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The Morning Risk Report: Many Businesses Are Quitting Russia. Big French Firms Are Staying Put
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Good morning. Companies across the West are retreating from Russia in the wake of President Vladimir Putin’s decision to invade Ukraine. Some of France’s biggest firms are hanging on.
Russians shopping for sporting goods, groceries, tools and hardware can find them at French retailers that continue to operate in Russia. French bank Société Générale SA’s local lender is processing transactions for Russian clients. Energy giant TotalEnergies SE is clinging to huge investments in Russian oil-and-gas fields.
[Continued below...]
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Auto maker Renault SA, which is 15% owned by the French state, is in a logistical scramble to restart its assembly lines in Russia, where it owns the country’s biggest car maker. The firm is reorganizing its Russian supply chain to replace parts it is missing because of sanctions, according to people familiar with the matter.
French firms say they are trying to go about their business in Russia, abiding by sanctions rules and hewing to guidance from the government of President Emmanuel Macron. France has an outsize presence among the biggest foreign firms in Russia, with roots established in the wake of the Cold War. French companies became some of Russia’s biggest foreign employers, providing more than 150,000 jobs.
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WSJ Risk & Compliance Forum
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Don’t miss the WSJ Risk & Compliance Forum on May 10, where discussion topics will include priorities in white-collar crime enforcement, working across the C-suite, reporting on sustainability and M&A risk. We’re also offering workshops on risk measurement and reporting and third-party cybersecurity risk. You can register here.
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AIMCo Appoints New Chief Risk Officer
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Alberta Investment Management Corp., which manages sovereign-wealth and pension funds in the Canadian province of Alberta, on Wednesday announced the appointment of Suzanne Akers as chief risk officer.
Ms. Akers will begin serving in her new role in April, leading AIMCo’s investment risk management and enterprise risk management functions while also serving as chief compliance officer, AIMCo said Wednesday.
Ms. Akers succeeds Andrew Tambone, who was appointed after a volatility trading strategy resulted in C$2.1 billion ($1.7 billion) in losses for AIMCo, about 2% of its portfolio, according to the fund manager. AIMCo’s board initiated a comprehensive review after that episode, seeking extensive outside assistance in an investigation of its risk management processes.
Ms. Akers was most recently co-head of the investment risk management group at Franklin Resources Inc., which operates under the name Franklin Templeton. She previously worked at Morgan Stanley in New York and London.
—Richard Vanderford
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Regional Banks Join Efforts to Set Climate Risk Management Standards
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A group of regional banks have formed a new consortium to set climate disclosure and risk management standards, following a related effort by larger financial institutions.
Webster Bank NA, of Waterbury, Conn., and Salt Lake City-based Zions Bancorp are part of the five-bank regional consortium, the Risk Management Association, a not-for-profit group that serves risk professionals at financial institutions, said Wednesday.
The move follows the formation of a similar consortium in January by several large banks, including Bank of America Corp., U.S. Bancorp and Wells Fargo & Co., that has since grown to 28 members.
Both groups intend to help banks develop climate risk strategies and common reporting standards.
—Richard Vanderford
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From Risk & Compliance Journal
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Judge Frees China’s ZTE From Some U.S. Oversight
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A U.S. judge ruled that ZTE Corp.’s probation for violations of U.S. sanctions on Iran could end, freeing the Chinese technology company from some oversight following years of government supervision.
The decision by the federal judge in Texas effectively ends ZTE’s five-year term of supervision under a Dallas lawyer assigned to police the company’s adherence to the terms of its 2017 settlement agreement resolving the sanctions charges.
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Facilities in Lubmin, Germany, of the Nord Stream 2 gas pipeline, a project that would have doubled the capacity of an existing Russian route. PHOTO: HANNIBAL HANSCHKE/REUTERS
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President Vladimir Putin’s war in Ukraine, and the wave of Western sanctions in response, is starting to hit Russia’s economic engine: Its prodigious oil-and-gas industry.
The U.S. and Canada have barred the little Russian oil they import, while the European Union is considering a ban. But for the most part, Western sanctions have so far avoided directly limiting most of Russia’s energy exports. U.S. and EU restrictions, though, have already cut off Russia’s access to funding and advanced technology to develop and maintain its aging fields.
Meanwhile, Russian President Vladimir Putin said he wants his country to only accept rubles in gas deals with European countries and other customers, adding a new financial dimension to tensions over energy supplies while the war in Ukraine rages.
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The Biden administration said Wednesday that it will renew tariff waivers for 352 categories of goods from China after previously granted exemptions expired.
The items that will be exempted include certain kinds of bicycle parts, electric motors, machinery, chemicals, seafood and duffel bags.
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A jury found a former Boeing Co. pilot not guilty of deceiving air-safety regulators about a 737 MAX flight-control system later blamed for two fatal crashes.
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An alleged fraud uncovered by a short seller ended in gunfire. A standoff between the FBI and a lawyer was the climax to citizen sting operation that took place in a rented private jet.
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Tencent Holdings Ltd., the Chinese social-media and videogame behemoth, said its revenue in the fourth quarter slowed to its weakest pace in nearly two decades, as a yearlong regulatory crackdown on China’s technology sector and weakening consumption weighed on sales.
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China’s property sector is in deep trouble—but it will be some time before investors can see the full extent of the damage.
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Everyday items like plastic food packaging are made from refined petroleum products. PHOTO: JUSTEN WILLIAMS FOR THE WALL STREET JOURNAL
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The headlines about high oil and gas prices seem far away from products like plastic wrap or lawn fertilizer. In reality, though, these everyday items need hydrocarbons to get made, and all across the supply chain, the struggle is on over who will bear the burden of higher costs. “Oil trickles down to everything,” said Josh Lee, the financial chief for chemical distributor CJ Chemicals LLC.
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The U.K. government Wednesday announced a series of measures including a cut in fuel taxes to help households that are struggling to pay their bills, as soaring energy costs pushed inflation beyond an annual rate that was already the highest in 30 years.
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Officials are in the process of assessing damage at hundreds of residences and businesses in southern Louisiana, a day after a storm brought a powerful tornado through the New Orleans area that killed at least one person and hospitalized at least eight.
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Okta said the attack had affected as many as 366 customers, or 2.5% of the more than 15,000 businesses and institutions it services world-wide. PHOTO: TIFFANY HAGLER-GEARD/BLOOMBERG NEWS
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Okta Inc., one of the world’s leading providers of digital identity verification, said that a January data breach revealed by hackers this week may have affected hundreds of customers that rely on its software to manage secure access to their internal computer networks.
Okta said the attack had affected as many as 366 customers, or 2.5% of the more than 15,000 businesses and institutions it services world-wide. The breach, claimed by the Lapsus$ group, originated from the laptop of an engineer employed by a subcontractor, which the hackers had access to between Jan. 16 and 21, Okta said Tuesday.
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The company’s embrace of remote work follows its name change from Facebook to Meta. PHOTO: CONSTANZA HEVIA H. FOR THE WALL STREET JOURNAL
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As more companies begin their return to the office, Facebook parent Meta Platforms Inc. is becoming more remote than ever before. The company’s management team, including Chief Executive Mark Zuckerberg, is scattering to locations far from its Silicon Valley headquarters in an extreme test of the limits of remote work.
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Amazon.com Inc. over the next month will face union elections at separate warehouses in New York City, a union-friendly area that has challenged the e-commerce giant in the past.
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Spotify Technology SA has reached a deal with Google to offer an alternative payment method within its app for users, the latest sign of the weakening grip that app stores have over third-party software.
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