Good morning. The European Union agreed to set up a new sanctions regime that slaps export bans on third countries for helping Russia sidestep Western restrictions, one of several measures meant to tighten economic pressure on Moscow, diplomats said.

• The new regime: The 27-nation bloc didn’t enact a proposed trade ban against eight Chinese companies for supplying Russia with goods that have a military use. Following discussions with Beijing, the EU blacklisted only three of the firms, diplomats said.
  
  The latest measures form the centerpiece of the 11th package of sanctions the EU has imposed on Russia since its invasion of Ukraine in February 2022. Senior member-state officials gave the measures political backing on Wednesday after weeks of discussion. Formal signoff is expected Friday.
   
• Preventing loopholes is a priority: European and U.S. officials have made it clear their priority now is to make their sanctions more effective and prevent loopholes. Atop that list have been plans to prevent companies from third countries from supplying Russia with Western products that can be used in the war.
  
  The EU is seeking to crack down on Russia’s ability to import sanctioned Western dual-use goods, including high-tech products, which the Kremlin can use in the war against Ukraine. Russia’s economy has so far defied the deep slump expected after the U.S., Europe and other Ukrainian allies imposed a range of sanctions, although there has been a sharp fall in government energy revenues this year following the start of a Western oil price cap mechanism.

FTC sues Amazon over ‘manipulative’ tactics used to enroll millions in prime

The Federal Trade Commission sued Amazon.com on Wednesday, alleging the retail giant worked for years to enroll consumers without consent into Amazon Prime and made it difficult to cancel their subscriptions to the program.

The FTC’s complaint, filed in federal court in Seattle, alleged that Amazon has duped millions of consumers into enrolling in Amazon Prime, a $139 annual subscription service with more than 200 million members worldwide that has helped Amazon become an integral part of many American households’ shopping habits.

Companies brace for Supreme Court ruling on affirmative action

U.S. companies are preparing for a Supreme Court ruling on affirmative action to present new tests to their hiring and other personnel decisions.

The outcome of two parallel cases, which involve admissions policies at Harvard University and the University of North Carolina, won’t directly affect employers’ practices and policies, which are governed by a different statute than admissions.

But lawyers and business leaders say they expect that any decision restricting or prohibiting race-conscious admissions could lead to more legal challenges to company hiring and promotion decisions, and more internal resistance to diversity, equity and inclusion initiatives.

• The Securities and Exchange Commission and its audit watchdog charged accounting firm Marcum with systemic failures in its quality controls and violations of auditing standards tied to work for hundreds of special-purpose acquisition companies and other clients.
   
• One of the top executives at Church & Dwight was stripped of $200,000 in stock awards because he deleted texts on his personal phone that the company wanted to review for an undisclosed legal matter.
   
• Hotel guests are suing Marriott International over a daily fee at the chain’s Los Angeles-area hotels, saying the employee-protection surcharge violates California’s consumer protections and unfair competition laws.
   
• Senate Majority Leader Chuck Schumer (D., N.Y.) launched an effort Wednesday to write new rules for the emerging realm of artificial intelligence, aiming to accelerate U.S. innovation while staving off a dystopian future.

SEC seeks more disclosure from smaller banks in wake of failures.

The Securities and Exchange Commission has started questioning some regional and community banks about risks tied to recent bank failures, a move designed to ensure investors have details on any spillover effects.

Many financial institutions and other companies have voluntarily updated their financial statements to address potential consequences from the failures this year of First Republic Bank, Silicon Valley Bank and Signature Bank. But the U.S. securities regulator has found that there are firms that haven’t gone far enough in providing clarity to investors when looking to raise capital or making other securities-related moves.

Biden calls Xi a dictator, jeopardizing U.S.-China thaw

China lashed out at President Biden on Wednesday for describing President Xi Jinping as a dictator, a remark that injected fresh discord into the relationship between the two men at a time when the broader U.S.-China ties appeared on threshold of a thaw.

Biden’s seemingly off-hand remark at a fundraiser near San Francisco Tuesday evening appeared to push the boundaries of how a U.S. leader refers to his Chinese counterpart. While Xi, who is unelected but wields vast power, may fit the textbook description of a dictator, political analysts said the term is loaded and rarely used by U.S. presidents to describe leaders they hope to engage in diplomacy.

• On the Menu for Narendra Modi U.S. Visit: Countering China
• U.S. Tracked Huawei, ZTE Workers at Suspected Chinese Spy Sites in Cuba
• European Business Confidence in China Falls to Record Low, Poll Shows

• The U.S. and U.K. on Wednesday offered new funds to help Ukraine rebuild its economy after Russia’s invasion last year, joining the European Union in a broad effort to harness money from other countries, private investors and even frozen Russian assets to ensure Ukraine’s economic survival.
   
• For more than a century, 3M introduced thousands of products ranging from water-resistant sandpaper to Scotch tape. Today, the company’s business also includes contending with tens of billions of dollars in potential liability costs.

• Silicon Valley companies are dumping office space at an accelerating pace, as tech leaders such as Google and Facebook parent Meta Platforms close locations and reassess their commitments to the workplace. 
   
• Supreme Court Justice Samuel Alito pre-empted a report on a billionaire-funded vacation he took in 2008, defending his undisclosed fishing trip to Alaska in an opinion piece published Tuesday ahead of the article that the nonprofit newsroom ProPublica planned to publish.
   
• Rescuers shifted their search for a missing submersible to an area where Canadian aircraft detected banging noises underwater, officials said Wednesday, as the clock ticked down in the race to find the crew that was headed to the Titanic shipwreck. The missing submersible headed for the Titanic shipwreck may have been operated by a wireless videogame controller that sells online for $49.99.
   
• New leads have emerged showing the Ukrainians suspected of attacking the Nord Stream pipelines used Poland as a logistical and financial hub, as the focus of the investigation tightens on the country’s role in the largest act of sabotage in Europe since World War II.
   
• A Russian court upheld the extended detention of Evan Gershkovich, the Wall Street Journal reporter deemed by the U.S. to be wrongfully held, ordering that he remain in Moscow’s Lefortovo prison until at least Aug. 30, according to Russian state-news service TASS.

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