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The Morning Risk Report: How China Helped Iran Cushion the Blow of Sanctions and Fund Its War Machine
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By David Smagalla | Dow Jones Risk Journal
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Good morning. In the first Trump administration, the U.S. launched a “maximum pressure” campaign to cut Iranian oil from the global market and eliminate Tehran’s biggest source of revenue. Today, Iran sells billions of dollars’ worth of oil every month. For that, it can thank one country: China.
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How they evade sanctions: To make its oil purchases possible, Chinese buyers have worked closely with Iran to expand what U.S. officials and researchers say has become one of the world’s largest sanctions-evasion networks. Payments are routed through smaller Chinese banks that have limited global operations and less to lose if they are sanctioned by the U.S., making it hard to stop them. Front companies established by Iran in Hong Kong and elsewhere help manage the proceeds.
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Use of “teapot” refineries: Private Chinese refineries, known as “teapots,” have become the primary buyers of Iranian crude, after China’s state-owned energy giants, wary of upsetting Washington, left the market. Fake invoices and mislabeled crude have further disguised the trade.
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The result: All these moves—laid out in U.S. sanctions documents, public indictments and described by Western officials and researchers—have allowed Iran to earn tens of billions of dollars in revenue every year from China, and then launder it so it can be used around the world.
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Content from our sponsor: Deloitte
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Software Licensing: Why Many Vendors Are at a Crossroad
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Licensing can become a value engine and move software vendors beyond transaction purchases toward long-term customer partnerships that boosts both trust and recurring revenue. Read More
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Treasury Secretary Scott Bessent said administration changes would cut back on unnecessary paperwork. Photo: Victor J. Blue/Bloomberg News
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Treasury proposes ‘fundamental’ reset of anti-money-laundering rules.
The Treasury Department proposed regulations that it said would fundamentally reset the U.S.’s anti-money-laundering rules, handing banks another win amid a series of deregulatory changes by the Trump administration.
The proposal would give the Treasury a more central role enforcing regulations that require banks to screen for and report suspicious activity by their customers. The Wall Street Journal first reported on the proposal last year, when it was still under consideration.
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Insurers’ $1 trillion buildup in private credit is leaving regulators in the dust.
Of the about $6 trillion in invested assets held by life and annuity companies, nearly $1 trillion is now in private-credit investments, according to A.M. Best.
The Treasury Department plans meetings with state insurance regulators about the private loans piling up in insurers’ portfolios. Last year the National Association of Insurance Commissioners pulled a report revealing that the ratings on insurers’ private-credit investments were routinely inflated.
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Elon Musk has amended his lawsuit against OpenAI to ask that any damages he might win be awarded to the company’s charitable arm rather than to himself.
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Maine looks poised to become the first state to freeze building of new data centers with legislation that could pass this spring, but community backlash against these properties is spreading across the country.
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Risk Journal reports: Swedish authorities released an oil tanker believed to be part of Russia’s shadow fleet, after investigators determined there was insufficient evidence to link the vessel to a 12-kilometer oil slick detected east of Gotland (free link).
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The United States Trade Representative called several Canadian policies trade barriers, reports Risk Journal, including restrictions on alcohol sales, federal procurement rules and agricultural import limits (free link).
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303
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The number of standalone enforcement actions by the Securities and Exchange Commission in fiscal year 2025, according to its annual enforcement report. This is down from fiscal year 2024, when the agency tallied 431 standalone actions.
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President Trump addressed the press Monday. Photo: Tom Williams/CQ Roll Call/ZUMA Press
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Trump agrees to two-week cease-fire with Iran if Hormuz reopened
President Trump said he agreed to suspend attacks on Iran for two weeks subject to the immediate reopening of the Strait of Hormuz, pointing to progress on a 10-point proposal from Tehran. The U.S. has halted all offensive operations in Iran, according to a senior U.S. official. Stock futures surged and oil prices fell sharply on the news.
Earlier Tuesday, Trump had threatened to wipe out the entirety of the country’s civilization if Tehran didn’t cede to his demands by 8 p.m. Eastern Tuesday.
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As the Trump administration grasps for a way to reopen the Strait of Hormuz without sending in ground troops, attention is turning to the United Nations-backed deal struck with Ukraine and Russia in 2022 to try to restart critical grain exports.
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Vice President JD Vance visited Hungary to support Prime Minister Viktor Orbán, who faces a tough re-election; President Trump also endorsed Orbán via phone.
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The rise of artificial intelligence has quickly sparked worries of job losses in America’s office cubicles. Whether this happens is a big question, but a new Goldman Sachs report analyzing past technology waves warns AI-displaced workers face potentially steep economic pain.
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The U.K. government has barred Kanye West from entering the country following a backlash over a planned performance at a London music festival and the rapper’s history of antisemitism.
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U.S. agencies said hackers linked to Iran continue to target industrial technology used in the U.S. energy grid, government services and other infrastructure. Photo: Getty Images
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U.S. officials urge firms to prepare for more Iran cyber threats.
U.S. cybersecurity officials reiterated Tuesday that critical infrastructure companies should watch for potential cyberattacks from Iran and its proxies as the countdown clock ticks on President Trump’s threats if the Strait of Hormuz isn’t reopened to traffic, Kim Nash reports for Risk Journal (free link).
Hackers linked to Iran continue to target industrial technology used in the U.S. energy grid, government services and other infrastructure, the U.S. Cybersecurity and Infrastructure Security Agency said in a joint alert with the Energy Department, Environmental Protection Agency, U.S. Cyber Command and other federal bodies.
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President Trump has ousted Kristi Noem from the Department of Homeland Security, but his administration is hanging onto the controversial $70 million jet she leased during her tenure, according to a department spokeswoman and other officials familiar with the matter.
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The State Department is negotiating with countries in Africa and Asia to relocate over 1,100 Afghans stranded in Qatar after U.S. travel restrictions.
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America’s battered office market is holding a fire sale, featuring some buildings marked down by more than 90%.
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North Korean leader Kim Jong Un expressed unexpected appreciation for South Korean President Lee Jae Myung after Lee apologized for drone incursions.
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