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January 28, 2020Today's Top Risk News + Analysis From the Editors at RANE
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01
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GEOPOLITICAL
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U.S. Warns That It Will Retaliate Against Brussels If It Imposes Carbon Tax

The U.S. may “react” against Brussels’ plan to impose a carbon tax, U.S. Commerce Secretary Wilbur Ross has said, reawakening tensions provoked by the European Union plan for a digital services tax. This is happening even as officials are trying to strike a truce in their trade dispute, the Irish Times reports. The Financial Times also reports that the U.S. responded to the EU’s plan for a digital services tax by threatening tariffs on EU imports, and Ross threatened a similar response to the carbon tax if the U.S. decides it is equally “protectionist.” Last week, new European Commission President Ursula von der Leyen said it would be counterproductive and unfair to EU businesses to introduce domestic limits on carbon, only to allow foreign companies to import it, though EU officials have stressed the “mechanism” will be introduced gradually, allowing exporters to take part in the EU’s emissions trading scheme. President Trump and von der Leyen said last week that they would try to make peace, raising hopes that a full-scale trade war could be avoided.

READThe Irish Times  , Financial Times 
02
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LEGAL, REGULATORY + COMPLIANCE
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State Attorneys General, Justice Department Share Info on Google Probe

State Attorneys General are due to meet U.S. Department of Justice officials to share information on their investigation into Google’s dominance of online search and advertising, the Wall Street Journal reports. So far, state and federal authorities haven’t shared information about the investigations, and the meeting is seen as the start of an exchange that could grow into formal cooperation. Seven state attorneys general, who make up the executive committee of the group investigating Google, have been invited to the meeting. The state and federal investigations have concentrated on Google’s position in the online advertising market, but they have also examined its dominant position in online search and possible anticompetitive behavior in its Android mobile operating system. Google is not the only tech firm to face scrutiny. The Federal Trade Commission is examining whether Facebook acquired potential rivals such as Instagram and WhatsApp to head off competition, and the House Judiciary Committee is looking at Facebook, Google, Apple and Amazon for possible anticompetitive practices.

READThe Wall Street Journal 
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03
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CYBER + INFORMATION
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Facial Recognition Deployed Across London; AI May Have Predicted Coronavirus

Facial recognition cameras are to be deployed across London, with the Metropolitan Police saying the technology is ready to be integrated into daily operations, the Verge reports. The cameras will be placed in popular spots like malls and the West End shopping and theatre district. It will scan for faces contained in “bespoke” watch lists, which will contain individuals “wanted for serious and violent offenses.” If the camera flags an individual, police officers will ask them to verify their identity. The Met says the system just provides police officers with a prompt, though privacy advocates describe its deployment as an attack on civil liberties. Until now, facial recognition in the UK has only been used at public events like concerts and football matches. One trial found that 81 percent of “matches” it suggested were incorrect, yet the Met says its algorithms only generate false alerts for one in every 1,000 cases. AI may have predicted the outbreak of coronavirus in the Chinese city of Wuhan before medical authorities, Quartz reports. A Toronto startup called Bluedot whose AI-driven platform analyzes billions of data points, claims to have alerted its clients to the outbreak of coronavirus on December 31, before the World Health Organization and U.S. Centers for Disease Control and Prevention sent notifications. Bluedot, which “uses big data analytics to track and anticipate the spread of the world’s most dangerous infectious diseases,” predicted correctly that the virus would reach Bangkok, Seoul, Taipei and Tokyo after it appeared in Wuhan.

READThe Verge , Quartz 
04
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MEDICAL + PSYCHOLOGICAL
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U.S. Government Evacuates Americans as Experts Say Coronavirus May Not Be Contained

The U.S. government was quickly moving Monday to evacuate Americans from the city at the center of the deadly coronavirus outbreak in China. While China is sending medical reinforcements into Wuhan, officials there had said that the virus was spreading faster, CBS News reports. At least 81 people have died in China from the new virus, which has been officially called Novel Coronavirus 2019. More than 2,700 others have been infected in more than a dozen countries with five confirmed cases in the U.S. More than 60 additional individuals in the U.S. were being examined for the disease. The Washington Post reports that the government in Beijing broadened its quarantine to more than 50 million people, by enforcing a travel ban on 16 cities in central Hubei province, where the virus first appeared. U.S. health officials reported one new case in Arizona and two in California, bringing the total to five. The patients had traveled from Wuhan, and all are hospitalized. China’s actions may not be enough to contain the new virus, which could spread around the world and even join the list of respiratory viruses that regularly infect people, some infectious disease experts have warned, Stat reports. One expert said “we need to plan for the possibility” that it won’t be possible to contain the epidemic. Tools like quarantine and isolation — which were key to controlling SARS — are unlikely to stop a virus that can transmit during the period from infection to symptoms, experts say.

READCBS News , The Washington Post  , Stat 
05
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LEGAL, REGULATORY + COMPLIANCE
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Increased Huawei Restrictions Delayed After Defense Department Raises Objections

The introduction of a rule imposing tougher restrictions on sales to Huawei has been delayed, after government agencies said it could undermine national security, rather than enhance it, the New York Times reports. The Trump administration fears China acquiring advanced technologies, and is particularly concerned that Huawei, which sells global telecom equipment, could give Beijing new surveillance channels. Last May, it put Huawei on a blacklist and tried to restrict its supplies of U.S. products by making companies get a special license if they wanted to sell to it. Some American tech companies used a loophole that allowed them to sell products made outside the U.S. without a license, as long as they contained less than 25 percent of sensitive American content. The new measure would have lowered the threshold to 10 percent for sales to Huawei and made all types of American content count toward it. But officials said it could discourage the use of American components abroad, weakening American firms and harming the country’s competitiveness.

READThe New York Times 
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06
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GEOPOLITICAL
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Chinese Companies Pouring Money Into Colombia as Faith in U.S. Falters

Colombia has received more Chinese investment in in the last few months than it did in the previous 15 years, as the U.S. ally responds to President Trump’s rhetoric by seeking to diversify its allegiances, Bloomberg reports. Since the Plan Colombia counter narcotics program was signed in 2000, Colombia has avoided courting Beijing, but it’s pro-American leader, President Iván Duque, was alarmed by Trump’s recent threat to “decertify” it as an ally in the war on drugs and treat it like it treats Venezuela. The U.S. retreated from the threat, but Colombia altered the approach that made it the only major South American country without significant Chinese investment, allowing Chinese money to pour into a railway, a gold mining company and Bogotá’s first metro. Both sides say the arrangements are purely commercial, but the U.S. is concerned by China’s new role in an area it regards as its sphere of influence and fears Beijing’s involvement in 5G networks or other means of communication.

READBloomberg 
07
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LEGAL, REGULATORY + COMPLIANCE
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German Investigators Probe Deutsche's Payment to a Saudi Royal Adviser

Deutsche Bank paid $1.1 million to win the wealth management business of a senior Saudi royal, an internal investigation that led to two former staff being reported to criminal prosecutors has found, the Financial Times reports. Between December 2011 and December 2012, Deutsche transferred $1.1 million in four tranches to an offshore company based in the British Virgin Islands that was owned by the adviser’s wife. Deutsche also arranged other perks for the adviser’s family, including an internship and a seminar at a Swiss ski resort, the investigation found. The gifts and payments broke Deutsche’s policies on anti-corruption and gifts and entertainment. Six employees left after the investigation, and twelve staff had their bonuses suspended. Deutsche reported two former employees to criminal prosecutors in Frankfurt for suspected bribery and embezzlement. Both employees challenged their dismissals in court. One won and Deutsche settled the other case. The scandal demonstrates the legal and reputational risks facing the wealth management business, which Deutsche regards as central to its attempts to revive its fortunes.

READFinancial Times 
08
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CYBER + INFORMATION
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Seattle Area Election Tests Mobile Voting in the U.S.

Voters in an election in King County, Washington cast ballots via smartphone last week in a first for the U.S., and a trial run for similar votes elsewhere, Fortune reports. The election, which is open to 1.2 million voters, is for the King County Conservation District board of supervisors, which is a volunteer position. It historically attracts a turnout rate of less than one percent, and King County wanted to see if mobile voting would boost turnout and save money. Voters visit the election's online voting portal and log in using their name and date of birth. They then receive a ballot to complete using a touch screen device. Washington State Secretary of State said she would be watching the process closely: she has previously expressed concerns that electronic transmission “could leave voter information and election infrastructure impaired” and believes it is too risky to use in the state, though its proponents believe it is worth trying, if it fixes the problem of low voter turn-out.

READFortune 
09
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GOVERNANCE
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Palantir CEO Finally Admits to Helping ICE With Deportations

Technology firm Palantir has admitted to helping the U.S. Immigration and Customers Enforcement (ICE) with deportations, lending weight to critics’ claims that is helping split up families, Vice reports. For years, Palantir has maintained that it only works with ICE’s Homeland Security Investigations, which deals with cross-border operations, and not with Enforcement and Removal Operations, which deals with interior immigration enforcement, including deportations. But, CEO Alex Karp has now admitted that his company “finds people in our country who are undocumented.” Karp said it was “a legitimate, complex issue.” One Latinx grassroots group disagreed, saying, “This is about human rights violations, about people being arrested at work, separated from their children, detained in inhumane conditions, all facilitated by Palantir software.” The confession implicates Palantir in recent events such as the raids in Mississippi in which 680 people were arrested in a single day.

READVice 
10
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BUSINESS INTELLIGENCE
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PE Firms Have $1.5 Trillion to Spend, and Are Seeking to Raise More

Private equity firms have record reserves of $1.5 trillion to spend, and are likely to raise more this year, as investors continue to seek better returns than public markets can provide, Fortune reports. Fundraising is unlikely to reach last year’s record total of $301.3 billion, but it will probably pass $200 billion and may come close to the previous record of $241.7 billion, set in 2017. Swedish private equity firm EQT Partner’ buyout of Nestle’s skin-health unit for $10 billion and Blackstone Group’s buyout of MagicLabs, which owns dating app Bumble, for $3 billion, were amongst last year’s biggest deals, suggesting private equity irms are finding new areas, like growth equity, to put their capital. Other companies are using private equity capital to help them through periods of change. Deal prices are expected to continue rising, fueling fears there is too much money chasing too few deals, but investors will probably be undeterred. They may be drawn to the technology sector, which one observer described as “pretty frothy,” or M&A in the private markets.

READFortune 
11
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CYBER + INFORMATION
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Facing Fraudulent Transactions, Google Chrome Store Suspends Operations

Google has suspended the publishing or updating of any commercial Chrome extensions on the Chrome Web Store as it attempts to contain a wave of fraudulent transactions involving paid extensions, ZDNet reports. The fraudulent transactions began earlier this month, and Google said they were happening “at scale.” Existing commercial extensions can still be downloaded from the Web Store but developers can’t upload updates. Google said the move was a “temporary measure meant to stem this influx as we look for long-term solutions to address this pattern of abuse.” Some well-known extensions are affected by the ban, such as password manager Dashlane and meeting planner app Comeet. It isn’t clear how long the ban will last."We are working to resolve this as quickly as possible, but we do not have a resolution timeline at the moment," said Simeon Vincent, who is developer advocate for Chrome extensions at Google. "Apologies for the inconvenience."

READZDNet 
12
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SAFETY + SECURITY
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Americans Will Get Used to New Neighbors as Climate Change Takes Effect

Almost every part of America can expect new arrivals from the coasts, as rising sea levels caused by climate change force millions of people to leave their homes, a new study predicts, Ars Technica reports. The area between Colorado and California will be the only region unaffected by population movements, according to the study, which used a neural network based on data from previous U.S. population movements to examine the consequences of sea-level rise of 0.9 and 1.8 meters — well below the worst-case prediction of 2.5 meters. More than one-third of the U.S. population now lives on the coasts, and over 10 million live on land that will be lost to a sea-level rise of 1.8 meters. Sea level rise will speed up the trend for urbanization but even places that are not popular destinations for migration will be affected. In Florida, people will congregate around Orlando, while further up the Eastern Seaboard, people will move inland and there will be a significant population increase throughout the mid-west.

READArs Technica 
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