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The Morning Risk Report: Ghosn’s Escape From Japan Followed Months of Planning
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Carlos Ghosn fled Japan on a private jet. PHOTO: ALEXANDRE MARCHI/MAXPPP/ZUMA PRESS
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Good morning. Carlos Ghosn’s escape to Lebanon from Japan followed months of planning by associates aimed at getting the former head of the Renault-Nissan alliance to a country they believed would provide a more friendly legal environment to try the claims of financial wrongdoing against him, according to people familiar with the matter.
The Lebanese government had for months been asking Tokyo to send Mr. Ghosn—a Lebanese citizen—to Beirut, where it proposed he would stand trial on corruption charges, according to a senior Lebanese official. Japanese authorities arrested Mr. Ghosn in late 2018 and have accused the former chief of auto makers Renault, Nissan Motor and Mitsubishi Motors of a series of financial crimes, which he denies.
[Continued below…]
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Mr. Ghosn was spirited from his court-monitored residence in Tokyo over the weekend onto a private jet, bound for Turkey, and then continued by plane to Lebanon, landing there early Monday morning, the people said. The Tokyo District Court told Japanese media on Wednesday it formally revoked Mr. Ghosn’s release on bail, which means the government will confiscate the ¥1.5 billion ($13.8 million) in bail money he paid.
Mr. Ghosn grew up in Lebanon and enjoys broad popularity as a globally successful businessman. Lebanon’s ambassador to Japan was a frequent visitor of Mr. Ghosn when he was in jail there. Lebanese officials said he entered the country legally and wasn’t subject to any restrictions. Upon his return to Lebanon, Mr. Ghosn met up with his wife, Carole Ghosn, who played a role in the operation, the people said. In a text message to The Wall Street Journal, Mrs. Ghosn described being reunited with her husband as the “best gift of my life.”
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From Risk & Compliance Journal
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U.S. Targets More Alleged Human Rights Abusers
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The U.S. has increased its use of sanctions as a tool to target alleged human rights abusers and corruption. The number of sanctions imposed against alleged human rights abusers under programs implementing the U.S. Global Magnitsky Human Rights Accountability Act reached an all-time high in 2019 due to a surge in designations in December, Risk & Compliance Journal’s Mengqi Sun reports.
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Israeli Prime Minister Benjamin Netanyahu led a cabinet meeting in Jerusalem on Sunday. PHOTO: POOL/REUTERS
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Israeli Prime Minister Benjamin Netanyahu asked lawmakers to grant him immunity from prosecution on corruption charges, ahead of an election in March that will decide his personal and political future.
Mr. Netanyahu was indicted in November on charges of bribery, fraud and breach of trust in connection with three corruption probes, becoming the first Israeli prime minister to be criminally charged while in office. He sent an official request for immunity to Israel’s Speaker of Parliament on Wednesday night, according to his family’s spokesman. Mr. Netanyahu announced earlier that he would do so “in order to fulfill my right, my duty, and my mission to continue serving you, the citizens of Israel.”
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Uber Technologies and Postmates sued California to challenge legislation that could force the companies to treat their drivers as employees, the latest escalation in a battle over the new law. The companies, competitors in the food-delivery market, joined two drivers in the lawsuit filed in federal court against the state and its attorney general, Xavier Becerra. The suit claims that the new law violates constitutional guarantees of equal protection and due process because of how it targets some workers and companies. California ushered in
a host of laws Wednesday that will mean major changes for consumers, workers and businesses.
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Since 2016, up to $800 in foreign goods shipped to an individual shopper in the U.S. are exempt from tariffs that predated the recent trade wars. The exemption allows consumers to avoid the shipping charge or higher price that American retailers often apply to recover the tariff cost. Experts say the volume of direct shipments from China to U.S. consumers for purchases under $800 remains very small, but government data suggests that the category of goods is growing.
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Growing problems at South Africa’s state-owned enterprises are pushing major companies toward bankruptcy and subjecting the continent’s most developed economy to rolling blackouts that are choking growth. In December, flagship carrier South African Airways narrowly avoided collapse after the government loaned it 2 billion South African rand ($137 million) and ordered a restructuring. The cash injection came as South Africans watch eye-popping testimony from a national commission where witnesses allege corruption at the airline and other state-owned companies under former President Jacob Zuma.
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Huawei Technologies said its revenue rose to a record $122 billion last year, showing the Chinese tech giant’s continued rise despite the Trump administration’s campaign to curtail its global business. Huawei has toughed out one of its trickiest years in its 32-year history. In the past year, U.S. officials handed down a pair of criminal indictments of the company, added Huawei to the Commerce Department’s trade blacklist, and placed new restrictions on its ability to sell to small American carriers.
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The SEC has proposed changes to auditor independence rules that would relax regulation of audit firms in certain cases. PHOTO: JOSHUA ROBERTS/BLOOMBERG NEWS
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The U.S. Securities and Exchange Commission proposed changes to auditor independence rules that would relax regulation of audit firms in cases involving affiliates of their clients and preparations for initial public offerings.
The proposal, which has been released for public comment over the next 60 days, represents a potential further loosening of regulation following the June approval of softer rules governing auditors’ and funds’ financial ties to the same lender. The changes would give auditors more discretion in assessing conflicts of interest in their relationships with companies they audit.
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Salesforce.com’s Marc Benioff said at a company conference in November that trade issues remain a concern for many CEOs. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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U.S. chief executives are getting worried about a recession. Fear of an economic decline topped the list of their concerns going into 2020, according to a survey from the Conference Board, a business research group. The year prior, recession fears ranked third for U.S. chiefs, though first overall for CEOs around the world—as is again the case for 2020. Going into 2018, the topic was barely a blip in the survey data.
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The collapse of a Vale mine-waste dam in Brumadinho, Brazil, at the beginning of 2019 killed 270 people—less than two years after a new chief executive vowed to improve safety at dozens of dams. Contractors, employees, lawmakers and investigators interviewed by The Wall Street Journal, as well as prosecutorial and police documents reviewed by the Journal indicate that Vale’s top management paid scant attention to dams, which cost money and generated no return, according to the people and documents. Bosses in charge of the Brumadinho site sometimes cut corners, denying requests for extra safety measures on several occasions because of budget constraints, workers and contractors alleged.
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U.S. chief executives are getting worried about a recession. Fear of an economic decline topped the list of their concerns going into 2020, according to a survey from the Conference Board, a business research group. The year prior, recession fears ranked third for U.S. chiefs, though first overall for CEOs around the world—as is again the case for 2020. Going into 2018, the topic was barely a blip in the survey data.
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President Trump said he would sign the recently negotiated phase-one trade deal with China in Washington on Jan. 15—marking a formal truce in the U.S.-China trade war—and would later travel to Beijing to negotiate a broader pact. Easing U.S.-China trade tensions lifted demand for Chinese goods and boosted factory production in December, an official gauge of manufacturing activity showed.
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Finance chiefs will pay close attention to the geopolitical climate and the threat of digital disruption in the coming year as they continue to face tough decisions related to capital spending and talent at their companies. Recruiting the best talent and empowering staff to expedite tech projects also top the 2020 agendas of chief information officers and other technology executives. Meanwhile, companies plan to pour
money into digital defenses in an effort to stem the spread of malware, which hackers are using to steal data, commit fraud and disrupt victims’ operations.
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YouTube operates a separate app for younger children called YouTube Kids, which doesn’t include personalized ads. PHOTO: GARY REYES/TNS/ZUMA 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 change, slated for early January, means the unit of Alphabet Inc.’s Google will stop showing data-driven personalized ads on videos for kids. The burden is falling on makers of videos to designate whether the content they post is targeted at children or a broader audience. The failure to properly designate videos could lead to Federal Trade Commission fines for creators.
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In the breach known as Cloud Hopper, cyberattackers allegedly working for China’s intelligence services broke into cloud companies, including CGI and IBM, to steal volumes of intellectual property and records from scores of companies.
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The cockpit of a 737 Max. PHOTO: DIMAS ARDIAN/BLOOMBERG NEWS
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Boeing is increasingly committed to transferring more control of aircraft from pilots to computers after two crashes exposed flaws in an automated system on its 737 MAX that overpowered aviators in the disasters.
Executives at Boeing and other makers of planes and cockpit-automation systems for some time have believed more-sophisticated systems are necessary to serve as backstops for pilots, help them assimilate information and, in some cases, provide immediate responses to imminent hazards.
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The U.S. market remains critical to Tesla’s near-term ambitions to produce 500,000 vehicles within a year. A Tesla Model S in a showroom in Santa Monica, Calif. PHOTO: LUCY NICHOLSON/REUTERS
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Tesla marks the beginning of a new era this week: the loss of a U.S. tax credit that effectively lowered the price of its vehicles and helped build interest in fledgling electric cars.
The end of the U.S. tax credit for the company’s customers comes as Tesla’s future growth increasingly looks tied to China, the world’s largest new-car market, which is becoming important in Chief Executive Elon Musk’s strategy for remaking the Silicon Valley auto maker into a global player with ambitions of selling millions of electric vehicles a year.
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Attendees watching the opening ceremonies of the World Scout Jamboree in Mount Hope, W.Va., in July. PHOTO: ANDREW SPEAR FOR THE WALL STREET JOURNAL
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The Boy Scouts of America hired a former energy executive as CEO, reaching for an external leader as the group struggles to attract a new generation of youth and navigate a wave of sex-abuse lawsuits.
The hiring of Roger Mosby, the longtime top human-resources officer at energy company Kinder Morgan Inc., comes at a crisis point for the Boy Scouts, founded in 1910, as the group faces lawsuits alleging sexual misconduct by employees and volunteers dating back as far as the 1960s. The cases have been fueled by state laws that have extended the statute of limitations for victims to sue.
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