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The Morning Risk Report: European Banks Trim Costs to Fund Compliance |
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In recent weeks, Commerzbank AG in Frankfurt voluntarily disclosed details about increases in spending on anti-money-laundering compliance. PHOTO: KRISZTIAN BOCSI/BLOOMBERG NEWS
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European banks are investing more resources in staff and technology to spot financial crime following a recent string of money-laundering scandals. In some cases, they’re cutting costs elsewhere in the enterprise to fund the initiatives.
In recent weeks, ABN Amro Group NV in Amsterdam and Commerzbank AG in Frankfurt voluntarily disclosed, for the first time, details about increases in spending on anti-money-laundering compliance. Amsterdam-based ING Groep NV, meanwhile, said it boosted investments in its defenses in part by using cash freed up from expense cuts elsewhere.
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Banks with global operations, not just in Europe, have been spending more on compliance-related technology, including systems powered by artificial intelligence, and hiring employees with advanced training in areas such as data science, said Walter Mix, managing director at Berkeley Research Group, who advises banks on anti-money-laundering regulations. The investments have put pressure on banks’ bottom lines, he said.
Banks in Europe are under particular pressure to demonstrate they have strengthened their money-laundering detection tools. Europe has been rocked by high-profile money-laundering scandals over the past year, including the disclosure by Denmark’s Danske Bank A/S that it allowed €200 billion ($230 billion) in Russia-linked transactions to flow through a small branch in Estonia.
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| From Risk & Compliance Journal |
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Embattled lender Wells Fargo & Co. hired Maria Teresa Tejada as its chief strategic enterprise risk officer. PHOTO: EVE EDELHEIT/BLOOMBERG NEWS
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Wells Fargo & Co. named Maria Teresa Tejada as the company’s chief strategic enterprise risk officer, the latest move by the lender to revamp its risk-management division.
Ms. Tejada will oversee risks to Wells Fargo’s business lines, corporate functions and its strategic priorities, the San Francisco-based bank said. She also will direct enterprise-risk programs and risk reporting and oversee strategic risk and reputation risk, the company said.
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The Future of Corporate Compliance |
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Companies face a widening range of risks from third-party relationships at a time when many depend on complex networks of hundreds of sales agents, suppliers and business partners. Join The Wall Street Journal and Dow Jones on March 12 at 8 a.m. in New York for a discussion about third-party risk, including an interview with Stephanie Davis, chief ethics and compliance officer for Volkswagen Group of America. Just added to the program: an interview with Daniel Kahn, chief of the FCPA unit at the U.S. Justice Department. Register here.
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The U.S. Treasury proposed the final major international-tax regulation under the 2017 tax law on Monday. PHOTO: PAUL J. RICHARDS/AGENCE FRANCE-PRESSE/GETTY IMAGES
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The Treasury Department proposed the final major international-tax regulation under the 2017 tax law, outlining how businesses can claim a break related to certain foreign sales. The break—for Foreign-Derived Intangible Income, or FDII—will let U.S. companies’ domestic operations get a 13.125% tax rate on some income, instead of the general 21% corporate tax rate.
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German prosecutors are investigating a top executive of Hamburg-based Berenberg Bank for allegedly tipping off acquaintances on the share sale of a shipping company the bank was arranging.
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A federal judge dismissed without sending to the jury a case against a former senior Barclays PLC trader accused of illegally trading in anticipation of a major client deal, highlighting the problems prosecutors have faced in efforts to hold individuals liable for allegations of corporate misconduct.
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Firefighters used heavy machinery during the search for victims, one month after the rupture of a Vale dam on Feb. 22. PHOTO: DOUGLAS MAGNO/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Vale SA, the owner of a mine-waste dam that collapsed this year, killing more than 180 people, dismissed an auditor that refused to certify the dam as safe in September, according to an initial probe by police and prosecutors.
The Brazilian mining giant replaced the auditor with TÜV SÜD, a German certification company, according to a document summarizing the early findings of a task force investigating the failed dam. TÜV SÜD, which had earlier certified the dam’s safety in June, signed off on the dam’s stability again in September, after the other auditor’s dismissal.
The task force summary, reviewed by The Wall Street Journal, is the first indication that Vale was warned by another, outside firm about the dam’s safety.
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acebook and Instagram are pushing back against a practice known as cybersquatting. PHOTO: YUI MOK/PA WIRE/ZUMA PRESS
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Facebook Inc. and its photo-sharing app Instagram sued four companies and three people based in China for allegedly creating and selling fake online accounts, likes and followers that were used for misinformation campaigns and other scams.
Starting in 2017, the companies marketed and sold fake accounts in large quantities through six websites with similar domain names to Facebook such as myfacebook.cc and 9xiufacebook.com, according to the complaint filed Friday in San Francisco federal court.
Facebook seeks to bar the companies from infringing on its trademarks and using domain names related to Facebook, a practice known as cybersquatting.
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The prospect of a no-deal Brexit is leading treasurers to reassess their bank accounts and cash pools. PHOTO: TOLGA AKMEN/AGENCE FRANCE-PRESSE/GETTY IMAGES
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A no-deal Brexit could force British and European treasurers to make changes to their bank accounts and cash pools to avoid higher fees and meet regulatory requirements.
Various European frameworks governing the payments industry might no longer apply to the U.K. after it leaves the European Union on March 29, including regulation on the single euro payments area, or SEPA. A decision by the European Payments Council on whether the U.K. can remain part of SEPA is expected Thursday.
If the U.K. exits the bloc without a withdrawal agreement, regulations that have smoothed the flow of payments between the U.K. and the rest of the EU could cease to apply to the U.K. That would require British and European companies to assess their bank accounts and payment profiles.
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The Fimiston Open Pit mine in Kalgoorlie, Australia. The mine is operated by a company jointly owned by Barrick Gold and Newmont Mining. PHOTO: CARLA GOTTGENS/BLOOMBERG NEWS
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Newmont Mining Corp. turned down a proposal from rival Barrick Gold Corp. to merge and create one of the world’s largest mining companies, a widely expected move. Newmont said in a news release that Barrick’s all-share proposal was inferior to the Denver-based mining company’s own deal with Goldcorp Inc.
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AT&T Inc. started reorganizing its WarnerMedia unit by combining its disparate networks and entertainment businesses, an overhaul that is expected to lead to cost-cutting and layoffs. The moves are AT&T’s first significant steps since it closed on its $80 billion-plus acquisition of Time Warner last June.
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Ted Baker founder Ray Kelvin at the Carondelet House on Aug. 12, 2015 in Los Angeles. PHOTO: ARI PERILSTEIN/GETTY IMAGES
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British fashion retailer Ted Baker PLC said its founder and chief executive has resigned with immediate effect following an investigation into his alleged misconduct. Ray Kelvin took a voluntary leave of absence from his role as CEO in December after staff accused him of inappropriate behavior, including forced hugs. Mr. Kelvin has denied all allegations, but said Monday he had decided to step down to allow the company to move on.
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Walt Disney Co. tweaked Robert Iger’s compensation package for the second time in three months, removing $13.5 million in potential salary and incentive awards available for the chief executive after the company closes its acquisition of 21st Century Fox Inc. assets. The move comes a few months after the company adjusted his compensation due to shareholder pushback on his salary.
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A Tokyo court approved the release of Carlos Ghosn on bail, raising the prospect that the former Nissan Motor Co. chairman could soon be released after 3½ months in jail. A new bail application for Mr. Ghosn, included an offer for him to be monitored by surveillance cameras to ensure he doesn’t flee Japan or tamper with evidence, his lawyer said.
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