FINANCIAL GEOPOLITICS JULY 2026: NATO-industry tie-ups – Tech tensions – Muslim Brotherhood sanctions

Hello from Lanzarote, people. My kids and wife are doing cannonballs in the pool, the bar is open and I am typing your newsletter from atop a giant pink inflatable flamingo, because the geopolitical fun never stops.

We are launching a partnership with a geopolitical analysis think tank, plus giving you top insight into US-Europe tech rivalries, Russian and Ukrainian dark arts, a curious US sanctions designation in the UK with wider implications, as well as key crypto policy nuggets. Hat tip also to author Maximilian Hess who made an on-brand joke on X, almost putting a silver lining on England’s tragic self-inflicted loss to Argentina in the World Cup. “English High Court to hold emergency hearing, issue new £12 billion award to Burford over Argentina’s YPF nationalisation,” Hess quipped. If you know, you know. If you want to know, get in touch with matei@reporter.london.

THE BROAD VIEW WITH DAVIDE E. IANNACE and MAIA SACCHETTO

Iannace is a policy PHD and consultant, with expertise across defence, public spending and research, and has worked for EU and Italian institutions. Sacchetto is a strategic consultant, expert in the defence industry and has previously worked with international institutions. Both are based in Italy and provide policy analysis to the Geopolitical Insight and Education Foundation, a Washington-based nonprofit.

As part of a new non-monetary, non-binding partnership between our newsletter and the GIEF to support each other’s work without impinging on the editorial independence of either side, the experts have given us a deep read of the NATO summit in Ankara this month, with special focus on economic and financial implications.

The winner of the summit was Ukraine, having secured more fulsome US support including the promise of Patriot air defence manufacturing licenses for missiles. Ukraine now faced the question of creating “industrial infrastructure and secure supply chains,” the analysts said.

There continue to be disagreements within the alliance over rising military spending, notably from Spain, but the broad trend of a sharp rise in investment is unaffected, which means a boon for the industry, including cybersecurity and digital assets. “This infrastructure is the backbone of modern military operations,” according to the analysis provided by the two authors. These topics were discussed at the Defence Industry Forum which ran alongside the NATO summit. Here NATO announced a new strategy for partnership with industry and an online platform for contractors. The key areas of co-operation with industry are going to be drones, cyber operations and space, the experts said.

Supply chain resilience is a sore spot, the analysts said, pointing to critical raw materials: NATO will focus on the need “to stress-test the defence value chain,” including finding ways “to scale-up the production under certain constraints and conditions. This initiative will see a major exchange between the industrial sector and the alliance.”

Catching up with the Americans: another sore spot is the relative lack of dynamism in European industry, compared to China, the US and Ukraine, which NATO is now seeking to address. “In the strategy, there is also a clear interest in reinforcing the capacity of research and innovation of the alliance and its members.”

In line with US demands that Europe take on a large role in NATO, “there is a growing sense that production could shift towards EU-based suppliers.” This suits Europe too because President Donald Trump’s commitment to the alliance continues to be under question, possibly as a deliberate strategy by the White House to spur on allies. The result will be further growth in European defence tech, which is already underway.

“This push toward a different ecosystem will find a sort of breeding ground in Europe,” where policymakers are pushing for “greater autonomy. These resources are not aimed only at the “classic” companies which comprise the backbone of the defence industry (e.g., Leonardo, Rheinmetall) but to a wider range of middle-sized and small companies, even start-ups, which are entering this market with innovative and frontier technologies.”

Defence is no longer a taboo for banks, the experts said. “Financial institutions will play a central role in ensuring the industry is duly equipped with the financial instruments, [such] as equities or bonds, to react promptly to the novelties on the defence side,” said the analysts. “There is space for dual-use industries,” they said.

But there’s a tension between NATO-first and Europe-first strategies, the experts noted, as we have covered previously in this newsletter, with policymakers in some European countries keen to have parts of their defence stack fully American-free. This continues to play out in debates at the highest levels which don’t only involve procurement but the grand strategy of the US itself.

TOP LINES

1. POLITICS OF CYBERPUNK: This one is coming from Tom King, an expert in Russian tech policy who is also an investigative researcher, journalist and friend of this newsletter. In short: the EU and UK are trying something that Russia has been pushing for 20+ years, and still hasn’t achieved: breaking its dependence on US tech.

Writes Tom: The UK and EU are moving ahead with efforts at ‘digital sovereignty’, an attempt to secure technology infrastructure and reduce reliance on foreign tech companies, especially American ones. Faced with the challenge, both may benefit from a cautionary glance eastward; Russia’s ongoing attempt at digital sovereignty, kicked off in the early 2010s, warns of difficulties that could also be felt in Europe.

The approaches taken by the UK and the EU are not uniform, and the EU has a slight headstart. Since 2020, the EU has pushed a spate of non-binding reports and summits that invoke the need for digital sovereignty, and Westminster has itself admitted that “in contrast to the UK, digital sovereignty is a clearer driver of policy in the EU.”

The EU has found some success in forcing US companies to comply with EU data protection law, but Europe and Russia have both struggled to strong-arm US companies into compliance with data localisation [the physical location of servers] and cybersecurity requirements. Meta and Google shrugged off data localisation fines and sanctions from Russia, yet remain in use. The UK endured similar pains in 2026 after Apple refused to build backdoor access into iCloud’s Advanced Data Protection encryption, the US tech giant instead withdrawing the encryption feature entirely from UK users.

As in the EU and UK, Russian [domestic] tech companies’ cooperation is required for digital sovereignty — but they do not always bow to the Kremlin. Russia’s repeated, ratcheting controls against Telegram began in 2018 following the Russian social media giant’s refusal to hand over its data decryption keys. Eventually, in April 2026, Telegram was fully blocked on local networks, amid continual opposition, even from Kremlin officials — and remains highly in use today [via VPN]. Home-grown tech giant Yandex succumbed over time to digital sovereignty laws, but full submission required a state-backed acquisition of Yandex’s Russian operations, with similar state intervention seen at the social networks Vkontakte and Odnoklassniki. Russian reliance on the private sector is further reflected in the legion of profitable private companies now required to carry out digital sovereignty goals.

The UK and EU, which have a still less pliant private sector than Russia, have experienced their own digital sovereignty frustrations due to a lack of private cooperation. UK companies have lobbied against the cost and practicality of controls, and are not always willing to share data; a large telecoms company, after allegedly asking NATO for assistance against suspected Chinese hackers, then refused the agency access to its network.

Europe and Russia both suffer when replacing the high-end of the tech ‘stack’. Not without issues, Russia has made progress in domestic replacements for hardware and critical infrastructure compared to Europe, and has pushed to support its historically strong talent base — but both struggle to replace the advanced semiconductors required in politically salient technologies, such as to train and run AI models.

Despite similarities, Russia’s experience is not a perfect mirror to Europe’s. Both the UK and the EU repeatedly stress “resilience” when using foreign tech, and “cooperation with allies”, rather than Russia’s ideal of complete technological autarky. Although Russia arguably has a less severe reliance on American hardware, the UK and EU have the advantage — for now — of being able to leverage the US tech stack in order to develop their own digital economies, a paradoxical approach Russia lost after its 2022 invasion of Ukraine. However, Russia’s digital sovereignty challenges may still be a portent for nascent UK and EU efforts, or a useful handbook for middle powers in what lies ahead.

Some context to Tom’s analysis: The Kremlin charged Telegram founder Pavel Durov with ‘terrorism’ on July 29. The EU is drawing political fire from US officials for its heavy fines against US tech companies, including the latest last week of $1 billion on Google. “The transatlantic alliance is strongest when both shores create. We urge our European partners to build the future alongside us, rather than punishing those brave enough to reach it first,” posted a State Department official on X. As our friend, the journalist Eddy Wax from Euractiv observed, EU officials have stopped defending these fines publicly in media conferences. We ask, can you blame them, after the US targeted ex-EU officials in the past with sanctions that turned their lives upside down? It has also not gone unnoticed in Washington that the EU was able to subvert the rule of law to politics this month in the case of a sensitive chemical safety investigation targeting China. Meanwhile, the UK has picked a more modest target – the troll forum 4chan, which it fined £950,000 earlier in the year. True to its colours, 4chan refused to pay citing (lack of) jurisdiction. 4chan’s lawyer is on a very public campaign criticising the UK government for this. The UK, again mirroring Russia, has also floated and then walked back a ban on VPNs and other technology that puts internet control beyond government’s grasp. 

2. BROTHERHOOD WATCH: Exclusive insight below as the US sanctioned a UK-based alleged Muslim Brotherhood leader this month. A person with the same name appears on LinkedIn as the “editor” of a media company, and at least two dissolved companies linked to him appear on the UK register. The US designation is in line with a more aggressive posture against Islamist radicalism stemming from Washington’s new national security strategy under President Trump, said Yair Samban, a London-based expert in anti-money laundering and counter-terrorist finances. Samban, who co-authored a book on the subject, said that the wider network sanctioned alongside the UK Muslim Brotherhood figure has a crypto dimension through one of the co-designated entities in Turkey. “The MB isn’t one organisation as such. It’s a movement comprised of people who belong to many organisations. They constantly use crypto to gather donations. Some of these people are very crypto savvy,” he said. “The US generally has ramped up its targeting and efforts against crypto-enabled activity by all the actors,” Samban said, in line with the country’s national strategy of bringing crypto into the mainstream as a prop for US dollar dominance. “Trump wants to see crypto grow, this will increase their revenues, but this won’t happen with all the bad actors using crypto. The UK is not playing this global game […] The UK is treading very carefully when it comes to Muslim Brotherhood actions.” However, he agreed that if the US makes tackling the Brotherhood a strategic priority, the UK will have to follow suit due to the close links between the two countries. “I’m sure UK authorities are following closely on the ramifications of MB presence in this country, due to good US/UK collaboration, as seen in previously published joint operations against crypto-enabled crime.”

3. CRYPTO CROSSCURRENTS: It’s the same ballpark as the broader tech issue which is becoming geopolitical. US and Europe are massively diverging on cryptocurrency policy, with new steps taken this month to entrench the division. While the US is betting on crypto as a tool to increase dollar dominance and give banks more options to financialise assets in the real economy (such as stablecoin mortgages), the EU is clamping down for fear of encroachment over the authority of the European Central Bank and the EU Commission regarding the economy. Notably, the UK has quietly sided with the Americans on the issue, by tailoring its policy toward more openness to dollar-denominated stablecoins than is the case in the EU. In a further signal, Revolut, which has recently received a UK banking license but is heavily pushing for market share inside the EU, has withdrawn support for USDT (Tether stablecoin) in the European Economic Area, while continuing to back it in Britain. Izabella Kaminska, the independent journalist specialised in global financial infrastructure, pointed to this in her recent coverage, calling it a long-term strategic trend which is only likely to grow.

4. TERROR THREAT: The United States has opened a new front in global financial geopolitical conflicts by starting an all-government, multi-agency campaign against far-left organisations that commit violent acts. This will involve sanctions and debanking, according to Secretary Bessent who was himself a target of an assassination attempt. The international aspect of this strategic drive by the US is obvious from the fact that it was revealed in a conference by State Secretary Marco Rubio with leaders from allied countries. Rubio listed a long number of far-left violent episodes in European countries as well as South America. The speech was barely over that another couple of far-left terrorist attacks were revealed in Europe, with appropriate downplay in the mainstream media. The purpose of this newsletter is not to debate politics. Instead we highlight what issues are likely to affect geopolitical relations from a financial perspective. And as such we feel it’s our duty to tell our readers that we believe this new campaign by the US is here to stay, and it is going to have serious repercussions on relations with Europe, because many far-left organisations that have both endorsed and taken part in violent forms of “direct action” have documented connections to more or less mainstream political parties in multiple European countries. One to keep a close eye on. “This is an international conference because we are facing a transnational threat,” Rubio said. “And they work alongside hostile foreign states that share their mission,” Rubio said, namechecking Iran and Cuba. Rubio called on the governments present to co-operate. We reckon not all of them will be keen to do so. 

5. IRANIAN RUN: As we foreshadowed in the previous newsletter, the Versailles deal between the US and Iran wasn’t worth the paper it was written on and the countries were back at war within days of signing. Oil prices are back up, inflation is again growing and talk of clamping down hard on regime money abroad has been resumed by the US Treasury. One interesting development amid all of this is that the UK, one of the last holdouts against banning the IRGC, the hardcore Islamist group de facto in charge of Iran, has deigned to join the rest of the free world this month. This is going to be very bad news for the mullahs because a lot of their financial networks are wired through London and the ban is now allowing investigators in Britain and abroad to target them directly. Unlike last time that war flared in the Strait of Hormuz, oil tankers have managed to pass through to global markets, providing some hope that the oil supply will stabilise as Tehran gets pummelled. Other news has been less optimistic about American prospects. 

6. BITCOIN BELARUS: Not to be outdone and potentially eyeing the profitable grey market of sanctions avoidance, Belarus is also legislating for cryptomaxxing in the banking sector this year, reports our friend Thomas Rowley for Compliance Corylated, a professional news service. Belarus will give crypto companies banking licenses, which in theory at least would enable them to enter the global correspondent banking network that opens up access to truly worldwide payments. Experts consulted for the report said Belarus will take care to avoid sanctions-busting out of fears of attracting further sanctions on themselves.

7. RUSSIA HITS THE ROCKS: A bumper US sanctions package seen as a game changer for Western economic pressure is advancing through Congress amid reports that the death of one of the champions of this law, Lindsay Graham, just after returning from Ukraine, is being investigated by the FBI “out of an abundance of caution”. President Trump has been sitting on these sanctions for more than a year in the hope Russia would enter genuine diplomatic negotiations with Ukraine, but since the US-led war in Iran, Russia has been supporting Tehran, which may have changed Trump’s mind. The package is not a done deal, but it could indeed be the straw that breaks the Russian economy’s back. The news came days after a Reuters report cited Western intelligence agencies said that Russian banks faced an “explosive situation” as it becomes increasingly difficult for them to hide their insolvency. Financial markets are already buckling in Russia, and the finance ministry is unable to sell bonds even to its own banks, a situation which points to acute liquidity deficits. Adding to the pressure, a judge ruled this month that Russia’s Gazprom, which faces its own looming insolvency, is not entitled to compensation over the destruction of the Nord Stream pipeline.Our friend and experienced financial journalist Nick Kochan did a detailed writeup on LinkedIn gaming out the options for Russia’s Central Bank amid this crisis and Governor Nabiullina’s likely exit from the scene in the coming months. The central bank cut rates this month under political pressure, as the government has been flogging off reserves of gold and diamonds. Wildberries, the “Russian Amazon” with ties to the Kremlin, has had its warehouses bombed hard by Kyiv, which some say could trigger a banking crisis due to the group’s mountain of debt to state lenders. The cherry on top: the EU approved its latest sanctions package on Russia on July 23 which adds the largest number of names to the blacklist of all the similar actions yet. “For the first time, the EU is introducing the possibility of a full third-country ban for crypto-asset services, as a strong deterrent to countries hosting platforms that help Russia evade EU sanctions,” the EU Council said. Which may or may not be related to our very own exclusive coverage of Russia’s A7 crypto network, with strong ties to Kyrgyzstan.

8. GREAT GAME ON THE HIGH STREET: The Fence, a small London print, has a brilliant and incendiary article suggesting the proliferation of Afghan-led low-quality, tax-dodging high street shops blighting Britain is tied to flows of aid to Kabul in the wake of the Afghan war. The premise is supported by references to a surreptitious recording and denied by the subjects of the story. Still, it is delightfully geopolitical in its inference that elements of the British state chose to accommodate their foreign policy partners in Afghanistan, at the huge expense of British society itself as a whole – although Britain went to Afghanistan in the first place to protect British society. Related book here. 

9. SECRET INVESTMENT: China’s central bank has been secretly buying shares in strategic assets in Europe and the UK, according to an investigation by our friends at OCCRP. Needless to say this is not typical central bank behaviour and it raises the question of why the Chinese government would do this, going to considerable lengths to hide its hand behind shell companies and other corporate wrappers. Among the assets in question are a Belgian police building, wind farms in the UK and a gas company in Spain.

10. BACKPACK BLOWUP: Alarming events in Monaco where an assassination attempt by exploding backpack points to Ukraine’s secret services. It is unclear if the operation was by rogue elements within these structures or by the structures themselves, but neither option is likely to soothe Western concerns that Ukraine’s war is liable to spill over in uncontrollable ways. The target, according to media reporting, was the family of a rich businessman who renounced Ukrainian citizenship. After the explosion, the main suspect was herself assassinated. 

11. McMAFIA CASE: The UK civil courts are seeing a high-stakes case where a dirty money forfeiture order is in play as a Dubai fund is claiming to have been aggrieved by the targets of an “unexplained wealth order” issued by the National Crime Agency. According to anti-financial crime NGO Spotlight on Corruption, the case is interesting because the Dubai fund interceded before the money was recovered, and this means the NCA’s ongoing attempt to bring the investigation to a conclusion could be delayed. 

12. EASTERN PROMISES: Further moves in the Hungarian corporate sector are afoot following the collapse of the anti-Western regime of Viktor Orban. Top Polish bank PKO is eyeing a takeover of Hungary’s MBH Bank, according to our friends at Vsquare in Warsaw. MBH was close to the Orban administration. Meanwhile, Chinese electric vehicle brand BYD hired Orban’s ex-foreign minister as a glorified press officer, a move that some online miscreants suggested could hurt the Chinese company’s reputation in Europe. 

13. TRUMP MEDIA v WaPo: Your correspondent breathed a sigh of relief this month as a $3.7 billion dollar civil lawsuit brought by the company behind the Truth Social website against the Washington Post was thrown out by a Florida judge after three years of fighting. The suit alleged defamation and malicious falsehood in a story published by the Post, in which the publisher of this newsletter was a co-author. Our website has doggedly covered the less-than-transparent activities of the Caribbean bank which partnered with the media company behind the failed lawsuit.

Alright, that’s it. Enjoy your time and please don’t forget to send us interesting links and thoughts on matei@reporter.london. We’ll be back on payday in August.

Special thanks as always to BM who helped edit this edition.

Any comments or errors? email matei@reporter.london

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