Good morning. Sen. Ted Cruz on Wednesday unveiled legislation aimed at shielding technology firms for up to 10 years from federal artificial intelligence regulations deemed to hamper innovation, Angus Loten reports for Risk Journal.

The Strengthening Artificial Normalization and Diffusion by Oversight and Experimentation Act, or Sandbox Act, seeks to boost innovation by giving AI developers “the room to create while still mitigating any health or consumer risks,” Cruz said in a statement. He said the move is crucial for keeping the U.S. ahead of China in advancing AI capabilities.

• The background: Earlier this year, the Texas Republican who chairs the Senate Commerce Committee sought to include a 10-year moratorium on state AI laws in the Senate’s version of the Trump administration’s budget bill. The provision, which had been approved by the House, was reduced to a proposed five-year moratorium, but was ultimately rejected by the Senate. The Sandbox Act would apply only to federal AI regulations, a Commerce Committee spokesperson said.
   
• The proposal: Under the bill, the Office of Science and Technology Policy would review requests by AI developers to waive or modify regulations they say impede their work. Approved waivers would be renewable every two years, to a maximum of 10 years. Developers would need to make regular disclosures to federal agencies, which could revoke a waiver at any time for noncompliance. Compiled waiver requests would be used to help lawmakers identify specific regulations seen as overburdensome and consider updating or scrapping those policies.
   
• Patchwork of AI laws: Technology firms in recent years have called on Congress to enact a stand-alone federal AI law to override a patchwork of state AI regulations, which they say inhibit innovation. As part of the Trump administration’s AI action plan, announced in July, federal agencies can deny funding for AI-related projects in states deemed to have overly stringent AI regulations—a move critics say is aimed at discouraging states from enacting new AI laws.​

U.S. drops foreign bribery probe of avocado distributor.

The U.S. Justice Department has closed an investigation into whether California-based avocado distribution company Calavo Growers bribed Mexican officials, Risk Journal’s Max Fillion reports. 

Prosecutors told Calavo they closed the probe on Sept. 2, the company said in a securities filing on Tuesday. Calavo in January 2024 self-disclosed to U.S. authorities potential Foreign Corrupt Practices Act violations in Mexico that it discovered during an internal investigation.

FinCEN intends to delete collected domestic ownership information.

The Financial Crimes Enforcement Network said it expects to delete ownership information submitted by U.S. companies after finalizing a rule that would require only foreign businesses with foreign owners to report ownership information to the federal government, Risk Journal reports. 

FinCEN Director Andrea Gacki said during a U.S. House of Representatives subcommittee hearing on Tuesday the agency expects to “resolve any data questions involving the data that we have” as it finishes the new reporting rule under the Corporate Transparency Act.

• The U.S. under President Trump wants to be the “crypto capital of the world,” Securities and Exchange Commission Chairman Paul Atkins said, promising a “new day” at the agency and a hands-off approach to enforcement, Risk Journal’s Richard Vanderford reports. 
   
• A federal judge late on Tuesday blocked President Trump from removing Lisa Cook from the Federal Reserve Board of Governors while a lawsuit challenging her firing proceeds.

NATO planes shoot down Russian drones deep inside Poland.

NATO-member warplanes shot down several Russian drones over Poland, the first time the alliance has engaged Russian drones over a member’s territory after what officials contend was a test of its defenses by Moscow.

The incident, which Polish authorities said involved 19 incursions into its airspace, led authorities to close major Polish airports for the first time since the Ukraine war began.

• Trump Weighs In on Russian Drone NATO Incursion, but Doesn’t Condemn It

The bizarre sprint ahead of next week’s Fed meeting.

President Trump’s unprecedented bid to wrest greater control of the Federal Reserve barreled toward a suspense-filled conclusion Wednesday amid two parallel efforts to decide who will be able to participate at next week’s interest-rate meeting.

Late Tuesday, a federal judge granted Fed governor Lisa Cook an injunction that temporarily halted Trump’s attempt to remove her. The decision was a crucial legal victory for Cook—and the central bank’s independence more broadly—because it allows her to remain in her job, at least for now. It clears the path for her to vote at a consequential Fed meeting next week, when officials are expected to make their first interest-rate cut of the year.

• The Fed Official Who Called the Jobs Slowdown and Became a Candidate for Chair

• Iran has agreed to give the U.N. atomic agency access to its main nuclear facilities, opening the possibility for international inspectors to assess the damage done by U.S. and Israeli airstrikes in June and check on Tehran’s stockpile of near weapons-grade enriched uranium, the agency’s chief said.
   
• President Trump asked the European Union to hit some Chinese and Indian goods with tariffs of up to 100% in a new attempt to ratchet up pressure on Russia over its war in Ukraine, two EU officials said.
   
• The European Union plans to propose a partial suspension of the bloc’s trade agreement with Israel as pressure piles on the institution to take a harder line on Gaza.
   
• After violent protests in Nepal toppled the country’s prime minister, the Nepali army deployed its troops to enforce a nationwide curfew in a bid to stop violence and vandalism from spiraling.

• U.S. businesses are facing the biggest health-insurance cost increases in at least 15 years, after already-steep boosts in recent years that have pushed the annual expense for family coverage high enough to equal the price of a small car.
   
• OpenAI signed a contract with Oracle to purchase $300 billion in computing power over roughly five years, people familiar with the matter said, a massive commitment that far outstrips the startup’s current revenue.

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