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EU weighs adding Russia to money laundering ‘grey’ list

Moscow’s possible inclusion has ‘huge support’ as Brussels expects to adopt new listing next week after a delay

The EU is weighing whether to add Russia to its “grey list” of countries with lax money laundering controls, as Brussels’ lawmakers aim to increase financial pressure on Moscow.

European Commission officials said they were considering adding Russia, a move that a majority of members of the European parliament have been advocating. But no decision has been taken, officials stressed.

Markus Ferber, a German MEP who co-ordinates economic affairs for the centre-right European People’s party, said: “There is huge support for putting Russia on the list.”

The full list requires backing from a majority of MEPs and was expected to be announced this week. But the commission pulled its adoption at the last minute for “administrative/procedural reasons”, a commission spokesperson said, adding it would be adopted early next week.

Inclusion on the list carries reputational damage and requires financial institutions to carry out extra due diligence when processing transactions involving entities or people from the listed territories, resulting in higher costs.

The EU’s anti-money laundering and counterterrorism financing grey list usually follows the one issued by the Financial Action Task Force, an intergovernmental body set up to combat terrorism financing and money laundering.

An earlier version of Brussels’ list, seen by the Financial Times, mirrored the one last issued by FATF and planned to add Algeria, Angola, Kenya, Ivory Coast, Laos, Lebanon, Monaco, Namibia, Nepal and Venezuela. It also planned to withdraw Barbados, Gibraltar, Jamaica, Panama, Senegal, Uganda and the United Arab Emirates.

Even though Russia’s membership of FATF was suspended a year after its invasion of Ukraine, several other countries would be expected to block any move to add it to the body’s own grey list.

Ferber urged Brussels to do more than simply adopt the FATF list, arguing: “[The commission] should put their own work in. FATF just assesses the legal framework and not whether it is implemented. It is not enough for us.”

FATF removed the UAE and Gibraltar from its list in 2024, but the EU’s attempt to follow suit failed last year when a majority of MEPs rejected the list. Social democrat, green and liberal MEPs objected to the Gulf state’s exclusion, while Spanish conservatives refused to lift controls on Gibraltar, a British Overseas territory claimed by Madrid.

“The socialists will not vote for the UAE and the conservatives will not vote for Gibraltar so there is no majority,” said one parliamentary group official, forcing the commission to postpone its proposal.

Adding Russia, which has been hit by EU sanctions over its full-scale invasion of Ukraine, would help to persuade MEPs to back the list, as they can only approve or reject but not amend it, officials from different parliamentary groups said.

The UAE, which is negotiating a trade deal with the EU, said the money laundering issue is complicating efforts to improve bilateral ties, according to people familiar with the talks.

Maroš Šefčovič, EU trade commissioner, launched formal trade talks last month on a visit to Abu Dhabi. The UAE has an 18-month deadline to conclude deals, putting pressure on Brussels to act swiftly.

But he and the UAE government have said the money laundering issue was separate to trade talks.

A UAE official said: “Our commitment to anti-money laundering measures is . . . strong, and is consistent with our efforts to develop regulatory frameworks in line with global best practice.”

Spain is pushing hard to resolve issues with the UK over Gibraltar after the UK left the EU in 2020. It claims sovereignty over the territory, which the Spanish king ceded to Britain in 1713, and wants to keep it on the EU’s grey list to maintain leverage in negotiations.

“I don’t think the Spanish will change their mind, especially with the Gibraltar-Brexit agreement still pending,” said one person close to the conservative People’s Party.

The PP, which is the EPP’s second-biggest delegation, is vital to winning parliamentary support for the commission’s list. The PP and EPP, the largest caucus in parliament, both declined to comment on how they would vote on the proposal.

For Trump watchdogs, ‘deal’ is no longer a four-letter word

Conditional approval for union of Synopsys and Ansys hints at the new regime

Message from Donald Trump’s antitrust investigators: Lina Khan does not work here anymore. The Federal Trade Commission is distancing itself from the legacy of its hawkish former head. Its conditional approval of a $35bn union of two chip-design software companies hints at the new direction.

Synopsys and Ansys are two of the biggest companies making software for semiconductor design and production — the kind of thing that can attract regulatory scrutiny. The FTC looked, and last week decided its concerns over competition would be satisfied if they jettison three lines of business where their combined market power would be too great.

That raises the hope that Trump, a self-proclaimed dealmaker, is amenable to other people’s deals too. Wall Street advisers have been trying to read the tea leaves about how strict the new administration would be in evaluating competition effects in mergers and acquisitions. This is the kind of posture they can live with.

Khan was generally opposed to so-called remedies — the idea that problems caused by companies combining could be effectively lessened by asset divestitures or bans on certain kinds of business practices. The view, shared by her peers at the Department of Justice, was it was better to go to court and fight for an injunction. And losing a judge’s ruling itself was not an outcome to fear.

The FTC and the justice department had made noises that, like their Joe Biden-era predecessors, they would not be pushovers on M&A. New broom Andrew Ferguson isn’t rejecting Khan’s ideas outright. However, in the FTC order on Synopsys and Ansys’ merger he suggests her goals can be addressed with more care. Fighting deals in court, he says, can divert resources needed for reviews of other deals.

More broadly — and encouraging for companies looking to tie the knot — he claims to have no reflexive bias against consolidation, in a departure from the messaging of the Biden regime. Mergers can allow investors to exit at a profit, he suggests, and such capital formation is crucial in order to promote innovation.

The chilling effect from a widely held belief that the government was out to stop deals was real. According to law firm Dechert, nine deals were abandoned amid US competition investigations in 2024, the highest since it started tracking. Settlements, similarly, were at record lows. Some boards, on advice of their lawyers, eschewed transactions because prevailing in court was not worth the time and cost of litigation.

The risk has not gone away. One transaction is not enough to make sweeping judgments, and Ferguson says he’d still rather litigate than settle. That will be tested as more deals come to light. But there is at least now evidence that there’s more room for compromise. Officials and company-side lawyers can hammer out the details, knowing that both are open to meeting somewhere in the middle.

TotalEnergies promotion of natural gas under fire in greenwashing trial

Landmark case over claim of misleading commercial practices by oil and gas group

TotalEnergies defended its strategy of labelling natural gas as a transition fuel in promotional material as part of its rebranding, in a landmark trial over the claim that the French oil and gas group had overstated its climate commitments and misled consumers.

The case is the first in France to bring “greenwashing” allegations against an oil and gas company and drew a large crowd of courtroom observers, including legal experts, during opening arguments on Thursday. It also highlights fossil fuel industry moves to promote gas as a more environmentally friendly alternative to oil and coal.

Environmental campaign groups Greenpeace, Notre affaire à tous and Friends of the Earth brought the case alleging that TotalEnergies misled consumers in communications campaigns when it changed its name from Total in 2021.

They allege that TotalEnergies made misleading statements in 44 pieces of communication in 2021, ranging from advertisements to social media posts and statements on its website. Some of the campaign had stated that TotalEnergies was a “major actor in the energy transition” and encouraged the use of gas and biofuels, according to the claim.

The environmental groups said TotalEnergies’ assertion that it would reach “carbon neutrality with society” ran counter to its continued expansion of fossil fuel production.

They also criticised the promotion of natural gas as the “least polluting” fossil fuel, pointing to the high degree of global warming generated by leaks linked to the production and distribution of methane, which is the largest component of gas. The molecule retains 80 times more heat than carbon dioxide over a shorter lifespan of two decades, while CO₂ remains in the atmosphere for hundreds of years.

“Total has deployed communication campaign on gas aimed at associating it with renewable energies, in an attempt to make it seem positive, clean, desirable energy and even a ‘fantastic resource for decarbonisation’. This impression is, once again, seriously erroneous,” said Clémentine Baldon, a lawyer representing the environmental groups.

In defending the claim, TotalEnergies argued that many of the communications referred to were not destined for consumers, and the consumer law should not be applied.

It also said many of the communications were designed to explain the “transformation of the group” and the increase in its production of renewable energy.

TotalEnergies’ lawyer Françoise Labrousse said: “It is false and artificial to accuse TotalEnergies of greenwashing . . . TotalEnergies has never said that [fossil fuels] are good for the climate.”

She added: “According to the applicants, communicating on carbon neutrality would imply an immediate halt to all investment in new fossil fuel projects, including natural gas, which is nevertheless considered a transitional fuel by all stakeholders.”

TotalEnergies’ strategy since its name change has involved increasing electricity generation through renewable energy and gas-powered plants, while also continuing to grow its fossil fuel production by about 3 per cent a year.

The company has said it aims to produce 100TWh of electricity generated from renewable energy sources by 2030, equivalent to 20 per cent of its hydrocarbon production at that point.

However, it has joined many of its peers in vaunting liquefied natural gas as a cleaner fuel.

TotalEnergies’ lawyers referred to a Wood Mackenzie report citing that LNG had a 60 per cent lower warming potential than coal over a 100-year period. It is developing several large liquefied natural gas projects including in Qatar and Mozambique.

The environmental groups are seeking for TotalEnergies to alter its communications, including by placing banners on promotional material linked to the energy transition that would make clear its continued growth of fossil fuel production.

Labrousse said the demands should be rejected by the court and that the transition away from fossil fuels was a long process. She highlighted Greenpeace’s own defence of its continued use of internal combustion engines on boats it uses for its campaigns.

“As Greenpeace recognises . . . replacing [fossil fuels] takes time, is expensive and depends on an evolution of existing technologies.”

The court will deliver a judgment on October 23.

Japanese queue for hours as rice shortage deepens

Rising prices and poor harvest create political pressure for Prime Minister Shigeru Ishiba ahead of July poll

Within a few minutes of the doors opening, the farm produce co-operative in Atami, a seaside town south-west of Tokyo, had completely sold out of subsidised Japanese rice.

“This will only last us a couple of weeks,” said 46-year-old Yujiro Osaki, one of the dozens of people who had queued up for a 3kg bag just a few dollars cheaper than the supermarket price for rice of the same quality. “It’s a ridiculous situation for Japan to be in.”

For millions of consumers struggling with sharply rising food costs after years of stagnant prices, queues and the quest for better deals are now part of buying rice in Japan.

Prime Minister Shigeru Ishiba’s government — an administration already unpopular after a near-doubling of domestic rice prices in 2024 — faces an upper-house election in July that analysts forecast will hinge on public dismay over inflation and the price of rice.

The average price of a 60kg bag of rice harvested in 2024 has reached an all-time high of more than ¥26,400 ($184). While Japan has not run out of supply, it has yet to recover from a poor 2023 harvest that coincided with an end to Japan’s long deflationary period and retailers’ greater willingness to raise prices.

There has also been some hoarding by individuals and deliberate stock withholding by wholesalers. The government has tapped its strategic rice reserve outside a natural disaster for the first time, and when part of that went on sale last weekend, immense, multi-hour queues formed at supermarkets around the country.

Ishiba is setting up a special cabinet committee to discuss urgent rice policy reform. He has also sacked his previous agriculture minister and appointed Shinjiro Koizumi, the charismatic and ambitious son of former premier Junichiro Koizumi, to resolve the crisis.

Japan’s long-standing efforts to protect domestic farmers from outside competition, including limiting imports of foreign rice, means solving the problem will not be easy, said Kazuhito Yamashita, a director at the Canon Institute of Global Studies and an expert on Japan’s rice market.

Decades of government policy have focused on shoring up rice prices to appease the critical rural vote, but rising prices have hit millions of urban families and made inflation a broader political problem for the government.

Many criticise the government’s so-called set-aside programme, which attempted to raise rice prices by incentivising farmers not to grow. The policy only ended in 2018.

“The set-aside programme was always the problem,” said Yamashita. “If Japan switched to subsidies, as in other countries, everything would change. Farmers would be able to afford to accumulate more farmland, lower their costs through scale and produce more rice.

“Japan could have been a global exporter of top-quality rice if its policies had not been pushing in the opposite direction for all these years,” he added.

Although Japan’s population of working farmers has fallen to less than 1 per cent of the total population from 4.4 per cent in 1976, they remain a powerful lobby.

“The reduction in numbers has actually made it easier for the farmers to reach a unified political consensus,” said Kunio Nishikawa, a rice expert at Ibaraki University. “Japan’s electoral system means that a relatively large number of seats in the Diet are allocated to rural areas, reinforcing farmers’ political influence.”

Ultimately, the declining farmer population will make a debate on wholesale agricultural policy reform easier, he added.

“Even in the short term, because this rice crisis has become a topic of discussion for the entire nation, including consumers, I expect that agricultural policy reform will now progress,” he said.

Given the size of the price increases, the government may feel more pressure to placate consumers, said Tobias Harris, a political analyst at Japan Foresight. “But clearly Ishiba and Koizumi are going to have to find some way of placating the producers ahead of the upper-house campaign.”

Tapping the rice reserves may provide some relief, but analysts expect it will only be temporary.

The knock-on effect of shortages and rising prices has been to create huge competition between the rice-buying co-operatives, which command roughly 40 per cent of the Japanese market, wholesalers and other large-scale buyers such as national restaurant chains and food producers.

Many co-operatives approached farmers directly, offering prices that were locked in at about ¥26,000 for a 60kg bag. The co-operatives cannot now sell rice much below that, said analysts, without making a loss.

In supermarkets across the country, meanwhile, prices of Japanese-grown grain are at record highs, shelves are empty or sparsely filled and many shops display signs suggesting cash-strapped customers seek cheaper carbohydrates from bread and noodles.

In Atami, an elderly couple walked away from the farm produce store empty-handed. The cheaper rice was sold out by the time they had got to the front.

“We asked them when the next sale would be,” said the husband. “They said they didn’t know.”

Pret A Manger owner sounds out new investors ahead of potential IPO

JAB Holding has engaged advisers to explore options for the sandwich and coffee chain after a turbulent few years

The owner of Pret A Manger has recently explored bringing in new investors to the sandwich and coffee chain ahead of a potential initial public offering.

JAB Holding, the European investment group that acquired Pret for £1.5bn in 2018, has in recent months engaged advisers to explore various options for the business ahead of a potential listing, including a stake sale, said people with direct knowledge of the matter.

JAB said it is not “currently” considering a stake sale in Pret. It added: “As we move closer to a potential IPO, we may evaluate bringing on a pre-IPO investor.”

JAB, which has not previously commented on any IPO plans for Pret, last month appointed former Restaurant Brands International chief executive José Cil as chair of Pret and its other restaurant chains.

Pret, which also sells soups, salads and breakfasts, has weathered a number of shocks under JAB’s ownership. The pandemic pushed the chain to a £343mn operating loss in 2020 as its primary customers — office workers and commuters — were kept at home.

The business is led by Pano Christou, who started as an assistant manager in a central London Pret outlet, aged just 22. He climbed the ranks over the next two decades before JAB promoted him to chief executive in 2019.

Since the pandemic, which forced Pret to close dozens of outlets and cut more than 3,000 jobs, its trading figures have become a barometer of sorts for the number of people returning to the office.

The chain has introduced various subscription services to lure back customers after the pandemic, but was hit with a backlash after doubling the price of a monthly coffee subscription last year to £10. Pret eventually backtracked from the plan.

Pret also became a lightning rod for criticism when it raised prices aggressively after being hit by a wave of post-pandemic inflation.

Despite a turbulent time in its home market — where labour costs have been rising substantially — Pret has been pushing ahead with international expansion.

While most of its 700 outlets are in the UK, a quarter of Pret’s sales are now made in other countries. The US and France are the company’s biggest international markets and it also has outlets in Canada, India, Greece and Spain.

Pret’s sales jumped by a fifth to £1.1bn in 2023, while adjusted core profit increased 12 per cent to £166mn, mainly off the back of international openings.

The company’s outstanding loans and borrowings stood at £740mn at the end of 2023, although Pret raised £250mn of new capital last year to reduce its debt load.

The decision to seek new investors comes as JAB, which also owns Krispy Kreme and Keurig Dr Pepper, shifts focus from the consumer sector and diversifies into the insurance and asset management industry.

JAB, which primarily manages the wealth of Germany’s secretive Reimann family, has transitioned power to a new generation of leadership, after its previous managers embarked on a £50bn deal spree principally targeting the consumer sector.

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