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April 23, 2019Today's Top Risk News + Analysis From the Editors at RANE
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01
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GEOPOLITICAL
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UK Told That Huawei Funded by China’s Security State

Chinese telecoms giant Huawei has received funding from China’s state security apparatus, the CIA has told the UK’s intelligence agencies, as the British government considers plans to roll out its 5G network, the Times reports. The CIA told Britain’s spy chiefs that Huawei has received funding from the People’s Liberation Army and China’s National Security Commission, while another U.S. intelligence source said the Chinese ministry of state security approved government funding. The U.S. has banned Huawei from its federal government networks and does not want the other members of the Five Eyes spying network — the UK, Canada, New Zealand and Australia — to buy its 5G technology, because China’s laws oblige companies to co-operate with its security branches. Last month GCHQ, Britain’s cybersecurity center, said the government would find it “difficult” to manage the security risks posed by Huawei and said it had made “no material progress” in addressing security concerns it first raised last year.

READThe Times 
02
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SAFETY + SECURITY
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At Least 290 Killed in Easter Sunday Bomb Blasts in Sri Lanka

On Easter Sunday, at least 290 people are confirmed to have died in coordinated attack on churches and hotels in Sri Lanka. Officials have characterized the attack as a “brand-new type of terrorism,” CNN reports. Police have arrested 24 people connected to the suicide bombs, which saw an injury toll of at least 500 people. This is the worst violence Sri Lanka has witnessed since its bloody civil war ended 10 years ago. Additionally, there were concerns about more devices: A ninth improvised explosive device was defused close to the capital’s Bandaranaike International Airport on Sunday evening, an Air Force spokesman said. Although most of the dead and injured were Sri Lankan, there were foreign nationals who died as well including five British citizens and three Indians. The Associated Press reports that Sri Lankan officials did not heed the warnings from intelligence agencies regarding the threat of an attack by a domestic radical Muslim group that officials blame for the bombings, Health Minister Rajitha Senaratne said Monday. The bombings were made by seven suicide bombers from a militant group called National Thowfeek Jamaath, Senaratne stated.

READCNN , The Associated Press 
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03
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CYBER + INFORMATION
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Cyberattack on Japan Could Draw in U.S., as France’s WhatsApp Hacked

A cyberattack on Japan could draw the U.S. into a war in its defense, the U.S. secretary of state Mike Pompeo has said, Quartz reports. Speaking in Washington at a meeting between Japanese and U.S. defense officials, Pompeo said that a cyberattack could “constitute an armed attack under Article 5 of the U.S.-Japan Security Treaty,” which was ratified after World War II, and guarantees that the U.S. will come to Japan’s defense if it is attacked. Defending against cyberattacks, which the Japanese government defines as an “abuse of information and communications networks” in the attempt to “access, steal, falsify or destroy information” is inevitably a priority for Japan, for it was exposed to nearly 130 billion of them in 2016 with most presumed to come from China. Meanwhile, an instant messaging app that the French government developed as an alternative to WhatsApp was hacked within 90 minutes of its release, Forbes reports. Tchap was supposed to provide a channel for government employees, with end-to-end encryption, yet within just 90 minutes of its release, a French security researcher logged in with a fake email address, and accessed conversations in various “rooms.”

READQuartz , Forbes 
04
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GEOPOLITICAL
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Ukraine’s New President is Comedian With No Political Experience

A comedian with no political experience has been elected as Ukraine’s new president in a landslide victory, Reuters reports. Volodymyr Zelenskiy has won an emphatic victory, with close to final results having been tallied, while the incumbent Petro Poroshenko, who cast himself as the opponent of Russian aggression and the champion of Ukrainian identity, suffered a major blow. Zelenskiy, who plays a fictitious president in a popular TV series, has promised to end the war against pro-Russian separatists in eastern Ukraine that has killed some 13,000 people, and to end corruption. Yet he has not said much about how he plans to meet his goals, and investors want reassurances that he will push through reforms needed to attract foreign investment and keep the country in an International Monetary Fund program.  He has promised to maintain Ukraine’s pro-Western course, though he is less emphatic than Poroshenko about the prospect of joining the European Union and NATO.

READReuters 
05
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SAFETY + SECURITY
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Claims of Poor Standards at Boeing Dreamliner Factory in South Carolina

Consistent reports of poor standards at the South Carolina factory where Boeing makes its 787 Dreamliner jet have cast doubts around another of the company’s aircraft, the New York Times reports. The factory at North Charleston, S.C. was hailed as state-of-the-art when it opened in 2009, but emails and interviews have prompted fears that it values speed over quality and ignores issues raised by employees. Qatar Airways stopped accepting planes from the North Charleston plant after jets were damaged during manufacture and deliveries delayed, and workers have filed whistleblower claims and safety complaints with federal regulators, citing issues like defective manufacturing and debris left on planes. Regulators and lawmakers have been examining Boeing’s priorities, following two recent fatal crashes involving its 737 Max. The Dreamliner has never crashed, although the fleet was briefly grounded after a battery fire. Boeing said its South Carolina plant was “producing the highest levels of quality in our history.”

READThe New York Times 
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06
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SAFETY + SECURITY
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African Swine Fever Spreads to All Parts of China, Threatening Shortfall

African swine fever has spread to all parts of China, threatening its pork industry, the South China Morning Post reports. Already, 146 pigs have died at six farms on the southernmost province of Hainan, meaning the virus has spread to all 31 mainland provinces, municipalities and autonomous regions since it was confirmed at a pig farm not far from the border with Russia in August.Nearly 200 million pigs, or half the total in China, could be culled or die during the epidemic. One observer said there was not enough pork in “the whole world combined” to fill the potential shortfall, since China raises about half the world’s pigs. The price of pork rose 6.3 percent in March and could rise by as much as 70 percent in the second half of the year. Livestock numbers are also falling, with 18.8 percent fewer pigs on farms in March compared to a year ago, and the number of breeding sows down 21 percent. The quick rise in the price of pork, which is a staple meat for Chinese, will likely result in a higher reading for headline consumer inflation.

READSouth China Morning Post 
07
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GEOPOLITICAL
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Western AI Researchers Pair With Chinese Firms, Raising Complicity Fears

Leading western AI researchers are working with Chinese firms connected to Beijing’s surveillance systems, raising fears that they are becoming complicit in human rights abuses, Financial Times reports. Academics at prestigious U.S. institutions have co-written at least nine academic papers with researchers at Chinese companies that sell surveillance technology to the Chinese state or at institutions with military ties, such as China’s National University of Defense Technology. The papers focus on facial recognition, video surveillance, and human tracking technologies, such as person re-identification, which allows an individual to be followed through a collection of images. One researcher said the universities could not ensure the technology they were helping to develop would be used “in ethical ways,” and others said research collaborations were “a blind spot” for export control laws and allowed China to exploit overseas expertise in AI. Senator Marco Rubio (R-FL) called on American companies and universities “to rethink their co-operation with China.”

READFinancial Times 
08
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GOVERNANCE
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Tesla to Cut Four Musk Allies From Board in SEC Fight

Tesla will cut its board from 11 members to 7, removing four allies of CEO Elon Musk as part of its on-going fight with the Securities and Exchange Commission (SEC), MarketWatch reports. One observer said the departure of “Musk’s crew” as part of a settlement with the SEC, which had threatened to oust Musk for tweeting that he had secured funding to take Tesla private, would stop the board “acting like a cheerleader and an echo chamber.” The SEC has already accused Musk of not living up to its settlement by continuing to issue potentially misleading tweets. A court hearing on the resolution agreed by the SEC and Tesla is due next week. Tesla is making two other changes to its corporate governance by reducing director terms from three years to two, and getting rid of a supermajority rule, which required more than two-thirds of shares vote to back changes to its bylaws and rules. Meanwhile, more woes befall former Nissan Chairman Carlos Ghosn. Financial Times reports that, on Monday, Ghosn was indicted on a new charge as prosecutors accused him of making personal gains from and causing $5 million in damages to the Japanese carmaker.

READMarketWatch , Financial Times 
09
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SAFETY + SECURITY
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Carbon Capture Technology Offers Prospect of Tackling Climate Change

Advances in carbon capture technology raise the tantalizing possibility that it might provide a solution to global warming, the Washington Post reports. Carbon capture has always been prohibitively expensive, but technological advances and government incentives have helped companies such as Global Thermostat, Carbon Engineering and Climeworks drive down the cost from $600 a ton to $100 a ton, or lower. Oil companies can use new U.S. tax credits to pay for turning captured carbon dioxide into transportation fuels, essentially recycling the CO2, and helping them meet requirements to reduce carbon in fuels. They can also claim a $35-a-ton credit for enhanced oil recovery — injecting carbon dioxide into the ground to increase production. Most environmentalists want to see captured carbon dioxide buried, instead of being used to produce more fossil fuels, but one U.S. Senator who has campaigned on the issue said he was willing to accept the process, if it helped “save the planet.”

READThe Washington Post 
10
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CYBER + INFORMATION
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Millions Use Easy-to-Break Passwords Like 123456

Millions of people are using easy-to-break passwords like 123456, a study of breached accounts by the UK’s National Cyber Security Center (NCSC) has found. The BBC reports that the numbers 123456 appeared in more than 23 million breached accounts. The second-most commonly breached was 123456789, with “qwerty”, “password” and 1111111 completing the top five. People also used names, with Ashley, Michael, Daniel, Jessica and Charlie the most popular, and the names of soccer teams. Forty-two percent of people said they expected to lose money to online fraud and only 15 percent said they felt confident that they knew enough to protect themselves online. Fewer than half of those questioned used a separate, hard-to-guess password for their main email account. The NCSC said people should string three random but memorable words together to create a strong password, which one security expert said was the “single biggest control” that people had over their online security.

READBBC 
11
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CYBER + INFORMATION
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Weather Channel Goes Off Air for 90 Minutes After Ransomware Attack

The Weather Channel went off air for 90 mins after a ransomware attack, which it described as a “malicious cyberattack,” ZDNet reports. The ransomware struck The Weather Channel’s Atlanta headquarters about 6:00 am local time on Thursday, April 18, when its daily morning live show AMHQ stream went down and was replaced with re-runs of Heavy Rescue. The IT staff restored the affected computers from backups, but 90 minutes passed before regular programming resumed. FBI sources have said they were treating the outage as a ransomware incident. The Verge reports that what the hackers were wanting to result from the attack was not clear, but ransomware, which is a type of malware used to extort money from targets, has become a significant headache for companies and governments. In one of the most devastating examples of this type of attack, a ransomware strain called WannaCry, which has been believed to have been developed by North Korea, spread globally in 2017. The attack eventually impacted computers exceeds 150 countries.

READZDNet , The Verge 
12
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BUSINESS INTELLIGENCE
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Fewer Young Drivers Suggest U.S. Love Affair With Cars May Be Ending

America’s love affair with the car may be coming to an end, judging by the falling numbers of teenagers with licenses, the Wall Street Journal reports. Only a quarter of 16-year-olds had a driver’s license in 2017, compared with nearly half in 1983, and many young people are delaying their first purchase of a car — or not buying one at all: many rely on ride-hailing services and use social media to connect with friends, and when they reach their 20s, they move to big cities where they do not need or want a car. Analysts predict that people born after 1997 will buy about 120, 000 fewer new vehicles this year than millennials in 2004 — 488, 198 vehicles versus 607, 329. U.S. auto-makers have responded by dropping lower-priced compact and subcompact cars, though they believe that when Gen-Zers finally buy a car, it will be a sports utility vehicle (SUV) or truck, on which they earn better profit margins.

READThe Wall Street Journal  
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