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The Morning Risk Report: Treasury’s Financial Crimes Unit Ramps Up Foreign Targeting, Investigations
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U.S. financial institutions may be required to provide more customer information to the Treasury Department’s financial crimes office as it ramps up its focus on foreign money-laundering threats. PHOTO: PATRICK SEMANSKY/ASSOCIATED PRESS
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Good morning. U.S. financial institutions may be required to provide more customer information to the Treasury Department’s financial crimes office as it ramps up its focus on foreign money-laundering threats. The Treasury’s Financial Crimes Enforcement Network this year established a new division to oversee foreign and domestic investigations. The Global Investigations Division, created in August, was previously part of FinCEN’s enforcement office.
That FinCEN carved out the investigations unit as a stand-alone office highlights one of the agency’s key priorities in the year ahead, former officials tell Risk & Compliance Journal’s Kristin Broughton.
[Continued below…]
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FinCEN is expected to use its targeted investigative powers more frequently, including its authority under the Patriot Act to prohibit foreign banks from opening correspondent accounts with U.S. financial institutions, lawyers say. Other powers include the ability to request information from banks on customer transactions, and to require additional disclosures on transactions made in certain U.S.
“It signals that FinCEN will want to use the tools under the global investigations division with more frequency,” said Stephanie Brooker, a former director of enforcement at the agency who is now co-chair of the financial institutions practice at law firm Gibson Dunn & Crutcher LLP.
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Holiday Schedule for The Morning Risk Report
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The Morning Risk Report will not be published on Tuesday or Wednesday. We will be back Thursday.
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From Risk & Compliance Journal
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COSO to Issue Guidance on Blockchain
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An influential organization that advises industry on risk management practices plans to issue guidance next year for companies looking to apply internal controls to blockchain technology. The Committee of Sponsoring Organizations of the Treadway Commission is developing voluntary guidance for companies to strengthen their oversight of blockchain-technology projects, Kristin Broughton reports for Risk & Compliance Journal. The guidance is expected to be released in the first quarter of 2020.
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Enforcement of U.S. Sanctions Benefits Local Prosecutors
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An increase in the enforcement of U.S. economic sanctions has led to a windfall for local prosecutors in Manhattan. Corporate penalties related to economic sanctions violations have pulled in about $4.6 billion in penalties and forfeitures for the Manhattan district attorney’s office since 2000, according to a Wall Street Journal analysis of data compiled by Good Jobs First, a nonprofit. Penalties in the past two years alone have accounted for 17% of that total, Mengqi Sun reports.
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Work was under way in March on the Nord Stream 2 gas pipeline in Lubmin, northeastern Germany. PHOTO: TOBIAS SCHWARZ/AGENCE FRANCE-PRESSE/GETTY IMAGES
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German politicians have called on Europe to adopt protective measures against U.S. sanctions after Washington managed to halt completion of a new submarine gas pipeline linking Russia directly to Germany.
The bipartisan U.S. move initiated by Congress last week threatened sanctions against companies working on completing Nord Stream 2, Europe’s biggest energy-infrastructure project, which the U.S. and some European countries fear could give Russia some control over the continent’s energy supplies and boost revenues for an increasingly belligerent Kremlin.
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Major U.S. and international contractors involved in Afghanistan reconstruction projects allegedly paid the Taliban for protection, providing the insurgency with money that was used to attack and kill U.S. troops, according to a lawsuit filed in federal court. The plaintiffs are the families of 143 American troops and contractors killed and wounded in Afghanistan from 2009 to 2017. It alleges that the companies often paid the Taliban through local subcontractors, who funneled payments to the insurgency or hired Taliban guards directly onto their payroll.
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California’s law aimed at helping people control their personal information goes into effect Jan. 1, but the privacy activist who spearheaded the new rules is already seeking to strengthen them. Alastair Mactaggart, the real-estate developer whose state ballot initiative in 2018 led to the California Consumer Privacy Act, said he is pushing anew this year to improve the existing legislation and make it harder to modify.
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Eighteen months after the Supreme Court gave states the green light to tax online transactions, small companies that sell things as diverse as recycled yarn and gold bullion are struggling to adjust.
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The White House’s tariff strategy faces a potential threat from a series of lawsuits challenging whether the administration has followed the law closely enough in imposing new customs duties. Recent court victories by steel and energy companies have emboldened legal foes of the administration’s nearly-two-year campaign to wield tariffs as leverage in trade talks, and the decisions could lead to further challenges to President Trump’s tariff authority.
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A worker at Freddy’s Frozen Custard & Steakburgers in Jacksonville, Fla. The company has been making changes to adjust for new overtime rules. PHOTO: CHARLOTTE KESL FOR THE WALL STREET JOURNAL
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More workers will qualify for overtime in the new year under the first federal overhaul of requirements in more than 15 years, an update businesses are taking in stride but that is leaving some workers frustrated they won’t see bigger paychecks.
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Aviation regulators want virtually all drones to be identified and tracked in U.S. airspace within three years, under proposed rules that attempt to balance law-enforcement and safety concerns with industry interest in an array of commercial uses.
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Boeing’s New CEO to Focus on FAA Cooperation
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William Duhnke, chairman of the Public Company Accounting Oversight Board, spoke at The Wall Street Journal CFO Network conference in June. PHOTO: DENNY HENRY FOR THE WALL STREET JOURNAL
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The U.S. Securities and Exchange Commission and its audit-watchdog arm, the Public Company Accounting Oversight Board, have plans in 2020 to further shape the role of auditors of companies publicly listed in the U.S.
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The Financial Accounting Standards Board is preparing for a changing of the guard as Chairman Russell Golden steps down at the end of June after seven years in the position. And for at least the remainder of Mr. Golden’s term, the board is focused on two issues: differentiating liabilities from equity and improving the measurement of goodwill.
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How the Changing Face of Finance Is Affecting Management Accountants
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Law-enforcement officers near the site of a Halloween night shooting at an Airbnb rental property in Orinda, Calif. PHOTO: JOHN G. MABANGLO/EPA/SHUTTERSTOCK
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Airbnb, which is preparing to go public next year in a highly anticipated IPO, blossomed into a $31-billion behemoth by following the growth-first mantra that has defined Silicon Valley for years. Now it is grappling with the question that could consume the tech industry in the coming decade: How much responsibility should companies assume for bad things that happen on their platforms?
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Nissan cars at the auto maker's plant in Yokosuka, near Tokyo. PHOTO: KYODO/ASSOCIATED PRESS
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It took a year without Carlos Ghosn for the auto makers he once led to realize what he had been doing for two decades: keeping Nissan Motor and Renault from coming apart at the seams. Since Mr. Ghosn was arrested in November 2018, insiders at the companies said the two partners, lacking a chief to impose order, have reverted to the corporate equivalent of a nasty and brutish state of nature.
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Domino’s Pizza Group PLC said that its finance chief, David Bauernfeind, died in an accident on Thursday. The U.K.-based international franchise of pizza-delivery chain Domino’s Pizza Inc., the world’s largest pizza company by sales, said Mr. Bauernfeind died while vacationing with his family. Mr. Bauernfeind took over as CFO of the Domino’s international division in 2018.
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Juul Labs is still struggling to enforce a ban on vaping in most of its U.S. offices, even after threatening in September to dock employees’ bonuses as punishment.
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YouTube operates a separate app for younger children called YouTube Kids, which doesn’t include personalized ads. PHOTO: JENNY KANE/ASSOCIATED PRESS
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YouTube will soon limit the data it collects on videos designed for children to comply with a federal privacy clampdown, pleasing consumer advocates but delivering a potential financial blow to creators of free children’s content on the video platform. The Google unit recently began requiring the makers of videos to designate whether the content they post is targeted at children or a broader audience. YouTube will limit data collection on videos geared toward children starting in early January. A failure to properly designate videos could lead to Federal Trade Commission fines for creators.
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Tens of billions of dollars in financial assistance from the Chinese government helped fuel Huawei's rise to the top of global telecommunications, a scale of support that in key measures dwarfed what its closest tech rivals got from their governments. The U.S. has raised concerns that use of Huawei’s equipment could pose a security risk, should Beijing request network data from the company. Huawei says it would never hand such data to the government.
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