The Trump Administration is Continuing its Crackdown on Transnational Scam and Fraud Networks

Sanctions Update: June 29, 2026

Jun 29, 2026

The Sanctions Update, compiled by attorneys from Steptoe’s award-winning International Regulatory Compliance team and the Stepwise: Risk Outlook editorial team, publishes every Monday (subscribe here). Guided by the knowledge of Steptoe’s industry-leading International Trade and Regulatory Compliance team, the Sanctions Update compiles and contextualizes weekly developments in international regulatory enforcement and compliance, as well as offers insights on geopolitical context, business impacts, and forthcoming risks, and non-sanctions news updates.

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By Evan T. Abrams, Meredith Rathbone, Karl Hopkins, Guy Soussan, Alexandra Melia, Wendy Wysong, Ali Burney, Quentin Johnson, Elliot Letts, Algirdas Semeta, Melissa B. Mahle, Anni Coonan, Thomas Goldstein, Zayna Dembinski, Samuel Bloebaum, Elton Smole, Ian Cameron, Wilson Zhao, Zoey Hong, Kiki Dong, Isabella Rao, Jonathan Eaton, Carter Spahn, Chris Dantes

The Lede

The Trump Administration is Continuing its Crackdown on Transnational Scam and Fraud Networks

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On June 23, the US Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued sanctions against 9 individuals and 26 entities reportedly linked to the Prince Group. The US government alleges the organization to be a leading transnational criminal organization based in Cambodia. The sanctions, which were imposed pursuant to Executive Order 13581, target the Prince Group’s leadership and entities linked to them across Asia. Treasury also amended a rule from October 2025 against the Huione Group, alleged to be one of the Prince Group’s critical entities for money laundering, to cover any successor entities.

According to Treasury, cyber-enabled scam and fraud crimes cost Americans more than $10 billion dollars in 2024 and have grown over the past several years. Many of these scam operations are run by transnational criminal organizations based in Southeast Asia. While these organizations target victims of their fraud operations through various methods, they also use forced labor to man their operations by trafficking victims under the promise of legitimate work.

OFAC’s addition of new Prince Group-linked individuals and entities to the SDN list is part of a government-wide initiative across the Trump administration to target scam center groups that has been ramping up over the past year. In October 2025, Washington, in coordination with the United Kingdom, released its first tranche of sanctions against the Prince Group, sanctioning 146 entities. In January 2026, Chen Zhi was arrested by Cambodia and extradited to China following a joint US-China transnational crime investigation. Beijing had reportedly been investigating the Prince Group since 2020. In March, the White House issued Executive Order 14390 on combating cybercrime, fraud, and other predatory schemes, and in June the FBI announced Operation Riptide, a “coordinated law enforcement campaign targeting criminal actors and the key services they rely on” under the direction given by Executive Order 14390.

In conjunction with the sanctions, the US has brought a number of enforcement actions against the Prince Group. After the arrest of Chen Zhi in January, the head of the Huione Group Li Xiong was likewise arrested in Cambodia in April and extradited to Beijing.

Large seizures of cryptocurrency have also been a major element of the US’ campaign against the Prince Group. The joint US-UK action in October 2025 seized more than $14 billion worth of bitcoin, the largest known seizure of bitcoin in history. Alongside the most recent sanctions announcement, the US Department of Justice (DOJ) seized a cloud computing account used by the Huione Group’s subsidiaries, which DOJ referred to as “a part of a technological backbone” that supported the Prince Group’s activities.

Washington has worked with several international partners in its efforts to dismantle the Prince Group. The US, UK, and South Korea have all sanctioned the Prince Group, and the US has coordinated with both UK and Chinese authorities on actions against the Prince Group. Singapore and Hong Kong have also taken steps to sanction entities linked to the Prince Group. Vietnamese police caught two groups trying to set up online scam operations in the country’s north in June. Sri Lankan authorities have made more than 1,000 arrests of foreign nationals this year in raids on alleged scam centers. A raid in Colombo in June resulted in the arrests of 18 Chinese nationals and one national of Laos.

Most importantly, Cambodia, where the Prince Group is primarily based, has greatly increased its focus on combating large-scale criminal organizations based in the country, such as allowing the extradition of Prince Group leaders to China and liquidating a bank founded by Chen Zhi. Cambodia has also begun reforming its legal environment to promote fairness, transparency and efficiency in the commercial sector and to boost the country’s overall attractiveness for businesses.

Given the Trump administration’s prioritization of actions against the Prince Group and against the overall illicit scam economy, it is likely that Washington will continue to focus on combatting and dismantling groups linked to the cyber scam sphere and seizing assets that are derived from the proceeds of the alleged criminal activity. Both the FBI’s Operation Riptide and Executive Order 14390 demonstrate continued political will in this area. Washington has cooperated with international partners on these efforts, which will likely continue, and Washington may look to expand international cooperation if these groups successfully relocate their operations to other countries in the region. However, it is also possible that the administration could step up pressure on other countries and entities to take more decisive actions against transnational criminal organizations conducting scam operations as groups relocate.

US Developments

Renewed Hostilities Threaten US-Iran MOU and Negotiations

On Sunday, the US and Iran agreed to halt a series of tit-for-tat strikes that began late last week and resume talks on the Memorandum of Understanding (MOU) in Qatar on Tuesday. The renewed hostilities between the United States and Iran had threatened to sidetrack the negotiations to end the conflict. The attacks reportedly began after Iran fired on a container ship as it passed through the Strait of Hormuz and included strikes on Iranian military targets around the Strait and American assets in Bahrain and Kuwait.

Earlier in the week, on June 22, 2026, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued General License (GL) X, which implemented Point 10 of the MOU by generally authorizing transactions ordinarily incident and necessary to the production, sale, delivery, or offloading of crude oil, petrochemical products, or petroleum products of Iranian origin. GL X is the first implementation of a significant, but potentially temporary, shift in US sanctions policy toward Iran. We covered the legal and policy impact of the MOU and GL X in last week’s update and a recent blog post.

US Continues to Impose Sanctions on Overseas Scam Operations

On June 23, 2026, OFAC sanctioned nine individuals and 26 entities allegedly connected with the Prince Group, an organization previously designated as a Specially Designated National (SDN) and a Transnational Criminal Organization (TCO) on October 14, 2025. In a statement accompanying the designations, Secretary of the Treasury Scott Bessent said that “[t]he Trump Administration is united in its efforts to dismantle these overseas criminal enterprises, and Treasury will continue using its tools to disrupt the networks behind this egregious fraud and protect Americans.”

Separately, the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) proposed amending its October 2025 Rule, which designated the Huione Group, allegedly a supporter of Prince Group, a financial institution of “primary money laundering concern.” The proposed rule would amend the definition of Huione Group to include H-Pay Service PLC (“H-Pay”) and any successor entity, which, if promulgated, would subject H-Pay to the “special measures” imposed on the Huione Group by the October 2025 Rule, which would effectively sever H-Pay from the US financial system.

The Trump administration continues to target alleged Southeast Asia-based scam centers and their affiliates. OFAC previously imposed sanctions on individuals and entities linked to alleged scam centers on April 23, 2026, as well as May 5, May 29, September 8, October 14, and November 12, 2025.

State Department Applies More Sanctions Pressure on Cuba

On June 23, 2026, the Department of State announced sanctions against five entities and one individual to “further the Trump Administration’s comprehensive push to end the Cuban regime’s malign activities, both in Cuba and across [the western] hemisphere.”

Specifically, the State Department targeted three entities affiliated with Grupo de Administración Empresarial S.A. (GAESA), allegedly a “Cuban military-controlled umbrella enterprise,” which was previously designated on May 7, 2026; two entities allegedly involved in Cuba’s metals and mining sector; and one adult family member of Alejandro Castro Espin, who was designated on June 4, 2026. The designations were made pursuant to Executive Order (EO) 14404, which was issued on May 1, 2026, and which we covered in the May 4, 2026 edition of the Sanctions Update.

These designations follow related actions taken by the Trump administration to exert pressure on the Cuban regime on June 11, June 4, May 18, and May 7, 2026.

OFAC Issues New Sudan-Related Sanctions

On June 26, 2026, OFAC imposed sanctions against eight individuals and entities allegedly linked to procurement and recruitment networks that fuel the ongoing civil war in Sudan. According to OFAC, these networks have enabled both the Sudanese Armed Forces (SAF) and Rapid Support Forces (RSF) to expand the scale and intensity of their conflict.

Specifically, OFAC designated multiple entities affiliated with the Defense Industries System (DIS), Sudan’s largest defense enterprise, which allegedly supports arms and materiel procurement for the SAF and which was previously designated by OFAC on June 1, 2023. OFAC also imposed sanctions against three individuals alleged to be affiliated with a transnational network recruiting former Colombian military personnel to fight in Sudan for the RSF, marking the third tranche of such designations (following related actions in December 2025 and April 2026).

On the same day, the Department of State announced that it was imposing a second round of sanctions on Sudan pursuant to the Chemical and Biological Weapons Control and Warfare Elimination Act. Among other things, these sanctions were said to include “opposing loans or financial or technical assistance to Sudan from international financial institutions, further export restrictions by the Commerce Department, and a bar on Sudanese state-owned air carriers from operating in the United States.”

Treasury Sanctions Rwandan Gold Refinery

On June 25, 2026, OFAC sanctioned multiple individuals and entities alleged to be part of a network coordinating with the March 23 Movement (M23), a US and UN-designated entity, to smuggle minerals from eastern Democratic Republic of the Congo (DRC) to Rwanda.

According to OFAC, this action supports the US-brokered Washington Accords, an agreement signed by the DRC and Rwanda on December 4, 2025, intended to facilitate peace following the escalation of violence in eastern DRC in January 2025, which resulted in M23 capturing Goma, the capital of North Kivu province.

OFAC Sanctions ISIS Facilitators

On June 22, 2026, OFAC sanctioned three individuals and six entities in multiple jurisdictions for allegedly facilitating transactions on behalf of the Islamic State of Iraq and Syria (ISIS). Specifically, OFAC said that the designations target individuals and entities that enable ISIS to move funds among its regional affiliates, including through cryptocurrency.

In a statement accompanying the designations, Secretary Bessent said that the “United States will leverage every tool at its disposal to crush ISIS’s remaining capabilities and protect American lives.”

OFAC Amends Lukoil-related GL

On June 25, 2026, OFAC issued an amended Russia-related general license (GL) 131G, “Authorizing Certain Transactions for the Negotiation of and Entry Into Contingent Contracts for the Sale of Lukoil International GmbH and Related Maintenance Activities.”

We covered GL 131 in previous Sanctions Updates on November 17 and December 8, 2025. Broadly, GL 131 authorizes certain transactions related to the negotiation of and entry into contracts with PJSC Lukoil (Lukoil) or any of its affiliates for the sale, disposition, or transfer of Lukoil International GmbH (LIG) or any of its majority-owned entities, subject to certain restrictions.

GL 131G extends the term of the GL by around 30 days, from June 27, 2026, to July 25, 2026.

Alongside GL 131G, OFAC issued two amended Russia-related FAQs, which reflect the change to the license: FAQ 1224 and FAQ 1225.

OFAC Removes Multiple Russian Persons from SDN List

OFAC has continued to remove multiple individuals and entities from the List of Specially Designated Nationals and Blocked Persons (the “SDN List”) that were previously designated under Russia-related sanctions authorities.

On June 23, 2026, OFAC removed three individuals previously sanctioned pursuant to EO 14024, namely Anton Alekseevich Krugovov, Tamara Aleksandrovna Topchi, and Natalya Vladislavovna Puzyrnikova.
On June 24, 2026, OFAC removed seven individuals, two entities, and two vessels previously sanctioned pursuant to EO 14024.

Treasury did not provide a comment on why these individuals and entities were removed.

UK Developments

OFSI Amends Prince Group Insolvency General Licence

OFSI has amended General Licence INT/2026/9491628, which permits certain insolvency-related payments and activities involving the sanctioned Prince Group and its subsidiaries (the “Prince Group GL”). The principal amendment introduces a revised definition of “Permitted Insolvency Activities”, clarifying that payments and other actions connected with insolvency proceedings are authorised where they are carried out under the direction of, or with the consent of, an insolvency practitioner, provided they do not make funds or economic resources available to any designated person other than the Prince Group designated persons or their subsidiaries. The amended definition also confirms that the revised permissions apply only while the insolvency practitioner continues to act in that capacity.

The amendments also make consequential changes throughout the Prince Group GL by expanding the scope of authorised persons able to rely on the licence, including insolvency practitioners, designated Prince Group entities and subsidiaries, and updating the associated notification and record-keeping requirements. The Prince Group GL otherwise continues to facilitate the orderly administration of insolvency proceedings involving the Prince Group while maintaining safeguards to prevent funds or economic resources from being made available contrary to the Global Human Rights Sanctions Regulations 2020. Parties intending to rely on the Prince Group GL should review the amended version carefully to ensure compliance with the updated permissions and conditions.

OFSI and OFAC Publish Joint UK–US Sanctions Guidance

OFSI and OFAC have published joint guidance providing a comparative overview of the UK and U.S. sanctions regimes. Produced under the UK–US Enhanced Partnership following an in-person meeting between the two authorities in London in January 2026, the guidance is intended to help businesses understand the key similarities and differences between the two frameworks. It compares core aspects of each regime, including sanctions lists, licensing processes, reporting obligations, record-keeping requirements and broader compliance expectations.

Alongside the guidance, OFSI has published a blog highlighting the continued success of the UK–US Enhanced Partnership, which has now entered its fifth year. The blog explains that the initiative is intended to maximise the effectiveness of sanctions, minimise unintended consequences and make sanctions easier for businesses to understand and implement through closer cooperation between the two authorities. The publication of the comparative guidance underscores the increasing alignment between OFSI and OFAC and provides a practical resource for organisations managing cross-border sanctions compliance programmes.

OFSI Clarifies Amended Lukoil International General Licence via New FAQ

OFSI has published new FAQ 196 following its recent amendment to General Licence INT/2025/8031092, which permits the continuation of business involving Lukoil International GmbH and its subsidiaries (the “Lukoil GL”). The amended licence removed the previous requirement for funds made available, directly or indirectly, to or for the benefit of Lukoil International GmbH or its subsidiaries to be paid into a frozen account. The new FAQ clarifies the practical effect of this change and provides additional guidance for businesses relying on the Lukoil GL. Importantly, OFSI confirms that the amendment does not permit funds to be made available to or for the benefit of PJSC Lukoil, the UK designated Russian parent company. The FAQ therefore distinguishes between the treatment of Lukoil International entities operating under the licence and the continuing asset freeze applicable to PJSC Lukoil. Businesses intending to rely on the Lukoil GL should review both the amended licence and FAQ 196 carefully to ensure they understand the revised permissions and continue to comply with the Lukoil GL’s conditions.

EU Developments

EU Council Renews Economic Sanctions Against Russia

On June 25, the EU Council renewed the restrictive measures in view of Russia’s actions destabilizing the situation in Ukraine for another year, until July 31, 2027. The decision follows the agreement reached by EU leaders at the European Council summit on June 18-19 to prolong the economic sanctions against Russia for an additional twelve months.

The shift from the previous six-month renewal cycle to a twelve-month period reduces the frequency with which unanimous approval by all 27 Member States is required to maintain the sanctions, thereby limiting recurring opportunities for individual Member States, such as Hungary and Slovakia in previous renewal rounds, to exert leverage or delay the renewal of the measures.

The sanctions regime, first introduced in 2014, covers key sectors of the Russian economy through sectoral restrictive measures targeting trade, financial services, energy, and dual-use goods and advanced technologies. The restrictive measures have been significantly expanded through successive sanctions packages, adopted in response to Russia’s war of aggression against Ukraine.

EU Council Reviews Sanctions Listing Under South Sudan Regime

The EU Council recently concluded its periodic review of the list of persons subject to restrictive measures under the South Sudan sanctions regime and determined that the designation of one individual should be maintained. Specifically, the Council confirmed that Michael Makuei Lueth, former Minister for Information and Broadcasting and currently Minister of Justice and Constitutional Affairs, remains subject to restrictive measures, while updating the statement of reasons underpinning his designation. The revised statement confirms Makuei Lueth’s ongoing obstruction of the political process in South Sudan, including interference with the 2015 Agreement on the Resolution of the Conflict in South Sudan (ARCSS) and the 2018 Revitalized ARCSS (R‑ARCSS), as well as more recent conduct restricting political and democratic space in 2025.

The restrictive measures under Decision (CFSP) 2015/740 include an asset freeze, a prohibition on making funds or economic resources available, and a travel ban within the EU.

EU Council Renews Sanctions Against Haiti

The EU Council extended the restrictive measures against Haiti under Council Decision (CFSP) 2022/2319 until July 29, 2027. The sanctions regime currently targets nine individuals and one entity responsible for threatening the peace, security or stability of Haiti, or for undermining democracy or the rule of law in Haiti. Designated individuals and entities are subject to asset freezes and a prohibition on making funds or economic resources available. In addition, designated individuals are also subject to a travel ban within the EU.

Asia-Pacific Developments

China Retaliates Against US Blacklists with Procurement Ban and Export Controls on Defense-Linked Firms

On June 22, 2026, China announced a series of sanctions-related measures targeting US companies. The Ministry of Finance barred government procurement entities from purchasing products manufactured by 46 designated US firms, including Raytheon Missiles & Defense, while exempting US-invested companies operating in China. Separately, the Ministry of Commerce added 10 US entities, including Red Cat Holdings, Inc., Teal Drones, Inc., IMSAR, Jaia Robotics, Inc., Ball Aerospace & Technologies Corp., Oshkosh Defense, MP Materials Corp., and USA Rare Earth, Inc., to China’s export control list, prohibiting exports of Chinese dual-use items to those firms. China reportedly said the measures were a response to the US Department of Defense’s recent expansion of its Chinese Military Companies List, adding major firms such as BYD and Baidu.

Russia Urges South Korea to End North Korea Sanctions and Halt Pressure Campaigns

Russia sharply criticized South Korea’s regional security policy and sanctions stance, according to statements from the Russian Foreign Ministry and reporting by NK News. On June 25, 2026, Russian Deputy Foreign Minister Andrei Rudenko told South Korean Ambassador Lee Seok-bae that Seoul was aligning with Western “anti-Russian” actions and urged it to abandon pressure and sanctions against North Korea, arguing that joint military exercises with the United States near the DPRK were increasing tensions on the Korean Peninsula. Russian Foreign Ministry spokesperson Maria Zakharova echoed the criticism, warning that recent South Korea-US naval and air drills conducted near North Korean waters could undermine regional security. The remarks came after South Korea joined G7 and European leaders in condemning Russia–North Korea military cooperation and calling for North Korean denuclearization.

Global

Bank for International Settlements warns that an AI investment bubble could damage the global economy. The Brussels-based watchdog organization, a central bank of central banks, monitors the global economy and issues warnings about systemic risks. In its annual economic report released yesterday, it warns that disappointing returns on the massive investment in the tech sector could trigger a sudden pullback in financing, leading to a protracted investment bust. The current investment exuberance is similar to previous technology breakthroughs that attracted capital in excess of market capacity, such as the dotcom boom of the 1990s.

AI investment appetite is being fed by technology companies raising hundreds of billions of dollars to fund AI projects. Analysts are pointing to the SpaceX $25 billion bond sale right after its IPO as a signal that the market has entered into “bubble territory.” While the BIS report notes the upside risks that AI could raise productivity significantly, enabling companies and economies to grow, an investment bust could endanger financial stability. The interplay of record-high public debt with the increasing role of highly-leveraged hedge funds creates a new sovereign-financial stability nexus and poses growing financial stability risks. Governments will have less room to respond to future recessions or crises and need to take steps now to strengthen financial stability.

Read More: Financial Times [paywall], BIS Annual Economic Report, World Economic Forum

Europe

EU member states approved the revised Turnberry trade truce on Friday, but lingering tensions loom over the deal. On Thursday, the US opened the comment period for a Section 301 investigation into Germany’s pharmaceutical sector after a draft law, aiming for a speedy adoption in the summer, would mandate pharmaceutical cost reductions for patients covered by public insurance. US Trade Representative Jamieson Greer suggested that Germany may be underpaying pharmaceutical companies and shifting the burden of financing R&D to American consumers. Another trade hotspot is among digital service taxes (DSTs). Although there is no formal Section 301 investigation into European DSTs, a broad investigation into the EU’s Digital Markets Act and Digital Services Act could potentially encompass DSTs as a form of discrimination against American companies. US President Donald Trump threatened 100% tariffs on European countries on Friday if they implement or enforce DSTs.

The European Commission has the right to suspend the trade truce under the revised Turnberry deal if the US imposes new taxes above the 15% ceiling. The Commission stated it could respond “swiftly and decisively” if Trump were to violate the terms of the Turnberry deal or threaten the EU’s regulatory autonomy. Successive US administrations have criticized the EU’s DSTs and digital regulations, but differences have not disrupted the broader $1.5 trillion trading relationship.

Read More: AP, Deutsche Welle, Financial Times [paywall]

Middle East

The US and Iran agreed to halt attacks after a weekend of tit-for-tat strikes. The flare-up of violence started with an airstrike (unclaimed, but almost certainly Iranian) on a shipping vessel transiting the southerly, Omani route through the Strait of Hormuz, against Tehran’s orders to use the northern Iranian route. From Thursday to Sunday, the US and Iran exchanged attacks on Iranian military targets around the Strait and US assets in Bahrain and Kuwait before announcing a halt on Sunday.

The path forward for the MOU still seems unclear. US officials announced the pause in fighting, and President Trump on social media announced that Iran and the US would resume talks on broader peace negotiations in Doha on Tuesday. But Iran denied that the talks would be taking place, has not publicly commented on the Sunday ceasefire, and is publicly maintaining its right to “administer” the Strait. Ship traffic slumped to mid-war lows again as a result.

The shaky agreement likely will not endanger talks in the near term, but it reveals the cracks in the foundation. MOU negotiations have already weathered several violations of the agreement, and talks will likely continue as long as both sides think a deal is possible or that they can benefit from a pause in fighting. But both sides are far apart on key issues, exacerbated by vagueness in the MOU – Iran alleges that its current actions in the Strait are permitted under the agreement, which only requires Iran to make safe passage possible.

Read More: Washington Post [paywall], Al Jazeera, New York Times [paywall], The Times of Israel

Asia-Pacific

Japanese Defense Minister Koizumi Shinjiro met with his South Korean counterpart Ahn Gyu-back in Seoul on Sunday. In a step up for security ties between the two neighbors, South Korea and Japan reaffirmed their commitment to denuclearization of the Korean peninsula. The two countries agreed to bilateral cooperation on improving regional stability, including further partnerships with the United States. They also held joint naval trainings earlier this month, while Tokyo has been entering “minilateral” groupings for security cooperation with other nations in the region, including Australia and the Philippines. Ahn described the current regional situation as “a grave security environment.”

The talks were the first between Tokyo and Seoul’s defense chiefs in 11 years, marking a notable improvement in security ties. Relations between the East Asian neighbors grew closer in 2025, after a period of tension going back to 2019, when Seoul pulled out of the joint GSOMIA intelligence-sharing agreement. During the two-day visit over the weekend, the countries sought new ways to increase defense cooperation, including exchanges between their aerobatic teams, Blue Impulse and the Black Eagles, as well as joint search-and-rescue exercises. The renewal comes as North Korea continues to develop its nuclear program and strengthen ties with Russia.

Read More: Reuters [paywall], NHK, The Japan Times

Americas

The death toll from two major earthquakes in Venezuela has risen to 1,450 with at least 46,000 reported missing. The quakes struck northern Venezuela on Wednesday, with coastal La Guaira and the capital Caracas heavily impacted. Search-and-rescue efforts continued over the weekend, as international teams and civilian volunteers rushed into the hardest-hit areas. The Venezuelan authorities were forced to restrict access to the disaster zone in La Guaira after the flow of volunteers transporting donations clogged transport routes, delaying rescue crews. As of Saturday morning, only authorized personnel were allowed to enter the area.

The catastrophe is a severe test for the government of Delcy Rodríguez, which is seeking to assert its legitimacy through the disaster response efforts. It is also a key test of the Venezuelan government’s relationship with the administration of US President Donald Trump, who asserted that the US would ‘run’ Venezuela after the capture of Nicolás Maduro in January. The US has sent rescue crews from Virginia and California, and the US Southern Command announced that it will send a special Air Force Response team to help restore operations at Simón Bolívar International Airport. The US Navy also dispatched two warships to waters off the coast of Venezuela to support life-saving efforts.

The opposition in Venezuela has also organized response efforts, criticizing the ruling party’s planning and leadership. Opposition groups claimed that the ruling Chavista party has sought to take control over aid, banning grassroots organizers from labelling supply drop-off sites as “Donation Centers” if they were not government-authorized operations. An official from the opposition party Vente accused the ruling party of using the tragedy to strengthen its grip on power in Venezuela. The leader of the opposition, María Corina Machado, requested help from the White House to facilitate her return to Venezuela, which White House officials reacted to with frustration, describing the request as ill-timed.

Read More: FT [paywall], New York Times [paywall], Politico, NBC

Geoeconomics

Freight shipping costs are surging as companies rush goods into the United States. Rates on major Asia-US and Asia-Europe routes have reached their highest levels since the 2024 Red Sea crisis, when Houthi attacks forced ships away from the Suez route. The cost of shipping a 40-foot container from China to the US east coast rose to $7,880 last week, up 62% from a month earlier, while China-to-Mediterranean rates rose 47% to $6,431. The Platts Container Index climbed 80% in the 30 days to Wednesday, reaching its highest level since April 2022.

The driver is frontloading. US tariff deadlines are pulling forward the normal peak-season shipping rush that usually builds ahead of Black Friday and Christmas, as importers try to land goods before new levies hit in late July. The Trump administration is preparing tariffs of at least 10% on dozens of countries over forced-labor concerns, with China, the EU, India, Japan, and the UK among the major economies targeted, and further tariffs on industrial goods expected next month. The result is greater inflation: companies trying to avoid tariffs are bidding up freight capacity now, which raises landed costs even before the tariffs themselves arrive.

Read More: Financial Times [paywall], Wall Street Journal [paywall], OECD

Disruptive Technology

China-based Zhipu’s most recent model, GLM 5.2, shows comparable bug-finding capabilities as Anthropic’s Opus 4.8. This means Zhipu’s latest model is close to the cyber capabilities of the American frontier models Mythos 5 and Fable 5, which are currently offline after a Department of Commerce order directed Anthropic to restrict access for foreign nationals. Moreover, GLM 5.2 is about an eighth of the cost of Opus 4.8 and an open-weight model, meaning it can be modified by startups (or malicious actors) to create similar models.

China’s narrowing of the AI capabilities gap adds pressure for the US to define its AI approach. The alarm caused by Mythos’ bug-finding capabilities compelled the White House to create a voluntary screening program, but the Commerce Department escalated this to export controls, signaling a pivot or conflict within the US’ AI regulatory approach. US hesitation on AI policy comes as Chinese companies allegedly train their models on American frontier models (i.e., distillation) and find innovative ways to create homegrown compute. The preference for open-weight models narrows the amount of time needed to train new models.

Read More: CNBC, Wall Street Journal [paywall]

Energy

Berlin has come out in favor of delaying the EU’s planned rules governing methane emissions. Germany’s government has added its voice to a growing number of EU members, including Italy, Poland, and the Netherlands, which are urging Brussels to suspend implementation of EU rules on methane imports. The primary worry regarding the regulation is that it could endanger Europe’s security of energy supplies. The EU’s methane regulation came into effect for some areas in 2024, such as obligating producers in the EU to monitor and repair methane leaks, and starting in 2027, the regulation will begin to apply to imports of traditional energy sources to the EU. This puts the member countries on course to conflict with EU energy commissioner Dan Jørgensen, who has said the Commission will not reconsider the legislation. However, the EU has drafted plans to suspend penalties for companies that breach the law for a period of time to allow for adjustment.

The US and other energy-producing countries have heavily lobbied Europe to postpone implementation of the methane regulation. Multiple countries have pushed the EU to rewrite the rules on methane emissions with the warning that the policy could disrupt exports of energy supplies to Europe. Industry groups have also strongly opposed the regulation as harmful. The US, Qatar, Nigeria, and Algeria, all of which export gas to Europe, have called for a pause to the law’s implementation and urged “targeted amendments.” US Secretary of Energy Chris Wright has warned that the EU’s regulation would make it impossible for the bloc to import LNG from the US.

Read More: Reuters [paywall], Financial Times [paywall], Politico EU

Transnational Crime & Corruption

Anti-immigrant violence in South Africa is poised to escalate tomorrow. A coalition of vigilante groups, led by the March and March movement, set June 30 as a deadline for all immigrants to leave South Africa. South African security forces are preparing for significant civil unrest. Foreigners in South Africa, accused of taking jobs and social services from South African nationals, have been targeted with escalating violence over the last five years, with 148 killed since 2022. Vigilantes have attacked perceived foreigners on the street, blockaded hospitals rumored to be treating migrants and burned down immigrant-owned shops.

Anti-foreigner violence has strained South Africa’s foreign relations and its struggling domestic economy. Foreign embassies in South Africa have rushed to repatriate thousands of their nationals before the June 30 deadline. South African businesses are preparing for severe disruptions around the country. Previous civil unrest in South Africa in 2021 descended into widespread commercial looting and destruction of property.

Read More: Financial Times [paywall], Bloomberg [paywall], The Economist [paywall], ACLED