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The Morning Risk Report: U.S. Weighs New Sanctions on Iran’s Oil Sales to China if Nuclear Talks Fail
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There are risks that new crude-oil sanctions could backfire, driving Iran to accelerate its nuclear program.
PHOTO: ESSAM AL-SUDANI/REUTERS
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Good morning. The U.S. is considering tighter sanctions on Iranian oil sales to China as a way to encourage Tehran to conclude a nuclear deal and raise the costs of abandoning stalled negotiations.
U.S. negotiators have been working with European and other international partners in Vienna since April to revive the 2015 deal that limits Iran’s nuclear program in exchange for an easing of broad sanctions. As those talks falter, the U.S. is running through options intended to induce Iran to keep negotiating or punish it if it doesn’t, according to U.S. officials and people familiar with the matter.
[Continued below...]
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One plan being drafted would choke off Iran’s swelling crude-oil sales to China, the country’s main client, through fresh sanctions targeting the shipping networks that help export an estimated one million barrels a day and bring critical revenue to Iran, the officials said.
The new steps would take place if nuclear talks fail, the officials said. The plan would involve the aggressive enforcement of current sanctions already banning dealings with Iran’s oil and shipping industry through new designations or legal actions, the officials said. In the past, the U.S. has, for instance, sanctioned the captain of a Syria-bound Iranian crude tanker and obtained the seizure of fuel cargoes Tehran was sending to Venezuela.
“There is not much left to sanction in Iran’s economy,” said one of the U.S. officials. “Iran’s oil sales to China is the prize.”
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From Risk & Compliance Journal
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Debt Collector Encore Capital Hires New Chief Risk and Compliance Officer
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Debt-collection company Encore Capital Group Inc. has appointed Steve Carmichael as its chief risk and compliance officer.
Mr. Carmichael, who most recently was the head of enterprise and financial risk management at Discover Financial Services, will report to Encore President and Chief Executive Ashish Masih, and will serve on the company’s executive leadership team, the company said Monday.
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Alfa Laval Pays $416,000 to Settle Alleged Violations of U.S. Sanctions
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A regional office of the Swedish engineering firm Alfa Laval AB has agreed to pay $416,695 to settle apparent violations of U.S. sanctions on Iran, the U.S. Treasury Department said Monday.
Dubai-based Alfa Laval Middle East Ltd. conspired with other companies to export storage tank cleaning units from the U.S. to Iran, including by falsely listing another Dubai-based company as the end user on export documentation, the Treasury’s Office of Foreign Assets Control said.
The conspiracy, which took place in 2015 and 2016, ended when the U.S. Department of Commerce requested a post-shipment verification from an Exton, Pa.-based affiliate of Alfa Laval. The scheme resulted in the export of $18,585 worth of goods, according to OFAC.
The Treasury unit said the case was egregious, but credited Alfa Laval for taking disciplinary action against the implicated employees and cooperating with the Treasury in its investigation, among other actions. The company did not return a request for comment.
—Dylan Tokar
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Graham Steele would oversee the Biden administration’s plans to tighten regulations on Wall Street firms.
PHOTO: NANCY ROTHSTEIN/STANFORD GRADUATE SCHOOL OF BUSINESS
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President Biden plans to nominate Graham Steele as assistant Treasury secretary for financial institutions, a move that would put a long-time congressional staffer with ties to progressives at the center of efforts to refocus financial rules on issues such as climate change and racial equity.
Mr. Steele, a former Democratic chief counsel on the Senate Banking Committee and aide to Sen. Sherrod Brown (D., Ohio), would oversee the Biden administration’s plans to tighten regulations on Wall Street firms. That could include heightened scrutiny of cryptocurrencies; open-end mutual funds and hedge funds and their roles in market turbulence last year; and the financial sector’s exposure to climate-change risks.
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Thousands of opioid-crisis lawsuits filed against major drugmakers and distributors are nearing a conclusion, with the outlines of a $26 billion deal between states and four companies expected to be announced this week and a $1 billion settlement to resolve some of New York’s claims likely on Tuesday, people familiar with the matter said.
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The former prosecutor who conceived and oversaw the Justice Department’s effort to crack down on market manipulation in commodities and derivatives has resigned and joined the litigation firm Quinn Emanuel Urquhart & Sullivan LLP. Robert Zink, who left the department July 2, will now represent companies and individuals facing government investigations.
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Leon Black, the billionaire co-founder of Apollo Global Management Inc., submitted a detailed response Monday to a lawsuit that accused him of forcing a woman into a yearslong abusive relationship, roundly denying the allegations and calling the complaint “a work of fiction.” Guzel Ganieva, a Russian immigrant and former model, sued Mr. Black on June 1, accusing him of defamation and alleging he raped and harassed her.
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The Biden administration on Monday proposed sharply higher penalties for larger hospitals that don’t make their prices public. The Centers for Medicare and Medicaid Services, the federal agency responsible for enforcing rules requiring that hospitals publish their prices, is seeking to raise the penalties as high as $2 million a year for large hospitals that fail to make prices public.
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Cybersecurity experts had been pressing the Biden administration to respond to China’s alleged involvement in the Microsoft email hack.
PHOTO: LEAH MILLIS/REUTERS
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The Biden administration publicly blamed hackers affiliated with China’s main intelligence service for a far-reaching cyberattack on Microsoft Corp. email software this year, part of a global effort by dozens of nations to condemn Beijing’s malicious cyber activities.
The U.S. government has high confidence that hackers tied to the Ministry of State Security, or MSS, carried out the unusually indiscriminate hack of Microsoft Exchange Server software that emerged in March, senior officials said.
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Investors say much of what drove markets’ reversals on Monday is concern that the best of the economic recovery may be in the rearview mirror.
PHOTO: RICHARD DREW/ASSOCIATED PRESS
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Stocks, bond yields and oil prices declined Monday in the most acute sign yet that investors are second-guessing the strength of the global economic recovery that sent markets soaring this year.
The Dow Jones Industrial Average declined more than 700 points—its worst session since October—as anxiety mounted over the spread of the Delta coronavirus variant and its potential impact on the global economy.
Meanwhile, the National Bureau of Economic Research said that the U.S. officially climbed out of a recession in April 2020, concluding a pandemic-driven economic contraction that lasted two months, making it the shortest on record.
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Protesters gathered at Indiana University last month to oppose mandatory Covid-19 vaccinations for students, faculty and staff.
PHOTO: JEREMY HOGAN/SOPA IMAGES/ZUMA PRESS
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A federal judge has ruled that Indiana University may require its students to submit proof of Covid-19 vaccination before returning to campus this fall, dealing a setback to a brewing legal effort against vaccination requirements in higher education.
In a 101-page decision handed down Sunday, U.S. District Judge Damon R. Leichty said the university system acted reasonably to protect public health when it required all of its students, faculty and staff to be fully vaccinated against Covid-19 by July 1, with limited medical and religious exceptions.
The case is among the first to tackle the constitutionality of Covid-19 vaccine requirements at public universities.
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Ben and Jerry's said it will make different arrangements to stay in Israel.
PHOTO: KEVIN DIETSCH/GETTY IMAGES
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Ben & Jerry’s said it would stop selling its products in the Israeli-occupied West Bank and parts of contested East Jerusalem when its license agreement expires, as the ice-cream maker takes another activist stance.
Sales in the settlements of Palestinian territories were “inconsistent with our values,” the company said Monday in a statement on its website.
Ben & Jerry’s, a unit of Unilever PLC, won’t renew its agreement with its licensee in Israel, which manufactures and distributes ice cream in the region. The company said that after the agreement expires at the end of next year, it will make a different arrangement to stay in Israel.
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