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The Morning Risk Report: Trump Administration Unveils New Sanctions
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Secretary of State Mike Pompeo, left, with Treasury Secretary Steven Mnuchin, said new powers created by an executive order by President Trump bolster authorities created in the wake of the Sept. 11 attacks. PHOTO: SHAWN THEW/SHUTTERSTOCK
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Good morning. The Trump administration unveiled new counterterrorism powers on the eve of the 18th anniversary of the Sept. 11 attacks and imposed sanctions on dozens of individuals and entities allegedly involved with terror groups.
Secretary of State Mike Pompeo said the new powers created by an executive order by President Trump bolster authorities created in the wake of the attacks. The administration said the changes represent the most significant expansion of counterterrorism powers since they were originally ordered by then-President George W. Bush in the days after the World Trade Center and Pentagon were struck.
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The U.S. Treasury and State Department blacklisted dozens of people, currency-exchange houses and companies allegedly associated with U.S.-designated terror groups, including Hamas, al Qaeda, Islamic State, Hezbollah and the Quds Force of Iran’s Islamic Revolutionary Guard Corps. Many of the targets of the sanctions are companies that exchange one currency for another as part of an alleged attempt to hide the intended source and intended terror-financing recipients.
Under the new powers, any foreign financial institution that is found to have conducted terror-linked transactions risks losing access to the dollar and the world’s most important financial system, a sanction that has often spelled the end of financial institutions.
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From Risk & Compliance Journal
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Cloudflare provides cloud-based networking and cybersecurity services. PHOTO: KACPER PEMPEL/REUTERS
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Cloudflare Inc., a provider of cloud-based networking and cybersecurity services, may have violated U.S. economic and trade sanctions regulations, the company disclosed in a regulatory filing.
The San Francisco-based technology company, which is expected to go public as early as this week, has voluntarily disclosed potential economic and trade sanctions violations to the Treasury Department, the company said in documents that declared the company’s intention to go public.
Merrill Lynch to Pay $300,000 for Failure to Promptly Produce Audit Trail Data
The U.S. Commodity Futures Trading Commission said Tuesday that Merrill Lynch Pierce Fenner & Smith Inc. will pay $300,000 to settle charges it failed to produce required records and separately failed to “supervise its employees and agents to ensure that they fulfilled the firm’s statutory and regulatory obligations to keep and promptly produce such records.”
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Sigal Mandelker, undersecretary of the Treasury for terrorism and financial intelligence, speaking in Bern, Switzerland. PHOTO: ARND WIEGMANN/REUTERS
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The U.S. urged Switzerland to ensure its regulations governing cryptocurrencies are strong enough to prevent abuse, as the European banking hub prepares to host Libra, a digital currency proposed by Facebook Inc. The U.S. Treasury, along with other government officials and central bank officials, have raised questions about the Libra currency, which Facebook proposed earlier this year as part of a digital-payments system it plans to base partly in Geneva, and take mainstream to its more than two billion users.
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J.P. Morgan Asset Management is joining a chorus of global financiers saying that protecting the environment will be a key consideration for extending shipping loans. Starting on Jan. 1, 2020, some 60,000 ships will be required to reduce sulfur emissions by more than 80%. The move is mandated by the International Maritime Organization, an arm of the United Nations that works as the global marine regulator.
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The Federal Trade Commission is taking aim at certain companies that sell cannabidiol, or CBD, that have claimed their products can treat or cure serious diseases and health conditions. The FTC said it sent warning letters to three companies that sell CBD oils, tinctures, capsules, gummies and creams. The letters warned that it is illegal to advertise a product that can prevent or cure a disease without reliable scientific evidence to support such claims.
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The Mayo Clinic in Rochester, Minn., has struck a deal with Google to store the hospital system’s data. PHOTO: ANDREW LINK/THE ROCHESTER POST-BULLETIN/ASSOCIATED PRESS
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Amazon.com Inc., Microsoft Corp. and Alphabet Inc.’s Google are striking sweeping agreements to store data and develop software for hospitals, as the technology giants wrestle for control in health-care and cloud-computing markets.
Some hospital-system and company officials said they expect to jointly develop new software by combining data and expertise of health-care companies with tech giants’ computing power and engineering know-how. “Google can’t do this alone. We can’t do this alone,” said Cris Ross, the Mayo Clinic’s chief information officer. The terms weren’t disclosed.
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An insurance agent helped a consumer shop for health insurance in Miami in 2017. PHOTO: JOE RAEDLE/GETTY IMAGES
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More than two months after President Trump agreed to ease export restrictions on Huawei Technologies Co., the U.S. has yet to green-light any sales to the Chinese telecommunications giant—frustrating U.S. chip makers that stand to lose billions of dollars in revenue. The Huawei blacklist, which went into force May 16, cut U.S. chip makers off from a pipeline that enabled them to send $11 billion worth of components to Huawei last year.
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As cities become smarter, officials and security experts say that current defenses are unlikely to keep hackers at bay. Most major cities have some form of smart-technology program, including sensors that measure air quality, automated traffic-control systems and smart power grids that distribute electricity according to demand. Deploying these technologies comes at a cost, however, in that the number of connections also gives hackers more opportunities to break into city systems.
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The European Union official overseeing the regulatory push against Silicon Valley is poised to stay on the job for an unexpected second term—a warning the new administration here isn’t backing down on global tech oversight.
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The median U.S. household income remained essentially flat at $63,179 in 2018. PHOTO: JACQUELYN MARTIN/ASSOCIATED PRESS
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American incomes remained essentially flat in 2018 after three straight years of growth, according to Census Bureau figures that offer a broad look at U.S. households’ financial well-being.
Median household income was $63,179 in 2018, an uptick of 0.9% that census officials said isn’t statistically significant from the prior year based on figures adjusted for inflation. The poverty rate in 2018 was 11.8%, a decrease of a half percentage point from 2017, marking the fourth consecutive annual decline in the national poverty rate. It was the first time the official poverty rate fell significantly below its level at the start of the recession in 2007.
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Victoria’s Secret, which has long dominated the bra business, has posted lower sales in recent quarters. PHOTO: JOHN TAGGART/BLOOMBERG NEWS
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Victoria’s Secret will no longer rely on a small group of supermodels to promote its sexy lingerie, as the L Brands Inc. chain shifts to more inclusive marketing to end a prolonged sales slump.
Victoria’s Secret’s emphasis on supermodel “Angels” wearing padded bras has alienated some women and invited criticism the brand is out of touch. Demand for its bras has cooled as customers have turned to brands using unretouched images featuring women of more shapes and sizes.
At an investor meeting Tuesday, executives showed new videos for Victoria’s Secret and its teen brand Pink featuring a more diverse set of women than the company has used in the past, including curvier models. Pink also recently hired a transgender model. They are “real girls,” said Pink Chief Executive Amy Hauk, referring to the new videos and imagery. “I love the diversity.”
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Women’s Share of Board Seats Rises to 20%
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One-fifth of seats on a broad swath of public company boards are now held by women, a sign of change as U.S. corporations face increased pressure to diversify. The share of female board members in the Russell 3000 index, which includes most public companies on major U.S. stock exchanges, increased to 20% in the second quarter of this year from 19% the previous quarter, according to Equilar Inc., a governance-data firm. When Equilar began tracking the measure in late 2016, 15% of board seats were filled by women.
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Three grounded Boeing 737 MAX airplanes parked near Boeing Field, in Seattle. Boeing booked its sixth straight month of no orders for the jet. PHOTO: ELAINE THOMPSON/ASSOCIATED PRESS
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Boeing Co. delivered 18 jetliners in August, leaving the aerospace giant on track for its lowest annual total in eight years. The plane maker said it delivered 276 planes through August compared with 481 at the same point in 2018, trailing analysts’ revised estimates for about 500 deliveries in 2019. It handed over 64 planes in August 2018. Deliveries were halted after two 737 MAX planes crashed, with the second accident in March leading regulators to ground the aircraft globally.
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Uber Technologies Inc. said it cut 435 technical employees, the latest downsizing at the company as it faces market pressures to turn a profit. The company laid off 170 employees in the company’s product division and 265 engineering employees, or about 8% of those divisions’ combined workforce, according to an internal memo obtained by The Wall Street Journal. Most of the layoffs—about 85%—affect employees in the U.S., the company said.
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