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(Bloomberg) — India and the United Arab Emirates have completed talks for a wide-ranging economic pact aimed at boosting trade and investment, the Indian government said on Wednesday. 

The announcement comes days after the UAE signed a similar pact with Turkey in a push to deepen ties with fast-growing economies. The oil-rich Gulf state is seeking to burnish its reputation as a global hub amid deepening regional competition with Saudi Arabia. India wants better links to revive its economy after the pandemic.

“Negotiations for CEPA were launched in September 2021 and have been completed. The agreement will take India-UAE economic and commercial engagement to the next level,” a statement issued by India’s Ministry of External Affairs said. 

India’s Comprehensive Economic Partnership Agreement (CEPA) with the UAE is seen as a springboard for moving further on negotiating trade agreements with other Gulf Arab nations. The Modi government also views the deal as a gateway to Africa via the UAE, its third-largest trade partner.  

Total trade between India and the UAE stood at $53 billion during April-Dec. 2021-22. Imports stood at $33 billion while exports at $20 billion during the period.

UAE, India Aim to Double Trade to $100 Billion in Five Years 

Prime Minister Narendra Modi and Abu Dhabi Crown Prince Sheikh Mohamed bin Zayed al Nahyan are scheduled to hold a virtual summit on Feb. 18 to discuss bilateral cooperation and exchange views on regional and international issues of mutual interest, the statement said. 

Indian nationals make up one of the largest population groups in the UAE, a major source of foreign remittances. India is also an important market for two-way tourism and UAE airlines Emirates and Etihad. On a political level, UAE royals helped broker talks between India and Pakistan earlier last year.

Investment ties have deepened rapidly in the lead-up to the agreement. Groups from the UAE, a desert country that relies heavily on imports, committed $7 billion in 2019 to set up a “food corridor” and invest in Indian agriculture, with an eye on food security. Abu Dhabi wealth fund Mubadala invested $1.2 billion in India’s telecommunications provider Jio Platforms in June 2020, and India’s Reliance last year announced an investment of $2 billion in Abu Dhabi’s TA’ZIZ Industrial Chemical Zone.

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(Bloomberg) — Google said it would bring its Privacy Sandbox initiative to Android phones, vowing to chart a less “blunt” path than rival Apple Inc., whose push to protect users’ personal information has dinged the digital advertising market. 

The Alphabet Inc. company, which relies on ads for most of its revenue, said it can protect phone users’ data while giving advertisers and appmakers new technology to offer relevant promotions and track outcomes. The proposed tools for the Android mobile operating system would limit appmakers’ ability to share a person’s information with third parties, and ban data tracking across multiple applications, Anthony Chavez, vice president of product management for Android Security & Privacy, wrote Wednesday in a blog post. Google said it planned a beta launch of the tools by the end of 2022 and “scaled testing” in 2023.

Chavez said in an interview that the best path forward is an approach “that improves user privacy and a healthy mobile app ecosystem. We need to build new technologies that provide user privacy by default while supporting these key advertising capabilities.”

Google is trying to balance the rising demands of privacy-conscious consumers and regulators with the financial needs of developers and advertisers. The company is seeking input on the proposal, similar to the way its Privacy Sandbox initiative is slowly developing a new privacy standard for web browsing. The company’s first proposal attracted derision from U.K. regulators and peers, and Google has since suggested that it would serve ads based on topics a web user is interested in that are deleted and replaced after three weeks. 

Facebook parent Meta Platforms Inc. has been at loggerheads with Apple over the company’s App Tracking Transparency tool, which allows iPhone owners to shut off tracking across all of their apps. Google’s YouTube has also seen a relatively small financial hit from the technology, executives have said. In essence, it makes it more difficult for marketers to determine if their ads on iPhones have been successful. 

The Privacy Sandbox on Android will enable personalized ads based on recent “topics” of interest, and allow for attribution reporting, which lets marketers know if their ad was effective, Chavez said in the interview. 

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(Bloomberg) — Digital-asset firm Castle Island Ventures raised $250 million, the largest amount ever by the four-year-old firm, to target startups involved in building monetary networks, financial services and internet architecture such as web3.

Investors in the Castle Island Ventures III fund include endowments, asset managers and family offices, according to the firm. It’s a big step up for Castle Island — founded by Fidelity alumni Nic Carter and Matt Walsh — which previously raised funds of $30 million and $50 million.

The sectors targeted will add to a portfolio that includes firms such as Bitwise and BlockFi Inc. In addition to pre-seeded stage investments, Castle Island will look to lead more Series A rounds, Walsh said.

“The market opportunity and the wave of entrepreneurs that are actually starting things is just a lot bigger,” Walsh said in a phone interview. “The way we’ve reacted to the explosion in the space is to beef up our team and give ourselves the ability to go out and be a lot more aggressive in deploying capital in some of these companies.”

In addition to closing the round, Castle Island promoted principal Ria Bhutoria — also a Fidelity alum — to a general partner, joining Carter, Walsh and Sean Judge. 

Despite Bitcoin’s 36% drop from all-time highs and waning trading volume across exchanges, investment in the cryptocurrency universe has yet to cool. Crypto exchange FTX Trading Ltd. raised another $400 million last month, money that CEO Sam Bankman-Fried said will be used for acquisitions. In January, the Financial Times reported that Andreessen Horowitz is looking to raise $4.5 billion for crypto funds.

In Carter’s eyes, a sustained slump across cryptocurrencies could be to Castle Island’s benefit.

“As long as you sort of fundamentally believe in what was going on, it was a great time to invest. Valuations were lower and entrepreneurs were active,” said Carter, referring to Castle Island’s first fund that closed in May 2018. “If we did have a sustained selloff, selfishly, that would be convenient timing for us because obviously we don’t believe crypto’s going away.”

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(Bloomberg) — Coinbase Global Inc., Gemini Trust Co. and Robinhood Markets Inc. are among firms helping to build a platform to comply with a U.S. money-laundering rule as crypto and financial-technology companies seek to satisfy existing requirements and head off stricter oversight.

A group of 18 companies is setting up the platform to help meet conditions of the U.S. Treasury Department’s “travel rule,” which requires financial firms to pass on information including customer names, account numbers and transaction dates of fund transfers. The coalition has held talks with U.S. and global regulators about their plan, said Elena Hughes, chief compliance officer of crypto platform Gemini.

“We believe that the solution will allow for top-tier compliance for the travel rule, and we are looking to get buy-in from our regulatory authorities,” Hughes said in an interview.

Crypto-related firms have said that regulations are outdated and existing agencies don’t have the expertise to oversee the sector. Meanwhile, rule makers are pushing for tighter controls. Commodity Futures Trading Commission Chairman Rostin Behnam and Securities and Exchange Commission Chair Gary Gensler have called for more-aggressive oversight.

The group’s initiative, known as Travel Rule Universal Solution Technology, is a separate platform from the blockchains through which cryptocurrencies are transferred. There will be no central store of personal data, and the client information is sent directly from one member to another, the group said in a statement.

While private software makers offer some compliance solutions, the group thinks its proposal is better, Paul Grewal, chief legal officer of Coinbase, said in an interview.

“What makes TRUST unique is it’s the most industrywide solution to the problem,” he said. “It’s an excellent example of the industry actually coming together to solve these problems on its own.”

Treasury’s travel rule has been in place since 1996. In 2020, the department’s Financial Crimes Enforcement Network proposed an amendment extending the rule’s reach to crypto transactions.

Among other firms in the TRUST network are Fidelity Digital Assets, Kraken and Paxos.

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(Bloomberg) — Shopify Inc. said it expects revenue growth to be lower in 2022 than it was last year as online spending resets after the Covid-19 induced boom and consumers face higher inflation. 

“The Covid-triggered acceleration of ecommerce that spilled into the first half of 2021 in the form of lockdowns and government stimulus will be absent from 2022,” the Canadian ecommerce giant said in a statement on Wednesday. “There is caution around inflation and consumer spend near term, for the full year.”

As a result, Shopify said full year revenue growth will be lower than the 57% increase in 2021. The U.S.-traded shares fell 4% in early trading. 

Shopify, which provides software and other services that underpin the websites of many small businesses, grew dramatically during the early stages of the pandemic, with sales jumping 86% in 2020. Investors, however, fear the company can’t sustain its growth as shoppers return to more normal buying patterns. Those concerns intensified last month when Shopify said it had terminated contracts with several warehouse and fulfillment partners, sending shares to a 16-month low. 

But for the fourth quarter, Shopify beat analysts estimates for revenue and profit.

Revenue increased 41% to $1.38 billion. Analysts, on average, projected $1.34 billion, according to data compiled by Bloomberg. Profit, excluding some items, was $1.36 a share, compared with analysts’ average estimate of $1.26. Gross merchandise volume, the value of merchants sales flowing through Shopify’s platform, increased 32% in the fourth quarter from a year earlier to $54.1 billion. Analysts, on average, estimated $52.6 billion. 

The company’s successful fourth quarter follows a rocky previous period, when the company’s results failed to meet analysts’ estimates for the first time since Shopify went public in 2015. At the time, Shopify cited supply chain issues and rising inflation for the disappointing results. 

In its outlook for this year, Shopify also said new contract terms with apps and theme developers that would cause a “headwind” to revenue from its store subscription plans in the first half.

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(Bloomberg) —

For years, my colleagues at Bloomberg News and I have chronicled serious allegations of racial discrimination against Black workers at Tesla’s auto plant in Fremont, California.

Two cases warranted widespread attention just last year. In August, we learned that Tesla had paid Melvin Berry, a former materials handler, $1 million in a rare discrimination award by an arbitrator. In October, a federal jury in San Francisco awarded former contract worker Owen Diaz a staggering $137 million. Tesla appealed the latter ruling, and a federal judge has signaled he’s likely going to cut the size of the award.

California’s civil rights regulator, the Department of Fair Employment and Housing, fields complaints from workers throughout the state, including hundreds about Tesla, we learned last week.

The way news of the regulator’s lawsuit unfolded was a prime example of Tesla’s aggressive and dismissive attitude toward government agencies, as well as the company’s penchant for preemptively trying to control news cycles and narratives. Here’s a quick recap of how it all went down:

• On Feb. 7, Tesla filed its annual report to the U.S. Securities and Exchange Commission. There was a two-sentence disclosure on page 91 that DFEH had issued a “notice of cause finding” on Jan. 3 and notified the company that it had grounds to file a civil complaint. This was a clear signal Tesla was probably going to be sued.
• Early on Feb. 9, Tesla published a blog post titled “The DFEH’s Misguided Lawsuit.” Never mind that the lawsuit hadn’t actually been filed; Tesla was front-running the agency. The company claimed the suit appeared to focus on misconduct that took place from 2015 to 2019; that in almost 50 instances, cases had been closed without finding of misconduct; and that DFEH had “never once raised any concern about current workplace practices at Tesla.” DFEH would later counter each one of these points.
• On Feb. 10, the lawsuit was made available on the Alameda County Superior Court website.

According to the suit, Black workers have complained about use of the n-word and other racial slurs as early as 2012. “They have complained that swastikas, ‘KKK,’ the n-word, and other racist writing are etched onto walls of restrooms, restroom stalls, lunch tables, and even factory machinery,” the DFEH says in its complaint. “Leads, supervisors and managers were active participants and/or witnesses to these racist comments.”

DFEH alleges that Tesla failed to maintain and provide employment records, paid Black workers less, and in some cases preemptively notified alleged harassers of complaints before launching investigations.

On page 10 of the lawsuit, DFEH took issue with Tesla’s blog post, suggesting in a footnote that the reference to almost 50 instances of complaints being closed without misconduct findings was misleading.

“It is unclear which administrative complaints Tesla refers to, but many resulted in an immediate request for a right to sue,” the agency said. 

On page 12, DFEH said in another footnote that, contrary to the blog post, both the agency and Tesla’s workers have raised concerns about workplace practices for years. “They still do, as complaints were filed as recently as 2022,” the agency said.

Last week’s events were reminiscent of how Tesla dealt with lockdowns in early 2020. Chief Executive Officer Elon Musk seized on an announcement by Governor Gavin Newsom that manufacturers in parts of California could reopen, sending a memo to workers that neglected to mention San Francisco Bay area counties were leaving restrictions in place. When Alameda County resisted Musk’s plan to resume operations, Tesla sued, then restarted production before getting permission.

In 2018, after Tesla cast blame on the driver of a Model X operating on Autopilot for a fatal crash, the National Transportation Safety Board warned the company not to make statements about the incident while an investigation was underway. When the NTSB’s chairman called to inform Musk that the agency was kicking the company’s representatives off the probe, the CEO hung up on him. After Tesla released a statement saying it had withdrawn from the investigation, the NTSB issued one of its own to say it had actually removed the manufacturer.

Tesla does not respond to media inquiries in the U.S., but did say in its blog post last week that it would ask the court to pause the case brought by DFEH.

On Wednesday, my colleague Saijel Kishan reported that a major pension fund is ratcheting up pressure on Tesla. The New York State Common Retirement Fund filed a shareholder resolution this month calling for the carmaker to disclose, among other things, how much it has paid in settlements related to harassment and discrimination.

“Recent developments further highlight the need for Tesla to address how the company is preventing harassment and discrimination against employees,” New York State Comptroller Thomas DiNapoli said Monday in an emailed statement. “This kind of alleged behavior should never be tolerated.”

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(Bloomberg) — Ericsson may have made payments to the ISIS terror organization to gain access to certain transport routes in Iraq, in a shock admission following years of regulatory investigations.

Shares in the Stockholm-based company were down almost 14.5% around lunchtime on Wednesday, its biggest drop in a day since July 2017.

The admission from Ericsson comes after the company was accused by the U.S. Department of Justice in October of breaching a $1 billion agreement it made with prosecutors in 2019 to end a long a running corruption probe.

In an interview with newspaper Dagens Industri, chief executive officer Borje Ekholm said that Ericsson had identified “unusual expenses dating back to 2018” but the company hasn’t yet determined who the final recipient of the money was. “What we are seeing is that transport routes have been purchased through areas that have been controlled by terrorist organizations, including ISIS,” Ekholm added.

Ekholm’s comments follow a statement by the telecommunications equipment manufacturer late on Tuesday, in which the company said that it continues to “invest significantly” into a probe regarding compliance concerns in its Iraq-based operations.

A spokesperson for Ericsson declined to comment when contacted by Bloomberg News. 

The news of the internal investigation adds another embarrassment for the company following a long running corruption probe, including a $1 billion settlement in 2019. A unit of Ericsson AB pleaded guilty to a years-long campaign of bribery and corruption in Asia and the Middle East. In October last year, the matter resurfaced, after the U.S. Department of Justice accused the company of breaching the agreement by failing to provide certain documents to the D.O.J.

The new suspect payments likely formed part of the same corruption probe, according to analysts at Handelsbanken. The analysts don’t expect the revelations to trigger further investigations.

Ekholm told the newspaper that Ericsson has spent “considerable resources trying to understand this as best we can. Financing terrorism is completely unacceptable and something we do not allow at all.”

On Wednesday, Ericsson’s 500 million euro bonds due 2029 suffered their worst daily drop since issuance last May, down 1.2 cents to 92.7 cents. The cost of insurance against a default is rising to its highest level since June 2020.

A spokesperson of the Swedish Financial Supervisory Authority said it wouldn’t comment on the situation.  

(Adds comment from Sweden’s FSA in last paragraph, updates share and bond price movement)

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(Bloomberg) — Ride-hailing firm Uber Technologies Inc. is giving customers more insight into how their average rating is calculated and will for the first time allow riders to see how many five-star ratings they received from drivers.

Starting today, users will be able to see a breakdown of their personal rating through the app’s Privacy Center, which will show how many of each individual ratings they received, not just the decimal score between one and five they previously had access to. The rating is an average of the last 500 trips.

Riders won’t, however, be able to see when each rating was awarded, or why it was given. Slamming doors, leaving a mess behind or not wearing a seatbelt are some of the main reasons drivers deduct stars from a customer, Uber said.

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(Bloomberg) — L’Enclume wins three-star status in the new Michelin guide for Great Britain and Ireland, joining seven others that retained their status.

The restaurant in Cartmel in England’s Lake District from Chef Simon Rogan was promoted from two-star status as it celebrates its 20th year, Michelin said. It cited the eatery’s establishment of its own farm, adding that “an enormous amount of time and creativity goes into every superbly crafted, stimulating dish, which makes eating at this highly accomplished restaurant a truly memorable experience.”

The long-running guide announced its ratings for London, England, Scotland and Ireland on Feb. 16. in a digital broadcast. 

“Following the win of our second star nine years ago a third star has always been front of mind and something we’ve been striving for every day,” Rogan said in a statement.

There were five additions at the two star level. Chapter One by Mickael Viljanen is a new addition to the Guide.  The Clove Club from Chef Isaac McHale, Ikoyi from Chef Jeremy Chan, Chef Damien Grey’s Liath and Chef Gareth Ward’s Ynyshir all moved up from one-star status.

Last year, for the first time, Michelin bestowed three stars on women-led restaurants in the U.K. The awards went to Core by Clare Smyth and Hélène Darroze at the Connaught. That didn’t change this year; Smyth retained her three stars despite opening her first new restaurant outside the U.K., Oncore by Clare Smyth, in Sydney.

Dublin was a winner, with two of its restaurants — Chapter One and Liath —  achieving two-star status. Ynyshir put Wales onto the two-star list.

The stars represent a welcome blast of attention for restaurants in London which were wacked by the surge in Omicron cases during the traditionally busy pre-Christmas season. Noted chef Tom Kerridge lost 654 reservations in less than a week at his restaurants in mid December. 

A rating of three stars is given for “exceptional cuisine, worth a special journey,” according to Michelin. Two stars represent “excellent cooking, worth a detour.” One star is for “high-quality cooking, worth a stop.” Michelin also has a list of Bib Gourmands, for good-value, inexpensive restaurants. This year, there were 16 new Bib Gourmand spots around England, Scotland and the Republic of Ireland. 

Guides from Michelin date back to 1900; initially they focused on practicality with information like street maps and places to stop for fuel. They evolved to their signature red-bound books of restaurant listings. In 2021, the guides went to an all digital format.

Below are the winners in the three-star and two-star categories and the one-star establishments in London.

**Indicates a new entry.

Three Stars

Alain Ducasse at the Dorchester, LondonCore by Clare Smyth, LondonGordon Ramsay, LondonHélène Darroze at the Connaught, London**L’Enclume, Cartmel, EnglandSketch (the Lecture Room & Library), LondonFat Duck, Bray, EnglandWaterside Inn, Bray, England

Two Stars

A. Wong, LondonAimsir, Celbridge, IrelandAndrew Fairlie at Gleneagles, AuchterarderClaude Bosi at Bibendum, London** Chapter One by Mickael Viljanen, Dublin**The Clove Club, Shoreditch, LondonDa Terra, LondonDinner by Heston Blumenthal, LondonHand and Flowers, Marlow**Ikoyi, St James’s, LondonKitchen Table, LondonLa Dame de Pic London, LondonLe Gavroche, LondonLe Manoir aux Quat’ Saisons, a Belmond Hotel, Great Milton**Liath, Blackrock, DublinMidsummer House, CambridgeMoor Hall, AughtonPatrick Guilbaud, Dublin, IrelandRaby Hunt, SummerhouseRestaurant Sat Bains, NottinghamStory, London**Ynyshir, Machynlleth, Powys

One-Star Restaurants (London)

AmayaAnglerBarrafinaBehindBenaresBratCasa FofōChez BruceCity SocialClub GasconCornerstoneDining Room at The GoringDysart Petersham,Elystan StreetEndo at The Rotunda** Evelyn’s TableFive Fields** Frog by Adam HandlingGalvin La ChapelleGymkhanaHakkasan Hanway PlaceHakkasan MayfairHarwood ArmsHIDE**JamavarKaiKitchen W8** KolLa TrompetteLeroy, ShoreditchLocanda LocatelliLyle’sMãosMarcusMuranoMusePétrus by Gordon RamsayPied à TerrePollen Street SocialPortlandQuilonRitz RestaurantRiver CaféSaborSeven Park PlaceSO|LA** SollipSt JohnThe GlasshouseThe NinthTrinityTrishna**TrivetUmuVeeraswamy** Wild Honey St James

(Specifies the one-star list is for London alone.)

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(Bloomberg) —

Volkswagen AG Chief Executive Officer Herbert Diess warned of more output cuts because of the chip crisis at its main factory in Wolfsburg amid rising tensions over how to make the world’s biggest car plant fit for the electric age.

While VW has made progress managing the global components bottleneck, the situation at its German headquarters remains challenging, Diess said Wednesday during a workers assembly.

“Wolfsburg is particularly hard hit by the semiconductor situation,” the CEO said according to a prepared speech. “Capacity adjustments are therefore necessary, also in the medium term.”

Talks over how to keep Wolfsburg competitive in the shift to battery-powered cars has seen tensions rise between Diess and union leaders. The CEO last year hinted at possible job cuts to keep pace with Tesla Inc. as the electric car leader plans to ramp up output at its first European factory near Berlin this year.

READ MORE: VW Plots New German Electric Car Factory to Counter Tesla

VW should place its planned new electric-vehicle plant — which is supposed to produce about 250,000 EVs annually — at the main Wolfsburg site or at least very close to it to help protect jobs, labor leader head Daniela Cavallo said at the same event. She also called for compensating staff for the planned cuts to night shifts, a move that’s expected to reduce the pay of some 5,000 workers.

Warning System

Diess said the company has introduced an early-warning system on chips and its engineers have identified some 150 technology alternatives to replace missing semiconductors. 

“We’re seeing opportunities to further increase production, particularly in the second half of the year,” he said.

VW’s Wolfsburg plant is expected to produce some 570,000 vehicles this year, Cavallo said. Last year, output plummeted by 330,000 vehicles in part because the group favored production of higher-priced models at other locations.

“Those were your choices, that’s your responsibility,” Cavallo said in comments addressed to top management. “That’s why you owe your colleagues compensation.”

(Updates with CEO comment in seventh paragraph. A previous version of this story corrected the day in the second paragraph.)

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