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The Morning Risk Report: FATF Shows How Human Traffickers Launder Money |
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A November 2015 photo shows workers reacting during a raid on a shrimp shed conducted by Thailand's Department of Special Investigation in Samut Sakhon. PHOTO: Dita Alangkara/Associated Press
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Good morning. Human trafficking remains a lucrative business, WSJ Risk & Compliance Journal's Ben DiPietro reports, citing a report released this week by the Financial Action Task Force and the Asia/Pacific Group on Money Laundering that also looks at how proceeds from trafficking are being laundered.
FATF cited a statistic from the International Labor Organization that found the proceeds generated through human trafficking increased $150 billion in 2017, a fivefold jump from $32 billion the FATF calculated in its 2011 report.
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As human trafficking can happen anywhere, countries must assess how they are at risk of human trafficking and the laundering of the proceeds of this crime, share this information with stakeholders and make sure that it is understood, an FATF spokeswoman said.
“There have been some good initiatives at [the] regional and national level, but globally countries need to do more to focus on this,” she said.
The report provides useful indicators to help detect behavior that could indicate a human-trafficking situation, such as accounts that are funded primarily via cash deposits or a client who makes deposits accompanied or watched by a third party and avoids face-to-face contact with bank staff.
It also recommends ways regulators, banks and others could shore up their AML activities to combat these laundering methods.
The report was released as The Wall Street Journal reports companies from Russia continue to import workers from North Korea in apparent violation of United Nations sanctions.
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| Exclusive From Risk & Compliance Journal |
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U.S. arrests businessman in PdVSA probe. U.S. authorities arrested a businessman for allegedly paying bribes to an official of Venezuela's state-owned energy company as part of an ongoing investigation, prosecutors said.
Jose Manuel Gonzalez Testino was arrested at the Miami airport on an arrest warrant filed in Texas, prosecutors said. He's charged with paying bribes to a foreign official in violation of the Foreign Corrupt Practices Act, as well as a conspiracy charge.
Mr. Gonzalez allegedly paid at least $629,000 in bribes to a former official at Petroleos de Venezuela SA, or PdVSA, to get the official to direct PdVSA contracts to his companies, give his companies priority for receiving payments and to award contracts in dollars instead of bolivars.
A lawyer for Mr. Gonzalez didn't immediately respond to a request for comment. PdVSA couldn't be reached.
The ongoing probe into bribery at PdVSA has led to charges against 17 individuals, 12 of whom thus far have pleaded guilty, prosecutors said. -- Samuel Rubenfeld
Two dozen state attorneys general joined the push to increase the transparency of shell companies by requiring them to disclose their owners.
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Deutsche Bank AG found shortcomings in its ability to fully identify clients and the source of their wealth, Reuters reports, more than a year after it was fined nearly $700 million for allowing money laundering.
HSBC Holdings PLC is now pitching its “know your customer” software to rivals, FT reports. The bank, six years removed from being the favored institution of drug cartels, has agreed to sell its new compliance system through a deal with U.S.-listed outsourcing company EXL.
The Trump administration is challenging a tax benefit that gives the wine industry more than $50 million annually and blocking beer and spirits makers from using the same break, WSJ reports.
A major donor to President Trump agreed to pay $10 million to the president’s then-personal attorney if he successfully helped obtain funding for a nuclear-power project, including a $5 billion loan from the U.S. government, people familiar with the matter told WSJ.
Russia is letting thousands of new North Korean laborers enter the country and issuing fresh work permits, WSJ reports—actions U.S. officials say potentially violate United Nations sanctions aimed at cutting cash flows to Pyongyang and pressing it to give up nuclear weapons.
The Trump administration took direct aim at California’s role as de facto auto regulator for the nation, WSJ reports, proposing to end the state’s ability to set its own fuel-efficiency standards and to dial back Obama-era limits on tailpipe emissions.
Philip Morris International Inc. is suing its biggest rival British American Tobacco PLC over its tobacco heating device in Japan, the latest move by tobacco makers jostling for dominance over a promising new cigarette alternative, WSJ reports.
European capital goods companies are starting to show the strain of Washington’s trade conflicts with China and other countries, Reuters reports.
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Organizers behind the newly revealed batch of fake Facebook accounts often sought to work alongside legitimate groups organizing rallies and protests in the U.S., WSJ reports, marking a new strategy in efforts to sow discord through social media ahead of the midterm elections, a review of archived event listings shows.
Miss America’s troubles have moved beyond swimsuits and evening gowns as concerns mount about the organization’s financial future, WSJ reports. State pageant directors pressed new Chief Executive Regina Hopper in late July for reassurance that the Miss America Organization had enough funding to put on the Sept. 9 pageant and reward all participants with college scholarships.
After the U.S. placed tariffs on European steel and aluminum in June, Europe hit back with a tax that, among other things, made American kidney beans 25% more expensive in Europe, WSJ reports. Agricultural businesses across the U.S. are reeling from retaliatory tariffs sparked by President Donald Trump’s global trade offensive—levies imposed on a wide range of American goods from soybeans and pork to ginseng and cranberries. The duties from trading partners including China, Canada, Mexico and the European Union have deepened a downturn that was already sapping incomes in the U.S. Farm Belt.
A General Electric Co. engineer with ties to Chinese companies was arrested and accused of stealing files related to proprietary power-turbine technology, which the FBI says he elaborately concealed to avoid detection. To conceal the documents, the FBI said, the employee on July 5 embedded encrypted files into the code of a seemingly innocuous image of a sunset to send them to a personal email address, the FBI alleged. He told FBI agents that he used similar techniques to take GE materials on five to 10 previous occasions, according to an affidavit.
Short sellers taking aim at Tesla Inc. are holding onto bets that the electric car maker is on borrowed time, undeterred by the stock’s biggest one-day rally in years, WSJ reports.
Investors are questioning whether Dubai’s young financial center can police itself as the meltdown of its marquee private-equity firm highlights broader concerns about placing money in the region, WSJ reports.
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A combination of images provided by Facebook shows examples from suspicious accounts the social networking site discovered on its platform that it says is possibly linked to Russia with the intention of influencing U.S. politics. PHOTO: Facebook
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CBS Corp. reported quarterly results Thursday amid a maelstrom of corporate drama, WSJ reports. The media company’s board is investigating allegations that Chief Executive Leslie Moonves sexually harassed multiple women over his career. And its relationship with controlling shareholder National Amusements Inc. is the subject of a court battle. But at the start of a conference call to discuss the earnings, a company official issued an edict that such terrain would be off limits for questioning. Over the next 48 minutes, Wall Street analysts stayed off the topic.
Investors and ex-employees of China’s HNA Group Co. who bought investment products from a unit of the conglomerate protested outside the company’s headquarters in the southern province of Hainan this week, accusing it of taking their money and not returning it, people familiar with the matter told WSJ.
Since December 2014, DingTalk has grown exponentially to become the world’s largest chat service designed for companies, with over 100 million individual users and 7 million employers across China, Reuters reports. But its rapid rise has sparked a backlash from Chinese workers who say the app fuels an unhealthy work culture.
Google’s development of a censor-friendly mobile search app sent shares of China’s dominant search engine plunging, but analysts cautioned Google still faces hurdles in regaining entry to the country after a tense departure eight years ago, WSJ reports.
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Follow the WSJ Risk & Compliance Team on Twitter: @WSJRisk, @srubenfeld, @BenDiPietro1 and @LikelyMara.
Send complaints, comments and kudos to Ben DiPietro at ben.dipietro@wsj.com.
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