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The Morning Risk Report: Humanitarian Groups Face Banking Challenges as Venezuela Sanctions Escalate
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The U.S. Treasury Department this month named the Red Cross as one international aid group that has explicit authority to conduct business with the Venezuelan government. Smaller groups have run into challenges with their banks. PHOTO: MIGUEL GUTIÉRREZ/SHUTTERSTOCK
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Good morning. The prospect of hefty fines for skirting U.S. sanctions on Venezuela has made some banks skittish about doing business with the humanitarian organizations distributing food and other supplies in the troubled South American country.
Independent nonprofit groups in Venezuela have had U.S. bank accounts closed and transactions frozen as financial institutions take precautionary steps to comply with sanctions, according to aid workers.
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The U.S. this month escalated its campaign against the government of Venezuela. With stronger sanctions in effect, the United Nations and other groups are concerned the financial sector’s compliance practices could further complicate the work of humanitarian aid organizations, whose work has been caught in the center of rising tensions between the Maduro regime and the international community.
The Treasury Department has taken steps to address the issue. The agency’s Office of Foreign Assets Control this month outlined the legal authority aid groups and other firms have to operate in the country. The authorizations and accompanying guidance were intended to send a message to compliance executives: do your part to keep humanitarian assistance flowing.
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Mikhail Fridman is one of several wealthy Russian investors in Pamplona Capital Management, according to people familiar with the matter. PHOTO: SERGEI KARPUKHIN/REUTERS
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A rare showdown between a national-security panel overseeing foreign-investment in U.S. companies and a Russia-linked firm is nearing a potential resolution.
The Committee on Foreign Investment in the U.S. last year ordered a private-equity firm with ties to wealthy Russians to sell its stake in U.S. cybersecurity firm Cofense Inc. American officials had raised national-security concerns about the amount of foreign money invested in the private-equity firm, Pamplona Capital Management, given the nature of Cofense’s business. BlackRock Inc.’s private-equity-funds arm has agreed to take over Pamplona’s minority stake in Cofense, said people familiar with the talks.
The unusual terms of the deal would make it a rare instance in which a sale ordered by Cfius is structured to retain economic interest for a seller. The terms are intended to accomplish Cfius’s goal of limiting foreign investors’ access and sway over critical technology in ways that could hurt the U.S.
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The Trump administration is preparing to extend the length of a license that has enabled Huawei Technologies Co. to continue working with U.S. customers despite national-security concerns that landed the Chinese telecom company on an export blacklist this year. Commerce Department officials plan to announce that they will grant a 90-day extension to the license.
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Chinese police are investigating the presence of a gun in a package shipped by FedEx Corp. to China from the U.S., the latest scrutiny directed at the American shipping company by Chinese authorities. Chinese law prohibits the delivery of firearms, and bringing firearms into the country requires a number of permits, including from public security and customs authorities. FedEx said it had notified the authorities about the shipment.
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A federal judge on ordered Volkswagen AG and the Securities and Exchange Commission to seek a settlement over allegations the auto maker defrauded U.S. investors, rather than continue an expensive legal fight. U.S. District Judge Charles Breyer told the SEC and Volkswagen to return as soon as Oct. 4 with an idea of how to resolve the dispute.
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An expected update of the Volcker rule will deliver a victory to large banks that have fought regulators’ efforts to clarify trading definitions, said people familiar with the matter. The regulators are set to unveil a final rule stripped of a measure that could have expanded the types of assets covered by the rule’s limits on bank trading, the people said. Banks including JPMorgan Chase & Co., Bank of America Corp. and Citigroup Inc. had sharply criticized the proposal.
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In designing flight controls for the 737 MAX, Boeing Co. assumed that pilots trained on existing safety procedures should be able to sift through the jumble of contradictory warnings and take the proper action 100% of the time within four seconds. Now, the aerospace giant is sorting through the consequences: two crashes, a global grounding of the MAX fleet and frustrated airlines. The company is under investigation by federal prosecutors, securities regulators, aviation authorities and lawmakers.
Also ...
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The University of Michigan’s preliminary index of consumer sentiment for August was 92.1, down from July’s 98.4. PHOTO: RICHARD DREW/ASSOCIATED PRESS
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U.S. household sentiment dropped to a seven-month low in August, as consumers took fright from the implications of trade uncertainties and the Federal Reserve’s recent rate cut. The University of Michigan said its preliminary index of consumer sentiment for August was 92.1, down from July’s reading of 98.4. That fell short of economists’ expectations for an initial reading of 97.0 in August, and marked the lowest reading since January.
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Deere & Co. provided fresh evidence of weakening conditions in the U.S. manufacturing sector, saying lower demand for U.S. farm commodities is discouraging farmers from buying its machinery. The Moline, Ill.-based maker of tractors and construction machinery has struggled to increase sales amid lower commodity prices in recent years that have pulled down farmers’ incomes. Now, U.S. farmers are scaling back their purchases as a result of a yearlong trade dispute with China.
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Retailers have seen fewer tourists in their stores this summer, with no signs of improvement, piling on to challenges like volatile trade policy and geopolitical tensions. Prolonged trade anxiety, soft global economic activity and a strengthening U.S. dollar could soften travel to and within the U.S., a U.S. Travel Association report said earlier this month.
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Hikvision surveillance cameras as seen at a testing station near the company’s headquarters in Hangzhou, China, in May. PHOTO: QILAI SHEN/BLOOMBERG NEWS
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Thousands of pieces of Chinese video-surveillance equipment that have provoked national security concerns have been listed for sale on an online superstore catering to U.S. government agencies, despite a recent ban.
The listings are for cameras and recording equipment made by Hangzhou Hikvision Digital Technology Co., 42%-owned by the Chinese government, and Dahua Technology Co., a privately owned Chinese surveillance-equipment maker, The Wall Street Journal found.
The use of equipment made by Hikvision on U.S. military installations, police departments and embassies has sparked concern about security vulnerabilities in the equipment that the Chinese government might exploit. China has relied heavily on Hikvision, in particular, to watch over its 1.4 billion citizens, including ethnic minority Uighur Muslims.
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An Airbus A350 XWB prepares for landing. The aircraft maker’s Americas division is using artificial intelligence to shave costs from its expense report approval process. PHOTO: ADRIAN DENNISADRIAN DENNIS/AFP/GETTY IMAGES
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Airbus SE is using artificial intelligence to squeeze cost out of its finance function, an experiment launched in the aircraft maker’s Americas division that could save the corporation millions of dollars annually if rolled out in other regions.
It’s one of the latest examples of how companies across sectors are digitizing operations to increase efficiency, reduce human error and free up employees for tasks that require more human judgment, such as strategic planning, analysis and audits.
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Img caption/IMG CREDIT HERE
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Christina Spade, in her first interview since being appointed finance chief of the entity that will combine CBS Corp. and Viacom Inc., said she relishes the challenge of helping shape ViacomCBS Inc.
She will have a full agenda before the closing of the all-stock deal, which is expected by the end of the year: Due diligence, merging the books, regulatory filings and tax planning.
And there is the work that comes after the reunification of the companies that were split in 2006: Identifying and eliminating redundancies, budgeting and providing visibility into the company’s future revenue streams, which are expected to become less predictable because of the outsize impact blockbuster films can have on the Viacom side of the deal.
“We have a bigger checkbook but we’ll have to take a look at how we reprioritize our resources,” Ms. Spade said.
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Apollo it has remained in regular contact with Tegna despite so far being rebuffed. PHOTO: ANDREW HARRER/BLOOMBERG NEWS
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Apollo Global Management LLC has approached broadcasting company Tegna Inc. about a deal as the private-equity firm looks to bulk up its ownership of television stations, according to people familiar with the matter. Apollo first contacted Tegna about a potential transaction at the beginning of the year, some of the people said. It sent a letter to the board in February, expressing interest in buying the company at a premium, and it has remained in regular contact despite so far being rebuffed, the people said. Apollo would also consider other options, such as merging its stations into Tegna or selling them to the company.
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