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The Morning Risk Report: Yellen Could Bring More Nuance to U.S. Sanctions Efforts
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Janet Yellen at her Senate confirmation hearing in November 2013. She was the first woman to lead the Fed. PHOTO: ALEX WONG/GETTY IMAGES
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Good morning. President-elect Joe Biden plans to nominate former Federal Reserve Chairwoman Janet Yellen to become the next Treasury secretary, according to people familiar with the decision. If approved, she would play a key role in shaping the direction of economic sanctions, which have been a top U.S. foreign-policy tool for the Trump administration.
Ms. Yellen would bring three decades of experience on the forefront of policy-making into a role that calls for deep knowledge of the international financial system and how the U.S. can operate within it while balancing national security interests and foreign policy priorities.
“She’s actually perfect for this because nobody understands this stuff better than her,” said Daniel Glaser, who served about 20 years in the Treasury Department during Republican and Democratic administrations, including more than five years as assistant secretary for terrorist financing and financial crimes in the Treasury’s Office of Terrorism and Financial Intelligence under President Obama.
[Continued below…]
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The number of blacklisted entities surged during the Trump administration, and sanctions are still expected to play a key role in the Biden administration. But Ms. Yellen could bring a more nuanced approach to economic pressure, one that could perhaps more effectively achieve goals behind sanctions—whatever they might be, Mr. Glaser tells Risk & Compliance Journal.
“The Treasury has numerous tools within the international financial system and in the domestic financial system to advance national security interests, and sanctions are an important part of that,” he said. “But they’re not exclusive to that.
“If this were just about lobbing sanctions over the fence, anybody can do that,” he continued. “What having people like Janet Yellen at the helm allows us to do is to be very sophisticated about the way we think about the way we deploy our tools strategically. It’s not just about issuing lists. It’s about developing and implementing financial pressure strategy. And that’s what she’s going to excel at.”
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From Risk & Compliance Journal
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Odebrecht headquarters in São Paulo. The company last year filed for bankruptcy in Brazil and the U.S. PHOTO: AMANDA PEROBELLI/REUTERS
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An independent monitor has certified Odebrecht SA’s antibribery compliance program, the Brazilian construction company said.
The certification closes a 3½-year monitorship that was imposed on Odebrecht as part of a settlement with the U.S. Department of Justice resolving allegations that the company paid bribes to public officials to win lucrative infrastructure contracts. The monitor certified that Odebrecht’s compliance program is designed to prevent future violations of anticorruption laws, including the U.S.’s Foreign Corrupt Practices Act, according to the company.
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Santa Clara County Undersheriff Rick Sung in San Jose, Calif., in 2018. PHOTO: LIPO CHING/ASSOCIATED PRESS
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Apple’s head of security has been indicted on bribery charges for a scheme in which prosecutors allege he offered iPads to secure gun permits for his company’s employees. Thomas Moyer allegedly promised to give 200 iPads to the Santa Clara County Sheriff’s Office to get four concealed carry licenses, according to Jeffrey Rosen, district attorney of the Bay Area county where Apple is based.
The charges are part of a broader probe into the sheriff’s office. Two sheriff’s office officials, who were indicted on a charge of requesting the bribe, held back on issuing the permits until Mr. Moyer “agreed to donate close to $70,000 worth of iPads,” Mr. Rosen said. “The donation was pulled back at the eleventh hour when our search warrants into this probe began.”
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Mr. Ghosn was arrested in Japan in November 2018 on suspicion of financial crimes while he was chairman of Nissan Motor, then rearrested three more times and held in prison under repeated questioning by prosecutors until April 2019, with a one-month break between the third and fourth arrests. “The revolving pattern of detention was an extrajudicial abuse of process,” a report by the U.N. Human Rights Council’s Working Group on Arbitrary Detention said. The panel also broadly criticized aspects of Japan’s criminal-justice system as overly reliant on confessions and exposing detainees to potential coercion and torture.
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France opened a trial Monday into whether former President Nicolas Sarkozy tried to bribe a magistrate in an attempt to obtain confidential information about a police inquiry into the finances of his 2007 campaign.
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Prosecutors charged Mr. Sarkozy with corruption and influence-peddling, alleging that in the years after he left office in 2012 Mr. Sarkozy offered to help Gilbert Azibert seek a plum job in a court in the principality of Monaco. The trial was suspended Monday after the court ordered Mr. Azibert, 73, who faces corruption charges, to undergo a medical check.
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General Motors agreed to recall 5.9 million SUV and pickup-truck models to replace potentially faulty Takata air-bag inflaters, a fix that could cost the auto maker more than $1 billion.
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GM had asked the National Highway Traffic Safety Administration not to order a recall of the vehicles because the auto maker believed they were safe. The agency denied that request Monday, saying its research shows Takata inflaters installed in GM vehicles are prone to the deadly explosions reported in other auto makers’ cars.
Separately, GM said it will no longer back the Trump administration in its legal battle to strip California’s authority to set its own fuel-efficiency regulations, saying GM’s goals for green cars are aligned with the state and the incoming Biden administration.
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The U.S. government isn’t liable for losses on $3 billion in Puerto Rico pension bonds, a federal judge said Monday, rejecting efforts to put taxpayers on the hook for compensating investors. The ruling dismissed a lawsuit filed by Oaktree Capital Management and other bondholders accusing the U.S. government of illegally taking their property.
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President Trump and Chinese Vice Premier Liu He at the White House in January, when the so-called phase one trade deal was signed. PHOTO: WANG YING/XINHUA/ZUMA PRESS
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Senior Trump administration officials say they are pushing to create an informal alliance of Western nations to jointly retaliate when China uses its trading power to coerce countries. Officials say the plan was sparked by Chinese economic pressure on Australia after that country called for an investigation into the origins of the Covid-19 pandemic.
Under the joint retaliation plan, when China boycotts imports, allied nations would agree to purchase the goods or provide compensation. Alternatively, the group could jointly agree to assess tariffs on China for the lost trade.
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The death rate from Covid-19 is falling in the U.S., according to infectious-disease experts and biostatisticians, a signal of advancements in treatment of the disease. But the death rate could climb with the latest nationwide rise in cases, they warn.
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A long-awaited Commodity Futures Trading Commission report into the collapse of crude-oil futures to minus $40 a barrel in April has declined to identify a reason for the crash, prompting criticism from one of the agency’s own commissioners. The rapid descent into negative territory on April 20 sparked calls from market participants and others for a swift and thorough investigation by federal regulators.
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Washington Football Team owner Daniel Snyder and Washington Football Team president Jason Wright on the field before a game against the Baltimore Ravens at FedExField. PHOTO: BRAD MILLS/REUTERS
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Washington Football Team owner Dan Snyder says his National Football League team had a wayward work environment that demanded a sweeping overhaul. “But we can change,” Mr. Snyder said in a rare interview.
Mr. Snyder’s comments come amid an independent investigation led by lawyer Beth Wilkinson, which was commissioned by the team in July and is now overseen by the league. The probe was launched as the Washington Post reported allegations from women who said they were harassed or verbally abused while working for the team. The women said they were subject to unwelcome sexual overtures, discussion of their bodies and sexually charged comments. Mr. Snyder has denied a pair of alleged incidents involving him.
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