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The Morning Risk Report: Boeing Faces Possible FAA Penalties Tied to 2015 Safety Settlement
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The Federal Aviation Administration’s chief piloted a 737 MAX this fall. PHOTO: MIKE SIEGEL/REUTERS
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Good morning. U.S. aviation authorities are considering new safety-related penalties or other enforcement action against Boeing Co., according to a person briefed on the details, even as they prepare to allow the plane maker’s beleaguered 737 MAX fleet back in the air as soon as the middle of next week.
The Federal Aviation Administration, according to the person, has alerted Boeing that alleged quality-control lapses on assembly lines and undue management pressure on engineers certifying safety systems could amount to violations of a 2015 settlement addressing safety-oversight problems. The agency is examining issues affecting several aircraft models, the person official said, including production of the 787 Dreamliner.
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Boeing declined to comment. In the wake of the MAX crashes, the aircraft maker has retooled its internal safety-monitoring systems. Boeing’s efforts to resolve numerous problems associated with a hazardous flight-control system on the MAX have taken nearly two years, starting even before regulators grounded the fleet in March 2019. Misfires of that automated feature, called MCAS, took 346 lives in two crashes over less than five months.
The five-year-old agreement reached in 2015 was a response to persistent safety shortcomings identified by the FAA among some of Boeing’s engineers and inside its airliner factories. Its aim was to prevent breakdowns of multiple Boeing safety management and reporting systems.
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From Risk & Compliance Journal
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A U.S. unit of Deutsche Bank AG paid a fraction of the maximum penalty it could have faced to settle alleged sanctions violations, as the Treasury Department pointed to the bank’s compliance efforts and cooperation as mitigating factors. PHOTO: MICAH B. RUBIN FOR THE WALL STREET JOURNAL
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Companies should create closer links between their compliance departments and risk managers who focus on an array of corporate hazards, the Committee of Sponsoring Organizations of the Treadway Commission said in new guidance issued Tuesday.
The voluntary guidance encourages organizations to better coordinate risk management, compliance and ethics functions to strengthen protections against legal and regulatory pitfalls. “You need to integrate those together,” COSO Chairman Paul Sobel tells Risk & Compliance Journal. “Make sure that they’re being managed jointly or at least integrated so that they’re not duplicating efforts.”
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Workers pack boxes ahead of Alibaba’s Singles Day, often billed as the world’s largest online retail event. PHOTO: HECTOR RETAMAL/AGENCE FRANCE-PRESSE/GETTY IMAGES
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China released new draft antimonopoly rules for its online platforms, signaling an increased appetite by Beijing authorities to rein in its dominant technology companies. China’s State Administration for Market Regulation said Tuesday it would seek feedback on rules covering a host of potential antimonopolistic practices on the country’s digital platforms, including offering different prices to different consumers for the same product.
The release of the new draft rules, the timing of which came as a surprise to some in the market, follows on regulators’ abrupt intervention last week to halt the initial public offering of Ant Group.
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A group of Democratic senators asked the Justice Department to drop efforts to convert Purdue Pharma to a public asset, saying the proposed “rebranding” would force state governments to own a company they don’t want.
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High-ranking lawmakers including Sens. Chuck Schumer (D., N.Y.), Dianne Feinstein (D., Calif.) and Elizabeth Warren (D., Mass.) said in a letter sent Tuesday to Justice Department officials that the agency shouldn’t go ahead with a proposed settlement of yearslong government investigations into Purdue, the bankrupt OxyContin manufacturer. If approved by the judge overseeing Purdue’s bankruptcy, the settlement would clear the way for the company to turn over future profits to cities and states that have accused it of helping fuel the opioid addiction crisis.
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TikTok’s Chinese parent company asked a U.S. appeals court for additional time to work out a potential divestiture of the popular video-sharing app, citing a lack of communication from the Trump administration with a Thursday deadline looming.
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The swearing-in of Manuel Merino as Peru’s new president followed a fast-moving impeachment of President Martín Vizcarra that many Peruvians saw as an effort by lawmakers to shield themselves from corruption investigations. About half of the 130 members of Congress are facing criminal investigations on matters including graft and homicide.
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South African prosecutors issued an arrest warrant for the secretary-general of the ruling African National Congress Tuesday, a police spokeswoman said, making him the highest-profile official to be charged in a corruption scandal that has pitched President Cyril Ramaphosa against powerful members of his own party.
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Several conservative Supreme Court justices on Tuesday joined liberals voicing skepticism the entire Affordable Care Act must fall because of one change Congress made in 2017, suggesting the law may survive its latest test in the high court. The court is hearing arguments in a lawsuit seeking to strike down the Obama-era law. The case could be decided in coming months.
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A UPS delivery driver in New York last month. PHOTO: VICTOR J. BLUE/BLOOMBERG NEWS
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United Parcel Service is loosening its guidelines on employee appearance, including lifting a longstanding ban on facial hair and allowing natural Black hairstyles like Afros and braids.
The delivery giant said the changes, which also include eliminating gender-specific rules, are part of an effort to “celebrate diversity rather than corporate restrictions,” according to an announcement on an internal website and documents reviewed by The Wall Street Journal.
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President-elect Joe Biden seeks to give priority to a transition to cleaner energy sources. A wind farm in Indiana. PHOTO: TANNEN MAURY/EPA/SHUTTERSTOCK
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Energy and climate policy will be among President-elect Joe Biden’s top priorities when he steps into the Oval Office next year, but it could also prove one of his toughest challenges. President Trump has been a champion of traditional energy industries such as coal and oil. Mr. Biden wants to supercharge a transition to cleaner energy sources and has said reversing several Trump administration rollbacks of regulations aimed at combating climate change is a “Day 1” priority.
Investors already are pushing toward clean energy and Mr. Biden can give them a boost by tightening regulations and issuing executive orders banning new permitting of drilling projects on public lands. Obstructing pipeline projects is one way Mr. Biden could accelerate America’s shift toward renewable energy, by making oil more difficult and expensive to move around.
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California voters rejected a bid to roll back a 42-year-old limit on commercial-property tax increases, voting down Proposition 15 by a 52%-48% margin, according to the Associated Press, which called the race late Tuesday.
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Few participants made it all the way through GE’s five-year Corporate Audit Staff program. PHOTO: BENOIT TESSIER/REUTERS
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General Electric is disbanding its Corporate Audit Staff program, a rigorous multiyear rotation through various divisions that the conglomerate has long used to groom future leaders.
The program, a proving ground for young GE finance executives, dates back to the early 20th century. Employees worked long hours and traveled the world analyzing business units, looking for waste or reviewing internal controls. The end of the program is part of Chief Executive Larry Culp’s effort to simplify operations.
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A business in Washington, D.C., let it be known it was open Monday. Some shops around the country boarded up over fears of possible unrest related to the U.S. election. PHOTO: YEGOR ALEYEV/ZUMA PRESS
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Brands face a daunting challenge in appealing to both red and blue America even as a contentious political campaign season draws to a close, marketing executives say.
“How do we figure out how to work across the aisle? This will be true not only for the citizens of this country. It’s true also for businesses,” Ann Mukherjee, chairman and chief executive for North America at beverage company Pernod Ricard, said Tuesday during The Wall Street Journal’s CMO Network Summit. “Unity is going to be key. So we cannot be tone-deaf. We have to be thinking about all points of view.”
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A drive-through coronavirus testing site in El Paso, Texas, last month. PHOTO: CENGIZ YAR/GETTY IMAGES
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