Bangladesh’s central bank has asked the Federal Reserve Bank of New York to join a lawsuit it plans to file against a Philippines bank for its role in one of the world’s biggest cyber-heists, several sources said.

The Fed has yet to respond formally, but there is no indication it would join the suit.

Unidentified hackers stole $81 million from Bangladesh Bank’s account at the New York Fed in February last year, using fraudulent orders on the SWIFT payments system. The money was sent to accounts at Manila-based Rizal Commercial Banking Corp and then disappeared into the casino industry in the Philippines.

Nearly two years later, there is no word on who was responsible, and Bangladesh Bank has been able to retrieve only about $15 million, mostly from a Manila junket operator.

​Legal action discussed

Officials from Bangladesh Bank and the New York Fed spoke about legal action against RCBC in a conference call last month that was also attended by two representatives from SWIFT, according to three sources in Dhaka who had direct knowledge of the conversations.

It was agreed that Bangladesh Bank would send a proposal on the suit to the New York Fed, they said.

“The aim is to file a case by March-April in New York,” said one of the sources. “Work is on. Bangladesh Bank is likely to send something to the Fed soon.”

The source said the idea was it would be a civil suit to recover the money, and that Bangladesh hoped the Fed and SWIFT would be joint petitioners.

Subhankar Saha, a spokesman for Bangladesh Bank, said he had no knowledge of any plans to sue RCBC but that “efforts are on to recover the entire stolen money.”

The New York Fed and SWIFT declined comment.

A source familiar with the New York Fed’s thinking confirmed that Bangladesh Bank’s external counsel raised the idea of filing a suit against RCBC in the call.

The New York Fed officials agreed to review any proposal Bangladesh Bank wrote up, but they did not formally agree to a joint effort, and have not since worked on it nor heard from Bangladesh Bank, the source said.

​Rogue employees

RCBC has blamed rogue employees, and Philippine prosecutors have filed money-laundering charges against a former RCBC bank manager and four people who owned the bank accounts where the funds were sent, but are not identifiable because the accounts were in fake names. They are the only people to be formally cited in association with the crime.

Bangladeshi officials have cited internal RCBC documents, also seen by Reuters, to assert that the Filipino bank ignored suspicions raised by some RCBC officials when the money was first remitted to the accounts on Feb. 5, 2016, and then delayed acting on requests from RCBC’s head office to freeze the funds on Feb. 9.

RCBC did not respond to requests for comment. But it has said in the past that it would not pay any compensation and that Bangladesh Bank bore responsibility for the theft since it was negligent.

RCBC was fined a record 1 billion Philippine pesos ($20 million) by the country’s central bank last year for its failure to prevent the movement of the stolen money through it.

Separately, a Bangladesh court has sent letters rogatory to the United States seeking the findings of the Federal Bureau of Investigation (FBI) into the case, said the main police investigator in Dhaka. Letters rogatory are documents used to obtain judicial assistance from foreign courts.

“We have questions for the Federal Reserve Bank, we want to collect the FBI report, what their findings are,” Molla Nazrul Islam, a special superintendent of police in Bangladesh, told Reuters this week.

An FBI spokeswoman said the agency could not comment on ongoing cases.

A hacking group called Lazarus that is believed to have connections to North Korea has been linked to the Bangladesh cyberheist, and some U.S. officials said earlier this year that prosecutors were building a case against Pyongyang. But no case has yet been filed.
…

A federal judge in Michigan has sentenced a former high-level Volkswagen manager to seven years in prison for his part in the scheme to cheat emissions tests and defraud consumers.

Oliver Schmidt has also been fined $400,000. He pleaded guilty in August to charges that included defrauding the United States and violating the Clean Air Act.

“This sentence reflects how seriously we take environmental crime,” Acting U.S. Attorney Daniel Lemisch said Wednesday. “Protecting national resources is a priority of this office. Corporations and individuals acting on behalf of corporations will be brought to justice for harming our environment.”

Schmidt was the general manager of Volkswagen’s U.S. Environment and Engineering office. He admitted knowing about and agreeing with engineers to carry out a scheme to install a device on certain VW diesel vehicles that would switch on for emissions tests, but switch off during normal driving.

Customers bought the cars believing they were environmentally friendly when in fact the cars were polluting as much as 30 times higher than U.S. standards.

Federal courts have ordered Volkswagen to spend more than $1 billion to buy back or repair the affected cars.
…

China’s Ofo launched its dockless bicycles in Paris on Wednesday, becoming the fourth bike-sharing plan operator in a city set to banish all combustion-engine cars by 2030.

Ofo France general manager Laurent Kennel told Reuters the firm, one of two bike-sharing giants in China, had put just over 100 of its bright yellow bicycles on Paris roads on Wednesday and plans to ramp that up to 1,000 bikes by year-end.

Ofo comes hot on the wheels of Hong Kong-owned Gobee.bike, which launched in October and whose bright green bikes, estimated at a few thousand, can be seen on every Paris street.

A third Asian player, Singapore-owned oBike, has a few hundred bikes on Paris streets, and will also compete with the city’s long-established Velib plan.

Unlike the dockless Asian bikes, the Velib bikes must be parked in fixed docking stations of which there are some 1,800 in Paris, but which are often full in popular parts of the city.

“We want to be leader in free-floating bikes in Paris and France,” Kennel said.

He added that to cover Paris well, the firm plans to put several thousand bikes on the road, although there are no immediate plans to match Velib’s 24,000 bicycles.

Like Velib, the Ofo bikes have three gears – unlike the gearless Gobee and oBike bikes – but will be slightly more expensive at 0.50 euros ($0.6) per 20 minutes, compared to 0.50 euros for 30 minutes for the other two Asian operators.

Ofo’s bikes will be free for the first 40 minutes until the end of the year. Velib is free the first half hour for users with a subscription.

Kennel said Ofo operate more than 10 million bikes in 200 cities worldwide, the vast majority in China, and a few thousand in Europe, including in Milan, Madrid, Vienna, Prague, London and Cambridge.

Ofo, which has raised more than $1 billion from Chinese venture capitalists, including Alibaba Group Holding Ltd., will cooperate with Paris city authorities, which have said they want to regulate the dockless bike plans to prevent chaos on Paris sidewalks.

The dockless bikes can be found and unlocked with a mobile phone app, and after use they can be left anywhere. So far there have been no pile-ups as have been seen on Chinese roads.

The new Asian bike share operators’ entry into the Paris market is well timed, as longtime Velib operator JCDecaux is replaced by the Smoovengo consortium, which won a 600-700 million euro ($700-$825 million) contract to run the Paris city bike-sharing system from 2018 to 2032.

Dozens of Velib docking stations have been out of order for weeks as Velib’s old docking stations are replaced with Smoovengo’s new stations.

The Paris city government is building more bike lanes as it tries to reduce automobile traffic in a bid to cut pollution.

($1 = 0.8486 euros)
…

Vulnerable communities uprooted by climate change are being left out of a voluntary pact to deal with migration, campaigners said, after the United States pulled out of the global deal.

Although people within low-lying states are being forced to relocate because of worsening storms and rising seas, they will not be recognized in U.N. migration pact talks next year, putting lives at risk, campaigners said.

“Many of the situations we find ourselves in, here in the Pacific, are not caused by us. We continue to ask, ‘Where is the justice?’ Those of us who are least responsible, continue to bear the brunt,” said Emele Duituturaga, head of the Pacific Islands Association of Non-Governmental Organizations (PIANGO).

Hoping for acceptance

“We hope that there will be an openness and an acceptance that climate-induced migration is one that the world community has to be responsible for,” she said on the sidelines of a conference co-hosted by PIANGO in Fiji’s capital, Suva.

With a record 21.3 million refugees globally, the 193-member U.N. General Assembly adopted a political declaration in September 2016 in which it also agreed to spend two years negotiating a pact on safe, orderly and regular migration.

U.S. President Donald Trump this week withdrew from negotiations because the global approach to the issue was “simply not compatible with U.S. sovereignty.”

U.N. Secretary-General Antonio Guterres regretted the U.S. decision, his spokesman said, but expressed hope the United States might re-engage in the talks ahead of the start of formal negotiations in February.

Unique heritage

Climate displacement is already a reality for Telstar Jimmy, a student from the Bank Islands in northern Vanuatu.

Her family has relocated several times because of worsening cyclones and flooding, as rising seas slowly wash away ancestral homelands and burial sites.

“The foundations of our unique heritage were taken,” she told the Thomson Reuters Foundation.

“Relocation just meant safety and continuing to exist. But now the question is: Safe and existing for how much longer?”

Worldwide, sea levels have risen 26 centimeters (10 inches) since the late 19th century, driven up by melting ice and a natural expansion of water in the oceans as they warm, U.N. data show. Seas could rise by up to a meter by 2100.

‘It’s only going to get worse’

“With climate-induced displacement, we know that there are already people, communities and countries at risk,” said Danny Sriskandarajah, head of the rights group CIVICUS, co-hosting the Fiji conference. “It’s only going to get worse [and] we need to come up with ways to manage those flows.”

PIANGO and CIVICUS are among campaign groups drafting a declaration that calls on the United Nations to recognize climate change as a key driver of migration.

The 1951 Refugee Convention recognizes that people fleeing persecution, war and conflict have the right to protection, but not those forced out by climate change.

Trump also plans to pull out of the 2015 Paris climate accord, which seeks to end the fossil fuel era this century with a radical shift to cleaner energies to curb heat waves, downpours, floods and rising sea levels.

The deal aims to hold the global temperature rise to “well below” 2 degrees Celsius above pre-industrial levels and try to limit the rise even further, to 1.5 degrees Celsius.

The U.S. is the only country that is not part of the climate pact after Syria and Nicaragua joined this year.

“I’m a bit nervous because other countries may also pull out with the U.S., and that’s going to be a bigger issue for us, especially at a time when we’re trying to battle climate change,” said Vanuatu local Jimmy. “Whatever each country does will impact the lives of other people around the whole globe.”
…

Luxury goods companies may ban sales of their products on online platforms like Amazon to preserve their aura of exclusivity, the European Union’s top court said Wednesday. 

The European Court of Justice ruled in favor of the German branch of luxury cosmetics group Coty, whose brands include Calvin Klein and Marc Jacobs, which sought to keep its products from selling on non-authorized digital sale platforms. 

​The court said Coty’s effort to limit distributors “is appropriate to preserve the luxury image of those goods,” adding that it “does not appear to go beyond what is necessary.” Coty wanted to ban an authorized distributor from selling its products on Amazon.de in a case pending at a Frankfurt court, which requested a ruling from EU judges.

The Computer and Communications Industry Association said the ruling was “bad news for consumers who will face fewer choices and also less competition when they want to shop online.”

Germany’s antitrust agency said it was examining the EU court ruling, but expected it to have only a limited effect on its own decisions.

The court in Luxembourg “apparently made a great effort to limit its statements to the realm of real prestige products, where the luxurious aura is a significant part of the product itself,” said Andreas Mundt, the head of the Federal Cartel Office.

Manufacturers of goods that aren’t luxury brands “still have no carte blanche to sweepingly limit their distributors’ use of sales platforms, according to our assessment,” Mundt added.
…

The U.N.’s intellectual property agency says China racked up a record 1.3 million patent applications last year, topping the combined total in the U.S., Japan, Korea and Europe.

The World Intellectual Property Organization says innovators worldwide filed 3.1 million patent applications in 2016, up 8.3 percent from a year earlier, marking the seventh-straight yearly increase.

China alone accounted for 98 percent of that increase, with its patent office receiving 236,600 more applications than in 2015.

Releasing WIPO’s annual intellectual property report Wednesday, Director-General Francis Gurry cited the “extraordinary growth numbers” that epitomize the trend of recent years.

WIPO said trademark applications shot up by 16 percent to about 7 million, and worldwide industrial design applications increased by 10.4 percent to almost 1 million, again led by growth in China.
…

U.S. worker productivity rose 3 percent in the third quarter, the best showing in three years, while labor costs fell for a second straight quarter.

The increase in productivity in the July-September quarter was double the 1.5 percent gain in the second quarter and both quarters were up significantly from a scant 0.1 percent rise in the first three months of the year. Labor costs fell 0.2 percent after an even bigger 1.2 percent decline in the second quarter.

The third quarter figure for productivity was unchanged from an initial estimate while labor costs were initially estimated to have risen by 0.5 percent.

Economists are hopeful that the upturn in productivity may be a sign that this key measure of living standards is improving after a prolonged period of weakness.

Economists believe finding ways to increase productivity, the amount of output per hour of work, is the biggest challenge facing the economy right now. They say that without an improvement, the Trump administration will have difficulty reaching its goal of doubling economic growth in coming years.

The upturn in the past two quarters reflects the fact that overall output, as measured by the gross domestic product, accelerated sharply following a weak start to the year. GDP grew at an annual rate of 3.3 percent in the third quarter, the government reported last week, and that followed a 3.1 percent rise in the second quarter. It was the first back-to-back GDP gains of 3 percent or better in three years.

Productivity actually declined in 2016, dropping 0.1 percent. It was the first annual decline in 34 years and followed a string of weak annual performances since the economy emerged from recession in mid-2009.

Productivity has averaged annual gains of just 1.2 percent from 2007 through 2016, a sharp slowdown from average annual gains of 2.6 percent from 2000 to 20007. Those increases reflected a boost from the increased use of computers and the internet in the workplace.

Rising productivity allows employers to boost wages without triggering higher inflation.
…

Venezuela’s plan to create an oil-backed cryptocurrency faces the same credibility problems that dog the ruling Socialist Party in financial markets and is unlikely to fare any better than the struggling OPEC member itself, investors and technical experts say.

President Nicolas Maduro on Sunday floated a plan to create the “petro” that would be backed by the world’s largest crude reserves, amid a crippling economic crisis worsened by U.S. sanctions that limit Venezuela’s capacity to borrow money.

Cryptocurrencies rely on confidence in clear rules and equal treatment of all involved, three experts said, adding that Venezuela is widely seen as flouting basic property rights and mismanaging its existing bolivar currency.

Without such confidence, the “petro” would neither help Venezuela raise funds nor help it avoid sanctions levied by the government of U.S. President Donald Trump.

“If any government is willing to set up a fair set of rules for a cryptocurrency, it would be a great thing,” said Sean Walsh of Redwood City Ventures, a bitcoin and blockchain-focused investment firm.

“But if an administration has a history of unfair treatment of the population, then tacking on a buzzword like ‘cryptocurrency’ isn’t going to change that behavior.”

The Information Ministry did not respond to requests for comment. In further comments on Tuesday, Maduro said Venezuela’s new virtual currency would be backed by oil from the heavy-crude Orinoco Belt, plus gold and diamonds.

Bitcoin, the world’s most popular cryptocurrency, has soared in recent weeks to nearly $12,000 in what detractors call evidence of a bubble but supporters insist is the start of a new monetary system not dependent on central banks.

Venezuela’s inflation is expected to top 1,000 percent this year, driven by unchecked expansion of the money supply and a currency control system that critics say provides favorable treatment to well-connected officials and businessmen at the expense of everyday citizens.

‘Do We Trust Venezuela?’

Under the 15-year-old foreign exchange regime, state agencies receive dollars to import food and medicine at a rate of 10 bolivars while private citizens now pay more than 108,000 per greenback on the black market. The black market rate has depreciated more than 99 percent under Maduro.

Basic food and medical items are increasingly out of reach for most citizens, fueling malnutrition and preventable diseases. Maduro says the country is victim of an “economic war” led by political adversaries with the support of Washington.

Maduro has not outlined the rules that would govern the proposed currency, including what rights its holders would have over Venezuela’s oil reserves.

“The fact that the bolivar’s value has plummeted shows that people have very little faith in Venezuela,” said Yazan Barghuthi of Jibrel Network, a blockchain development firm.

“A tokenized asset will still have the same problem: Do we trust the institution that is backing this to fulfill the promises that this token represents?”

U.S. sanctions, in response to accusations of human rights violations and undermining of democracy, have effectively blocked the country from issuing new debt and have made global banks increasingly wary of working with Venezuela.

But Venezuela is unlikely to find foreign companies willing to accept payment for food or medicine in newly minted petros and has little chance of convincing creditors to accept them in lieu of dollars when making payments on its distressed bonds, the experts said.

“Given that there is no stable judicial system in Venezuela, no one will trust anything that the government claims is backed by assets of any kind,” wrote Marshall Swatt, founder of bitcoin exchange Coinsetter, in an email. “Even if the technology were proper and prevented government meddling (impossible to imagine), it is dead on arrival.”
…