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The Morning Risk Report: How 7.4 Tons of Venezuela’s Gold Vanished From Uganda
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Venezuelan President Nicolás Maduro at a 2018 cryptocurrency conference in Caracas. PHOTO: CARLOS BECERRA/BLOOMBERG NEWS
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Good morning. The government of Venezuelan President Nicolás Maduro is selling off his country’s gold reserves. Some of it has passed through a secretive operation in East Africa, a gambit that evades U.S. sanctions.
On two early-March flights, at least 7.4 tons of gold with a market value over $300 million moved from Venezuela to a refinery in Uganda, say officials in Venezuela and Uganda, a foreign diplomat and Venezuelan opposition lawmakers, who concluded Mr. Maduro’s government exported the ingots.
[Continued below...]
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The shipments expose one link in a global underground economy many suspect is helping Mr. Maduro cling to power by bypassing the U.S.-dominated international finance system. Washington has recognized opposition leader Juan Guaidó as Venezuela’s legitimate president, slapped financial and other sanctions on Venezuelan officials and institutions, and threatened penalties for others doing business with the regime.
Gold sales, U.S. and other officials say, are one of the government’s final financial lifelines. The gold that arrived in Entebbe passed through African Gold Refinery Ltd. in a compound at an international airport before being exported to the Middle East, Ugandan police say. Gold from AGR has made its way into supply chains at U.S. companies including General Motors Co., General Electric Co. and Starbucks Corp., regulatory filings show, despite U.S. measures to discourage use of so-called conflict minerals.
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From Risk & Compliance Journal
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Swedbank’s local headquarters in Tallinn, Estonia. PHOTO: INTS KALNINS/REUTERS
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U.K. Commission Suggests Changes to Suspicious-Activity Reporting
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A U.K. commission on legal reform has recommended changes to the country’s system for reporting suspicious transactions, saying a glut of substandard information being provided has hindered law enforcement’s ability to spot financial criminals, Risk & Compliance Journal’s Kristin Broughton reports.
The Law Commission, which advises British policy makers on legal reforms, said Tuesday that regulators should provide additional guidance to banks and other businesses on when to report suspected money-laundering activity. The commission also said policy makers should create standardized online reporting forms for companies to use, and they should establish an advisory board to monitor emerging money-laundering threats.
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CFTC Fines U.K. Company, Founder for Alleged Bitcoin Fraud
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The Commodity Futures Trading Commission on Tuesday charged a U.K. man with operating a fraudulent bitcoin trading company. The CFTC said in a civil complaint that Benjamin Reynolds and his company, Control-Finance Ltd., had stolen at least 22,858.822 bitcoin—worth at least $147 million at the time—from more than 1,000 customers. Mr. Reynolds and Control-Finance told customers that they would earn 1.5% in daily trading profits and up to 45% a month, the CFTC said.
Attempts to reach Mr. Reynolds were unsuccessful late Tuesday.
It isn't the CFTC’s first enforcement action against alleged bad actors in the virtual currency space. In 2018, the agency charged the New York-based CabbageTech Corp. with misappropriating Bitcoin and Litecoin currencies. Last year, a court ordered CabbageTech’s founder to pay over $1.1 million in civil penalties and restitution.
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The latest action demonstrates the agency’s growing sophistication in policing digital assets, Kari Larsen, a former CFTC lawyer and now a partner at Perkins Coie LLP, told Risk & Compliance Journal. “[Virtual currencies] are evolving so quickly, that it’s a constant education process,” Ms. Larsen said. “But if people think that they can get away with something because regulators aren’t watching or people don’t understand it, the message here is that’s not the case.”
—Dylan Tokar
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U.S.-Iran tensions have worsened following an attack on two oil tankers that Washington blamed on Iran. PHOTO: IRANIAN STUDENTS’ NEWS AGENCY/REUTERS
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Iran is trying to rally support from Russia, China and other countries to help counter a U.S. campaign that has included crippling economic sanctions and thousands of additional troops committed to the Middle East. Meanwhile, Saudi Arabia is cutting its oil output and is asking other producers for restraint in production, according to officials in the group, as signs of slowing global demand for crude outweigh threats of war and worries about supply disruptions in the Middle East.
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A Middle East company owned by a friend of Carlos Ghosn is seeking $386 million in damages from Nissan Motor Co. over a distribution agreement, in further fallout from the November arrest of the Japanese auto maker’s then chairman.
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Brazil’s huge state-controlled banks are bracing for heavy losses after Odebrecht SA filed Monday night for one of Latin America’s largest-ever bankruptcies. The construction conglomerate that was caught up in a Latin America-wide corruption scandal holds $25.3 billion in debt, according to market estimates, with state-controlled banks being its largest creditors.
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Former French soccer star and high-ranking soccer administrator Michel Platini was detained in Paris following a corruption investigation by French authorities into the awarding of the 2022 World Cup hosting rights to Qatar.
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Eleven banks, including Citigroup Inc., France’s Société Générale SA and Norway’s DNB ASA, say they will take climate considerations into account when extending new shipping loans. The goal is for the ship-financing sector to support an industry target to cut greenhouse-gas emissions by half in 2050.
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Amazon expects to have a rented fleet of about 70 planes by 2021. PHOTO: IAN LANGSDON/SHUTTERSTOCK
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Amazon.com Inc. is expanding its domestic air-cargo operation, adding smaller jets to its rented fleet in order to link its distribution centers and extend the reach of its next-day delivery service. Amazon is experimenting with local collection centers, its own delivery vans, on-demand taxis and even its own employees to speed deliveries to consumers at a lower cost.
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Kellogg Co. is cutting jobs from its North American operation as it prepares to slim down the business by selling Keebler cookies and a range of other brands. Around 150 salaried employees who work in the North American business will be let go, a spokeswoman said.
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Rising logistics costs consumed a bigger share of U.S. corporate spending over the past year as companies rushed to take advantage of an improving U.S. economy, according to a new report.
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The manual crank in a Boeing 737 MAX simulator on June 6. PHOTO: ANDRIANA MEREUTA FOR THE WALL STREET JOURNAL
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Efforts to get Boeing Co.’s 737 MAX jetliners back in the air have been delayed in part by concerns about whether the average pilot has enough physical strength to turn a manual crank in extreme emergencies. The problem, which hasn’t been previously reported on, has been the focus of weeks of engineering analysis, simulator sessions and flight testing by the plane maker and American air-safety officials, according to people familiar with the details.
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Boeing won a landmark 737 MAX order from British Airways parent IAG on Tuesday, ending a sales drought in the wake of the grounding of the aircraft following two fatal crashes. American Airlines pilots, meanwhile, aren't convinced new training protocols and materials will be enough to ensure that pilots can safely fly the Boeing 737 MAX, according to the president of American's pilots union.
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Canada said Tuesday China has banned imports from a Canadian pork company, weeks after Canadian officials warned the meat industry of heightened Chinese scrutiny of its products amid a broader diplomatic row between Ottawa and Beijing.
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PG&E Corp. has agreed to pay $1 billion to compensate more than a dozen California cities, counties and agencies for losses resulting from deadly wildfires sparked by its equipment. The agreement with local governments marks the first major settlement since PG&E sought bankruptcy protection in January. The company has estimated it could face more than $30 billion in potential liability costs resulting from fires in 2017 and 2018.
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A Nissan-Renault dealership in France earlier this year. PHOTO: CHRISTIAN HARTMANN/REUTERS
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Nissan Motor Co. and Renault SA are poised to resolve a standoff about Nissan’s corporate governance ahead of the Japanese car maker’s shareholder meeting next week, according to people familiar with their talks.
A resolution would settle one of the most public and acrimonious disputes between the partners since the November arrest of Carlos Ghosn, who formerly led both car makers. Renault, which owns 43.4% of Nissan, has been trying to ensure its influence over Nissan doesn’t slip, while the Japanese side has been pushing to maintain its independence.
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Viacom’s Bob Bakish is widely believed to be in pole position to become CEO of the combined company. PHOTO: CHRISTOPHER GOODNEY/BLOOMBERG NEWS
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CBS Corp. is preparing to make an offer for sister media company Viacom Inc. in the coming weeks, following a meeting of CBS directors last week in which a potential deal was discussed, according to people familiar with the situation.
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Alphabet Inc.’s Google said it would commit $1 billion to boost housing construction in the San Francisco Bay Area, the latest in a series of commitments by tech companies to address an affordability crisis in the region.
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Merck & Co. is searching for small and midsize deals, including more transactions aimed at expanding its portfolio of cancer treatments beyond the company’s top-selling product Keytruda, according to people familiar with the matter.
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Teen retailer Forever 21 Inc. has hired restructuring advisers to help negotiate exits from stores and raise a new loan, according to people familiar with the matter, as the once-hot chain deals with falling sales and a cash crunch.
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News Corp is reviewing its options for its News America Marketing unit, which could include a potential sale of the coupon publisher, as the company looks to focus on core areas of its business. News Corp owns Dow Jones, publisher of The Wall Street Journal.
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