Good morning. While the World Cup takes the spotlight, banks across North America are quietly scanning billions of dollars in transactions to help dismantle human trafficking networks operating in the tournament’s shadows, Richard Vanderford reports for Risk Journal. (free link)

• Government pressure: Financial authorities in the U.S., Canada and Mexico have told banks and money transmitters to look out for red flags associated with sex trafficking and forced labor as millions of spectators visit host cities. Anti-trafficking advocates have turned to the financial sector for help because banks and other financial businesses have visibility into huge volumes of transactions. They also have dedicated compliance resources and a statutory duty to stop illegal money flows.
   
• Massive scale: “The World Cup is the Super Bowl on steroids from a human trafficking perspective,” said Julie Conroy, a vice president at data analytics company Fair Isaac, also known as FICO, and board member of The Knoble, a network of financial crimes professionals who fight human trafficking. For criminal groups, the financial stakes are high. A single trafficked sex worker can bring in an estimated $40,000 to $60,000 in monthly revenue over the course of the event, said Alice Nottage, head of commercial and intelligence at London-based nonprofit Stop the Traffik. 
   
• Data analytics: Stop the Traffik has set up a subscription-based data analytics product that bank compliance teams can use to help investigate suspicious behavior. A number of North American tier-one banks are using the service, Nottage said. The group scrapes adult service websites and want-ad platforms to look for sketchy patterns, such as advertisements for several seemingly unconnected sex workers using the same phone number.
   
• Long road ahead: The Knoble said it expects banks will be sifting through data into November. The group’s past efforts have yielded concrete results—in connection with the 2023 Super Bowl in Arizona, it made 42 referrals to law enforcement. Federal law enforcement ultimately arrested 348 people and rescued five minors in their anti-trafficking push, Knoble’s Conroy said. For the World Cup, The Knoble expects 2,000 escalations to law enforcement.

France passes new law to fine Shein, Temu and ultrafast fashion.

The French parliament passed legislation Monday imposing fines on ultrafast fashion retailers, part of the country’s effort to curb the environmental impact of cheap, high-volume clothing and rein in Chinese e-commerce giants that have flooded Europe with low-price apparel.

Shein and other ultrafast fashion retailers, alongside marketplaces such as Temu, have gained ground in France by offering trendy styles at cutthroat prices, putting pressure on the country’s traditional retailers and prompting calls for tighter regulation.

Silicon Valley is obsessed with ‘trust stacking,’ and the IRS doesn’t like it.

A hot tax break beloved by company founders and angel investors is expanding so rapidly that it is drawing the ire of the Trump administration.

At issue is what is known as trust stacking, which multiplies the benefits of a tax break for investors in small companies by two, three, four or even more times. The Qualified Small Business Stock tax break, or QSBS, allows founders to exclude up to $15 million in capital gains from their taxable income. But people are trying to exclude $60 million and beyond by transferring shares to trusts in their relatives’ names.

Treasury Department officials in this administration typically take a pro-taxpayer posture, but they have signaled a coming crackdown.

• The Financial Action Task Force updated its global counterterrorism financing standards to require countries to exempt humanitarian assistance from sanctions measures, Risk Journal reports. The move will speed aid to Venezuela following two earthquakes in a country subject to U.S. and international sanctions. (free link)
   
• A unit of energy servicer Petrofac agreed to settle with the U.K. tax and customs authority over allegations the company violated sanctions on Russia, Risk Journal reports.
   
• Australia’s consumer watchdog is suing Amazon.com, alleging that the U.S. retailer relied on unfair contract terms to introduce advertising to more than 850,000 local streaming customers.
   
• Taiwanese authorities escalated a probe into the unauthorized diversion of advanced artificial-intelligence servers made by Super Micro Computer, as part of efforts to crack down on the alleged smuggling of Nvidia chips to China.

Iran’s oil money is coming back. Its Main Street will have to wait.

The U.S.-Iran deal to free up shipping in the Strait of Hormuz promises a quick cash injection for the Tehran regime. For ordinary Iranians, economic relief is likely to take much longer.

A Trump administration waiver last week to let Iran sell its oil and receive dollar payments gives the government a path to earning billions of dollars in badly needed foreign currency following the war and years of crushing sanctions.

AI data centers have been great for the steel industry. Now, a power crisis looms.

The American steel industry is reaping the benefits of the AI data-center construction boom. But now, steelmakers are warning of a high-stakes competition with their data-center customers for a commodity they both require: electricity.

Data centers’ insatiable demand for electricity is driving up power costs for steel companies by tens of millions of dollars a year and threatening the companies’ operations, according to a new report from the Steel Manufacturers Association.

• Federal Reserve governor Lisa Cook emerged as the victor in Monday’s Supreme Court ruling blocking President Trump’s attempt to fire her. Arguably the biggest winner, however, is Kevin Warsh, the man Trump picked to lead the central bank. The decision gives Warsh more room to operate independently of a president who badgered former Chair Jerome Powell to lower rates, and which Trump continues to favor.
   
• American corporations are tiptoeing toward a future powered by artificial intelligence. Madison Avenue is already all in.
   
• British American Tobacco plans to shrink its workforce by nearly a fifth, as the cigarette maker cuts and outsources jobs in an effort to reduce costs and simplify its operations.
   
• European aerospace leader Airbus will get a 3 billion euros ($3.42 billion) loan from the European Investment Bank as European Union officials seek to build out the bloc’s own technological capabilities to fend off mounting competition from the U.S. and China.
   
• The European Union will limit tariff-free steel imports by 47% to 18.3 million metric tons starting Wednesday to protect its steel industry, while imports above that quota would face a higher 50% levy in 26 categories of steel products.
   
• Remote work is making it harder for grads to find (and keep) jobs.

• The Supreme Court upheld state laws that count mailed ballots if they are postmarked by Election Day but arrive a few days afterward.
   
• A federal judge has permanently blocked the Trump administration from withholding funds from a $16 billion rail tunnel project that would connect New York and New Jersey under the Hudson River.
   
• Comcast’s decision to split itself into two just created the next big deal magnet in an entertainment industry that is poised for yet another cycle of consolidation.
   
• President Trump said on Sunday that his administration would renovate one of Washington, D.C.’s public golf courses that sits on a prime stretch of real estate starting in September.

Follow us on X at @WSJRisk. Send tips to our reporters Max Fillion at max.fillion@dowjones.com and Richard Vanderford at richard.vanderford@wsj.com.

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