civilian projects before the war,” Nayshtetik told Reuters. “We never dreamt of killing people. We wanted to heal people but the situation changed.”

    Reuters spoke to more than a dozen entrepreneurs, as well as Ukrainian and Western officials who said the shift to military innovation in Ukraine’s once-thriving technology sector has bolstered the country’s out-manned and out-gunned armed forces.

    Military experts and Ukrainian officials told Reuters that innovations developed by these startups are making a difference on the battlefield, ranging from software applications that can target enemy positions more quickly to civilian drones adapted for military use, and systems that integrate data to give commanders more detailed battlefield views.

    “The Ukrainians are outmatched by every numerical scale: in terms of numbers of forces; in terms of numbers when it comes to equipment. And yet they’re holding their own,” said a senior NATO official, who spoke on condition of anonymity. “One of the reasons they’re holding their own is that they have, in a very innovative way, integrated technology into warfighting.”

    Before Russia’s invasion, Ukraine represented one of the fastest growing tech hubs in central and eastern Europe. The enterprise value of startups soared more than 9-fold between 2017 and 2022 to reach 23 billion euros, according to data from Dealroom.com.

    Ukraine offered a host of advantages for emerging technology businesses, including a tradition of producing graduates strong in math and computer science. A low cost base also allowed entrepreneurs to do more with less.

    The country boasted 285,000 software developers in 2021 with an additional 25,000 graduating from tech universities annually, according to software development outsourcing company Softjourn.

    But with most emerging companies in Ukraine focused on the domestic market, many startups suffered a collapse in demand following the war – which has killed tens of thousands of people, reduced cities to rubble and wreaked havoc on infrastructure.

    Pavlo Kartashov, director of the Ukrainian Startup Fund (USF), a government-backed organization that seeds technology startups, told Reuters his group resumed funding in October. It hopes to finance around five to 10 emerging companies a month with grants of up to $35,000.

    Most will focus on military technology, he said.

    The fund also aims to unveil in April a new platform to connect emerging companies more closely with the military to identify the needs on the battlefield and to speed the transformation of ideas into tools that can be used in the conflict.

    “If you have something innovative and efficient it will definitely be used by the army,” he told Reuters. “We need new technology to fight the enemy and can try different approaches in real time.”

    PLOUGHSHARES INTO SWORDS

    Since the war, Western venture capital firms often have required strict term sheets that include having at least one founder and other key parts of the business located outside Ukraine. So the government has become the sole source within the country of early stage funding – the lifeblood of the technology sector – more than half a dozen founders and venture capitalists said.

    Demand from the government has driven the shift to military technology, but most of the entrepreneurs who spoke to Reuters said that patriotic duty also played a role.

    Take Kiev-based efarm.pro, a startup founded in 2016 whose GPS technology attached to tractors helps farmers more precisely monitor how fertilizer has penetrated the ground. Many of its customers are located in parts of Ukraine that became too dangerous to farm after the Russian invasion so the company adapted its product to detect mines.

    The self-driving technology is only aimed at farmers for now but could also work for military vehicles, the company’s founder Alexander Prykhodchenko told Reuters.

    “Clients were calling us in the first days of the war saying they don’t know how they can work in the field,” Prykhodchenko said. “The war started on February 24 and on February 26 we started work on the new project.”

    Currently, only three of the tractors are in use as the autonomous technology remains in the testing and development phase, Prykhodchenko said.

    Ukraine’s Minister of Digital Transformation Mykhailo Fedorov said the intensity of the fighting has meant that some concepts can flow from the drawing board to the battlefield in months, if not days.

    While acknowledging the critical role of weapons supplied by Western nations in helping to fight the Russians, he added that the ability to utilize the know-how of tech-savvy Ukrainians at home and abroad has proved invaluable.

    “One of the few areas where Ukraine has managed to stay consistently ahead of Russia is in the use of innovative military technologies,” he wrote in a February article for the Atlantic Council.

    Russia says its own weapons industry is increasing production and introducing new technology fast to meet the demands of military operations in Ukraine.

    Gregory Allen, a senior fellow at the Center for Strategic & International Studies in Washington DC, highlighted the so-called “Uber for Artillery” application developed by a network of Ukrainian programmers before the Russian invasion that networks together infantry, reconnaissance and artillery units to spot and land an artillery strike more quickly.

    He also said that a pair of anonymous Ukrainian software developers had rapidly created a program in mid-2022 that used machine learning to analyze video feeds from drones to detect more effectively military vehicles camouflaged in forests. Reuters was not able to confirm independently the details of the software.

    “I used to work in the Defense Department, and I have almost never seen high quality military machine learning systems go from an idea in someone’s head to a real system being used in war in a matter of weeks,” Allen told Reuters. “The value of the Ukrainian software systems is impressive but the speed is astonishing.”

    The Pentagon’s chief weapons buyer Bill LaPlante has described Ukraine’s use of technology in the war as a “wake up call.”

    “We are seeing true innovation on the battlefield: new combinations of technologies and concepts being developed and implemented, and the cycle from idea to prototype to a warfighter’s hands collapsed to months, if not weeks,” LaPlante told a U.S. Congressional committee last month.

    ISRAELI MODEL

    While Ukraine’s government and tech founders are focused on war-time innovation to aid the military now, they say these emerging start ups can also underpin Ukraine’s post-war economy — pointing to Israel as an example of how military technology laid the foundation for a booming technology sector.

    Government support and experience working on military projects transformed Israel into a global tech hub and propelled the nation into a leader in cybersecurity and autonomous driving vehicles — a path Ukraine officials and tech leaders like Valery Krasovsky hope to emulate for a country with a pre-war population nearly five times that of Israel.

    “There are much more ideas in military technology,” said Krasovsky, the founder and chief executive of Swedish-Ukrainian Sigma Software Group.

    For now, the scarcity of seed funding in Ukraine has forced some companies to flee to places like to neighboring Poland. Groups like the Polish-Ukrainian Start Up Bridge – a Polish-government backed venture – offer emerging Ukrainian tech companies small grants to fund basic business needs and a co-working space in Warsaw.

    “Startups have had the past year to teach themselves how to survive and adapt to the new reality,” Mykhailo Khaletskyi, an advisor for the Startup Bridge and Ukrainian government, told Reuters.

    Additional Reporting by Andrew Gray and Sabine Siebold in Brussels, Elizabeth Piper in London and Mike Stone in Washington, Editing by Daniel Flynn

    Our Standards: The Thomson Reuters Trust Principles.

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  • Trump hush money case: What is an indictment? An arraignment? A gag order?

    Trump hush money case: What is an indictment? An arraignment? A gag order?

    April 3 (Reuters) – Former U.S. President Donald Trump is scheduled to be arraigned at a Manhattan courthouse on Tuesday following his indictment on criminal charges after a probe into hush money paid to a porn star.

    Below is an explanation of what it means to be indicted and arraigned, and other key terms related to Trump’s case.

    INDICTMENT

    An indictment is a court document containing charges that were voted on by a grand jury, a group of people who decide whether a prosecutor has enough evidence to pursue criminal charges.

    An indictment formally charges a defendant with a crime and provides a basis for legal prosecution.

    Following an indictment, a defendant is given formal notice of the charges, a right enshrined in the Fifth Amendment of the U.S. Constitution.

    A defendant can then be formally arraigned on whatever charges are brought. Law enforcement officials fingerprint and photograph most defendants facing arraignments.

    ARRAIGNMENT

    An arraignment is where a defendant is brought to court to hear charges and have a chance to enter a plea, which is generally guilty or not guilty.

    A judge or prosecutor typically reads the charges aloud. A defendant is usually represented by lawyers, especially in cases that are high-profile or could lead to jail or prison.

    If a defendant pleads not guilty, a judge will typically accept the plea and schedule the next court appearance, and perhaps a tentative trial date.

    [1/6] A person uses a smartphone after former U.S. President Donald Trump’s indictment by a Manhattan grand jury following a probe into hush money paid to porn star Stormy Daniels, in New York City, U.S, April 3, 2023.  REUTERS/Amanda Perobelli

    If a defendant pleads guilty, the judge will impose punishment, typically at a later date.

    Trump’s lawyers have said he will plead not guilty on Tuesday.

    Lawyers for some defendants who plead not guilty may engage in plea bargaining, where they negotiate a guilty plea with prosecutors to avoid a trial. Defendants would typically plead guilty to some but not all charges they face.

    BAIL

    Judges in New York state criminal court have three options for bail: They can set bail, order a defendant released without bail, or order a defendant’s detention.

    The purpose of bail in New York is to ensure that a defendant returns to court, without taking into account the risk a defendant may cause further harm. In 2019, New York ended cash bail for most cases involving misdemeanors and nonviolent felonies, such as Trump’s case.

    GAG ORDER

    A gag order is when a judge prohibits lawyers, parties and witnesses from talking about a case in public.

    Gag orders are common in criminal cases. That is especially true when there is a risk that someone may make statements that could incite violence, be viewed as threatening to prosecutors or witnesses, or taint the jury pool.

    A defendant who violates a gag order in New York can be held by a judge to be in criminal contempt, a misdemeanor punishable by up to one year in jail. A judge will typically warn a defendant before issuing a contempt citation.

    If a gag order is imposed against Trump, he can appeal and argue that it undermines his First Amendment right to free speech as he runs for president.

    Reporting by Rami Ayyub and Jonathan Stempel; editing by Noeleen Walder and Jonathan Oatis

    Our Standards: The Thomson Reuters Trust Principles.

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  • Analysis: China’s intensifying nuclear-armed submarine patrols add complexity for U.S., allies

    Analysis: China’s intensifying nuclear-armed submarine patrols add complexity for U.S., allies

    HONG KONG, April 4 (Reuters) – China is for the first time keeping at least one nuclear-armed ballistic missile submarine constantly at sea, according to a Pentagon report – adding pressure on the United States and its allies as they try to counter Beijing’s growing military.

    The assessment of China’s military said China’s fleet of six Jin-class ballistic missile submarines were operating “near-continuous” patrols from Hainan Island into the South China Sea. Equipped with a new, longer-range ballistic missile, they can hit the continental United States, analysts say.

    The note in the 174-page report drew little attention when it was released in late November, but shows crucial improvements in Chinese capabilities, according to four regional military attaches familiar with naval operations and five other security analysts.

    Even as the AUKUS deal will see Australia field its first nuclear-powered submarines over the next two decades, the constant Chinese ballistic missile patrols at sea pile strain on the resources of the United States and its allies as they intensify Cold War-style deployments.

    “We’re going to want to have our SSNs trying to tail them… so the extra demands on our assets are clear,” said Christopher Twomey, a security scholar at the U.S. Naval Postgraduate School in California, speaking in a private capacity. SSN is a U.S. designation for a nuclear-powered attack sub. “But the point here is that the information – the near continuous patrols – has changed so rapidly that we don’t know what else has changed.”

    The new patrols imply improvements in many areas, including logistics, command and control, and weapons. They also show how China starting to operate its ballistic missile submarines in much the same way the United States, Russia, Britain and France have for decades, military attaches, former submariners and security analysts say.

    Their “deterrence patrols” allow them to threaten a nuclear counterattack even if land-based missiles and systems are destroyed. Under classic nuclear doctrine, that deters an adversary from launching an initial strike.

    The Chinese subs are now being equipped with a third-generation missile, the JL-3, General Anthony Cotton, the commander of the U.S. Strategic Command, told a congressional hearing in March.

    With an estimated range of more than 10,000 kilometres (6,214 miles) and carrying multiple warheads, the JL-3 allows China to reach the continental United States from Chinese coastal waters for the first time, the Pentagon report notes.

    Previous reports had said the JL-3 was not expected to be deployed until China launched its next-generation Type-096 submarines in coming years.

    The Chinese defence ministry did not respond to a request for comment on the Pentagon report and its submarine deployments. The Pentagon did not comment on its earlier assessments or whether the Chinese deployments posed an operational challenge.

    The U.S. Navy keeps about two dozen nuclear-powered attack subs based across the Pacific, including in Guam and Hawaii, according to the Pacific Fleet. Under AUKUS, U.S. and British nuclear-powered subs will be deployed out of Western Australia from 2027.

    Such submarines are the core weapons for hunting ballistic missile subs, backed by surface ships and P-8 Poseidon surveillance aircraft. The U.S. also has seabed sensors in key sea lanes to help detect submarines.

    Timothy Wright, a defence analyst at London’s International Institute for Strategic Studies, said U.S. forces could probably cope with the situation now, but would have to commit more assets in the next 10 to 15 years once the stealthier Type-096 patrols begin.

    China’s rapid expansion of its nuclear forces mean U.S. strategists must contend with two “nuclear peer adversaries” for the first time, along with Russia, he added.

    “That will be of concern to the United States because it will stretch U.S. defences, hold more targets at risk, and they will need addressing with additional conventional and nuclear capabilities,” he said.

    COMMAND AUTHORITY

    China’s navy has for years been thought to have the capability for deterrence patrols, but issues with command, control and communications have slowed their deployment, the military attaches and analysts say. Communications are crucial and complex for ballistic missile subs, which must remain hidden as part of their mission.

    The Jin-class subs, expected to be replaced by the Type-096 over the next decade, are relatively noisy and easy to track, the military attaches said.

    “Something concerning command authority must have also changed, but we just don’t have very good opportunities to talk to the Chinese about this kind of stuff,” Twomey said.

    The Chinese military has emphasised that the Central Military Commission, headed by President Xi Jinping, is the only nuclear command authority.

    Hans Kristensen, director of the nuclear information project at the Federation of American Scientists, said he believed command and communications issues remained a “work in progress”.

    “While China probably has made progress on establishing secure and operationally meaningful command and control between the Central Military Commission and the SSBNs, it seems unlikely that the capability is complete or necessarily fully battle hardened,” he said, using the designation letters for a nuclear-powered ballistic missile submarine.

    Two researchers at a Chinese navy training institute in Nanjing warned in a 2019 underwater-warfare journal of poor command organisation and co-ordination among submarine forces. The paper also urged improvements in submarine-launched nuclear strike capability.

    The navy must “strengthen ballistic missile nuclear submarines on patrol at sea, so as to ensure that they have the means and capabilities to carry out secondary nuclear counterattack operations when necessary,” the researchers wrote.

    SOUTH CHINA SEA ‘BASTION’

    With the advent of the JL-3 missile, Kristensen and other analysts expect Chinese strategists to keep their ballistic missile subs in the deep waters of the South China Sea – which China has fortified with a string of bases – rather than risk patrols in the Western Pacific.

    Collin Koh, a security fellow at Singapore’s S. Rajaratnam School of International Studies, said China could keep its ballistic missile submarines in a “bastion” of protected waters near its shores.

    “If I was the planner, I would want to keep my strategic deterrence assets as close to me as possible, and the South China Sea is perfect for that,” Koh said.

    Russia is thought to keep most of its 11 ballistic missile submarines largely in bastions off its Arctic coasts, while U.S., French and British boats roam more widely, three analysts said.

    Kristensen said the more numerous Chinese submarine deployments have meant the PLA and U.S. militaries increasingly “rub up” against each other – increasing the odds of accidental conflict.

    “The Americans of course are trying to poke into that bastion and see what they can do, and what they need to do, so that is where the tension can build and incidents happen,” he said.

    Reporting By Greg Torode in Hong Kong and Eduardo Baptista in Beijing; Additional reporting by Idrees Ali in Washington; Editing by Gerry Doyle.

    Our Standards: The Thomson Reuters Trust Principles.

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  • Exclusive: Ukraine accuses Russian snipers of abusing child, gang raping mother

    Exclusive: Ukraine accuses Russian snipers of abusing child, gang raping mother

    • Soldiers assaulted family soon after invasion, prosecutors say
    • Ukraine accuses Russian army of widespread sexual assaults
    • President Vladimir Putin’s government denies atrocities

    KYIV, March 14 (Reuters) – Ukraine has accused two Russian soldiers of sexually assaulting a four-year-old girl and gang raping her mother at gunpoint in front of her father, as part of widespread allegations of abuse during the more than one-year-long invasion.

    According to Ukrainian prosecution files seen by Reuters, the incidents were among a spree of sex crimes Russian soldiers of the 15th Separate Motorized Rifle Brigade committed in four homes of Brovary district near the capital Kyiv in March 2022.

    Russia’s Defence Ministry did not respond to a request for comment. Phone numbers listed for the brigade were out of order. Two officials at the Samara Garrison, of which the brigade is a part, said they were unable to give contacts for the unit when contacted by Reuters, with one saying they were classified.

    During Moscow’s failed push to capture Kyiv after its Feb. 24 invasion, soldiers entered Brovary a few days later, looting and using sexual violence as a deliberate tactic to terrorise the population, the Ukrainian prosecutors said.

    “They singled out the women beforehand, coordinated their actions and their roles,” said the prosecutors, whose 2022 documents were based on interviews with witnesses and survivors.

    Most of the alleged atrocities took place on March 13, when soldiers “in a state of alcoholic intoxication, broke into the yard of the house where a young family lived,” the prosecutors alleged.

    The father was beaten with a metal pot then forced to kneel while his wife was gang raped. One of the soldiers told the four-year-old girl he “will make her a woman” before she was abused, the documents said.

    The family survived, though prosecutors said they are investigating additional crimes in the area including murders during the same period.

    President Vladimir Putin’s government, which says it is fighting Western-backed “neo-Nazis” in Ukraine, has repeatedly denied allegations of atrocities. It has also denied that its military commanders are aware of sexual violence by soldiers.

    The soldiers were both snipers, aged 32 and 28, the files said, adding that the former had died while the younger, named as Yevgeniy Chernoknizhniy, returned to Russia.

    When Reuters asked for the identities of both soldiers, prosecutors provided only the name of the younger man. When Reuters called a number in online databases for him, a person saying he was Chernoknizhniy’s brother said he was deceased.

    “He died. There’s no way you can get hold of him,” said the man, crying. “That’s all that I can say.”

    Reuters was unable to independently confirm his assertion.

    GROWING ACCUSATIONS

    The two snipers were among six suspects accused in the Brovary assaults, which prosecutors say is one of the most extensive investigations of sexual abuse since the invasion.

    After the alleged attack on the girl and her parents, the two soldiers entered the house of an elderly couple next door, where they beat them, prosecutors said, also raping a 41-year-old pregnant woman and a 17-year-old girl.

    At another location where several families lived, the soldiers forced everyone into the kitchen and gang raped a 15-year-old girl and her mother, they said.

    All the victims survived, prosecutors said, and were receiving psychological and medical assistance.

    A pre-trial investigation is ongoing into the possible role of superior officials in the Brovary attacks, prosecutors said, in a case adding to growing allegations of systematic sexual abuse by Russian soldiers.

    Ukraine’s Prosecutor General’s office says it is investigating more than 71,000 reports of war crimes received since Russia sent tens of thousands of troops over the border.

    Ukrainian investigators know the probability of finding and punishing suspects is low and potential trials would be mainly in absentia, but there are also international efforts to prosecute war crimes including by the International Criminal Court.

    While suspects are unlikely to be surrendered by Moscow, anyone convicted in absentia may be placed on international watchlists, which would make it difficult to travel.

    Russia has also accused Ukrainian forces of war crimes, including the execution of 10 prisoners of war.

    A U.N. human rights monitoring mission in Ukraine has said that most of the dozens of sexual violence accusations pointed at the Russian military.

    So far, Ukrainian prosecutors have convicted 26 Russians of war crimes – some prisoners of war, some in absentia – of which one was for rape.

    Reporting by Anthony Deutsch in Amsterdam and Stefaniia Bern in Kyiv;
    Additional reporting by Anton Zverev and Maria Tsvetkova;
    Editing by Alison Williams and Andrew Cawthorne

    Our Standards: The Thomson Reuters Trust Principles.

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