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The Morning Risk Report: U.S. Weighs Export Controls on China’s Top Chip Maker
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The Trump administration has sought to limit U.S. technology transfers to China, which is seeking greater tech self-sufficiency. PHOTO: LEAH MILLIS/REUTERS
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Good morning. The Trump administration is weighing whether to place export restrictions on China’s most advanced manufacturer of semiconductors, a move that could cut to the heart of China’s ambitions to become self-reliant on critical technologies.
U.S. agencies are in discussions to determine whether Semiconductor Manufacturing International Corp. should be added to the Commerce Department’s entity list, a step that would require companies to go through a difficult layer of review before exporting any U.S. technology to SMIC, said a spokeswoman for the Defense Department, which is taking part in the effort.
[Continued below…]
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The step is the same one that U.S. officials imposed on Chinese telecom equipment maker Huawei. The decision to add Huawei Technologies Co. to the entity list, along with later steps to close off loopholes and further starve the company of components, has threatened its business and worsened U.S. relations with China.
The Trump administration has increasingly used the Commerce Department’s export blacklist as a tool to further U.S. foreign policy goals, government officials and policy observers say.
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We’re conducting a survey of compliance professionals about the impact of the Covid-19 pandemic on their work, and we’ll present findings at the WSJ Risk & Compliance Forum on Oct. 8. If you work in compliance, we’d love to hear from you via this survey link. Responses will be kept anonymous. To request an invitation to the event, click here.
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From Risk & Compliance Journal
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Catherine Razzano, chief compliance officer of Panasonic Avionics Corp., says her company is “not putting risk assessment to the side,” that it is “just doing it in a more targeted and thoughtful, proactive way.” PHOTO: KRISZTIAN BOCSI/BLOOMBERG NEWS
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The coronavirus pandemic is presenting companies with an opportunity to scrutinize due diligence processes, risk assessments and other routine tasks that help businesses avoid brushes with the law, compliance chiefs say. The effort to make compliance departments more cost-effective is happening as companies grapple with the economic fallout from the pandemic.
“This is an amazing time for companies—especially their compliance departments—who are resource strapped, to engage in what I call internal cleanup,” said Allen Chiu, chief compliance officer of Genesys Telecommunications Laboratories Inc., a call-center software company.
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The U.S. Treasury Department’s Office of Foreign Assets Control and the Delaware Department of Justice signed a memorandum of understanding to encourage information-sharing and coordination on investigations and to promote compliance with U.S. trade and economic sanctions laws. The agreement is intended to improve transparency in corporate structures that may be used to obscure illicit business and to prevent the use of U.S. companies by blacklisted individuals or entities, the Treasury Department said.
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Russian opposition leader Alexei Navalny with his wife, in hat, and supporters in Moscow in February. PHOTO: KIRILL KUDRYAVTSEV/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Germany signaled it is prepared to reconsider its Nord Stream 2 gas pipeline project with Russia in light of the poisoning of Russian opposition figure Alexei Navalny, who was roused from an induced coma on Monday.
Chancellor Angela Merkel, who has been a champion of the pipeline project, couldn’t rule out including Nord Stream 2 in possible sanctions against Russia should Moscow fail to investigate Mr. Navalny’s poisoning, a spokesman for the German leader said. Germany’s reaction would depend on Russia’s actions in the coming days, the spokesman said.
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Production problems at a Boeing 787 Dreamliner factory have prompted air-safety regulators to review quality-control lapses potentially stretching back almost a decade, according to an internal government memo and people familiar with the matter.
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Amazon is barring foreign sales of seeds into the U.S. and e-commerce company Wish will ban the sale of seeds. Amazon said sales of plants from outside the U.S. would also be barred and some overseas sellers would have their offers removed from the site. A representative for San Francisco-based Wish cited an “ongoing threat to U.S. consumers.”
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President Trump said he would support an investigation into Postmaster General Louis DeJoy’s fundraising practices, after employees of his former business said they felt pressured by Mr. DeJoy to make campaign contributions for which he later reimbursed them.
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A federal judge ruled that a former Green Beret and his son can be extradited to Japan to face charges that they helped former auto titan Carlos Ghosn escape criminal prosecution in that country.
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China's Foreign Minister Wang Yi earlier this month in Berlin. PHOTO: MICHAEL SOHN/PRESS POOL
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China is launching its own initiative to set global standards on data security, countering U.S. efforts to persuade like-minded countries to ringfence their networks from Chinese technology. Announcing the initiative today at a seminar on global digital governance, Chinese Foreign Minister Wang Yi cited growing risks to data security and what he characterized as efforts to politicize security issues and smear rival countries on technology matters.
“It is important to develop a set of international rules on data security that reflect the will and respect the interests of all countries,” Mr. Wang said, according to a transcript of his speech published by China’s Foreign Ministry.
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A search by U.S. authorities for Chinese researchers with ties to China’s military is leading to intensifying cat-and-mouse tactics involving what prosecutors say are foiled escapes, evidence tossed into a dumpster and a chase through an airport. A widening operation has triggered efforts by some suspects to evade authorities and led to the arrest of at least two researchers whose work is allegedly tied to China’s military development, according to court filings by prosecutors.
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Many Americans are hesitant about taking a coronavirus vaccine. A volunteer was examined during a Covid-19 vaccine study in Hollywood, Fla., in August. PHOTO: CHANDAN KHANNA/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Several drug makers developing Covid-19 vaccines plan to issue a public pledge not to seek government approval until the shots have proven to be safe and effective, an unusual joint move among rivals that comes as they work to address concerns over a rush to mass vaccination.
A draft of the joint statement, still being finalized by companies including Pfizer, Johnson & Johnson and Moderna and reviewed by The Wall Street Journal, commits to making the safety and well-being of vaccinated people the companies’ priority. The vaccine makers would also pledge to adhere to high scientific and ethical standards in the conduct of clinical studies and in the manufacturing processes.
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‘Fortnite’ on an iPhone X. The creator of the game filed a motion for a preliminary injunction against Apple on Friday. PHOTO: CJ GUNTHER/EPA/SHUTTERSTOCK
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The creator of “Fortnite” is taking another stab at getting a judge to bring the popular game back to Apple’s devices, this time disclosing that roughly a third of players access it through the tech giant’s App Store.
Epic Games filed a motion seeking a preliminary injunction against Apple, reiterating arguments made in a federal lawsuit last month when it accused the tech giant of monopolistic behavior after pulling “Fortnite” from the App Store. The closely held software developer also sued Google for removing the game from its Google Play store.
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The downtown area of Gatlinburg, Tenn. Amusement parks in the city have had trouble hiring J-1 visa workers to fill seasonal jobs. PHOTO: LUKE SHARRETT/BLOOMBERG NEWS
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In June, President Trump banned several work-based visa types through the end of the year, including the J-1 and H-2B programs for seasonal foreign workers, with the aim of safeguarding any open jobs for Americans.
Recruiting those U.S. workers, however, proved difficult this summer because the seasonal jobs aren’t permanent, affordable housing is hard to find, and, in some locations, there simply aren’t enough workers available, business leaders say.
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