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The Morning Risk Report: Humanitarian Groups Sending Gaza Aid Face Banking Challenges

By Richard Vanderford

 

Good morning. Some humanitarian organizations in Europe and the U.S. trying to combat a hunger crisis in Gaza say they have had their bank accounts closed without reasons being provided and their transactions frozen since the Oct. 7 Hamas-led attacks on Israel.

This move by banks to derisk stems from challenges many of them encounter in regions governed by sanctioned groups that allegedly have a history of diverting aid, as it can be difficult to ascertain the ultimate beneficiaries of transactions. And normal methods banks use to investigate transactions might not be available in active war zones.

  • Longstanding scrutiny: Financial transactions and bank accounts related to the Palestinian territories of Gaza or the West Bank were frequently flagged and questioned by banks even before the most recent conflict. One reason for this is that Gaza was under the control of Hamas, a U.S.-designated global terrorist organization, until Israel’s invasion in late 2023.
     
  • Numerous incidents: From Oct. 7 through late May, there had been 30 incidents where groups or individuals with links to or activities directed toward the Palestinian territories had their bank accounts closed in Europe and other countries, according to Agnese Valenti, an Amsterdam-based lawyer at the European Legal Support Center, which advocates for Palestinian rights in Europe.
     
  • Risk shy: Despite the carve-out for aid in sanctions laws, a decade-plus of expanding sanctions packages has made banks, which tend to be risk-averse, inclined to simply “derisk,” dropping clients they deem as potentially problematic.


Please note that the Morning Risk Report will be taking a break Monday for Labor Day in the U.S. We will be back Tuesday.

 
Content from: DELOITTE
Climate Change Resiliency Investments Could Save Home Insurers Billions

For personal property insurers hit hard by severe weather-related claims, sunnier profitability is possible by partnering with stakeholders to get more homes up to code.  Read More

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Compliance

The FTC’s new rule on fake reviews is slated to go into effect later this year. ILLUSTRATION: THOMAS R. LECHLEITER/WSJ, ISTOCK

$5 for a good online review? No way, says new FTC rule.

The Federal Trade Commission inked a new rule to combat fake online reviews and sham social-media clout.

The new rule, finalized this month and set to go into effect later this year, prohibits a slew of practices including buying fake indicators of social-media influence, such as followers or views made by a bot or hijacked account, to inflate the importance of a brand or product for commercial purposes.

 ‏‏‎ ‎
  • Major U.S. publishers are challenging a Florida law enacted last year that cracks down on sexual content in school libraries, alleging it has led to indiscriminate book banning in violation of the First Amendment.
     
  • Dozens of South Korean children sued their government over inadequate policies targeting climate change, arguing their rights to live in a clean environment had been violated. On Thursday, they earned a major legal victory.
     
  • Kalshi, a trading startup that lets its users bet on the outcome of future events, has been granted a regulatory license that could help it increase its customer base.
     
  • Nasdaq will pay $22 million to the top U.S. commodities regulator, resolving a longstanding case over payments made to encourage trading on a now-defunct energy exchange.
     
  • A federal labor agency has denied Amazon.com’s request to overturn the results of a 2022 election in which workers voted to unionize a Staten Island, N.Y., warehouse.
     
  • A regulator in New South Wales state released a report that found embattled Australian casino operator Star Entertainment hadn’t moved fast enough to overhaul its operations, raising fresh doubts about the future of Star’s ability to continue operating a casino in Sydney.

“This settlement continues the CFTC’s campaign against highly respected legal and compliance professionals...The CFTC’s standard is apparently that everyone must know everything everywhere all at once.”

— Commodity Futures Trading Commission Commissioner Caroline D. Pham, dissenting from the CFTC's settlement with Nasdaq.
 

Risk

Chinese leader Xi Jinping at a summit in San Francisco last year. PHOTO: REUTERS

China’s Xi pushes to keep U.S. ties steady through bumpy presidential race.

Chinese leader Xi Jinping used a meeting with U.S. national-security adviser Jake Sullivan to push for stability in ties between the two global powers, seeking to define the relationship in ways that favor Beijing as the U.S. presidential election draws near.

Sullivan has met this week in Beijing with several top Chinese leaders who stressed the importance of following through on agreements between President Biden and Xi at a summit in California last November, during which Biden pledged to avoid a new Cold War with China and to seek more areas of cooperation.

 

Threat of strike this fall hangs over U.S. ports.

Efforts to avoid a walkout by dockworkers at some of the nation’s busiest seaports are entering a crucial phase.

Union officials representing 45,000 workers at ports from Maine to Texas will meet for two days in New Jersey starting Wednesday to discuss wage demands and prepare to strike on Oct. 1.

 
  • Iran has continued to expand its stockpile of near weapons-grade uranium in recent months, a confidential report from the United Nations atomic agency said Thursday, amid warnings in Washington that Tehran is better placed to produce the bomb in the future.
     
  • Japan is planning a multibillion-dollar network of small satellites to monitor ships and military sites, its latest response to a barrage of pressure from China that includes a recent incursion into Japanese airspace.
     
  • Consumer inflation in the Tokyo metropolitan area rose at a faster-than-expected pace in August, stoking speculation that the Bank of Japan will soon raise interest rates again.
     
  • Eurozone inflation fell sharply in August to its lowest level since mid-2021, when the global surge in consumer prices that prompted an unprecedented rise in interest rates was just getting started.
     
  • Australian retail sales were weaker than expected in July, coming in unchanged from June, in a further sign that the commodity-rich economy is slowing
 ‏‏‎ ‎
$101.2 Million

The year-to-date revenue of a single "pig butchering" scam based in Myanmar, according to a report from blockchain analytics company Chainalysis.

 

Executive Insights

Here is our weekly roundup of stories from across WSJ Pro that we think you'll find useful.

  • OpenAI is expanding some of its educational offerings, while holding others—including a tool that could be used to detect cheating—back.
     
  • The Boy Scouts of America’s 321-piece art collection, including Norman Rockwell paintings, is heading to the auction block to raise funds for sex-abuse survivors.
     
  • Canada Goose, known for its extreme cold weather gear, is expanding beyond its heavyweight down-filled coats and parkas, selling everything from hoodies to T-shirts and sneakers.
     
  • European central bankers don’t expect to speed up policy easing as their American counterpart starts to lower borrowing costs.
 

What Else Matters

  • Kamala Harris has taken a narrow lead over Donald Trump, a new Wall Street Journal poll finds.
     
  • Apple and Nvidia are in talks to invest in OpenAI, a move that would strengthen their ties to a partner integral to their efforts in the artificial-intelligence race.
     
  • Once an escape from Washington, Los Angeles is now giving Kamala Harris access to powerful Hollywood neighbors and help in the race for the White House.
     
  • "Don’t shoot! I’m Farhan!" An Israeli hostage’s captivity ended with a cry in a tunnel.
 ‏‏‎ ‎

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About Us

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.

 
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