Good morning. Western sanctions and export controls were meant to subdue America’s enemies, leveraging the power of the dollar to strong-arm governments into submission without the bloodshed of military force. They have inadvertently birthed a global shadow economy tying together democracy’s chief foes, with Washington’s primary adversary, China, at the center.

Unprecedented finance and trade restrictions on Russia, Iran, Venezuela, North Korea, China and other authoritarian regimes have squeezed those economies by curbing access to Western goods and markets. But Beijing has increasingly foiled those U.S.-led efforts by bolstering trade ties, according to Western officials and customs data. The bloc of sanctioned nations collectively now have the economy of scale to shield them from Washington’s financial warfare, trading everything from drones and missiles to gold and oil.

• Aligned needs: On one side of the equation, China gets oil from three OPEC powerhouses—Russia, Iran and Venezuela—at heavily discounted prices. That is a windfall for the world’s biggest oil importer, which bought more than 11 million barrels of oil a day last year to keep its economy running. Those countries, in turn, then have revenue they can use to buy sanctioned goods from China.
   
• Made in China: Chinese and Russian customs data show China has supplanted Russia’s loss of Western access to the highest priority dual-use goods, products that have both civilian and military uses.
   
• Booming trade: China’s ability—and willingness—to keep Russia’s war machine running and help Moscow rebuild its military industrial capacity fostered unprecedented trade and finance, say U.S. officials.

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European Union approves new financial crime agency.

The European Union has approved the creation of a new anti-money-laundering watchdog, a move aimed at closing loopholes for illicit cash flows in the 27-member union.

The Council of the European Union, a legislative body, said Thursday that it had adopted a package of anti-money-laundering measures, including one creating a Frankfurt-based authority to oversee the most high-risk financial entities.

New York financial regulator sets standards on handling crypto customer complaints

The New York State Department of Financial Services is requiring cryptocurrency firms under its supervision to set up procedures to promptly address customer service requests and complaints and to collect relevant data as part of its examinations, part of the regulator’s efforts to double down on its focus on protecting crypto customers.

The requirements, laid out in an NYDFS guidance document issued Thursday, stipulate that crypto companies must maintain records of their customer service policies and procedures and conduct quarterly analyses of the requests and complaints received. The guidance also outlines what the agency said are effective strategies to handle customer complaints, such as providing ways both by phone and electronic text to submit complaints, and issuing regular updates and estimated resolution timelines to customers.

—Mengqi Sun

• China will impose export controls on billions of dollars of aviation equipment, technology and software, a move it said was aimed at enhancing national security.                                                          ​
• Federal prison officials returned Sam Bankman-Fried to the New York jail that he left last week, bowing to a recommendation from a federal judge that the FTX founder be allowed to remain there while working on his appeal.
   
• The Supreme Court on Thursday revived a National Rifle Association lawsuit alleging a New York regulator unlawfully attempted to blacklist the organization because of its pro-gun views.

Eurozone firms, consumers proffer sunnier mood.

Confidence among consumers and businesses alike improved in the eurozone this month as the bloc looks increasingly sure of a soft landing from recent years’ high inflation and interest rates.

The brighter mood in the bloc comes as inflation cools and the European Central Bank prepares to cut interest rates, clearing the way out of two years of economic stagnation and biting price rises that began with Russia’s invasion of Ukraine early in 2022. Economic growth is beginning to pick up pace and the ECB expects inflation to come down to its 2% target by next year.

The eurozone’s unemployment rate also fell to a record low in April.

• The biggest investor in U.S. solar manufacturing is embracing a new technology that reduces the cost of producing the panels, potentially bolstering efforts to build a supply chain outside of China for an industry crucial to the energy transition.
   
• Taiwan expects to triple its economic growth rate this year as strong demand for new technology such as artificial intelligence boosts the island’s exports.

• Healthcare providers are wary of relying on a handful of dominant tech providers, especially after the February hack of a critical UnitedHealth Group unit froze millions of dollars in claims.
   
• Private-equity firms remain reluctant to add staff or raise pay despite an improving outlook for the industry.
   
• Applebee’s and IHOP promotions like $1 margaritas and 50-cent wings aim to bring customers into restaurants. They are also meant to be profitable for franchisees.
   
• 🎧 Listen to Moderna’s CIO describe how technology enabled the biotech’s first major distribution efforts during the pandemic and how it now plans to leverage tech to lower costs.

• Donald Trump became the first former president ever convicted of a crime, with a Manhattan jury finding him guilty Thursday of 34 felonies for falsifying records to cover up hush money paid to a porn star.

• The luster of a 1,400-foot-high tower on Manhattan's Billionaires’ Row has been tarnished by claims that the building was beset by construction defects.

• America’s tiniest national park has a hugely unpronounceable name.

• Landing a job is all about who you know (again).

Follow us on X at @WSJRisk. Follow Risk & Compliance editor David Smagalla @DSmagalla_DJ and reporters Mengqi Sun @_MengqiSun, Dylan Tokar @dgtokar and Richard Vanderford @VanderfordRich.

You can reach us by replying to any newsletter, or email David at david.smagalla@wsj.com.