Bloomberg

Malaysia to Table Amended Anti-Tobacco Bill After Resistance

(Bloomberg) — The Malaysian government will push forward to table a bill that seeks to ban smoking and vaping for those born from 2007, after making amendments following resistance from some lawmakers.

Health Minister Khairy Jamaluddin said he hopes the bill — dubbed a ‘generational endgame’ — will receive the support of lawmakers when it is tabled at the next parliament session in October. It was referred to a parliamentary select committee in August for further scrutiny amid criticism that some of its features would infringe on personal freedom. 

“The enforcement powers really are focused and restricted only against distribution, manufacturing and supply,” Khairy said in a group interview on Friday. “We’ve clarified that in the latest amendments, so if you contravene the law in terms of GEG smoking offense, then the enforcement officer cannot frisk you, they cannot take away your computer or your phone or things like that.”

Malaysian lawmakers last month delayed a vote on the bill and referred it to the select committee to examine and make recommendations for improvement. The bill also bans those born after 2007 from buying, possessing or using tobacco and other related products even after they reach 18. Shopkeepers and distributors will be prohibited from selling such products to anyone in the age group under the proposal.

 

(Updates with minister’s comments in third paragraph)

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Apple Music Takes Over Pepsi as Presenter of Super Bowl Halftime Show

(Bloomberg) — Apple Music will become the title sponsor of the Super Bowl halftime show, taking over from PepsiCo Inc., which has had its name on the star-studded intermission program since 2013.

Apple Inc.’s sponsorship begins this season with Super Bowl LVII, which will be played in Arizona in February. The $2.5 trillion tech company may have paid as much as $50 million a year for the five-year deal, Sportico reported, without saying where it got the information.

The pricey sponsorship’s announcement also coincides with Apple’s bid for the rights to stream the NFL’s Sunday Night games. The company is considered the front-runner for the popular package of games, for which the league is seeking $2.5 billion, an increase of $1 billion over its current deal with DirecTV. 

Apple has generally stayed away from sponsorships, which are primarily a marketing tactic. Apple Music sponsored the German football club FC Bayern Munich for at least two years last decade. But the firm does have a long history with the Super Bowl: It’s been running ads during the event since 1984, when it first introduced the Apple Macintosh personal computer.

PepsiCo announced in May it was ending its 10-year sponsorship run. The Super Bowl, the National Football League’s annual season-ending championship, is among the most-watched sporting events in the world. More than 120 million viewers watched the halftime show in 2022, with total US viewers increasing 6% from the previous year.

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Tesla Countersues California Agency in Workplace Racism Battle

(Bloomberg) — Tesla Inc. filed a countersuit against the California Civil Rights Department after the agency accused the company of fostering racial bias at its main factory.

The world’s most valuable car maker said state officials didn’t give it adequate notice of claims or earnestly engage in efforts to resolve the dispute in violation of state law.

The department’s conduct “is entirely inconsistent with the principles of fair notice, neutral investigations, good faith conciliation, and mandatory pre-suit mediation,” required under state employment law, Tesla said in its complaint filed Thursday in Alameda County Superior Court. The suit was brought unlawfully without seeking public comment or holding a hearing, according to the complaint.

A judge last month rejected similar arguments by Tesla in its request for dismissal of the department’s complaint, which described the company’s Fremont plant as a “racially segregated workplace.” 

Read More: Tesla Must Face California’s ‘Rampant’ Workplace Racism Suit 

Tesla wants a court order barring the agency from applying “invalid and unlawful underground regulations” until the agency comes up with a fresh set of rules governing company investigations.

A spokesperson for the agency didn’t immediately respond outside regular business hours to a request for comment.

The countersuit comes a day after the department asked a judge to order Tesla to cooperate with an investigation into an individual’s civil rights complaint against the company filed in 2020. The agency said the company was withholding documents related to race-based harassment complaints, internal investigations and disciplinary records. 

“Tesla has impeded CRD’s investigation by refusing to provide substantive investigative discovery responses,” the agency said in a court filing.

The countersuit was reported earlier by Reuters and the Wall Street Journal.

The agency said in its February complaint that Black workers at Tesla complained to the department about hearing racial slurs as often as 50 to 100 times a day and spotting racist graffiti on restroom walls, work stations, lunch tables and other areas.

Tesla has said it “strongly opposes all forms of discrimination and harassment.” 

A former contractor for Tesla who won a $137 million jury verdict over racist abuse at the factory is headed for a retrial against the company in March after disagreeing with a judge who said the award should be reduced to $15 million.

The case is Tesla Inc. v. California Civil Rights Department, 22CV006830, California Superior Court, Alameda County.

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HappyFresh Exits Malaysia and Thailand After Strategic Review

(Bloomberg) — HappyFresh has shut down operations in Malaysia and Thailand after struggling in those countries, leaving the embattled grocery delivery startup to focus on its main Indonesian market.

The Instacart-style delivery service said it was left with no choice but to cease operations in the two markets, according to posts on its local Instagram accounts on Thursday. It will stop its grocery business effective immediately, just days after the startup said it secured fresh funding and resumed operations in Indonesia.

Jakarta-based HappyFresh, which struggled this year to raise capital after a sharp downturn in the young online grocery sector, is working with venture debt funds Genesis, Innoven and Mars on restructuring its business. Representatives of US firm Kroll replaced three former directors on its board as part of the effort.

Read More: HappyFresh Wins Funding, Revamps Board as Business Resumes 

Founded in 2014 as one of the first Instacart-style grocery delivery services in Southeast Asia, HappyFresh has raised at least $97 million in equity funding in addition to debt financing. Formally known as ICart Group Pte, the company’s business has faced challenges in the face of slowing economic growth, surging inflation and higher interest rates.

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Asian Stocks Fall as Yields Surge With Rate Hikes: Markets Wrap

(Bloomberg) — Asian stocks headed for a sixth weekly decline following another day of losses for US shares and surging Treasury yields that underscore expectations for tighter monetary policy and a slowing global economy. 

Equities fell Friday in Hong Kong, Australia and South Korea after the S&P 500 closed at the lowest level since June. US futures fluctuated.

The 10-year Treasury yield soared 18 basis points to pierce 3.7% on Thursday, its highest in a decade as investors weighed the risk of recession. Yields in Asia pushed higher, led by a jump of more than 20 basis points in Australia as trading resumed there after a holiday.

There is no trading of cash Treasuries in Asian hours with markets closed in Japan for Autumnal Equinox Day. 

A dollar gauge held near a record high after a day of dramatic moves in currency markets that saw Japan intervene to prop up the ailing yen for the first time since 1998. The offshore yuan weakened in the face of efforts to slow the depreciation, with the People’s Bank of China setting the daily reference rate stronger than expected for a 22nd day.

Japan’s intervention hasn’t addressed the underlying cause of yen weakness — the yawning gap between Japan’s ultra-loose monetary policy and rising rates in other countries — leaving the currency vulnerable.

Rate hikes overnight in the UK, Switzerland and Norway, along with increases Thursday in Asia in the Philippines, Indonesia and Taiwan, look set to damp market sentiment in the region. 

The Federal Reserve has given its clearest signal yet that it’s willing to tolerate a recession as the necessary trade-off for regaining control of inflation, with officials forecasting a further 1.25 percentage points of tightening before year-end.

“We see this new even-higher-for-longer rate path as associated with a substantially greater higher likelihood of a hard landing, and so not just unambiguously hawkish but unambiguously bad for risk,” said Krishna Guha, vice chairman of Evercore ISI.

Elsewhere in markets, gold fluctuated and Bitcoin pushed higher, extending gains to a second day, while remaining below $20,000. Oil clung to a slight gain as it headed toward a fourth weekly loss.

The energy market faces a very volatile last quarter of the year, Amrita Sen, co-founder and research director of Energy Aspects Ltd. said on Bloomberg Television. “It’s just too many different and contradictory factors driving prices right now,” she said, citing demand concerns from recessionary fears and supply constraints relating to Iran and Russia, as well as a lack of spare capacity from OPEC.

Will the Nasdaq 100 Stock Index hit 10,000 or 14,000 first? This week’s MLIV Pulse survey focuses on technology. It’s brief and we don’t collect your name or any contact information. Please click here to share your views.

Here are some of the main moves in markets:

Stocks

  • S&P 500 futures rose 0.1% as of 9:44 a.m. in Singapore. The S&P 500 fell 0.8%
  • Nasdaq 100 futures gained 0.1%. The Nasdaq 100 dropped 1.2%
  • Hang Seng Index fell 0.2%
  • Shanghai Composite Index rose 0.3%
  • South Korea’s Kospi index lost 1.1%
  • Australia’s S&P/ASX 200 Index slipped 1.6%
  • Euro Stoxx 50 futures climbed 0.3%

Currencies

  • The Bloomberg Dollar Spot Index was little changed
  • The euro was steady at $0.9836
  • The Japanese yen strengthened 0.2% at 142.07 per dollar
  • The offshore yuan weakened 0.2% to 7.0960 versus the dollar

Bonds

  • The yield on 10-year Treasuries advanced 18 basis points to 3.71%
  • Australia’s 10-year yield rose 23 basis points to 3.90%

Commodities

  • West Texas Intermediate crude increased 0.3% to $83.72 a barrel
  • Gold climbed traded at $1,672.26 an ounce

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©2022 Bloomberg L.P.

UN Latest: Pakistan’s Sharif Seeks Debt Relief, Aid Amid Floods

(Bloomberg) — Pakistan Prime Minister Shehbaz Sharif appealed for debt relief from wealthy countries as catastrophic floods exacerbated by climate change have displaced millions of people in his South Asian nation. 

Russia’s Foreign Minister Sergei Lavrov walked out of a United Nations Security Council meeting where the US and its allies were criticizing President Vladimir Putin’s government over the invasion of Ukraine, in a stark demonstration of the divisions opened up by the war.

Lavrov arrived at the meeting late, delivered his speech and left once it was done, refusing to stay for the speeches that accused Russia of committing war crimes and violating the UN Charter. He said the West forced Russia to launch it’s so-called “special military operation” to protect its own security.

Click here for the full schedule of speakers. 

(All times ET)

Essential reading:

  • How the UN Became a Bystander to the World’s Biggest Flashpoint
  • To catch up on the latest developments on Ukraine, click here.
  • And listen to our Twitter Space on UN’s struggle for relevance
  • Russia Is Left an Outlier Among World Leaders Gathered at the UN

Pakistan’s Leader Appeals for Aid, Debt Relief (9:21 p.m.)

Pakistani Prime Minister Shehbaz Sharif said in an interview with Bloomberg Television in New York that he had asked the Paris Club of rich creditor nations for a moratorium on his country’s debt as it tries to recover from disastrous flooding. 

The floods have submerged a third of the nation and killed more than 1,500 people. United Nations Secretary General Antonio Guterres has called on the international community to help Pakistan financially as damages caused by the floods exceed $30 billion. 

“Unless we get substantial relief how can the world expect from us to stand on our own feet? It is simply impossible,” Sharif said in the interview.  

Ireland’s Martin Decries Security Council Veto (9 p.m.)

Ireland’s prime minister, Micheal Martin, in his address to the General Assembly on Thursday, said the Security Council veto, which allows for a permanent member to defeat a resolution or decision, should be abolished if the organization is to function effectively. 

Ireland is now an elected member of the council, and Martin cited a Russian veto that killed a resolution on climate change that was supported by 113 countries. He also said the Security Council must be more active in helping end violence in the Tigray region of Ethiopia and to promote a “two-state solution” in the conflict between Israel and the Palestinians. 

He said he envisioned an Irish leader a century from now addressing the General Assembly and “will not cite frustrations over the use of the veto at the Security Council to thwart the will of the majority of member states because the veto will be an anachronism that has long ceased to exist.”       

Barbados’s Mottley Calls for Fairer Financial System (8 p.m.)

Prime Minister Mia Mottley of Barbados asked world leaders to embrace a more inclusive global financial architecture that better serves the majority of the UN member states, most of which were not involved in the 1944 Bretton Woods Agreement that gave rise to the World Bank and the International Monetary Fund.

To address inequities in the global financial system, she asked that nations demand change. Debt should carry clauses that waive repayment during times of natural disaster or pandemic. 

During her first term in office, Mottley restructured Barbados’s debt with an eye toward making the country resilient to disruptive climate events. Like other Caribbean nations, Barbados is vulnerable to intensifying cyclones and rising sea levels. 

Israeli Leader Resurrects Two-State Solution (2:25 p.m.)

Yair Lapid called for a two-state solution to the Israel-Palestine conflict, the first Israeli leader to do so at the  General Assembly in six years.

“An agreement with the Palestinians, based on two states for two peoples, is the right thing for Isra

el’s security, for Israel’s economy and for the future of our children,” he said, adding that the only condition Israel had was for a future Palestinian state to be “a peaceful one.”

Lavrov Defends Invasion on Security Council Meeting (12:45 p.m.)

Lavrov, Russia’s top representative at the General Assembly, defended his country’s invasion of Ukraine in a speech to a Security Council session on the crisis, before leaving the session midway through.

Lavrov reiterated the Kremlin’s assertion that what it calls a “special military operation” was “inevitable” because the US and its allies sought to use Ukraine as a “base for creating and realizing threats to Russian security.” Both Ukraine and the West have rejected those allegations.

Lavrov didn’t stay to listen to the other speeches at the session, nearly all of which blasted Russia’s invasion.

“He has left the chamber, I’m not surprised,” UK Foreign Secretary James Cleverly told the session shortly after Lavrov spoke. “I don’t think Mr. Lavrov wants to hear the collective condemnation of this council.”

Russia has also struggled to marshal support outside the Security Council. The General Assembly voted 101-7 with 19 abstentions to allow Ukrainian President Volodymyr Zelenskiy to speak by video link this week.

Guterres Denounces Russian Plans for Referendums (10:58 a.m.)

Secretary-General Guterres said he was “deeply concerned by reports of plans to organize so-called referenda in areas of Ukraine that are currently not under government control.”

“Any annexation of a state’s territory by another state resulting from the threat or use of force is a violation of the UN Charter and of international law,” Guterres told the Security Council in condemning Putin’s plans to stage sham referendums to justify claiming Ukrainian territory as part of Russia.

ICC Prosecutor Says World Must Show ‘Law Has Meaning’ (10:47 a.m.)

International Criminal Court Prosecutor Karim Khan said those guilty of war crimes or other abuses in Ukraine must be brought to justice, as diplomats used a Security Council session to again lament Russia’s invasion.

“This is a moment where we must collectively demonstrate — by action, not words — that the law has meaning,” Khan said. “Anybody who picks up a gun, anybody who fires a missile” must know the law applies and will be employed, Khan said.

Ireland’s Leader Cites ‘Shared Determination’ for Resolution With Truss (10:44 a.m.)

There’s a renewed sense of determination to resolve issues surrounding the Northern Irish Protocol as the UK’s Liz Truss begins work as prime minister, according to Ireland’s leader, Micheal Martin.

Martin’s meeting at the weekend with Truss was “constructive” and “there is shared determination to get the issue resolved,” he said in an interview with Bloomberg Television.

While the difficulties in getting a resolution on the part of the Brexit agreement that deals with trade into Northern Ireland shouldn’t be underestimated, Martin said, he was “clear now that there is a will to get it resolved on all sides and where there is a will there’s always a means to doing that.”

US and Chinese Foreign Ministers to Meet on Friday (8:40 a.m.)

US Secretary of State Antony Blinken will meet with China’s Foreign Minister Wang Yi on Friday on  the margins of the UN session, the State Department said in a statement.

The department said it’s “part of our ongoing efforts to maintain open lines of communication and manage competition responsibly.” 

Amid tensions over issues from trade to the future of Taiwan, President Joe Biden told the UN gathering on Wednesday that “we do not seek a Cold War. We do not ask any nation to choose between the United States or any other partner.”

South Korean Leader Heard Insulting Congress (6:30 a.m.)

South Korean leader Yoon Suk Yeol was overheard insulting American lawmakers as “idiots,” after briefly meeting President Joe Biden to discuss issues including US electric-vehicle subsidies that South Korea wants to change.

“What an embarrassment for Biden, if these idiots refuse to grant it in Congress,” video broadcast on South Korean television showed Yoon telling Foreign Minster Park Jin in New York. The comments were caught on a microphone as Yoon and Park were leaving a brief chat with Biden at a Global Fund event. 

Yoon has come under pressure at home to remedy provisions in the Inflation Reduction Act signed by Biden, which includes tax credits of as much as $7,500 for purchases of electric vehicles made in North America. That could disadvantage major South Korean brands like Hyundai and Kia, which don’t yet have operational EV plants in the US. 

China and Russia Foreign Ministers Meet (11:15 p.m.)

China vouched for Russia’s role in the UN in a meeting between the two nations’ foreign ministers on the sidelines of the General Assembly, according to Tass. “Russia is a permanent member of the Security Council and must continue to play its important role in the UN. No one can deprive Russia of this right,” it quoted China’s Wang Yi as saying.

The meeting underscored the two countries’ similar approach to global affairs that allows them to “play a constructive role in the formation of a more just and sustainable polycentric world order,” Tass reported separately, citing a statement from the Russian Foreign Ministry. The two foreign ministers also criticized US foreign policy, particularly toward Taiwan.

Last week, Putin told Chinese leader Xi Jinping he understands Beijing’s “questions and concerns” about his invasion of Ukraine, a rare admission of tensions between the diplomatic allies that came in the first in-person talks between the leaders of the long-time partners since the war began.

Putin Acknowledges Xi’s ‘Concerns’ on Ukraine, Showing Tension

Truss Says Democracies ‘Must Deliver’ for Citizens (9:30 p.m.) 

Truss evoked the struggle between democracy and autocracy as the UK prime minister paid tribute to the late Queen Elizabeth II, saying when the queen “addressed this general assembly 65 years ago, she warned that it was vital not only to have strong ideals but also to have the political will to deliver on them. Now we must show that will.”

The premier praised the international alliance that has supported Ukraine in the war against Russia and “at this crucial moment in the conflict, I pledge that we sustain or increase our military support to Ukraine for as long as it takes.”  

US Sees General Assembly as Fertile Ground for Price Cap (8:20 p.m.)

US diplomats are using meetings on the sidelines of the General Assembly to push for other countries to adopt a price cap on Russian oil and petroleum products, a senior State Department official said.

The US is emphasizing that the price cap is meant to limit Putin’s ability to finance the Ukraine war. They also stress — particularly to developing countries — that the mechanism can keep cheap Russian oil on the market and stabilize global energy prices, the official said, adding countries have been receptive to the cap, especially those that haven’t previously discussed the subject with the US. Even nations that won’t agree to the cap understand they can benefit from discounts on Russian energy.

Zelenskiy Warns of Negotiations as Delaying Tactic (8 p.m.)

Zelenskiy, in his speech, asked for more weapons to pursue his country’s efforts to repel Russia’s invasion and warned that Moscow would try to use the prospect of negotiations as a delaying tactic. The Russians, he added, are “afraid of real negotiations.”

He spoke of a recent prisoner swap between Russia and Ukraine and praised the efforts of Saudi Arabia in brokering the deal.   

Yoon, Kishida Sit Down Together in New York (7 p.m.)

The leaders of Japan and South Korea used their first summit in nearly three years to pledge to resolve historical issues that have damaged ties between the US allies.

Japan, South Korea Pledge Better Ties in First Summit Since 2019

South Korean President Yoon Suk Yeol and Japanese Prime Minister Fumio Kishida met for about 30 minutes in New York, where both had addressed a session of the assembly. Statements from both sides said the pair also discussed the importance of cooperation that includes the US as they face threats from the likes of North Korea.

Decisions by South Korean courts in recent years finding certain Japanese companies liable for compensation to Korean laborers for work done during Japan’s 1910-1945 colonial rule over the peninsula has soured ties. It also briefly touched off a trade dispute between the neighbors that the Biden administration has been courting as it seeks to secure supply lines for crucial goods such as semiconductors that diminish dependence on China.

Trump-Picked World Bank Boss Under Fire at UN (5 p.m.)

It’s one of the biggest talking points on the sidelines of the UN and among officials: why David Malpass insists on being a climate denier.

Pressure to replace the World Bank chief installed three years ago by former President Donald Trump has ramped up after his equivocations on the impact of burning fossil fuels sharpened criticism of the lender’s track record on climate change. 

The controversy kicked off Tuesday when former US Vice President Al Gore labeled World Bank President David Malpass a climate denier and called for a change of leadership. Asked about the criticism during the same event in New York, Malpass dodged questions on the effects of man-made emissions on climate change before saying: “I don’t know. I’m not a scientist.”

Macron and Truss Appear to Put ‘Friend or Foe’ Question to Rest (4 p.m.)

French President Emmanuel Macron appeared to try to bury the hatchet with Truss on the sidelines of the assembly.

“There is a willingness to re-engage, to move forward and to show that we are, as it were, allies and friends in a complex world,” Macron told a group of reporters in New York City after the talks. “Now, I believe in evidence, and results.”

Macron’s government has repeatedly been at odds with former UK Prime Minister Boris Johnson’s, especially during post-Brexit negotiations and on issues related to migrants crossing the English Channel. When Truss was eying the position, she said “the jury’s out” on whether France was UK’s “friend or foe.”

The two leaders appeared to shake off tensions, smiling and shaking hands during a photo op preceding their meeting. Readouts of the conversation shared by their aides focused on their common stance on Ukraine and Russia rather than thornier issues including Northern Ireland.

Biden and Truss Present a United Front on Ukraine (2:31 p.m.)

Biden and Truss brushed shoulders at Queen Elizabeth II’s funeral but had to wait till now to formally sit down and get acquainted. At the Group of Seven summit in Germany, it was still Boris Johnson who was in power and the two men did not have a bilateral, a fact that the UK press was quick to pounce on. 

Truss is a vocal hawk and the UK is the US’s closest geopolitical ally. On Ukraine the two countries are very much on the same page. Where there is tension is on the post-Brexit reality of a problematic Irish border.

The US president said he and Truss were both “committed to protecting” the Good Friday Agreement in Northern Ireland and that aiding Ukraine and countering China also were on the agenda. 

The meeting was a chance for Biden and Truss to form a stronger personal bond and cool simmering tensions over trade and Northern Ireland. Truss has questioned the nature of the so-called “special relationship” between the US and UK. Asked Wednesday if the “special relationship” is intact, Truss gave a single, firm head nod.

Biden-Truss Era Dawns With Caution, Doubt, Silence on Trade 

 

Biden Says US Doesn’t Seek Conflict With China (11:32 a.m.)

Biden told the General Assembly that the US doesn’t seek conflict with China and will conduct itself as “a reasonable leader.”

“We do not seek a Cold War We do not ask any nation to choose between the United States or any other partner,” Biden said in his speech. He also sought to tamp down speculation that his recent pledge to defend Taiwan if China invades marks a change in US policy.

“We seek to promote peace and stability across the Taiwan Strait, remain committed to our one China policy, which has helped prevent conflict for four decades,” Biden said. “We continue to oppose unilateral changes in the status quo by either side.”

Macron To Discuss Gas Prices, Supplies With Biden (11:30 a.m.)

Macron expects to improve coordination on energy and food with the US following a meeting with Biden this afternoon on the sidelines of the assembly. Europe needs to secure gas supplies and “reasonable pricing,” Macron said.

The French president called for “everyone to put maximum pressure on President Putin for him to end this senseless war.”

He declined to say how France would react if Russia were to use nuclear weapons. France’s doctrine is not to take part in any escalation, Macron said.

War in Ukraine Is Not Going Well For Putin, Greek Premier Says (11:26 a.m.)

Putin is going to try everything to turn the table as his invasion is not going well, Greek Prime Minister Kyriakos Mitsotakis said.

“We’re all united in supporting Ukraine defend itself against an open act of aggression,” Mitsotakis told Bloomberg TV in New York. “The war is not going well for Russia and I’m convinced Putin won’t succeed.” 

Biden Says Putin’s War is About ‘Extinguishing Ukraine’s Right to Exist’ (11:12 a.m.)

Biden opened his speech to the General Assembly by condemning Putin’s push to escalate his military campaign in Ukraine, condemning it as a “brutal, needless war.”

Biden again sought to rally support from the rest of the world to stand up against Putin. The US president has marshaled a global campaign to aid Ukraine and counter Russia, authorizing billions of dollars of military assistance for Kyiv’s forces and imposing sanctions that have hobbled the Russian economy. 

“This war is about extinguishing Ukraine’s right to exist as a state, plain and simple. And Ukraine’s right to exist as a people. Whoever you are, wherever you live, whatever you believe, that should make your blood run cold,” Biden said.

The US president has hailed the effort as proof he has been able to revitalize US alliances that were frayed by former President Donald Trump. Finland and Sweden, countries that for decades prized non-alignment, are on the brink of being welcomed into NATO amid concerns about Russian aggression. Existing allies have boosted defense spending, long a US goal.

Biden has also used bellicose language to condemn Putin for his invasion, calling him a war criminal and declaring in a major address in Warsaw earlier this year that “this man cannot remain in power.”

 

 

 

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IDB Board Recommends Removing Trump-Picked Chief Claver-Carone

(Bloomberg) — The board of a top development bank focused on Latin America voted Thursday to recommend removing the lender’s president after a probe into an alleged romantic relationship with a top aide found he probably violated ethics rules.

The 14 executive directors of the Inter-American Development Bank unanimously recommended ousting Mauricio Claver-Carone, according to people familiar with the process, who asked not to be identified describing a closed-door meeting. The IDB press office wouldn’t immediately comment when asked to confirm the vote.

Ultimate responsibility for removing Claver-Carone rests with the IDB’s board of governors, mostly finance ministers from the 48 member countries and governments to which the executive directors report. They will have until Tuesday to vote online, although the process is expected to be a formality, the people said.

Then-President Donald Trump’s 2020 nomination of Claver-Carone, a White House aide, to lead the development bank focused on Latin America opened a rift between the US and the region. He was the first US citizen to lead an institution traditionally presided over by a Latin American since its creation in 1959.

The US supports Claver-Carone’s dismissal, a Treasury spokesperson said. The US is the biggest shareholder in the Washington-based IDB, with about triple the weight of second-largest Brazil and Argentina. The lender is key to US influence in Latin America.

The bank loaned $23.5 billion last year, focusing on boosting economies and offering credit lines to buy Covid-19 vaccines for a region that was one of hardest hit globally by the pandemic. Nations experienced one of the worst economic contractions in their history in 2020, with millions losing jobs or fallen into poverty.

Claver-Carone — a 47-year-old former top Treasury Department adviser, International Monetary Fund representative and foreign-policy satellite radio host from Miami — has mounted an aggressive defense to keep his job. In a statement posted Tuesday on the IDB’s website, Claver-Carone said he fully cooperated with the investigation and asserted that it “does not substantiate the false and anonymous allegations that were made against me or IDB staff in the press.”

But the Treasury spokesperson said Claver-Carone’s refusal to fully cooperate with the investigation, and his creation of a climate of fear of retaliation among staff and borrowing countries, has forfeited the confidence of the bank’s staff and shareholders and necessitates a change in leadership.

Trump-Picked World Bank Boss Faces Calls for Ouster Over Climate

“It’s shameful the U.S. commented to the press before notifying me and that it is not defending two Americans against what is clearly fabricated information,” Claver-Carone said in a statement. “It’s beyond satire that China found its way into the IDB during the Obama Administration and now Biden officials are handing it back over on a silver platter, days after the initial anonymous malicious campaign was proven to be unsubstantiated.”

The investigation found evidence — backed by handwriting analysis, divorce records and interviewee statements — supporting the conclusion that the pair were in a romantic relationship prior to joining the Washington-based IDB in late 2020 “and that the relationship may have continued during their employment at the bank,” according to the Sept. 19 report prepared by law firm Davis Polk & Wardwell LLP at the direction of the IDB’s board. 

Claver-Carone, in interviews with Davis Polk in recent weeks, denied ever having a romantic relationship with the aide, who declined to be interviewed for the investigation, according to the report. The person didn’t respond to requests for comment.

Salary Raise

In comments to Bloomberg, Claver-Carone said he was interviewed by investigators for more than seven hours and responded to many of their requests for information.

The probe also found that Claver-Carone took employment action to benefit the aide, raising her salary twice in less than a year for a cumulative 46% increase to more than $400,000.

The report hasn’t been made public but has been seen by Bloomberg.

The probe found “no direct evidence of an existing relationship” between Claver-Carone and the aide, the report said. “However, particularly in light of their failure to cooperate, it would be reasonable to conclude that the evidence of a prior relationship, and the additional circumstantial evidence of a current relationship while they were both at the bank, constitute a violation of the applicable bank policies.”

(Updates with US Treasury support for dismissal beginning in fifth paragraph)

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©2022 Bloomberg L.P.

Convicted Twitter Spy Says US Hid Whistle-Blower Report

(Bloomberg) — A former Twitter Inc. employee who was convicted of spying for Saudi Arabia by turning over personal information of platform users said he deserves a new trial because prosecutors didn’t tell him about a whistle-blower’s report on security lapses at the company.

Ahmad Abouammo said in a court filing Thursday that the explosive report might have helped him because, as his lawyer argued to the jury, Twitter threw him “under the bus” to deflect from the company’s careless handling of its users’ data.

He said whistle-blower Peiter Zatko, a former Twitter security chief, submitted the report in July to multiple government agencies, including the Justice Department. But it didn’t become public until after Abouammo’s trial ended in August, when it sparked a congressional hearing and gave Elon Musk new ammunition in his effort to back out of an agreement to buy Twitter for $44 billion.

Read More: Former Twitter Employee Convicted of Spying for Saudi Arabia 

Abouammo’s allegation that prosecutors committed misconduct by withholding the report is one of several arguments his lawyers made in Thursday’s filing to try to get a judge to set aside the jury’s Aug. 9 guilty verdict. Such motions are routine in criminal cases and rarely succeed. 

The contents of Zatko’s report include information that clears Abouammo of wrongdoing and “reflects powerful impeachment evidence for multiple government witnesses who testified about the purportedly ironclad protection of user data at Twitter,” his lawyers wrote. 

“Given the government’s and its witnesses’ focus on Twitter security and efforts to fend off foreign interference, the information provided by Zatko would have been a central and compelling aspect of the defense case,” according to the filing.

A spokesman for the US attorney’s office in San Francisco and a Twitter spokesperson declined to comment on the filing. 

In his testimony to the Senate, Zatko described a “ticking bomb of security vulnerabilities” at Twitter as a result of outdated software, broad employee access to personal user data and a reactive security policy that had engineers running “from fire to fire.”

Twitter has said it fired Zatko in January for poor performance and that he has given “a false narrative about Twitter and our privacy and data security practices that is riddled with inconsistencies and inaccuracies and lacks important context.”

The company has disclosed it reached a $7.75 million separation agreement with Zatko on June 28.

Abouammo, a US resident born in Egypt, was found guilty of charges including acting as an agent for Saudi Arabia, money laundering, conspiracy to commit wire fraud and falsifying records, following a two-week trial. He faces 10 to 20 years in prison when he’s sentenced. 

The case is US v. Abouammo, 19-cr-00621, U.S. District Court, Northern District of California (San Francisco).

(Updates with Twitter declining to comment)

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China May Find It Hard to Cool Lithium’s Rally This Time Around

(Bloomberg) — Scorching gains for lithium, a raw material vital for powering electric vehicles, threaten to push costs even higher for Chinese battery makers, and the government is finding itself powerless to do anything about it.

Even after a meeting last week where Chinese authorities pleaded with major producers to stabilize prices, lithium carbonate surged to a fresh record, rising to 500,500 yuan ($70,716) a ton. In yuan terms, that exceeds the level prevailing when Tesla Inc.’s Elon Musk called prices “insane” earlier this year.

“In the short term, I don’t think the meeting will help China cool the rally,” said Peng Xu, analyst at BloombergNEF. Prices for seaborne spodumene — a partly processed form of lithium — are increasing amid a supply-demand mismatch and that’s squeezing the margins of Chinese lithium refiners, Xu said, adding there’s still room for further gains from current price levels.

It was easier for China back in March, at the time of the previous peak. Then, officials hauled in representatives of the supply chain and told them they wanted “rational” prices. That did at least stall the rally. But it came at a time when virus lockdowns were curbing demand, and downstream users were also struggling to cope with high costs for other battery materials like nickel and cobalt. Now, things are different.

China’s manufacturing is picking up, with output of electric vehicles more than doubling from a year ago in August. The China Passenger Car Association expects EV sales to hit a record 6 million this year, double the number in 2021. Lithium supply still trails demand, and there are concerns about the availability of power in key production hubs this winter. In a sign of market tightness, an auction of Australian spodumene just attracted the highest-ever winning bid.

A slumping Chinese currency is also playing a role in the surge in domestic prices. The yuan has tumbled more than 10% this year, and is heading for the worst annual performance since 1994. The Federal Reserve’s 75-basis-point hike on Wednesday only made things worse. China typically buys raw materials in dollars, so the weakening yuan increases costs for the nation’s importers.

Read also: Lithium Resumes Insane Gains to Add Pressure on Automakers

In China’s meeting with the lithium industry last week, authorities asked major firms to ensure prices don’t hugely deviate from production costs and urged consumers to strike long-term agreements. The nation also said it will help boost exploration, stabilize imports and promote recycling of raw materials.  

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IRS Wins Order for SFOX Customer Data in Crypto Tax Push

(Bloomberg) — M.Y. Safra Bank must produce information to the US Internal Revenue Service about customers who may have failed to pay taxes on cryptocurrency transactions through prime dealer SFOX Inc., a US judge ruled Thursday.

The IRS requested the information to determine if taxpayers are reporting crypto profits and losses on their tax returns, according to a statement from Damian Williams, the US attorney for the Southern District of New York. 

US District Judge Paul Gardephe in New York granted the summons, which the IRS has used in tax investigations around the world. The US has served similar information demands, called “John Doe” summonses, seeking user data from Kraken, Circle Internet Financial and Coinbase.

The IRS push to collect taxes on cryptocurrency is part of a broader effort by US lawmakers and regulators, including the Securities and Exchange Commission and the Commodity Futures Trading Commission, to extend their oversight to crypto trading.

“The government’s ability to obtain third-party information on those failing to report their gains from digital assets remains a critical tool in catching tax cheats,” IRS Commissioner Charles Rettig said in a statement. The granting of the summons “reinforces our ongoing, significant efforts to ensure that everyone pays their fair share.”

The tax agency had earlier asked federal judges in New York and Los Angeles to let it serve summonses on SFOX and M.Y. Safra Bank, which partnered with SFOX in 2019 to offer its customers cash deposit accounts backed by the Federal Deposit Insurance Corporation. The IRS is seeking account and transaction records for users with cryptocurrency transactions over $20,000 in any year from 2016 to 2021.

According to a May analysis by Barclays Plc, cryptocurrency investors are paying less than half the taxes they owe. SFOX has more than 175,000 users who have made $12 billion in transactions since 2015, according to the government.

The cases are In the Matter of the Tax Liabilities of John Does, 22-mc-00150, U.S. District Court, Central District of California (Los Angeles); and In the Matter of the Tax Liabilities of John Does, 22-mc-00213, U.S. District Court, Southern District of New York (Manhattan).

 

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