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The Morning Risk Report: Biden Administration to Constrain Use of Sanctions in Foreign-Policy Shift
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Deputy Treasury Secretary Adewale Adeyemo. PHOTO: GREG NASH - POOL VIA CNP/ZUMA PRESS
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Good morning. The Biden administration plans to limit the use of economic and financial sanctions in a shift that Treasury Department officials said should strengthen the impact of a tactic that U.S. foreign policy has relied on in recent years.
After a nine-month Treasury-led audit of sanctions policy, the officials said Monday that sanctions will remain a critical policy tool but need to be better calibrated. To that end, the officials said, the interagency vetting process for sanctions will be refocused to more heavily weigh the potential for unintended harm to vulnerable groups, resistance from allies and other economic and geopolitical fallout.
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The policy overhaul marks a potential turning point in U.S. foreign policy after successive administrations increasingly turned to sanctions to punish what they saw as misdeeds and push foreign governments to comply with American interests. The number of sanctions levied on governments, businesses, officials and others grew 10-fold over the past two decades—a trend that culminated in the Trump administration, which blacklisted adversaries more frequently than previous administrations.
Many foreign governments, including some allies, have often criticized their use as bad policy and long-arm justice. Sanctions advocates have also questioned their effectiveness and worried about undermining U.S. global power and spurring the creation of alternative financial systems and the use of cryptocurrencies beyond U.S. reach.
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Alphabet CEO Sundar Pichai in Switzerland last year. PHOTO: FABRICE COFFRINI/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Sundar Pichai, chief executive of Google and parent company Alphabet Inc., said the U.S. government should take a more active role in policing cyberattacks and encouraging innovation with policies and investments.
In the wake of recent cybersecurity breaches attributed to Chinese and Russian hackers, Mr. Pichai said the time had come to draft the equivalent of a Geneva Convention for technology to outline international legal standards for an increasingly connected world. “Governments on a multilateral basis…need to put it up higher on the agenda,” Mr. Pichai said in a recorded interview for The Wall Street Journal’s Tech Live conference on Monday. “If not, you’re going to see more of it because countries would resort to those things.”
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Sinclair Broadcast Group Inc., one of the largest owners of broadcast stations in the U.S., said it is working to contain a cybersecurity incident that disrupted some of its networks and had some of its servers and workstations encrypted with ransomware. Sinclair said the event, which it identified over the weekend, has caused a disruption, and may continue to do so, to parts of the business, including its local advertisements.
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N26 said it raised $900 million in new funding from investors that included Third Point Ventures and Coatue Management. PHOTO: CHRISTOPHE GATEAU/ZUMA PRESS
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N26 Bank GmbH, a Berlin-based digital bank that is now as valuable as the country’s second-largest lender, said Germany’s financial regulator had temporarily capped the number of new customers it can sign up, the third regulatory action in six months aimed at improving controls at the startup.
N26 on Monday said the regulator, BaFin, had ordered it to limit new European customers to 70,000 a month. A spokeswoman declined to disclose its monthly sign-up numbers, though N26 said it has added more than 2 million customers in the past year.
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Regional Federal Reserve Banks haven’t presented Sen. Elizabeth Warren with a plan to ban stock trading by senior central bankers as the Democrat from Massachusetts requested last month.
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Ms. Warren had written to the 12 bank presidents on Sept. 16 asking for the ban, following disclosures that the leaders of the Dallas and Boston Fed banks had been trading stocks and other investments even as they helped set the nation’s monetary policy. Both officials later resigned.
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Members of a congressional committee questioned whether Amazon.com Inc. executives misled them during an investigation of the company’s business practices and if they may have lied under oath. In a letter sent to Amazon CEO Andy Jassy on Sunday, five members of Congress asked the company to provide “exculpatory evidence” to corroborate the sworn testimony that several leaders, including then-CEO Jeff Bezos, provided to the House Judiciary Committee’s antitrust subcommittee in 2019 and 2020.
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Legislation to curb the influence of big technology companies, including putting new restrictions on online content, is starting to gain traction in Congress as lawmakers narrow their targets and seek to build on public attention.
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Satellites are emerging as a tool to fight climate change, exposing hidden sources of greenhouse gas emissions and allowing governments to monitor compliance with international pacts. Over the past three years, satellite images have been used to spotlight previously unreported leaks of methane—or to bump up estimates of known emissions—in Russia, Turkmenistan, Texas’ Permian Basin and elsewhere, in some cases triggering international scuffles.
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A trading frenzy in shares of GameStop Corp. this year raised a number of questions for regulators but didn’t expose major weaknesses in stock-market infrastructure, the Securities and Exchange Commission said on Monday.
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A highly anticipated SEC report attributed the episode primarily to a rapid increase in trading by individual investors, many of whom used social-media platforms like Reddit to swap ideas and strategies. The agency poured cold water on a number of alternative hypotheses for why the struggling videogame retailer’s share price soared to an intraday high of $483 on Jan. 28 from less than $20 at the end of 2020.
The SEC also found no evidence to support theories that gained traction on social media around brokerage firm Robinhood Markets Inc.’s decision to restrict trading in GameStop and other so-called meme stocks that day.
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The Biden administration said it is moving forward on regulations to limit the spread of several toxic chemicals that public-health advocates say are harmful to humans and should become the target of a widespread cleanup effort. White House officials said Monday that they are working on a proposal to designate some chemicals classified as perfluoroalkyl and polyfluoroalkyl substances, or PFAS, as hazardous substances under 1980 federal law, a status that could make manufacturers and other distributors of the chemicals liable for cleaning up contaminated sites.
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Bill Gates, one of the world’s richest people, was Microsoft’s chief executive until 2000, a full-time employee until 2008 and chairman until 2014. PHOTO: RONDA CHURCHILL/BLOOMBERG NEWS
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The 2019 letter from a Microsoft Corp. engineer reporting an affair with Bill Gates that preceded his exit from the board wasn’t the first time some Microsoft directors encountered the billionaire’s inappropriate behavior with female employees. More than a decade earlier, Microsoft executives discovered emails between Mr. Gates and a midlevel female employee at the company while Mr. Gates was still an employee at Microsoft and chairman of the board, according to people familiar with the matter. In the messages, the then-married Mr. Gates was flirtatious and propositioned the female employee, the people said.
Two top Microsoft executives, then-General Counsel Brad Smith and then-Chief People Officer Lisa Brummel, met with Mr. Gates and told him the behavior was inappropriate and needed to stop, the people said. Mr. Gates didn’t deny the exchanges, told the executives in hindsight it wasn’t a good idea and said that he would stop, the people said.
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The World Bank failed to protect two young employees who filed sexual-harassment allegations against a veteran, high-ranking official who is now a presidential candidate in Costa Rica, according to findings released by the bank’s internal labor tribunal.
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Motor vehicle and parts production dropped 7.2% amid a shortage of semiconductors. PHOTO: BILL PUGLIANO/GETTY IMAGES
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ViacomCBS Chief Executive Bob Bakish PHOTO: REUTERS
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ViacomCBS Chief Executive Bob Bakish said that uproar over some content is inevitable for major media companies, following outcry over a Netflix Inc. special by comedian Dave Chappelle that some employees of the streaming service said was offensive to the transgender community.
In his remarks Monday, made during a WSJ Tech Live interview, Mr. Bakish declined to address the Netflix dust-up directly but said that ViacomCBS has had its own brushes with controversy over the years and likely will again. “If you’re going to be in the mass-market business, you’re going to inevitably run into some of these issues, and you have to manage them with finesse,” Mr. Bakish said. “Ultimately, yeah, there may be some stuff you have to pull, as you look at it. But it is not unusual to be there.”
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