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The Morning Risk Report: Global Shipping Faces Smuggling Questions
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The largest seizure of heroin ever made in Britain came through a vessel that docked at Felixstowe last August, according to the U.K.’s National Crime Agency. PHOTO: NATIONAL CRIME AGENCY/HANDOUT/SHUTTERSTOCK
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Good morning. Ocean carriers saw a series of seizures of large shipments of drugs in the U.S. and Europe in 2019, and officials say they are a sign of the growing use of commercial shipping operations for increasingly large loads of cocaine, heroin and other drugs. Officials say the growing scale of shipping operations, with the biggest container ships doubling in size over the past decade, has made it an attractive target for drug traffickers.
For ocean carriers and their shipping customers, the moves by drug smugglers to piggyback on their operations raises new concerns for international supply chains. The drive to stem the drug flows is raising costs and slowing shipments while highlighting the tough security questions that are arising as operators pursue greater size and speed.
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Ship operators are under pressure to deliver vast amounts of cargo on time, and the rule of thumb around the world is that only one in 10 containers gets checked as boxes move quickly through ports and into sprawling, complicated logistics networks.
Seizures of cocaine aboard commercial ships and private vessels world-wide more than tripled over the past three years, to 73.2 metric tons in 2019 from 22.4 metric tons in 2017, according to Resilience360, which monitors risk and disruptions across supply chains and is owned by German logistics company Deutsche Post DHL.
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From Risk & Compliance Journal
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Yemenis protest against the U.S. over the killing of Maj. Gen. Qassem Soleimani. Policy analysts expect the U.S. to impose more sanctions on Iranian officials or companies that trade with Iran as tensions escalate between Tehran and Washington. PHOTO: YAHYA ARHAB/SHUTTERSTOCK
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Sanctions observers expect the U.S. to impose more sanctions as tensions escalate between Tehran and Washington following a U.S. airstrike that killed an Iranian military leader.
Possible targets of sanctions include Iranian officials or East Asian shipping companies that may be involved in the transportation of Iranian oil, sanctions analysts tell Risk & Compliance Journal’s Mengqi Sun. The U.S. also could target money facilitators and people running shell companies that are believed to be involved in procuring nuclear weapons parts for Iran, as well as Iranian consumer goods companies.
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Justice Department Closes Uber Bribery Probe
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The Justice Department has closed an inquiry into whether Uber Technologies violated a U.S. law prohibiting bribes to foreign government officials, the ride-sharing company said.
The Uber investigation, which was previously reported by The Wall Street Journal in 2017 and disclosed by the ride-hailing company in April, focused on allegations of improper payments in Indonesia, Malaysia, China and India. The company disclosed the end of the probe in a securities filing, saying the Justice Department would be taking no action.
An Uber spokesman declined to comment on the end of the Justice Department probe beyond the information included in the filing.
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The United Auto Workers emblem on Solidarity House in Detroit, Michigan. PHOTO: JEFF KOWALSKY/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Federal prosecutors filed a new charge against a former United Auto Workers official, alleging the defendant was involved in an embezzlement scheme that was part of a wider racketeering enterprise at the union.
The U.S. attorney’s office in Detroit charged Vance Pearson, a former director at UAW’s regional office in Missouri, with one count of conspiracy to embezzle union funds and to use a facility of interstate commerce to aid a racketeering enterprise, according to documents filed in a Michigan federal court. The new charge is the first to specifically mention racketeering in the yearslong investigation into corruption and embezzlement at the union.
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Vice President Mike Pence spoke by phone with Venezuela’s Juan Guaidó and reiterated the U.S. position that Mr. Guaidó is the country’s “only legitimate” leader, a senior administration official said. The 10-minute phone call on Monday afternoon came after President Nicolás Maduro sought to exert his control over the country on Sunday, with his allies trying to replace Mr. Guaidó as the head of the National Assembly with their preferred choice.
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An affiliate of Owens-Illinois Group, one of the world’s largest manufacturers of glass container products, filed for bankruptcy under the weight of thousands of asbestos injury claims. Facing 900 asbestos-related lawsuits and thousands of additional claims, O-I Glass created Paddock Enterprises LLC, a subsidiary, to isolate the personal injury liabilities and separate them from the valuable glass operations in advance of the bankruptcy.
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A group of men who allege they were sexually abused when they belonged to the Boy Scouts of America filed a lawsuit in Washington, D.C., against the organization, testing the limits of the district’s new statute-of-limitations law.
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The Ghosns in Tokyo last March. PHOTO: ISSEI KATO/REUTERS
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A Japanese court issued an arrest warrant for Carole Ghosn, wife of former Nissan Motor Co. Chairman Carlos Ghosn, on suspicion of perjury.
In a statement Tuesday, Tokyo prosecutors said Mrs. Ghosn is suspected of lying in sworn testimony last April before the court handling her husband’s case. He is accused of financial crimes including funneling Nissan money to business partners in the Middle East for his personal benefit. Mr. Ghosn says he is innocent.
Prosecutors alleged Mrs. Ghosn’s testimony that she didn’t know or remember meeting one potential witness was false, as she had met and exchanged messages with the person after Mr. Ghosn’s arrest in November 2018. Prosecutors didn’t identify the person.
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The human, environmental and economic toll of Australia’s devastating wildfires is mounting each day, but the country has barely begun to grasp the total cost of the blazes and how it will change the way people live. Australia’s insurance council says more than $260 million of claims have been lodged since Nov. 8, when it declared a catastrophe, but that represents a trickle of what is to come. An additional $39 million in claims were lodged before Nov. 8 for fires in September and October.
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A Boeing 737 MAX jet being assembled in March 2019. The company halted production this month. PHOTO: TED S. WARREN/ASSOCIATED PRESS
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Boeing said it would reassign as many as 3,000 workers that make the 737 MAX, and its biggest supplier announced plans for voluntary layoffs ahead of a planned production halt of the grounded jetliner.
Boeing said in a memo to employees that it doesn’t plan to furlough any staff when it suspends production of the MAX in the middle of this month to limit further pressure on its finances. The aerospace giant said it would shift workers to look after the fleet of about 800 grounded jets and build other aircraft. Boeing announced plans last month to halt MAX production as it awaits regulatory approval for the MAX to return to service and the resumption of jet deliveries, with no certainty on the timing of such a move.
Spirit AeroSystems Holdings, which makes the fuselage and other parts for the MAX, is also suspending production and said Monday it is evaluating a voluntary layoff package for some employees to address ramifications from the suspension of a production program that accounts for half of its sales.
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A Bosch shuttle car at the International Motor Show in Frankfurt in September. PHOTO: FRIEDEMANN VOGEL/SHUTTERSTOCK
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Germany-based engineering company Bosch is using artificial intelligence to reduce the risk that hackers will be able to trick cars’ electronic systems into misinterpreting road signs. Traffic-sign recognition is one of the key tools required for autonomous vehicles. Thanks to road-sign standardization, this technology is well-suited to machine-learning and deep-learning processes that can identify images.
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The employee ID badge is starting to be replaced by biometric identification systems, microchip implants and tools that monitor workers’ gaits or typing habits. However, research shows facial recognition isn’t always accurate, particularly when identifying people of color. Governments are starting to draft legislation to restrict how it can be used. Several U.S. cities including San Francisco have banned government agencies from using the technology. Europe’s privacy laws require special safeguards to protect biometric data.
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Glyphosate, Roundup’s active ingredient, is a dominant weedkiller world-wide. A farmer in Brazil applied it last year. PHOTO: DIRCEU PORTUGAL/ZUMA PRESS
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Before it was targeted by tens of thousands of plaintiffs in lawsuits, Roundup was the king of the field—the world’s most heavily used weedkiller. Now it’s mired in court over claims it caused cancer and viewed as a major liability for its parent company, Bayer. On top of that, some weeds have evolved to survive Roundup.
That has left an opening for a new contender, seed and pesticide maker Corteva Inc., to cover for Roundup’s failings, kicking off a clash of agribusiness rivals as fierce as Pepsi’s showdown with Coca-Cola on store shelves. At stake are billions of dollars in herbicide and seed sales, and influence over how farmers manage crops for decades.
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The steady erosion of tax enforcement has been driven by years of cuts in the Internal Revenue Service’s budget along with a heavier workload. PHOTO: JONATHAN ERNST/REUTERS
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Individual taxpayers are half as likely to get audited as they were in 2010, after tax enforcement by the Internal Revenue Service fell to the lowest level in at least four decades.
The IRS audited 0.45% of personal income-tax returns in fiscal 2019, down from 0.59% in 2018 and marking the eighth straight year of decline, according to a report released on Monday. In 2010, the IRS audited 1.1% of tax returns. The report doesn’t break down audits by income category or provide details about how much revenue they generate.
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Goldman Sachs will release new details about how and where it makes money, a shot of transparency it hopes will win over skeptical investors and boost a stock price stuck in neutral.
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