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The Morning Risk Report: Venezuela Sanctions Pose Problems for Banks |
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Venezuela’s state-owned oil company, PdVSA, and its subsidiaries, including Citgo, have been targets of U.S. sanctions. PHOTO: MARCO BELLO/REUTERS
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Hello. Recently imposed sanctions on Venezuela have posed new compliance risks for U.S. and international financial institutions as they seek to untangle business ties between the two countries to meet evolving requirements.
The U.S. Treasury Department has ramped up sanctions with more designations and guidance in recent weeks. Gradually increasing U.S. measures targeting the government of Venezuela, and the country’s state-owned oil giant in particular, have made banks more reluctant to touch accounts that might relate to Venezuela for fear of sanctions violations.
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Intricacies stemming from the sanctions are particularly disruptive for the banking industry, said Daniel Gutierrez, who chairs the anti-money-laundering compliance committee at the Florida International Bankers Association. “The question the industry has is how far down that outsourcing chain do I have to go to determine if I have a sanction on Venezuela or not,” Mr. Gutierrez.
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U.K. Sanctions Office Issues First Penalty |
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Raphaels Bank, a small U.K. bank, received the U.K.’s first-ever sanctions penalty under powers that the office at Her Majesty’s Treasury gained in April 2017, according to the Office of Financial Sanctions Implementation.
The OFSI said it imposed a £5,000 penalty on the bank for handling a transaction that violated sanctions regulations. The transaction was worth £200, the office said. Raphaels Bank dealt with funds belonging to a person targeted under a sanctions program concerning Egypt, the office said.
Bank representatives didn’t respond to a message seeking comment. Investigations related to the transaction are ongoing, OFSI said, but they don’t concern the bank. The bank disclosed the transaction to OFSI when it became aware of the sanctions breach. OFSI said it reduced the penalty by half after considering the disclosure and the bank’s cooperation.
—Samuel Rubenfeld
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| From Risk & Compliance Journal |
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PHOTO: EDIJS PALENS/XINHUA/ZUMA PRESS
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Swedbank AB on Tuesday abruptly switched the external auditor in charge of investigating allegations the bank facilitated billions in suspicious transactions, including some that could be traced to a massive money-laundering scandal at Danske Bank A/S.
The Stockholm-based bank dropped Ernst & Young as the auditor five days after the bank hired the firm to investigate allegations of money-laundering. Forensic Risk Alliance will now conduct the Swedbank investigation, the bank said. FRA is expected to report its results to the bank’s chief executive and board of directors by March 28.
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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. Register here.
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Tesla CEO Elon Musk/IMG CREDIT HERE
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The latest legal action between U.S. securities regulators and Tesla Inc. Chief Executive Elon Musk highlights the challenge facing regulators and boards when it comes to reining in a wealthy chief executive whose identity is closely tied to the value of the company he or she leads.
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The Federal Trade Commission said it would create a new task force to examine potential antitrust violations in the tech industry, signaling tougher scrutiny ahead for the sector’s largest firms.
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The Labor Department is investigating Fidelity Investments over an obscure and confidential fee it imposes on some mutual funds, according to a person familiar with the inquiry.
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The Securities and Exchange Commission is reviewing a series of bond trades by three insurance companies tied to Guggenheim Partners LLC, according to people familiar with the matter.
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A federal appeals court rejected the Justice Department’s bid to roll back AT&T Inc.’s 2018 acquisition of entertainment company Time Warner, ending efforts by government antitrust enforcers to sink the $80 billion-plus deal.
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Justice Department officials and lawmakers are considering an overhaul of longstanding music-licensing rules that have pitted songwriters and publishers against the businesses, broadcasters and digital streaming services that want to play their compositions. The government’s review could have major implications on the multibillion-dollar music industry.
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Lawmakers on Tuesday launched a new attack on consumer credit-reporting companies, a year and a half after the data breach at Equifax Inc. exposed personal financial details of millions of Americans.
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Few companies are telling securities regulators about cyberattacks, a new analysis finds, despite recent efforts to bolster disclosures of such incidents to investors.
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Papa John’s International Inc. reported its first annual sales decline in nearly a decade and forecast a challenging first half of 2019, underscoring a tumultuous year in which it lost a deal with the NFL and ended up in an all-out fight with founder John Schnatter.
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Nevada gambling regulators levied their largest fine in the state’s history against Wynn Resorts Ltd. after the Las Vegas company admitted that it systematically ignored employees’ sexual-misconduct allegations against founder and former CEO Steve Wynn.
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Caterpillar pointed to China’s slowing economy in its latest earnings call, saying its profit would rise less than expected. The firm expects more than $200 million in tariff-related costs this year. PHOTO: ALY SONG/REUTERS
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The government refers to the inability to access data as devices get more encrypted as the going-dark issue. PHOTO: CAROLYN KASTER/ASSOCIATED PRESS
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Nearly three years after the Federal Bureau of Investigation abandoned an effort to force Apple Inc. to extract data from an encrypted iPhone, technology companies are facing several new efforts from governments fighting for access to digital secrets.
Australia and the U.K. have passed laws that make it easier for law enforcement to compel tech companies to turn over data, although the impact of those measures has yet to be tested. India is considering a sweeping law that would give authorities access to some data from the hugely popular WhatsApp messaging service within its borders, and the U.S. has signaled it has not given up on its efforts to get inside of encrypted devices such as Apple’s.
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Walmart plans to bring its store and digital ad teams closer together, using Walmart’s vast trove of shopper data to sell marketing opportunities in more parts of its sprawling business. PHOTO: SAUL LOEB/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Walmart Inc., the world’s largest retailer, wants to become a big seller of advertisements too. As Amazon.com Inc. expands its share of the online advertising market, Walmart is trying to entice suppliers and other marketers with its own ad space and access to shopper data.
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Volkswagen AG is planning to invest around $1.7 billion in a self-driving car venture with Ford Motor Co.’s Argo subsidiary, according to people familiar with the matter.
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Union members outside a former GE locomotive plant in Pennsylvania’s Erie County Tuesday. The new owner, Wabtec Corp., didn’t reach a labor agreement with unions representing more than 1,000 workers at the plant. PHOTO: GREG WOHLFORD/ASSOCIATED PRESS
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More than a thousand workers went on strike Tuesday at a former General Electric Co. locomotive plant in Erie, Pa., a day after the operation was acquired by rival Wabtec Corp.
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The U.S. Justice Department has closed a two-year investigation into allegations of price fixing by some of the world’s biggest container shipping lines without filing charges or imposing fines, according to the companies.
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Macy’s Inc. said Tuesday it would streamline senior management as part of a plan to save $100 million a year.
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Fiat Chrysler Automobiles NV plans to spend $4.5 billion to expand factory production in Michigan, including a new Jeep assembly plant in Detroit, but also said Tuesday it will lay off workers at a plant in Illinois.
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PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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Online marketplace eBay Inc. and activist investors Elliott Management Corp. and Starboard Value LP are nearing a settlement deal that would give the activists board seats and could open the door to the company breaking itself up.
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Boeing Co.’s board has nominated Nikki Haley, President Trump’s first ambassador to the United Nations, to serve as a director.
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AI Tool Helps Companies Detect Expense Account Fraud |
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Employers across a range of industries are using artificial intelligence in a bid to curb unauthorized three-martini lunches, workday rounds of golf and other questionable write-offs hidden within employee expense reports.
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