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The Morning Risk Report: Accused Terrorists Use Loopholes to Tap Funds
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A United Nations Security Council meeting at the U.N. headquarters in New York on June 12. PHOTO: LI MUZI/XINHUA/ZUMA PRESS
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Good morning. Loopholes in U.N. Security Council sanctions procedures are enabling blacklisted al Qaeda and Islamic State terrorists and their supporters to tap their bank accounts despite a U.N. asset freeze, according to documents reviewed by The Wall Street Journal and people familiar with the matter.
Those gaining access to their funds include Khalifa al-Subaiy, a Qatari financier who the U.S. says long provided financial support to senior al Qaeda leadership, including Sept. 11 mastermind Khalid Sheikh Mohammed.
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Mr. Subaiy was added to the United Nations terror blacklist in 2008, but the U.N. has allowed him since then to take up to $10,000 a month from frozen accounts for “basic necessities,” according to the documents and people familiar with the matter. Mr. Subaiy didn’t respond to requests for comment.
U.N. records show that the Security Council allowed blacklisted individuals to access their accounts on 71 out of 72 requests between 2008 and 2018. But that figure likely doesn’t fully capture the number of times blacklisted individuals have used their bank accounts: The Security Council has designated more than 250 individuals as al Qaeda or Islamic State members or supporters, suggesting many are being allowed by their home countries to tap their accounts without even seeking Security Council permission.
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A cargo of suspected Iranian crude was intended for Sicily’s Milazzo oil refinery, which Eni jointly owns with Kuwait Petroleum Italia. PHOTO: ROBERTO LA ROSA/ALAMY
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Italy’s oil giant Eni SpA has rejected a cargo of suspected Iranian crude, as energy companies grapple with sophisticated techniques used by Iran to evade U.S. sanctions. The cargo, which was intended for the Milazzo refinery in Sicily, remains on board a Liberia-flagged vessel named White Moon, after Eni said the specifications didn’t match those of its contract for Iraqi oil.
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The U.S. levied sanctions against a Russian bank accused of aiding North Korea by opening accounts for blacklisted entities. The action against the Moscow-based Russian Financial Society comes amid long-stalled nuclear talks with Pyongyang. It follows recent missile tests by North Korea that some U.S. analysts say are meant to pressure Washington to return to the negotiating table.
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The Financial Accounting Standards Board on took a major step toward removing a potentially costly accounting burden facing companies affected by global reference rate reforms, including a planned shift away from the London interbank offered rate. FASB tentatively decided that changes in a contract’s reference rate, such as Libor, would be accounted for as a continuation of that contract, provided it met certain criteria.
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Dozens of startups that want to make the leap from unregulated cryptocurrency dealer to licensed brokerage are waiting for regulators to open the door to let them proceed. Around 35 to 40 companies involved in digital assets have applied with U.S. securities watchdogs to become brokerages, with many hoping to launch electronic trading platforms, according to the Blockchain Association, an industry group.
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The Environmental Protection Agency overturned Obama-era climate rules for power plants, vastly limiting the agency’s ability to mandate tougher greenhouse-gas emission regulations that could force older coal- and gas-fired plants to close. The EPA estimates that the new plan, combined with industry trends, will cut U.S. power-plant emissions 35% by 2030 from 2005 levels.
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Five female anchors sued the parent company of New York City news channel NY1, claiming they were discriminated against in favor of men and younger women. In a complaint filed in federal court in Manhattan, the anchors claim Charter Communications Inc.’s NY1 “blatantly marginalized them and cast them aside in favor of younger women and men” despite their demonstrated skills.
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Venezuela’s political opposition welcomed funds from private donors and foreign governments as the movement to remove authoritarian leader Nicolás Maduro gained momentum earlier this year. But now, accusations that two opposition activists pilfered tens of thousands of dollars from those funds are threatening to become an embarrassment for a coalition that is heavily dependent on the largess of dozens of countries, including the U.S., which is allied with its chief, Juan Guaidó.
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Two MQ-4C unmanned aerial vehicles, like the one that was shot down by Iran on Thursday, according to a U.S. official cited by the Associated Press. PHOTO: HANDOUT ./REUTERS
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Iran said Thursday that it shot down a U.S. military drone, the latest in a series of skirmishes across the Middle East that have stoked fears of a wider military conflict. The Islamic Revolutionary Guard Corps said its air force brought down the American surveillance drone in a southern coastal region along the Strait of Hormuz, according to Iranian state-owned Press TV. The IRGC said the drone had violated its airspace.
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Two Canadian naval ships passed through the Taiwan Strait this week, the first such trip by Canadian vessels in the contentious waterway since ties between Ottawa and Beijing deteriorated following the arrest of a senior Huawei Technologies Co. executive. Experts warn this threatens to exacerbate China-Canada tensions. Beijing has long claimed sovereignty over Taiwan, and demands that foreign countries seek permission before naval ships go through the strait.
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A pair of autographed Adidas Run-DMC 25th Anniversary shoes on display at the High Museum in Atlanta. PHOTO: BRANDEN CAMP/EPA/SHUTTERSTOCK
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Are three stripes a trademark? Adidas AG thinks so, but Europe’s second highest court ruled that the German sportswear giant’s iconic branding didn’t qualify, saying Adidas hadn’t offered sufficient evidence to claim the parallel stripes were a mark of “distinctive character” worthy of protection. The ruling by the General Court of the European Union could make it more difficult for Adidas to go after rivals using the three-stripe motif, according to a person familiar with the court.
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Facebook Inc. Chief Operating Officer Sheryl Sandberg said that the social-media company failed to anticipate foreign interference aimed at disrupting the 2016 U.S. presidential election. Speaking onstage during a question-and-answer session at the Cannes Lions International Festival of Creativity, Ms. Sandberg said the company was prepared to thwart hackers in advance of the 2016 election but wasn’t ready to combat the spread of misinformation from Russia and elsewhere.
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Deutsche Bank Chief Executive Christian Sewing has signaled cutbacks in its investment bank, as the lender tries to stabilize weak profits. PHOTO: KAI PFAFFENBACH/REUTERS
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Executive turnover and banker defections are complicating Deutsche Bank AG’s efforts to stabilize its Wall Street presence. The German bank is discussing naming its fourth U.S. head in less than four years, according to people close to the bank. And two senior New York bankers are poised to leave, threatening a loss of key clients and possibly other staff, in what would be the most prominent departures from the U.S. operations this year.
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John Elkann, chairman of Fiat Chrysler Automobiles NV and scion of the Agnelli family that founded the Italian side of the car maker, is holding on to a key bastion of support in the wake of busted merger talks with Renault SA: his own family. The Agnelli-Elkann clan—numbering more than 100 extended family members springing from Fiat’s founder, Mr. Elkann’s great-great-grandfather—is so far sticking by him, according to family members and people close to the group. Members gathered late last week for the annual meeting of the family investment company, Giovanni Agnelli BV.
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A computer rendering of the new Airbus A321XLR, expected to enter service in 2023. PHOTO: AIRBUS
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American Airlines Group Inc. agreed to buy 50 long-range, single-aisle jets from Airbus SE—a big order for a new plane that leaves rival Boeing Co. behind in a new race to dominate a potentially promising market for midsize aircraft.
Airbus unveiled its new A321XLR, a fuel-efficient, narrow-body jetliner capable of flying between Europe and the middle of America, on Monday. It has racked up a series of big orders for the aircraft this week at the Paris Air Show.
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A truck moves coal at a Peabody Energy mine near Gillette, Wyo. A new joint venture will be owned by Peabody and Arch Coal. PHOTO: KRISTINA BARKER/REUTERS
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Two of the biggest producers of coal used to fire power plants are integrating their operations in Wyoming and Colorado, betting they can pull off cost savings that would help keep the commodity competitive with natural gas and renewable-energy sources. Arch Coal Inc. and Peabody Energy Corp. said their proposed joint venture would include seven mines, including Peabody’s NARM property and Arch’s Black Thunder site.
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E-commerce technology company Shopify Inc. is extending into physical distribution, offering customers access to a network of dedicated U.S. fulfillment centers to store and ship consumer goods for online orders. The aim is to speed up delivery for retailers racing to keep up with Amazon.com Inc. while keeping a lid on transport costs by placing inventory across a distributed network within easy reach of major population centers.
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