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The Morning Risk Report: U.S.-Backed Researchers Use AI to Probe for Weaknesses in Drug Supply Chains
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The DHS-backed research comes amid focus on supply-chain issues in the healthcare sector, a concern that has ramped up in the aftermath of pandemic-induced disruptions to global trade. The research project will in part probe the extent of foreign influence on U.S. drug supplies, including from China.
Any overreliance on foreign inputs in drug supply chains could leave the U.S. open to dire shortages in the event of conflict or natural catastrophe. The White House has flagged the potential disruption of the pharmaceutical supply chain as a national-security issue, saying these drugs are essential to the health and prosperity of the country.
Quantifind Inc., a company that normally does risk screening for financial institutions, will do the work, looking into supply chains for the Cross-Border Threat Screening and Supply Chain Defense Center of Excellence, a government-backed research center connected with Texas A&M University.
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Content from our Sponsor: DELOITTE
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Is It Time to Name a Chief Resilience Officer?
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In an environment of potentially existential threats, leaders should consider developing organizational resilience and corresponding capabilities. Could a chief compliance officer help? Read More ›
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Compliance Pros Look to Geopolitical Tensions, Survey Shows
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Geopolitical issues are a growing concern for compliance professionals, according to a survey of 250 compliance specialists released Tuesday by Boston Consulting Group.
Rising geopolitical tensions joined other key topics, including sanctions and trade compliance, for the first time in BCG's survey of compliance issues. Sanctions compliance was a concern for more than a third of respondents, while geopolitical tensions were named as a concern by 17%.
Cybersecurity topped the list of compliance professionals' worries, with 62% of respondents naming it as a concern. Nearly four-fifths of respondents also reported that their commitment to ESG issues had intensified over the past two years.
–Richard Vanderford
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BlockFi filed for bankruptcy on Monday. PHOTO: GABBY JONES/BLOOMBERG NEWS
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More fallout from FTX collapse. BlockFi Inc. told a U.S. bankruptcy court on Tuesday it was blindsided by cryptocurrency exchange FTX’s rapid demise and would work to repay creditors and allow customers access to their digital wallets as soon as possible.
Jersey City, N.J.-based BlockFi, which secured a rescue loan from FTX in June to shore up its liquidity, reviewed unaudited FTX financial reports as part of due diligence it performed at the time of the transactions, said Joshua Sussberg, a lawyer for BlockFi, during its debut hearing in the U.S. Bankruptcy Court in Trenton, N.J. BlockFi filed for chapter 11 on Monday after the loan fell apart in the wake of FTX’s collapse earlier in November.
BlockFi, which also counts FTX as one of its largest borrowers, is an early victim brought down by FTX’s downfall in an exceptionally intertwined and lightly regulated sector. The company said Tuesday that, unlike FTX, it had appropriate internal controls and would seek to return client funds as soon as possible.
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Oligarch task force expanding focus. A Justice Department task force created in response to Russia’s invasion of Ukraine is increasingly shifting its attention from yachts and private jets to the professional network of service providers that enable Russian oligarchs to move and hide their money around the world, a senior prosecutor said.
The focus on seizing large and ostentatious assets such as yachts and private jets before they were moved to out-of-reach jurisdictions was a short-term goal of the task force, said Andrew Adams, the director of the Justice Department’s Task Force KleptoCapture, during a legal conference in New York on Tuesday.
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In other compliance-related news...
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A prepandemic military parade in Beijing showcased nuclear-capable missiles. PHOTO: GREG BAKER/AGENCE FRANCE-PRESSE/GETTY IMAGES
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China's nuclear stockpile swells. China is on pace to challenge the U.S. militarily and prevent it from intervening in a crisis with Taiwan, including by expanding its stockpile of nuclear warheads, the Pentagon said in a report published Tuesday.
The 170-page congressionally mandated annual report, which assesses China’s military and security strategy, comes amid U.S.-China tensions over Taiwan and halting efforts by the U.S. to engage Russia and China in nuclear arms control talks. The report concluded that China’s goal of expanding its nuclear arsenal and its military pursuit of control of Taiwan hadn’t been hampered over the past year.
The report predicted that China would field a stockpile of about 1,500 warheads by 2035, roughly triple the number today.
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Another crypto exchange folds. Bitfront, operated by Japanese messaging app Line, is the latest cryptocurrency exchange to shut down.
Bitfront, which runs on the Line blockchain that offers crypto token Link, said in a Sunday notice that its closure is unrelated to recent developments in the crypto market, including exchanges that have been accused of misconduct.
“Despite our efforts to overcome the challenges in this rapidly evolving industry, we have regretfully determined that we need to shut down Bitfront in order to continue growing the Line blockchain ecosystem and Link token economy,” the notice said.
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Ukraine war strains ties. Trans-Atlantic ties are starting to fray as French President Emmanuel Macron and other European leaders chafe at new U.S. policies they say compound economic woes fueled by the war in Ukraine and the resulting energy crisis.
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In other risk-related news...
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OPEC and other big oil producers are likely to decide to keep output levels flat at their meeting Sunday, the group’s delegates said, amid mounting concerns over returning Covid-related lockdowns in China and lingering uncertainty over Russia’s ability to pump.
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The rate of gun deaths in the U.S. reached a 28-year high in 2021 after sharp increases in homicides of Black men and suicides among white men, an analysis of federal data showed.
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Across much of the developing world, cash-strapped governments are having to cut spending and freeze investments so they can pay creditors, as the Federal Reserve’s interest-rate hikes drive up borrowing costs.
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Several thousand shipping containers of solar panels have been detained by U.S. Customs near ports such as Los Angeles, according to some estimates, while even more have been held up in factories and ports or diverted to places such as Europe—a result of U.S. legislation aimed at cracking down on labor abuses in China.
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Iraqi Prime Minister Mohammed al-Sudani said his country would tighten security cooperation with Iran, after Tehran strengthened its military presence along its western border to prevent the infiltration of Kurdish groups based in northern Iraq.
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House Speaker Nancy Pelosi and Senate Majority Leader Chuck Schumer speaking to the media Tuesday. PHOTO: YURI GRIPAS/BLOOMBERG NEWS
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Congress takes action to halt rail strike. Congressional leaders agreed Tuesday to head off a nationwide strike by railroad workers, promising to pass legislation quickly that would avert a work stoppage and prevent damage to the economy despite their misgivings about intervening in the dispute.
Speaker Nancy Pelosi (D., Calif.) said that House lawmakers will aim to pass legislation Wednesday that accepts the original labor union agreement negotiated by Biden administration officials plus additional railway worker benefits added from subsequent negotiations. Senate leaders also said they would aim to quickly pass the bipartisan legislation once it is sent over from the House, even as some lawmakers pushed for changes to the deal or said Congress should stay out of it.
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Network announces staffing cuts. AMC Networks Inc. said it is planning to lay off about 20% of its U.S. employees, a sign of further disruption at a company that earlier Tuesday announced its chief executive had stepped down less than three months after taking the reins.
“We have determined we need to conserve resources at this time,” the entertainment company said Tuesday. “This will involve cutbacks in operations which unfortunately includes a large-scale layoff, impacting approximately 20% of our employees in the U.S.” AMC said it has about 1,000 U.S. employees.
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In other operations-related news...
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Nestlé SA said Tuesday it would explore strategic options for the world’s only approved peanut allergy drug, effectively putting the drug up for sale, after lower-than-expected demand from doctors and patients.
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Elon Musk has warned of dire financial challenges facing Twitter, the social-media company he took over for $44 billion in October. Photo Illustration: Laura Kammermann
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Musk Stokes Battle With Apple. Elon Musk’s onslaught Monday against Apple Inc. and a cornerstone of the iPhone business empire has set the stage for a potentially bruising battle between the world’s richest man and the world’s most valuable company.
Apple and its Chief Executive Tim Cook have the ability to hold great sway over Twitter Inc.’s potential success, as the iPhone maker is a major advertiser and tightly controls the software on its App Store.
In a string of tweets accusing Apple of stanching free speech and claiming that the tech giant had threatened to kick the Twitter app off the iPhone, Mr. Musk introduced a new wrinkle in Apple’s efforts to maintain control over software distribution, acting as a megaphone for critics who say the company holds too much power through its App Store.
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