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NATO’s mission in Afghanistan has been the Alliance’s largest and one of its longest-running military operations, with 50 coalition countries contributing a peak of 140,000 troops over a 13-year campaign. The United States, together with NATO Allies and partners, support a sovereign, stable, unified, and democratic Afghanistan and will continue our partnership with Afghanistan based on the principles of mutual respect and mutual accountability. Moreover, we believe that an Afghan-led peace and reconciliation process is the surest way to end violence and ensure lasting stability for Afghanistan and the region.

International Security Assistance Force (ISAF). Since 2001, ISAF has assisted Afghan authorities in maintaining security and developing the Afghan National Security Forces (ANSF), per a United Nations mandate and at the request of the Afghan government. The ISAF mission is part of the overall international effort to enable the Government of Afghanistan to exercise its authority throughout the country by providing security and stability to the Afghan people. NATO assumed command of the ISAF mission in August 2003.

At the Lisbon Summit in 2010, Afghanistan and ISAF nations, including the United States, committed to transition full responsibility for security to the Afghan Government by the end of 2014. Afghanistan and ISAF nations reaffirmed that commitment in 2012 at the Chicago Summit and took a step further announcing a mid-2013 milestone after which the ANSF would be in the lead for security nationwide and the ISAF role would transition from combat to support.

Since June 2013, the ANSF has been in the lead, with modest coalition support, and has exceeded most expectations. Today, ISAF forces focus primarily on training, advising, and assisting their Afghan counterparts. At the end of 2014, the ANSF will assume full responsibility for security and the ISAF mission will end.

Resolute Support. At the Wales Summit, NATO Allies and partners reaffirmed their intent to conduct a non-combat train, advise, and assist mission in Afghanistan beyond 2014, known as Resolute Support, contingent upon the Afghans signing a Bilateral Security Agreement (BSA) and a status of forces agreement (SOFA) with NATO. This new advisory mission would be at the security ministry and national institutional level, with advising to the ANSF at the corps level and advising to Afghan special operations forces at the tactical level. This non-combat mission would be centered in the Kabul-Bagram area, with a regional presence in the north, west, south, and east. It would initially include approximately 12,000 troops. Four Allied nations have agreed to serve as “framework nations” – Turkey will lead in the capital; Germany will lead in the north; Italy will lead in the west; and the United States will lead in the south and east. NATO is prepared to commence this mission at the beginning of 2015.

For the United States’ part, President Obama announced on May 27, 2014 that the U.S. combat mission in Afghanistan will end by the end of this year and, contingent upon a signed BSA and NATO SOFA, the United States would be prepared to continue “two narrow missions” in Afghanistan after 2014: “training Afghan forces and supporting counterterrorism operations against the remnants of al-Qa’ida.”

At the beginning of 2015, we anticipate 9,800 U.S. troops in Afghanistan with the majority participating in the NATO-led Resolute Support mission. By the end of 2015, we would reduce that presence by roughly half, consolidating our troops in Kabul and Bagram Airfield. By the end of 2016, our military presence would shift to a strong security assistance mission based from our embassy. This presence would serve as the basis for sustained security cooperation with the Afghan government and continued coordination with Allies’ and partners’ efforts to advise and assist the Afghan security ministries and to continue to develop ANSF capabilities.

Financial Sustainment of the ANSF. At the Wales Summit, NATO Allies and partners renewed their commitment to contribute significantly to the financial sustainment of the ANSF through the end of 2017 and to financially sustain the ANSF throughout the decade of transformation. The international community has pledged nearly €1 billion annually to sustain the ANSF for 2015 through the end of 2017. The United States has requested up to $4.1 billion in our 2015 budget, which would help sustain the ANSF surge end strength of 352,000 through 2015. The United States expects that Afghanistan will assume an increasing portion of ANSF sustainment costs beginning with $500 million in 2015, as agreed at the Chicago Summit. To ensure that donors can confidently commit their financial support to the ANSF over the long term, NATO Allies and partners welcomed the development of effective funding mechanisms including the strengthening of the Afghan National Army Trust Fund and the establishment of the Oversight and Coordination Body. And finally, NATO Allies and partners look forward to working with Afghanistan to review planning for a sufficient and sustainable ANSF beyond 2015.

NATO-Afghanistan Enduring Partnership. At the Wales Summit, NATO nations reaffirmed their commitment to strengthen its enduring partnership with Afghanistan, which would serve as the foundation for longer term security cooperation between NATO and Afghanistan.

Attorney General Eric Holder announced today that the Justice Department has launched two initiatives to address concerns about police services in the city of Ferguson and in St. Louis County, Missouri. First, in addition to the ongoing criminal civil rights investigation, the Civil Rights Division has opened a civil pattern or practice investigation into allegations of unlawful policing by the City of Ferguson Police Department (FPD). Second, the Attorney General announced that the Community Oriented Policing Services (COPS) Office has launched a Collaborative Reform Initiative with the St. Louis County Police Department (SLCPD).

“The Department of Justice is working across the nation to ensure that the criminal justice system is fair, constitutional and free of bias,” said Attorney General Holder. “The interventions in Missouri are an important part of that commitment. While there is much work left to do, we feel confident that there are solutions to any issues we find and that community trust in law enforcement can be restored and maintained. Ferguson and St. Louis County are not the first places that we have become engaged to ensure fair and equitable policing and they will not be the last. The Department of Justice will continue to work tirelessly to ensure that the Constitution has meaning for all communities.”

The pattern or practice investigation will look at whether officers of the Ferguson Police Department have engaged in systemic violations of the Constitution or federal law. The investigation will focus on the Ferguson Police Department’s use of force, including deadly force; stops, searches and arrests; discriminatory policing; and treatment of detainees inside Ferguson’s city jail by Ferguson police officers. The department will consider all relevant information, particularly the efforts that FPD has undertaken to ensure compliance with federal law, and the experiences and views of the community.

Over the past five fiscal years, the Civil Rights Division has opened over 20 pattern or practice investigations into police departments across the country, which is more than twice as many as were opened in the previous five fiscal years. The division is enforcing 14 agreements to reform law enforcement practices at agencies both large and small. These agreements have already resulted in tangible changes in these communities by ensuring constitutional policing, enhancing public safety and making the job of delivering police services safer and more effective.

The investigation is being conducted by attorneys and staff from Civil Rights Division. They will be assisted by experienced law enforcement experts. The department encourages anyone wishing to provide relevant information to contact the department at 1-855-856-2132, or via email at community.ferguson@usdoj.gov .

The COPS Collaborative Reform Technical Assistance process with the SLCPD is a voluntary process that will include an open, independent and objective assessment of key operational areas of the police department, such as training, use of force, handling mass demonstrations, stops, searches, arrests, and fair and impartial policing. The assessment will include the SLCPD police academy which trains officers for many police departments in the region, including the FPD. The findings of this assessment, and recommendations to address any deficiencies that it uncovers, will be provided in a public report and shared with the community. Additionally, SLCPD Chief Jon Belmar has requested that COPS conduct an after action report on the SLCPD’s response to the protests following the shooting of Michael Brown.

The Collaborative Reform process is an initiative in which the COPS Office, in partnership with a designated technical assistance provider and subject matter experts, works with a law enforcement agency to assess an issue that affects police and community relationships. Grounded in the principles of constitutional policing and procedural justice, it is a means to organizational transformation through an analysis of policies, practices, training, and tactics around a specific issue that can jeopardize an agency’s legitimacy within its community. It is not a short term solution for a serious deficiency, but a long term strategy that identifies the issues within an agency that affect public trust and offers recommendations on how to improve the issue and enhance the relationship between the police and the community.

The Collaborative Reform process was initially launched in 2011. The Las Vegas Metropolitan Police Department was the first agency to participate and complete the process, which resulted in the adoption of over 75 recommendations regarding the use of force. The COPS Office is currently working with the Philadelphia and Spokane police departments with this process.

“Today we are launching a comprehensive review of the Ferguson Police Department to assess whether police practices are constitutional and fair in Ferguson,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “We are encouraged by the pledge of cooperation from Mayor Knowles and Chief Jackson, and we look forward to working with them as our process moves forward.”

“The recent disturbances in Ferguson have revealed significant mistrust between the community and police agencies throughout the county, including the St. Louis County Police Department,” said COPS Director Davis. “The county has expressed a strong desire to take steps to create a relationship of trust and to ensure fairness and equity in its policing practices, and I applaud St. Louis County Police Chief Jon Belmar for seeking technical assistance and agreeing to the Collaborative Reform process. The advancements that will be made through this effort will not only benefit the St. Louis county police department; they will serve as a model for all police agencies in the region and throughout the nation.”

The department is also conducting in a thorough, fair and independent criminal investigation into the circumstances of the fatal shooting of Michael Brown on in Ferguson on Aug. 9, 2014. Although the department is working cooperatively with the local investigators, the federal investigation supplements, but does not supplant, the St. Louis County Police Department’s investigation into the shooting incident. The initiatives announced today are also separate from the ongoing current criminal investigations related to the death of Michael Brown.

The Civil Rights Division has an ongoing, separate investigation of the St. Louis County Juvenile Court to determine whether it engages in patterns or practices of violations of young people’s rights. The section is assessing whether there are violations of due process, equal protection or access to counsel. Anyone wishing to provide information related to that investigation can email the department at Community.StLouis@usdoj.gov or call toll free 855-228-2151.

The Justice Department has taken similar steps involving a variety of state and local law enforcement agencies, both large and small, in jurisdictions throughout the United States using its authority under the Violent Crime Control and Law Enforcement Act of 1994, the Omnibus Crime Control and Safe Streets Act of 1968, and Title VI of the Civil Rights Act of 1964. Under Attorney General Holder’s leadership, more investigations have resulted in comprehensive, court-overseen agreements to fundamentally change the law enforcement agency’s police practices than in any other five-year period in the department’s history.

The European Commission has found that Infineon, Philips, Samsung and Renesas (at the time a joint venture of Hitachi and Mitshubishi) coordinated their market behaviour for smart card chips in the European Economic Area (EEA), in breach of EU rules that prohibit cartels. The Commission has imposed fines totalling € 138 048 000. The companies colluded through bilateral contacts that took place in the period between September 2003 and September 2005. Renesas benefitted from full immunity under the Commission’s 2006 Leniency Notice for revealing the existence of the cartel to the Commission.

Commission Vice President in charge of competition policy Joaquín Almunia said: “In this digital era smart card chips are used by almost everybody, whether in their mobile phones, bank cards or passports. It is crucial that the companies producing them focus their efforts on how to outperform their competitors by innovating and providing the best products at the most attractive prices. If instead companies choose to collude, at the expense of both customers and end consumers, they should expect sanctions”.

Smart card chips are used in mobile telephone SIM cards, bank cards, identity cards and passports, pay TV cards, and various other applications. Those used in the SIM segment rely mainly on memory, for example to store telephone numbers, while the smart card chips used in other applications also rely on security devices like cryptography in order to ensure data confidentiality.

The companies involved in the cartel colluded through a network of bilateral contacts in order to determine their respective responses to customers’ requests to lower prices. They discussed and exchanged sensitive commercial information on pricing, customers, contract negotiations, production capacity or capacity utilisation and their future market conduct. Collusion of this type breaches Article 101 of the Treaty on the Functioning of the European Union (TFEU) and Article 53 of the Agreement on the European Economic Area (EEA), which prohibit cartels and restrictive business practices.

The Commission had initially explored the possibility of settling this case with some of the companies involved under the Commission’s 2008 Settlement Notice. However, in 2012 the Commission decided to discontinue the settlement discussions and to revert to the normal procedure because of the clear lack of progress of these discussions.

Fines
The fines were set on the basis of the Commission’s 2006 Guidelines on fines (see IP/06/857 and MEMO/06/256) taking into account the serious nature of the infringement, its geographic scope (i.e. the entire EEA) and the duration of each company’s participation in the infringement.

Under the Commission’s 2006 Leniency Notice, Renesas (and its joint venture parent companies Hitachi and Mitsubishi) received full immunity, as it was the first to reveal the existence of the cartel to the Commission, avoiding a fine of more than € 51 million for its participation in the infringement.

Samsung received a reduction of 30% of its fine for cooperating with the investigation.

Philips has divested its smart card chips business after the infringement, but remains liable for what happened during the period of the infringement.

Background
The Commission started this investigation in 2008 with unannounced inspections (see MEMO/09/1). After the settlement discussions were discontinued in 2012, the Commission issued a Statement of Objections in 2013 (see IP/13/346), giving the companies the opportunity to comment and to be heard before taking today’s decision.

More information on this case will be available under the case number 39574 in the Commission’s public case register on the competition website, once confidentiality issues have been dealt with. For more information on the Commission’s action against cartels, see its cartels website.

Action for damages
Any person or firm affected by anti-competitive behaviour as described in this case may bring the matter before the courts of the Member States and seek damages. The case law of the European Court of Justice (ECJ) and the Antitrust Regulation (Council Regulation 1/2003) both confirm that in cases before national courts, a Commission decision is binding proof that the behaviour took place and was illegal. Even though the Commission has fined the companies concerned, damages may be awarded without these being reduced on account of the Commission fine.

In June 2013, the Commission adopted a proposal for a Directive that aims at making it easier for victims of anti-competitive practices to obtain such damages (see IP/14/455, IP/13/525 and MEMO/13/531). More information on antitrust damages actions, including a practical guide on how to quantify the harm typically caused by antitrust infringements, the public consultation and a citizens’ summary, is available at:

http://ec.europa.eu/comm/competition/antitrust/actionsdamages/documents.html

Today, the United States won court approval of a settlement agreement to reform the ways in which the Portland Oregon Police Bureau (“PPB”) interacts with individuals with actual or perceived mental illness. The agreement was entered jointly by the United States and the city of Portland, Oregon, with the approval of the Albina Ministerial Alliance Coalition for Justice and Police Reform (“AMA Coalition”) and Portland Police Association (“PPA”). The agreement addresses constitutional claims in a civil action filed by the United States pursuant to the Violent Crime Control and Law Enforcement Act of 1994. In today’s order, the court approved the agreement with the requirement that the parties appear for periodic hearings to provide the court progress on implementation of the agreement.

The agreement requires changes—many of which PPB has already begun to implement—in PPB’s policy, training, supervisory oversight, community-based mental health services, crisis intervention, employee information systems, officer accountability and community engagement and oversight. The agreement also calls for innovative new mechanisms for ongoing community involvement in the implementation of reforms. In addition, the agreement establishes an independent compliance officer and community liaison (“COCL”), who will be responsible for synthesizing data related to PPB’s use of force, reporting to the city council, the Justice Department and the public and gathering input from the public related to PPB’s compliance with the agreement. Finally, the agreement lays the framework for a community oversight advisory board (“COAB”), which will be a crucial mechanism for civil engagement in the reform process.

“We are committed to continuing to work with our partners in the community throughout the reform process to ensure full implementation of the settlement agreement,” said Acting Assistant Attorney General Molly Moran for the Civil Rights Division. “We applaud the city’s efforts to implement portions of the settlement agreement during the pendency of the litigation. We are pleased to provide the court information about reforms through ongoing periodic hearings. We are also appreciative of the continued collaboration with the AMA Coalition and the participation of the PPA to resolve these issues to enable the entry of the settlement agreement. We look forward to the positive changes that these civil rights reforms will bring about for the people of Portland.”

“Today’s decision is the culmination of significant work on the part of all parties to reach such a groundbreaking resolution for the citizens of Portland ,” said U.S. Attorney Amanda Marshall for the District of Oregon. “We are very grateful to the court for entering this order, and look forward to continued collaboration with the city of Portland, the Portland Police Bureau, the Portland Police Association, the Albina Ministerial Alliance Coalition for Justice and Police Reform , and all citizens of Portland to ensure the letter and the spirit of this agreement are upheld.”

The United States’ complaint followed an investigation, launched on June 8, 2011, and conducted by the Civil Rights Division’s Special Litigation Section and the U.S. Attorney’s Office for the District of Oregon. The investigation focused on whether PPB engages in unconstitutional or unlawful policing through the use of excessive force, with a specific focus on the use of force against people with actual or perceived mental illness or in mental health crisis.

In a September 2012 findings letter detailing the outcome of the 14-month investigation, the Justice Department found that most uses of force by PPB officers were lawful and reasonable, but it also found reasonable cause to believe that PPB engages in a pattern or practice of excessive force, in violation of the Fourth Amendment of the U.S. Constitution and the Violent Crime Control and Law Enforcement Act of 1994, in certain contexts. Following the release of the findings letter, the United States and the city engaged in settlement negotiations resulting in the settlement agreement, which the city council voted to approve. The city fully cooperated with the United States throughout its investigation and was eager to address problems identified in the United States’ findings letter regarding Portland Police Bureau’s policies, practices, training and supervision through entry of the settlement agreement.

On Dec. 17, 2012, the United States initiated a lawsuit against the city and, with the city’s cooperation, concurrently filed a joint motion asking the court to approve the negotiated settlement agreement and conditionally dismiss the case. Specifically, the United States’ complaint alleged that PPB engages in a pattern or practice of using excessive force on individuals with actual or perceived mental illness by: (1) too frequently using a higher level of force than necessary; (2) using electronic control weapons (“ECWs”), commonly referred to as “Tasers,” in circumstances when such force is not justified, or deploying ECWs more times than necessary on an individual; and (3) using a higher degree of force than justified for low-level offenses.

Both PPA and the AMA Coalition subsequently moved to intervene in the suit, seeking to join the case as parties and objecting to the proposed settlement agreement. The court partially granted PPA’s motion to intervene and granted the AMA Coalition enhanced amicus status, allowing the AMA Coalition to participate in the litigation. The court then ordered all parties to mediation to attempt to resolve PPA’s and the AMA Coalition’s objections to the settlement agreement. Such mediation efforts have resulted in a memorandum of understanding with PPA and a separate agreement previously reached with the AMA Coalition.

Following a fairness hearing on the settlement agreement, the court previously found that the settlement agreement is substantively fair, reasonable and adequate. The court found, however, that it needed a procedure to receive information on the city’s implementation of reforms on at least an annual basis. In today’s ruling, the court required the parties and COCL to file quarterly reports with the court and required the parties to appear for periodic hearings to describe to the court the progress being made toward achieving substantial compliance with all provisions of the settlement agreement and any obstacles or impediments toward that end, and to respond to the court’s questions on these issues.

The assigned attorneys in the United States Attorney’s Office in Portland were Bill Williams, Adrian Brown and David Knight. From the Civil Rights Division of the Department of Justice in Washington, D.C., the assigned attorneys were Laura Coon, Jonas Geissler and Michelle Jones.

For more information on the Justice Department’s Civil Rights Division, please visit www.justice.gov/crt .

ST. PETERSBURG, Russian Federation, August 23 (UNHCR) – Before Ukraine’s secession crisis erupted in February, the Federal Migration Service office in St. Petersburg handled 120 asylum applications a year, mainly from Asians and Africans.

Today, Ukrainians are arriving in the Russian city at a rate of 300 a day, according to the regional branch here of the Russian Red Cross, which has been working hard to provide assistance and help find shelter for those who need it.

Natalia,* one of the tens of thousands of Ukrainians who have found their way to Russia’s second largest city from eastern Ukraine, said she had been staying with friends, like many others. “Now their own relatives are arriving, so we have to move out and find a new place,” she explained to UNHCR.

But the influx is having a positive effect on the asylum process, and that is good for the Ukrainians. UNHCR hopes asylum-seekers from other countries in Central Asia, the Middle East and Africa will also benefit. Recent legal changes allow for a simpler and faster asylum procedure for processing Ukrainians and for medical screening.

New arrivals from Ukraine apply for temporary asylum, a status that is usually granted within a few days and allows them to stay in the Russian Federation and receive assistance.

Many seem ready to remain here and have started looking for employment and putting down roots. Natalia has been lucky; her husband has found work as a technician and is waiting for his first salary payment. They have been spending time in a shelter since leaving the friend’s house and are now looking for a place to rent.

Life is tougher for many others, but the St. Petersburg Red Cross branch, which has had a long cooperation with UNHCR on refugee issues, has been working closely with the Federal Migration Service, the municipality and potential employers to help the neediest Ukrainians.

The Red Cross runs a short-term emergency shelter for hardship cases, where Natalia and her husband have been staying. The regional branch is also providing legal and social counselling and is running a nationwide hotline for all refugees, Ukrainians or not.

Their most recent initiative is a day-care centre where Ukrainian parents can leave their children while they are running chores, getting documents or looking for employment. “These children are as traumatized as their parents and it does not help if they have to stand in queues for hours in this summer heat,” said Tatiana Lineva of the Red Cross branch.

The influx of Ukrainians has also helped to raise public awareness in St. Petersburg about refugee issues and triggered a wave of solidarity in the city, including offers of shelter and donations of useful items. Some have also been donating their time as volunteer helpers.

UNHCR and the Red Cross in St. Petersburg hope this wave of sympathy will also benefit non-Ukrainian asylum-seekers and ease their difficult situation as well as facilitate their access to legal status and social support.

For most of the Ukrainian arrivals in St. Petersburg, returning to Ukraine does not seem to be on the cards. “Our own army has been shelling us. We do not want to go back if they take control,” said Natalia, echoing the thoughts of others.

She and others stay in touch with friends and relatives in the Ukraine through the social media network Vkontakte. Natalia is in contact with people in her home town of Slovyansk, which is slowly emerging from conflict. But she won’t return any time soon.

Attorney General Eric Holder and Associate Attorney General Tony West announced today that the Department of Justice has reached a $16.65 billion settlement with Bank of America Corporation – the largest civil settlement with a single entity in American history ­— to resolve federal and state claims against Bank of America and its former and current subsidiaries, including Countrywide Financial Corporation and Merrill Lynch. As part of this global resolution, the bank has agreed to pay a $5 billion penalty under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) – the largest FIRREA penalty ever – and provide billions of dollars of relief to struggling homeowners, including funds that will help defray tax liability as a result of mortgage modification, forbearance or forgiveness. The settlement does not release individuals from civil charges, nor does it absolve Bank of America, its current or former subsidiaries and affiliates or any individuals from potential criminal prosecution.

“This historic resolution – the largest such settlement on record – goes far beyond ‘the cost of doing business,’” said Attorney General Holder. “Under the terms of this settlement, the bank has agreed to pay $7 billion in relief to struggling homeowners, borrowers and communities affected by the bank’s conduct. This is appropriate given the size and scope of the wrongdoing at issue.”

This settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force and its Residential Mortgage-Backed Securities (RMBS) Working Group, which has recovered $36.65 billion to date for American consumers and investors.

“At nearly $17 billion, today’s resolution with Bank of America is the largest the department has ever reached with a single entity in American history,” said Associate Attorney General West. “But the significance of this settlement lies not just in its size; this agreement is notable because it achieves real accountability for the American people and helps to rectify the harm caused by Bank of America’s conduct through a $7 billion consumer relief package that could benefit hundreds of thousands of Americans still struggling to pull themselves out from under the weight of the financial crisis.”

The Justice Department and the bank settled several of the department’s ongoing civil investigations related to the packaging, marketing, sale, arrangement, structuring and issuance of RMBS, collateralized debt obligations (CDOs), and the bank’s practices concerning the underwriting and origination of mortgage loans. The settlement includes a statement of facts, in which the bank has acknowledged that it sold billions of dollars of RMBS without disclosing to investors key facts about the quality of the securitized loans. When the RMBS collapsed, investors, including federally insured financial institutions, suffered billions of dollars in losses. The bank has also conceded that it originated risky mortgage loans and made misrepresentations about the quality of those loans to Fannie Mae, Freddie Mac and the Federal Housing Administration (FHA).

Of the record-breaking $16.65 billion resolution, almost $10 billion will be paid to settle federal and state civil claims by various entities related to RMBS, CDOs and other types of fraud. Bank of America will pay a $5 billion civil penalty to settle the Justice Department claims under FIRREA. Approximately $1.8 billion will be paid to settle federal fraud claims related to the bank’s origination and sale of mortgages, $1.03 billion will be paid to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $135.84 million will be paid to settle claims by the Securities and Exchange Commission. In addition, $300 million will be paid to settle claims by the state of California, $45 million to settle claims by the state of Delaware, $200 million to settle claims by the state of Illinois, $23 million to settle claims by the Commonwealth of Kentucky, $75 million to settle claims by the state of Maryland, and $300 million to settle claims by the state of New York.

Bank of America will provide the remaining $7 billion in the form of relief to aid hundreds of thousands of consumers harmed by the financial crisis precipitated by the unlawful conduct of Bank of America, Merrill Lynch and Countrywide. That relief will take various forms, including principal reduction loan modifications that result in numerous homeowners no longer being underwater on their mortgages and finally having substantial equity in their homes. It will also include new loans to credit worthy borrowers struggling to get a loan, donations to assist communities in recovering from the financial crisis, and financing for affordable rental housing. Finally, Bank of America has agreed to place over $490 million in a tax relief fund to be used to help defray some of the tax liability that will be incurred by consumers receiving certain types of relief if Congress fails to extend the tax relief coverage of the Mortgage Forgiveness Debt Relief Act of 2007.

An independent monitor will be appointed to determine whether Bank of America is satisfying its obligations. If Bank of America fails to live up to its agreement by Aug. 31, 2018, it must pay liquidated damages in the amount of the shortfall to organizations that will use the funds for state-based Interest on Lawyers’ Trust Account (IOLTA) organizations and NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development. The organizations will use the funds for foreclosure prevention and community redevelopment, legal assistance, housing counselling and neighborhood stabilization.

As part of the RMBS Working Group, the U.S. Attorney’s Office for the District of New Jersey conducted a FIRREA investigation into misrepresentations made by Merrill Lynch to investors in 72 RMBS throughout 2006 and 2007. As the statement of facts describes, Merrill Lynch regularly told investors the loans it was securitizing were made to borrowers who were likely and able to repay their debts. Merrill Lynch made these representations even though it knew, based on the due diligence it had performed on samples of the loans, that a significant number of those loans had material underwriting and compliance defects – including as many as 55 percent in a single pool. In addition, Merrill Lynch rarely reviewed the unsampled loans to ensure that the defects observed in the samples were not present throughout the remainder of the pools. Merrill Lynch also disregarded its own due diligence and securitized loans that the due diligence vendors had identified as defective. This practice led one Merrill Lynch consultant to “wonder why we have due diligence performed” if Merrill Lynch was going to securitize the loans “regardless of issues.”

“In the run-up to the financial crisis, Merrill Lynch bought more and more mortgage loans, packaged them together, and sold them off in securities – even when the bank knew a substantial number of those loans were defective,” said U.S. Attorney Paul J. Fishman for the District of New Jersey. “The failure to disclose known risks undermines investor confidence in our financial institutions. Today’s record-breaking settlement, which includes the resolution of our office’s imminent multibillion-dollar suit for FIRREA penalties, reflects the seriousness of the lapses that caused staggering losses and wider economic damage.”

This settlement also resolves the complaint filed against Bank of America in August 2013 by the U.S. Attorney’s Office for the Western District of North Carolina concerning an $850 million securitization. Bank of America acknowledges that it marketed this securitization as being backed by bank-originated “prime” mortgages that were underwritten in accordance with its underwriting guidelines. Yet, Bank of America knew that a significant number of loans in the security were “wholesale” mortgages originated through mortgage brokers and that based on its internal reporting, such loans were experiencing a marked increase in underwriting defects and a noticeable decrease in performance. Notwithstanding these red flags, the bank sold these RMBS to federally backed financial institutions without conducting any third party due diligence on the securitized loans and without disclosing key facts to investors in the offering documents filed with the SEC. A related case concerning the same securitization was filed by the SEC against Bank of America and is also being resolved as part of this settlement.

“Today’s settlement attests to the fact that fraud pervaded every level of the RMBS industry, including purportedly prime securities, which formed the basis of our filed complaint,” said U.S. Attorney Anne M. Tompkins for the Western District of North Carolina. “Even reputable institutions like Bank of America caved to the pernicious forces of greed and cut corners, putting profits ahead of their customers. As we deal with the aftermath of the financial meltdown and rebuild our economy, we will hold accountable firms that contributed to the economic crisis. Today’s settlement makes clear that my office will not sit idly while fraud occurs in our backyard.”

The U.S. Attorney’s Office for the Central District of California has been investigating the origination and securitization practices of Countrywide as part of the RMBS Working Group effort. The statement of facts describes how Countrywide typically represented to investors that it originated loans based on underwriting standards that were designed to ensure that borrowers could repay their loans, although Countrywide had information that certain borrowers had a high probability of defaulting on their loans. Countrywide also concealed from RMBS investors its use of “shadow guidelines” that permitted loans to riskier borrowers than Countrywide’s underwriting guidelines would otherwise permit. Countrywide’s origination arm was motivated by the “saleability” of loans and Countrywide was willing to originate “exception loans” (i.e., loans that fell outside of its underwriting guidelines) so long as the loans, and the attendant risk, could be sold. This led Countrywide to expand its loan offerings to include, for example, “Extreme Alt-A” loans, which one Countrywide executive described as a “hazardous product,” although Countrywide failed to tell RMBS investors that these loans were being originated outside of Countrywide’s underwriting guidelines. Countrywide knew that these exception loans were performing far worse than loans originated without exceptions, although it never disclosed this fact to investors.

“The Central District of California has taken the lead in the department’s investigation of Countrywide Financial Corporation,” said Acting U.S. Attorney Stephanie Yonekura for the Central District of California. “Countrywide’s improper securitization practices resulted in billions of dollars of losses to federally-insured financial institutions. We are pleased that this investigation has resulted in a multibillion-dollar recovery to compensate the United States for the losses caused by Countrywide’s misconduct.”

In addition to the matters relating to the securitization of toxic mortgages, today’s settlement also resolves claims arising out of misrepresentations made to government entities concerning the origination of residential mortgages.

The U.S. Attorney’s Office for the Southern District of New York, along with the Federal Housing Finance Agency’s Office of Inspector General and the Special Inspector General for the Troubled Asset Relief Program, conducted investigations into the origination of defective residential mortgage loans by Countrywide’s Consumer Markets Division and Bank of America’s Retail Lending Division as well as the fraudulent sale of such loans to the government sponsored enterprises Fannie Mae and Freddie Mac (the “GSEs”). The investigation into these practices, as well as three private whistleblower lawsuits filed under seal pursuant to the False Claims Act, are resolved in connection with this settlement. As part of the settlement, Countrywide and Bank of America have agreed to pay $1 billion to resolve their liability under the False Claims Act. The FIRREA penalty to be paid by Bank of America as part of the settlement also resolves the government’s claims against Bank of America and Countrywide under FIRREA for loans fraudulently sold to Fannie Mae and Freddie Mac. In addition, Countrywide and Bank of America made admissions concerning their conduct, including that they were aware that many of the residential mortgage loans they had made to borrowers were defective, that many of the representations and warranties they made to the GSEs about the quality of the loans were inaccurate, and that they did not self-report to the GSEs mortgage loans they had internally identified as defective.

“For years, Countrywide and Bank of America unloaded toxic mortgage loans on the government sponsored enterprises Fannie Mae and Freddie Mac with false representations that the loans were quality investments,” said U.S. Attorney Preet Bharara for the Southern District of New York. “This office has already obtained a jury verdict of fraud and a judgment for over a billion dollars against Countrywide and Bank of America for engaging in similar conduct. Now, this settlement, which requires the bank to pay another billion dollars for false statements to the GSEs, continues to send a clear message to Wall Street that mortgage fraud cannot be a cost of doing business.”

The U.S. Attorney’s Office for the Eastern District of New York, together with its partners from the Department of Housing and Urban Development (HUD), conducted a two-year investigation into whether Bank of America knowingly made loans insured by the FHA in violation of applicable underwriting guidelines. The investigation established that the bank caused the FHA to insure loans that were not eligible for FHA mortgage insurance. As a result, HUD incurred hundreds of millions of dollars of losses. Moreover, many of Bank of America’s borrowers have defaulted on their FHA mortgage loans and have either lost or are in the process of losing their homes to foreclosure.

“As a Direct Endorser of FHA insured loans, Bank of America performs a critical role in home lending,” said U.S. Attorney Loretta E. Lynch for the Eastern District of New York. “It is a gatekeeper entrusted with the authority to commit government funds earmarked for facilitating mortgage lending to first-time and low-income homebuyers, senior citizen homeowners and others seeking or owning homes throughout the nation, including many who live in the Eastern District of New York. In obtaining a payment of $800 million and sweeping relief for troubled homeowners, we have not just secured a meaningful remedy for the bank’s conduct, but have sent a powerful message of deterrence.”

“Bank of America failed to make accurate and complete disclosure to investors and its illegal conduct kept investors in the dark,” said Rhea Kemble Dignam, Regional Director of the SEC’s Atlanta Office. “Requiring an admission of wrongdoing as part of Bank of America’s agreement to resolve the SEC charges filed today provides an additional level of accountability for its violation of the federal securities laws.”

“Today’s settlement with Bank of America is another important step in the Obama Administration’s efforts to provide relief to American homeowners who were hurt during the housing crisis,” said U.S. Department of Housing and Urban Development (HUD) Secretary Julián Castro. “This global settlement will strengthen the FHA fund and Ginnie Mae, and it will provide $7 billion in consumer relief with a focus on helping borrowers in areas that were the hardest hit during the crisis. HUD will continue working with the Department of Justice, state attorneys general, and other partners to take appropriate action to hold financial institutions accountable and provide consumers with the relief they need to stay in their homes. HUD remains committed to solidifying the housing recovery and creating more opportunities for Americans to succeed.”

“Bank of America and the banks it bought securitized billions of dollars of defective mortgages,” said Acting Inspector General Michael P. Stephens of the FHFA-OIG. “Investors, including Fannie Mae and Freddie Mac, suffered enormous losses by purchasing RMBS from Bank of America, Countrywide and Merrill Lynch not knowing about those defects. Today’s settlement is a significant, but by no means final step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit.”

The attorneys general of California, Delaware, Illinois, Kentucky, Maryland and New York also conducted related investigations that were critical to bringing about this settlement. In addition, the settlement resolves investigations conducted by the Securities and Exchange Commission (SEC) and litigation filed by the Federal Deposit Insurance Company (FDIC).

The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis. The RMBS Working Group brings together more than 200 attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, 10 U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and more than 10 state attorneys general offices around the country.

The RMBS Working Group is led by Director Geoffrey Graber and five co-chairs: Assistant Attorney General for the Civil Division Stuart Delery, Assistant Attorney General for the Criminal Division Leslie Caldwell, Director of the SEC’s Division of Enforcement Andrew Ceresney, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric Schneiderman.

Investigations were led by Assistant U.S. Attorneys Leticia Vandehaar of the District of New Jersey; Dan Ryan and Mark Odulio of the Western District of North Carolina; George Cardona and Lee Weidman of the Central District of Carolina; Richard Hayes and Kenneth Abell of the Eastern District of New York; and Pierre Armand and Jaimie Nawaday of the Southern District of New York.

Learn more about the RMBS Working Group and the Financial Fraud Enforcement Task Force at: www.stopfraud.gov .

The Department of Justice has forfeited more than $480 million in corruption proceeds hidden in bank accounts around the world by former Nigerian dictator Sani Abacha and his co-conspirators.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division and Assistant Director in Charge Valerie Parlave of the FBI’s Washington Field Office made the announcement after a judgment was entered on Aug. 6, 2014, by U.S. District Judge John D. Bates of the District of Columbia.

“Rather than serve his county, General Abacha used his public office in Nigeria to loot millions of dollars, engaging in brazen acts of kleptocracy,” said Assistant Attorney General Caldwell. “With this judgment, we have forfeited $480 million in corruption proceeds that can be used for the benefit of the Nigerian people. Through the Kleptocracy Asset Recovery Initiative, the Department of Justice’s Criminal Division denies kleptocrats like Abacha the fruits of their crimes, and protects the U.S. financial system from money laundering. In coordination with our partners in Jersey, France and the United Kingdom, we are helping to end this chapter of corruption and flagrant abuse of office.”

“We remain steadfast in protecting the U.S. banking system from becoming a tool for dictators to hide their criminal proceeds,” said Assistant Director in Charge Parlave. “This court order bolsters the FBI’s ability to combat international corruption and money laundering by seizing the assets of those involved. I want to thank the special agents, financial analysts and prosecutors whose hard work over the years resulted in today’s announcement.”

The forfeited assets represent the proceeds of corruption during and after the military regime of General Abacha, who assumed the office of the president of the Federal Republic of Nigeria through a military coup on Nov. 17, 1993, and held that position until his death on June 8, 1998. The complaint alleges that General Abacha, his son Mohammed Sani Abacha, their associate Abubakar Atiku Bagudu and others embezzled, misappropriated and extorted billions of dollars from the government of Nigeria and others, then laundered their criminal proceeds through U.S. financial institutions and the purchase of bonds backed by the United States.

The judgment is the result of a civil forfeiture complaint the department filed in November 2013 against more than $625 million in the largest kleptocracy forfeiture action brought in the department’s history. The forfeiture judgment includes approximately $303 million in two bank accounts in the Bailiwick of Jersey, $144 million in two bank accounts in France, and three bank accounts in the United Kingdom and Ireland with an expected value of at least $27 million. The ultimate disposition of the funds will follow the execution of the judgment in each of these jurisdictions. Claims to an additional approximately $148 million in four investment portfolios in the United Kingdom are pending.

As alleged in the complaint, General Abacha and others systematically embezzled billions of dollars in public funds from the Central Bank of Nigeria on the false pretense that the funds were necessary for national security. The conspirators withdrew the funds in cash and then moved the money overseas through U.S. financial institutions. General Abacha and his finance minister also allegedly caused the government of Nigeria to purchase Nigerian government bonds at vastly inflated prices from a company controlled by Bagudu and Mohammed Abacha, generating an illegal windfall of more than $282 million. In addition, General Abacha and his associates allegedly extorted more than $11 million from a French company and its Nigerian affiliate in connection with payments on government contracts. Funds involved in each of these schemes were allegedly laundered through the United States.

This case was brought under the Kleptocracy Asset Recovery Initiative by a team of dedicated prosecutors in the Criminal Division’s Asset Forfeiture and Money Laundering Section, working in partnership with federal law enforcement agencies to forfeit the proceeds of foreign official corruption and, where appropriate, to use those recovered assets to benefit the people harmed by these acts of corruption and abuse of office. Individuals with information about possible proceeds of foreign corruption located in or laundered through the United States should contact federal law enforcement or send an email to kleptocracy@usdoj.gov.

The investigation was conducted by the FBI. The case is being prosecuted by Trial Attorney Elizabeth Aloi and Assistant Deputy Chief Daniel Claman of the Criminal Division’s Asset Forfeiture and Money Laundering Section, with substantial support from the Criminal Division’s Office of International Affairs. The department appreciates the extensive assistance provided by the governments of Jersey, France and the United Kingdom in this investigation.

WASHINGTON – In response to Russia’s continued efforts to destabilize eastern Ukraine, the U.S. Department of the Treasury today imposed prohibitions on additional entities operating within the financial services sector of the Russian economy pursuant to Executive Order (E.O.) 13662. Specifically, Treasury imposed sanctions that prohibit U.S. persons from providing new financing to three major Russian financial institutions, limiting their access to U.S. capital markets. Treasury today has also designated one Russian state-owned defense technology firm pursuant to Executive Order (E.O.) 13661. These measures coincide with actions taken to suspend U.S. export credit and development finance to Russia.

“In light of Russia’s continuing support for separatists in Ukraine, we took additional steps today to further increase financial pressure on the Russian government,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen. “These actions, along with actions announced today by the European Union, significantly increase the costs to Russia for its efforts to undermine Ukraine’s sovereignty. We are prepared to continue to expand these sanctions if Russia refuses to change course.”

Prohibition of Certain Types of Activities with Three Russian State-Owned Financial Institutions Pursuant to E.O. 13662

Treasury today imposed measures prohibiting U.S. persons and persons within the United States from transacting in, providing financing for, or otherwise dealing in new debt of longer than 90 days maturity or new equity for Bank of Moscow, Russian Agricultural Bank, and VTB Bank OAO, their property, or their interests in property. As a practical matter, this step will severely limit these banks’ access to medium- and long-term U.S. dollar financing, and will impose additional significant costs on the Russian Government for its continued activities in Ukraine.

We have not blocked the property or interests in property of these banks, nor prohibited transactions with them beyond these specific restrictions. However, the scope of prohibited activities and the number of sanctioned financial institutions may be expanded under the authority of E.O. 13662 if we decide to do so.

Bank of Moscow is a Russian state-owned financial institution—through its parent bank, VTB Bank OAO—with 148 sub-offices located in all administrative districts of Moscow.

Russian Agricultural Bank (A.K.A. Rosselkhozbank) is a state-owned bank, which acts as a Russian government agent offering a full range of financial services to clients. With a network of 78 regional branches and more than 1,500 additional offices covering Russia, it has the second-largest regional branch network in the Russia.

VTB Bank OAO is a state-owned bank, and, together with its subsidiaries (“the VTB Group”), is Russia’s second-largest banking group. The VTB Group has more than 1,600 offices in Russia, and operates more than 30 banks in 23 countries across Europe, Asia, and Africa. The VTB Group offers financial services including retail, corporate and investment banking; brokering and other stock-market services; insurance; asset management for pension and unit funds; and leasing. VTB Bank’s shares are traded on the Moscow Exchange and on the London Stock Exchange.

Imposition of Sanctions on One Russian State-Owned Firm Pursuant to E.O. 13661 for Operating in the Arms or Related Materiel Sector in Russia

Treasury today has also designated and blocked the assets of United Shipbuilding Corporation, pursuant to E.O. 13661, for operating in the arms or related materiel sector in Russia.

United Shipbuilding Corporation, which was established pursuant to a March 21, 2007 presidential order, is a Russian state-owned company that manufactures, among other things, ordnance and accessories, and is engaged in shipbuilding, repair, and maintenance. United Shipbuilding Corporation designs and constructs ships for the Russian Navy and is the largest shipbuilding company in Russia. This addition expands upon the list of eight defense technology firms designated on July 16.

As a result of today’s action under E.O. 13661, any assets of the entity designated that are within U.S. jurisdiction must be frozen. In addition, transactions by U.S. persons or within the United States involving the entity designated today under E.O. 13661 are generally prohibited.

28 July 2014 – The United Nations Security Council today, meeting in an emergency session just after midnight, called for an “immediate and unconditional” ceasefire, allowing for the delivery of urgently needed humanitarian assistance to the Gaza Strip.

In a presidential statement, the 15-member body expressed strong support for the call by international partners and Secretary-General Ban Ki-moon for such a ceasefire, and urged all parties to accept and fully implement it into the Eid period marking the end of the Muslim fasting month of Ramadan and beyond.

“The Security Council also calls on parties to engage in efforts to achieve a durable and fully respected ceasefire, based on the Egyptian initiative,” the statement added.

In this regard, the Council welcomed the efforts of international partners and the convening of the international meeting to support the ceasefire held in Paris on 26 July and urged all concerned regional and international parties to vigorously support efforts to consolidate an agreement between the parties.

The Israeli military offensive in Gaza, which is home to 1.8 million people, has left hundreds dead and thousands injured. Over 170,000 people have been uprooted from their homes and have sought shelter in UN-run facilities.

The Council expressed “grave concern” regarding the deterioration in the situation as a result of the crisis related to Gaza and the loss of civilian lives and casualties.

The call by the Council echoes that made by Mr. Ban some 12 hours earlier for both the Israelis and Palestinians to extend the humanitarian ceasefire that was in effect and mostly observed until early Sunday morning.

“Working closely with regional and international leaders, the Secretary-General urges all those with influence on the parties to help encourage an extension of the humanitarian ceasefire and compliance with observing it, once declared,” said a statement issued by his spokesperson.

www.un.org

The Department of Justice announced today that an $80 million False Claims Act judgment was entered against BNP Paribas for submitting false claims for payment guarantees issued by the U.S. Department of Agriculture (USDA). BNP Paribas is a global financial institution headquartered in Paris.

“We will not tolerate the misuse of taxpayer funded programs designed to help American businesses,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery. “Companies that abuse these programs will be held accountable.”

The United States filed a lawsuit against BNP Paribas in connection with its receipt of payment guarantees under USDA’s Supplier Credit Guarantee (SCG) Program. The program provided payment guarantees to U.S.-based exporters for their sales of grain and other agricultural commodities to importers in foreign countries. The program encouraged American exporters to sell American agricultural commodities to foreign importers and covered part of the losses if the foreign importers failed to pay. The SCG Program regulations provided that U.S. exporters were ineligible to participate in the SCG Program if the exporter and foreign importer were under common ownership or control.

The judgment entered by the court resolves the government’s allegations that, from 1998 to 2005, BNP Paribas participated in a sustained scheme to defraud the SCG Program. In furtherance of the scheme, American exporters and Mexican importers who were under common control improperly obtained SCG Program export credit guarantees for transactions between the affiliated exporters and importers. In some cases, the underlying transactions were shams and did not involve any real shipment of grain. BNP Paribas accepted assignment of the credit guarantees from the American exporters, even though it knew that the affiliated exporters and importers were ineligible for SCG Program financing, and a BNP Paribas vice-president, Jerry Cruz, received bribes from the exporters. Beginning in April 2005, when the Mexican importers began defaulting on their payment obligations, BNP Paribas submitted claims to the USDA for the resulting losses.

On Jan. 20, 2012, Cruz pleaded guilty to conspiracy to commit bank fraud, mail fraud and wire fraud, and conspiracy to commit money laundering.

“I would like to thank the Department of Justice and the USDA General Counsel’s office for their collaboration in recovering $80 million under this judgment,” said Administrator of USDA’s Foreign Agricultural Service Phil Karsting. “This illustrates the importance USDA and this administration places on protecting the integrity of our programs.”

The resolution of this matter was the result of a coordinated effort among the Commercial Litigation Branch of the Justice Department’s Civil Division, the USDA, the USDA Office of Inspector General, the U.S. Postal Inspection Service and the Internal Revenue Service Criminal Investigation.

Speakers at the Security Council this morning expressed deep sorrow over the loss of life that resulted from the downing of a commercial airliner over eastern Ukraine yesterday, calling for a credible investigation into the tragic incident and urging accelerated political efforts to end the country’s crisis.

For that to happen, a concerted effort by national actors from across the political spectrum, backed by strong and unified support of the international community was needed, despite the fact that recent initiatives had dissipated, said Jeffrey Feltman, Under-Secretary-General for Political Affairs.

“While the security, political, economic, social and human rights issues in Ukraine that should be addressed are indeed complicated, we hope that the shock of the downing of the civilian passenger jet yesterday will prompt a serious and sustained effort to end the fighting and concentrate positively on Ukraine’s future,” he said.

Reiterating the Secretary-General’s condemnation of the downing of the Malaysia Airlines jet that he said killed nearly 300 people, including United Nations staff and some 80 children, he added that, while the Organization at this point had no independent verification of the circumstances, “the Secretary-General is alarmed at what seemed to be credible, numerous reports that suggest that a sophisticated surface-to-air missile was used”.

There was clearly a need for a full and transparent international investigation and the United Nations was ready to cooperate, having been in touch with the International Civil Aviation Organization (ICAO), which had offered Ukraine its assistance in putting together an international team.

Reporting on the intensification of fighting and loss of life in Ukraine following the 30 June announcement by Ukraine President Petro Poroshenko of the end of the 10-day ceasefire with separatist groups, he said that he would return to Kyiv and Moscow in the coming days in the interest of facilitating dialogue and ending the crisis, which was threatening peace and security beyond Ukraine’s borders.

Following Mr. Feltman’s briefing, Council members and other interested countries took the floor to express their condolences, to call for an immediate, credible investigation and to urge that efforts to find a political solution to the Ukraine crisis be accelerated.

Ukraine’s representative said that his country had been in contact with international authorities on beginning a thorough, impartial investigation of the downing of the airliner. He maintained, however, that there was already a great deal of evidence pointing to the responsibility of the separatists, whom he referred to as terrorists. In his statement, he called on the Russian Federation to stop fighters and arms from coming from that country into Ukraine and denied that Ukraine had fired into Russian territory.

Although most speakers called for an investigation to determine responsibility for the airliner’s crash, many also directed criticism at the separatists for the incident as well as for the continuing violence in the region.

The representative of the Russian Federation said that the facts of the airline crash must be determined through an investigation; placing blame at this time must be avoided. He maintained, however, that an investigation should find out whether Ukraine aviation authorities were negligent in monitoring the safety of their airspace. He also criticized Ukraine for not abiding by the Council’s calls for restraint in its actions in the east and for cross-border aggression and he called for negotiations to end the conflict.

Expressing his country’s appreciation for expressions of condolence and support, Malaysia’s representative condemned any attacks on such civilian targets as “a flagrant violation of international law and an outrage against human decency”. Those responsible must be swiftly brought to justice through an independent international investigation.

Echoing other speakers, he called the parties in the conflict to provide full cooperation and ensure evidence was not disturbed. “Though many facts remained unknown,” he said, “the event was a grave reminder of how escalation of disputes threatened international peace and security and could claim innocent lives in a most tragic and senseless manner.” He, therefore, urged the Council to step up its role in facilitating a peaceful resolution of the Ukraine crisis.

Also speaking today were representatives of the United Kingdom, Chad, United States, Lithuania, China, Australia, Luxembourg, France, Jordan, Argentina, Nigeria, Chile, Republic of Korea, Netherlands, Indonesia, Philippines, Belgium, Canada, New Zealand and Viet Nam.

The meeting began at 10:10 a.m. and ended at 12:15 p.m.

Briefing

JEFFREY FELTMAN, Under Secretary-General for Political Affairs, said that a rapidly deteriorating crisis in the Ukraine was threatening the peace beyond its borders, noting that recent possibilities for political agreements had dissipated. “While the United Nations at this point has no independent verification of the circumstances regarding the downing of the Malaysian Airlines passenger plane, the Secretary-General is alarmed at what seemed to be credible, numerous reports that suggest that a sophisticated surface-to-air missile was used.” The Secretary-General has strongly condemned that act. Nearly 300 were killed, including staff of the World Health Organization (WHO) and some 80 children. There was clearly a need for a full and transparent international investigation and the United Nations was ready to cooperate, having been in touch yesterday and today with the International Civil Aviation Organization (ICAO), which had offered Ukraine its assistance in putting together an international team.

Following the 30 June announcement by Ukrainian President Petro Poroshenko of the end of the 10-day ceasefire and subsequent resumption of the security operation in the eastern part of the country, the fighting between Government forces and armed groups has intensified dangerously, resulting in numerous deaths. According to Ukrainian authorities, a number of towns had been returned to their control, but relentless fighting had continued particularly in and around the cities of Lugansk and Donetsk, where the armed groups appear to have consolidated. The border areas near the Russian Federation were of particular concern, with Russian officials claiming Ukrainian shells had caused fatalities on their side, and Ukrainian authorities claiming that border guard units had come under continuous rocket and mortar attack. There were also reports that several Ukrainian military aircrafts had been shot down, most recently on 16 July.

He reiterated the Secretary-General’s demand that armed groups immediately disarm and end violent activities and again urged Ukrainian authorities to act with restraint and make every effort to protect civilians, some 500 of whom had already been killed, 1,400 injured and tens of thousands displaced, according to the Office of the United Nations High Commissioner for Refugees (UNHCR).

He said that there was an urgent need for a sustainable ceasefire as underlined by the 2 July joint Berlin Declaration. He was disconcerted however, by the apparent lack of tangible progress towards a political solution, for which an immediate ceasefire would be a critical first step. On behalf of the Secretary-General, he called on the international community to come together in support of Ukraine and in accordance with the principles of the Charter. He would return to Kyiv and Moscow in the coming days in the service of good offices. A concerted effort by national actors from across the political spectrum, backed by strong and unified support of the international community was needed. “While the security, political, economic, social and human rights issues in Ukraine that should be addressed are indeed complicated, we hope that the shock of the downing of the civilian passenger jet yesterday will prompt a serious and sustained effort to end the fighting and concentrate positively on Ukraine’s future,” he said.

MARK LYALL GRANT ( United Kingdom), offering condolences to the people and Governments of the victims on the flight, said his country was mourning the loss of possibly nine of its citizens. It was a “dark moment” for the international community with the violence in that region reaching “monstrous” proportions. He called for a full international investigation in accordance to full international aviation guidelines, welcoming Ukraine’s cooperation and support towards that end. However, investigators must gain access to the site and work unhindered, with no evidence tampering. Armed groups must allow that access. Yet, despite assurances, that had not happened. He called on the Russian Federation to ensure that access, noting that early indications had shown the flight had been brought down by a surface-to-air missile. That had not been the first time such weaponry had been utilized in that region. In early June, armed separatists had downed three Ukrainian flights. The separatist leaders were Russian and were receiving weapons and support from the Russian Federation, including man-portable air defence systems, battle tanks and other armoured vehicles.

He called on the Russian Federation to “reflect carefully on what you have created”, adding it should cease support to armed groups, for without it, they would wither.

MAHAMAT ZENE CHERIF ( Chad) conveying condolences to the families of those killed in the crash, said that the tragedy had impacted international peace and security, given the diverse nationality of the perpetrators. He joined the demand for a full international investigation, and welcomed the Ukrainian authorities’ intention to broaden that investigation to include independent investigators. He also called on all countries with influence to press for an inclusive political dialogue; he urged a ceasefire to enable the bodies’ evacuation.

SAMANTHA POWER ( United States), noting that there had been infants on board, said it was impossible to express condolences to those families. With that, she called for a full international investigation, and emphasized that those responsible must not be sheltered by any Member State. The flight had been cruising at 30,000 feet in a corridor used by commercial airlines and its flight path had been available online. Only a surface-to-air missile system could have been capable of hitting that plane. A western reporter had spotted such a weapon earlier in the region. Furthermore, separatists had claimed responsibility and had boasted on social media about shooting down the plane. Those posts had been deleted. Ukrainian weapons were not in the area, nor had they been fired, despite air-space violation. In connection with her call for an international investigation, she noted that United States President Barack Obama had offered to Russian Federation President Vladimir Putin experts and other assistance if needed.

Most Council members and the international community had been warning for months that the Russian Federation must stop what it had started to prevent such devastation. But, recent activities demonstrated otherwise, including the discovery of Russian weapons and documentation by Ukrainian authorities, the recruiting efforts by separatist groups for those experienced in operating heavy artillery, and deployment of new forces near the Ukrainian border. Expressing her delegation’s commitment to a diplomatic solution, she noted the people killed on that flight had come from nine different nations, “but could have easily come from any of our countries”. The world community was duty-bound to find out what happened and ensure accountability, she said.

DAINIUS BAUBLYS ( Lithuania) said the circumstances of the downing of the Malaysian Airlines flight must be established through an independent international investigation. The perpetrators must not escape responsibility and investigators must immediately be granted access to the crash site. The circumstances around the downing of the Malaysian Airlines flight were impossible to ignore and all pointed in one direction — a horrible crime committed as part of the armed aggression against Ukraine. The international community could not stand by in the face of such aggression, as the conflict had become a threat to international peace and security. Lithuania called on Russia to collaborate with Ukraine to ensure the security of their border and prevent weapons and armed terrorists from entering Ukrainian territory. He called on Russia to constructively cooperate in the implementation of the peace plan put forward by Ukrainian President Poroshenko. Ukraine’s independence, sovereignty and territorial integrity within the internationally recognized border, including Crimea, was non-negotiable and must be respected by all.

LIU JIEYI ( China) expressed shock and grief at the downing of the airplane in eastern Ukraine, extending condolences to the families. The priorities now should be to establish facts and not to trade accusations. He supported a credible investigation with the cooperation of all parties. In addition, he expressed deep concern over the situation in Ukraine, calling for calm and restraint to prevent further intensification of conflict. A political settlement was the only way out. Noting constructive efforts to achieve a ceasefire through dialogue, he hoped that those would come to fruition, taking account of all the rights of all the people involved. China respected the sovereignty and territorial integrity of all countries, including Ukraine; he pledged his country would play a constructive role in promoting a political settlement.

PHILIPPA KING ( Australia) pointed to mounting evidence that a missile had downed a Malaysian Airlines plane in Ukraine, and that Russian-backed rebels were responsible. Welcoming the separatists’ decision to allow access to the crash site, she urged the Russian Federation’s full cooperation with investigations. Despite a Council press statement calling for an investigation, she urged adoption of a resolution that would reinforce the need to grant access to the crash site and for a full, thorough, independent and international investigation. In 19 Council meetings on Ukraine, “the overwhelming majority” of members had called for an end to violence and destabilization, together with de-escalation of tensions, the laying down by separatists of their weapons and genuine dialogue. It was “time for the equivocation and dissembling and false narratives of some to stop”, she said. Russia needed to end provocations and any support for separatists, and to prevent weapons, equipment and fighters flowing across the border. Pointing to the promise of the four party talks, she hoped to see results from their agreements.

SYLVIE LUCAS ( Luxembourg) said that the international community owed it to the victims to find out all the facts about the tragic downing of a civilian airliner. All concerned parties must cooperate with an investigation, she said, adding that the violence was part of an ongoing deterioration of the situation in the Ukraine. Separatists continued to threaten the stability and independence of the country, while active armed groups were well-equipped military forces surely benefiting from outside support. She called on the Russian Federation to keep arms and fighters from crossing the border. Ukraine had played its part in holding dialogue and guaranteeing the rights of minorities. Unfortunately, the armed groups had not accepted that outstretched hand. A genuine and lasting ceasefire was needed, and she welcomed efforts by the Organization for Security and Cooperation in Europe (OSCE) and others towards that end. Yesterday’s disaster emphasized that it was high time to end this crisis.

GÉRARD ARAUD ( France) called for an international investigation. A glimmer of hope had been seen with the election of Ukrainian President Poroshenko. He also noted the recent “daily exchanges” between President Putin, President Poroshenko, French President François Hollande and German Prime Minister Angela Merkel towards a lasting ceasefire. However, the situation continued to deteriorate with combat stepped up because the separatists refused to accept the hand extended to them. The shooting down of the aircraft could have only happened with the use of sophisticated weapon systems. Those responsible for arming that group bore responsibility. He called for a sincere commitment from the Russian Federation, which had not been seen. An end to the escalation of violence and the attaining of a lasting ceasefire must happen and that country must take a constructive role in that. Weapons crossing the Russian-Ukrainian border must cease, along with the rapid deployment along the borders.

ZEID RA’AD ZEID AL-HUSSEIN (Jordan) called for an independent and comprehensive investigation with participation of the relevant Ukrainian authorities, as well as others, including Malaysian authorities. The situation was taking a new and dangerous trend after yesterday, causing great concern for his Government. He reaffirmed his call for all influential parties to exert pressure on the insurgents to disarm and withdraw from facilities and buildings which they occupied. There needed to be a peaceful solution and those people displaced from their homes must be allowed to return. All parties to the Geneva Statement and the Berlin Joint Declaration should abide by those provisions.

MARÍA CRISTINA PERCEVAL ( Argentina) expressed deepest condolences to the countries, friends and families of the passengers aboard the Malaysian jet. She called for an international, impartial investigation that would determine the facts behind the tragic event as quickly as possible. Armed groups must end their violent acts and there was a need to respect Ukrainian sovereignty. At this difficult and sad moment, Argentina called for prudence, without entering into the blame game. The truth needed to be found, she added, concluding, “may the victims rest in peace”.

U. JOY OGWU ( Nigeria) said that yesterday’s tragic event seemed to her like the apocalypse described in the Book of Revelation. Such incidents would increase if countries did not end support to violent activity around the world. She expressed full support for an independent investigation as called for by the Secretary-General and for the cooperation of all parties in that effort. There needed to be an end of hostilities in eastern Ukraine and that had to come through dialogue as provided for by the Berlin Joint Declaration and other statements.

VITALY CHURKIN ( Russian Federation) said that the facts must be determined over the tragic downing of the airliner and speculation at this point was counterproductive. An international commission under ICAO would be appropriate. Among the questions that should be asked is how commercial airliners were routed over an area of conflict. In such a situation, States were responsible for monitoring the safety of their airspace and an investigation should find out whether Ukraine aviation authorities had properly performed their duties in that regard. The Council had called for restraint, and the destruction in eastern Ukraine did not show any evidence of that. There had been no evacuations of areas with clashes and evidence that people fleeing the violence had been reportedly targeted, while the Russian Federation was sheltering tens of thousands. There were aggressive acts from Ukraine against Russian citizens, as well. He called on authorities to stem such incidents in the future.

He reiterated his call for inclusive dialogue, but said that this appeared unlikely because of the support for Ukraine’s use of force by his Western colleagues, particularly the United States. Because of that, previous agreements had become irrelevant. The Kyiv Government had decided to stamp out dissenters, with some calling them the chilling name “insects”. Promised reforms of the Ukrainian Constitution were being done in secret; other reforms were not being acted on after they engaged European support. International institutions had not acted on ending the violence because of his Western colleagues, who had met his country’s initiatives with cynicism. The operation in eastern Ukraine needed to end as soon as possible. “Negotiations were still possible, but the right choices need to be made,” he said.

OCTAVIO ERRÁZURIZ ( Chile), calling for an international investigation, said no cause could justify an act of such cruelty. All facilities must be provided to ensure security and access for the investigators to the site. It was essential that those responsible be brought to justice, and he called on all States to cooperate actively with the authorities. The downing of that plane in an area of high political tension emphasized the danger of the escalation of violence.

OH JOON (Republic of Korea) expressed shock and outrage at the downing of the plane. His country, he said, was also a victim of a downing by armed groups of one of its planes, and stressed that if yesterday’s crash had been a deliberate attack, the international community must do everything within its power to bring those responsible to account. “No one should get away with killing so many innocent people who had nothing to do with the conflict,” he said.

EUGÈNE-RICHARD GASANA ( Rwanda), Security Council president, speaking in his national capacity, said that the tragedy had been the result of the Council’s inability to take action. However, with the shooting down of the Malaysian aircraft, the Ukrainian crisis was no longer between the Ukrainian authorities and armed groups —— it had “crossed the red line by endangering all of our lives as it did for the men, women and children from different countries on that flight”. He called for an independent investigation in line with international aviation guidelines, and urged that responsibility be determined so that the perpetrators could be held accountable. Furthermore, the frequent use of surface-to-air missiles posed the question of access to those weapons. The Security Council and the larger international community could no longer afford to turn a blind eye on the matter. It was unfortunate that the tragedy had come at a time when regional and international efforts were under way to find a diplomatic and political solution. With that, he voiced support for the Berlin Joint Declaration. He renewed his call for armed groups to respect the unity, sovereignty and territorial integrity of Ukraine, concluding that the shooting down of the plane was a stark reminder to Council members to put aside their differences.

YURIY A. SERGEYEV ( Ukraine) expressed sorrow to all delegations of countries that had lost citizens in the airline downing. He affirmed that International Criminal Police Organization (INTERPOL) had been contacted and that his country would cooperate with an impartial thorough investigation. There was much information that was already clear, however. The plane was shot down over what he called terrorist-controlled territory, where a Ukrainian aircraft had previously been downed. There were recordings of terrorists discussing the event, in which they seemed to acknowledge responsibility. There was evidence that terrorists had two BUK anti-aircraft systems, which captured cadres had said had come from the Russian Federation. He maintained that, in fact, numerous supplies of weaponry had proven to have come from the Russian Federation, with some of the evidence specifying Russian military units had provided those arms.

He added that recruiting efforts, in favour of the illegal armed groups, were spreading throughout the Russian Federation, seeking those who could operate sophisticated weaponry. It was significant that the country had never called on its citizens not to join the armed groups, nor had it prosecuted anyone for joining them. In fact, he said, several times a day, columns tried to breach the border. In addition, the armed groups themselves had fired towards the Russian border to create a provocation. He maintained that Ukrainian national forces had never fired at Russian territory. In addition, massing of Russian troops on the Ukrainian border had continued, violating not only the United Nations Charter, but also previous agreements of the parties. He demanded that the Russians immediately cease provocations, stop threatening the peace and security of his country and allow his President’s peace plan to be implemented.

HUSSEIN HANIFF (Malaysia), expressing profound sorrow to families and friends of those on board the airline, said his country was deeply touched by the expressions of condolences and pledges of support and assistance from around the world. Describing the nationalities of the victims and the circumstances of the flight, he condemned such attacks on civilians in the strongest possible terms as “a flagrant violation of international law and an outrage against human decency”. The perpetrators must be swiftly brought to justice, he urged, demanding in that regard “a full, independent and transparent international investigation into the incident involving the relevant international authorities, including the ICAO”. He reported that Malaysia had been formally invited by the Ukrainian authorities to take part in the investigation and would be sending two representatives as soon as possible.

He urged the parties to the conflict in the area of the crash site to provide their fullest cooperation, including unhindered access to humanitarian and investigatory personnel, for whom he urged the Security Council to ensure security. There must be no interference at the crash site or removal of debris from the area, including the flight data recorder or “black box”. Alhough many facts were still unknown, the event was a grave reminder of how escalation of disputes threatened international peace and security and could claim innocent lives in a most tragic and senseless manner. With that, he urged the Council to step up its role in facilitating a peaceful resolution of the Ukrainian crisis.

KAREL J.G. VAN OOSTEROM ( Netherlands), noting that at least 189 victims had been Dutch nationals, said his country was united and determined to “seek the truth about what happened”. He called on all parties who had any influence to grant unfettered access to the crash site to emergency responders and investigators alike. He also called on the Security Council, “the world’s highest authority”, to mandate a full, thorough and impartial international investigation and ensure that all relevant evidence, including the black box be made available to the international investigation.

He went on to say that, if the tragedy was the result of the use of weapons, his Government would demand that those responsible, both directly and indirectly, be held accountable and be brought to justice. That was not only a moral obligation, but a duty in the face of international law and justice. He asked that the United Nations help his country bring home the victims’ remains as soon as possible. Not only did the Netherlands deserve to know what happened, but the world had a right to know.

DESRA PERCAYA ( Indonesia) said that if a surface-to-air missile was responsible for the tragedy it was a grave violation to international and humanitarian law. The international community should ensure a full international and independent investigation. His country stood ready to support such an investigation. Further, if the shooting down of that plane had been intentionally caused by human factors, he demanded that the perpetrators be brought to justice to the fullest extent. His Government had instructed all Indonesian airlines to

exercise caution and avoid flying over that region of Ukraine’s air space. As a member of the Association of South-East Asian Nations (ASEAN) family, he expressed solidarity with Malaysia, as well as all the countries of the victims.

LIBRAN CABACTULAN ( Philippines), stating that the flight had on broad 298 irreplaceable lives, said that the world today was united in grief. The incident was “revolting”, particularly in light of reports that the crash had occurred due to a targeted move. He joined other delegations for an immediate securing of the crash site so that a full, independent, transparent and international investigation would be ensured. Full and safe access to investigators, as well, needed to be ensured so that they could swiftly conclude and report their results.

BÉNÉDICTE FRANKINET ( Belgium) said that five of her country’s nationals had been on that flight. Echoing other delegations, she called for a full impartial, international investigation and full access to the site for investigators and search and rescue teams. Voicing support for the proposal by Australia for a resolution towards that end, she said “we owe this to the victims and their families, but also to ourselves”.

GUILLERMO RISHCYNSHI ( Canada) said that, as more information became available, his delegation was increasingly convinced that the downing of the flight was not only a tragedy, but very likely the result of an “outrageous crime” perpetrated against hundreds of innocent civilians from many countries. Calling upon all parties to the conflict to cooperate fully with an international investigation, he pointed out that the conflict in the region in which the plane went down was a conflict generated by and perpetuated by “ Russia’s provocative military actions” against Ukraine. The Russian Federation must cease its political, financial and material support to armed insurgents in the region.

JIM MCLAY ( New Zealand), expressing solidarity with Malaysia and all concerned countries, called for the protection of the integrity of the crash site and for a full investigation. The countries of those who had lost their citizens in the plane crash had a right for an investigation and any party that had any information on the incident must offer assistance. “No ifs, no buts, no maybes,” he declared. The conflict was now an international issue, resulting in people from other parts of the world who had no direct connection to the conflicts being killed.

HOAI TRUNG ( Viet Nam) expressed sympathy for all the lives lost in the downing of the airline, three of whom had been Vietnamese. He called for expeditious action to assist the families of the victims and a credible investigation of the incident. He expressed concern over the crisis in the Ukraine and hoped for restraint from the parties, as well as for the promulgation of dialogue towards a peaceful resolution.

This is courtesy of www.un.org

In a meeting today to address the devastating impacts of the violence engulfing Gaza — claiming civilian lives and threatening an already troubled region — the United Nations senior political official told the Security Council the attacks and retaliations were frustrating hopes of any de-escalation.

Briefing the 15-member body, Jeffrey Feltman, Under-Secretary-General for Political Affairs, said that the intensification of violence that the United Nations had been attempting to head off was becoming a reality in and around Gaza. The crisis was the result of a collective failure to advance a political solution to the Israeli-Palestinian conflict, he said, urging the international community to assume its responsibility to restore a serious prospect of a two-State solution, while warning against “temporary fixes”.

He expressed the Secretary-General’s concern that the escalation would increase the already “appalling death toll” among Gazan civilians. Israel had legitimate security concerns, he said, condemning the indiscriminate rockets fired from Gaza, numbering more than 2,000 since 8 July, with more than half striking Israel. At the same time, he was shocked at Israel’s response, which had claimed the lives of hundreds of Palestinian civilians, including four children on a beach in Gaza City and three more children yesterday.

A ceasefire was indispensable and urgent, he said, adding that unless the root causes of the escalation were addressed, “this dreadful violence” would return again and again. Offering a prescription once calm was restored, he urged an end to weapons smuggling and to the blockade, as well as returning Gaza to “one Government”. He warned: “We cannot return to the status quo ante — a concern which Palestinians and Israelis share.”

He called on all parties to bring an immediate end to indiscriminate firing of rockets by Hamas into Israel and Israeli retaliatory action. Civilians must be protected, as well as the integrity of United Nations premises, and humanitarian aid should be allowed to reach all in need. At the same time, he cautioned that the “bigger picture” not be forgotten, highlighting, in particular, impacts on Lebanon and the potential grave danger to stability in the Golan.

The Permanent Observer for the State of Palestine emphasized that the Palestinian Authority had engaged continuously in efforts to secure a comprehensive ceasefire, yet Israel had continued to wage war with the massive ground invasion of the Gaza strip, which was now threatening the safety of the entire Palestinian civilian population.

He called on the Security Council, once again, to uphold its Charter duties and implement its resolutions regarding the Palestinian-Israeli conflict. The Council should adopt a resolution condemning Israeli military aggression in Gaza and ensuring the lifting of the blockade and the protection of the Palestinian people. Should the Council fail to respond to those appeals, “we would have no recourse but to turn to the judicial bodies of the United Nations and the international system”.

Israel’s representative told the Council: “We did everything in our power to avoid this.” In the face of the attacks, his country had been “left with no choice” but to have the Israel Defense Forces enter Gaza, he said, adding that the Prime Minister had accepted every ceasefire offered, even while the country was under attack. Despite that, Hamas had rejected every overture.

The Israel Defense Forces were fighting in Gaza, but they were not fighting the people of Gaza, he emphasized, adding that the army was operating against only terrorist targets and genuinely regretted any civilian loss of life. In the nine years since Israel’s withdrawal from Gaza, Hamas had fired rockets “each and every month”. When Israel informed the international community of the thousands of rockets being smuggled into Gaza by Hamas, it had been met with silence.

Speakers around the room called for a ceasefire between the parties and a return to the negotiating table. Nigeria’s representative warned that “violence begets violence”, making political solutions impossible. France’s delegate urged both Hamas and the Israel Defense Forces to cease fire, as civilians were bearing the brunt of the attacks. “More war will not bring more security,” said the representative of Luxembourg, adding “it will only bring more tragedy”.

Also speaking were representatives of Jordan, United States, China, Australia, Chile, Lithuania, United Kingdom, Chad, Russian Federation, Argentina, Republic of Korea and Rwanda.

The meeting began at 3:10 p.m. and ended at 5:10 p.m.

Briefing

JEFFREY FELTMAN, Under-Secretary-General for Political Affairs, said that the intensification of violence that the United Nations had been attempting to head off was becoming a reality in and around Gaza. It was more dismaying that signs of hope had been emerging for a ceasefire, which Egypt had been brokering. Following a temporary pause, militants had resumed firing projectiles from the Gaza Strip “frustrating our hopes” of a de-escalation. Shortly after those firings, Israeli Prime Minister Benjamin Netanyahu announced the launch of a ground operation into Gaza. Four ground incursions had been conducted, accompanied by some 90 airstrikes, mostly within the access-restricted areas. The Israel Defense Forces also fired some 357 tank shells, while their Navy fired 150 shells. Militants had fired some 127 rockets and 29 mortar shells at Israel. Approximately 20 Palestinian houses had been hit, 26 Palestinians had been killed and another 116 injured. One Israeli soldier had been killed.

He expressed the Secretary-General’s concern that the escalation would increase the already “appalling death toll” among Gazan civilians. He noted that Israel had legitimate security concerns, condemning the indiscriminate rocket fire from Gaza, but he was alarmed at Israel’s heavy response. The Secretary-General was also shocked by the Israeli strike that killed four children on a beach in Gaza City on 16 July, as well as the killing of three more children yesterday. The violence must end, he stressed.

Since 8 July, he continued, more than 2,000 rockets had been fired from Gaza into Israel with 1,100 of them striking Israel and hundreds intercepted by the Iron Dome. Two Israelis had been killed, including one civilian. Twelve Israeli soldiers and 365 Israeli civilians had been injured. During the same period, some 261 Palestinians, a majority of them civilians, including at least 48 women and more than 50 children, had been killed and more than 1,600 injured as a result of some 1,900 Israeli strikes on Gaza from land, air and sea. Additionally, more than 1,800 Palestinian’s homes had been destroyed or damaged.

Based on the understanding of November 2012, there was a humanitarian pause, which would have helped Egypt facilitate a ceasefire. Although Israel had accepted the Egyptian proposal for a ceasefire, Hamas had tabled counter-proposals that were not acceptable to Israel. The Palestinian Authority had also expressed its support of a ceasefire and President Mahmoud Abbas had been engaged with both regional and world leaders in an appeal to end the crisis, meeting yesterday with Egyptian President Abdel Fattah Al Sisi in Cairo. Both Presidents had agreed on the necessity of an immediate ceasefire and on the urgency of holding a donors’ conference to start rebuilding the Gaza Strip.

President Abbas, he reported, had also indicated that in the event of a ceasefire, he would be willing to redeploy Palestinian Authority forces along the Philadelphi Corridor between Gaza and Egypt for the reopening of the Rafah border crossing under their supervision. That would be a key component of bringing Gaza back under one legitimate Palestinian Government. President Abbas had also written to the Secretary-General requesting that Palestine be placed under an international protection system administered by the Organization.

He called on all parties to bring an immediate end to indiscriminate firing of rockets by Hamas into Israel and Israeli retaliatory action, and to ensure the protection of civilians and the integrity of United Nations premises. The placing of approximately 20 rockets in a vacant school in Gaza of the United Nations Relief and Works Agency for Palestine Refugees in the Near East (UNRWA) was a flagrant violation of its premises’ inviolability. A ceasefire was indispensable and urgent. The Agency had been providing shelter for around 48,000 Gazans who had nowhere to flee following warnings by the Israel Defense Forces. However, the Agency’s resources were being stretched thin. The root causes must be addressed. “We cannot return to the status quo ante — a concern which Palestinians and Israelis share,” he said.

Since the Security Council’s 9 July meeting on the implementation of resolution 1701 (2006), he said, at least 11 rockets had been launched from the United Nations Interim Force in Lebanon (UNIFIL) towards Israel in five separate incidents, between 11 and 18 July. In addition, the Lebanese Armed Forces had found and dismantled two rockets set to launch towards Israel. Israeli forces had retaliated on all occasions firing across the Blue Line. The Interim Force, in coordination with the Lebanese Armed Forces, was maintaining an enhanced operational presence on the ground. Turning to the 1974 Disengagement of Forces Agreement between Israel and Syria, he noted that, among several incidents of engagement, explosions and rockets from the Bravo side had impacted the Alpha side, leading to return fire by Israeli forces.

“While we focus on Gaza today, we must not forget the bigger picture,” he said. The escalation in Gaza had repercussions in the West Bank, including in East Jerusalem, with clashes occurring among demonstrators on both sides. Restrictions had been placed this morning on Palestinian access to the holy places in the Old City. The situation on the ground was ultimately the result of a collective failure to advance a political solution to the conflict. Temporary fixes would no longer do, he said, urging the international community to assume its responsibility to restore a “serious prospect” for a two-State solution and bring an end to the decades-long conflict and occupation. That was the only way to make a ceasefire last, break the endless cycle of attack and retaliation and ensure a durable peace for generations of Palestinians and Israelis alike. The Secretary-General would leave for the region tomorrow to express solidarity with Israelis and Palestinians and, in coordination with regional and international actors, help work towards ending the violence and finding a way forward.

Statements

RIYAD MANSOUR, Permanent Observer for the State of Palestine, said that while the Palestinian Authority had engaged continuously in efforts to secure a comprehensive ceasefire, Israel had continued to wage war on the Palestinian people, with the massive ground invasion of the Gaza strip now threatening the safety of the entire Palestinian civilian population. Hundreds had been killed, the majority of which he maintained were women and children, and homes and infrastructure had been destroyed, displacing thousands of families. It could not be justified by any means. Listing the names and ages of some of the dead, he said war crimes, crimes against humanity and systematic human rights violations were being committed by Israel.

He called on the Security Council once again to uphold its Charter duties and act forthwith to implement its resolutions regarding the Palestinian-Israeli conflict and on protection of civilians and children in armed conflict. Should the Council fail to respond to those appeals, “we would have no recourse but to turn to the judicial bodies of the United Nations and the international system”, he said. He called on the Council to adopt a resolution that condemned Israeli military aggression in Gaza and demanded its immediate cessation, the lifting of the Israeli blockade and the protection of the Palestinian people, since Israel, the occupying Power, had clearly forfeited its legal obligation to do so. He appealed to the international community to provide emergency humanitarian assistance to Gaza.

RON PROSOR ( Israel) said that, in the face of attacks, kidnapping and jihadist activities, his country had been “left with no choice” but to have the Israel Defense Forces enter Gaza to restore a sustained calm there while degrading Hamas’s capabilities. “We did everything in our power to avoid this,” he said, noting that Prime Minister Netanyahu had accepted every ceasefire offered, even while Israel was under attack. Despite that, Hamas had rejected every overture; Israel “faces an enemy who lives by violence and celebrates death”. The Israel Defense Forces were fighting in Gaza, but they were not fighting the people of Gaza. “ Israel ceases and Hamas fires,” he said, calling on the international community to “stand now with Israel” to prevent the next barrage of rockets, kidnappings and suicide attacks and, once and for all, remove the “threat of terrorism casting a dark shadow on the people of Israel”. His country had shown great restraint in the face of unrestrained aggression. During recent ceasefires, Hamas had continued to defiantly fire rockets at Israel and had sent heavily armed terrorists through tunnels towards the Kibbutz Sufa. “No country in the world would tolerate such an assault on its citizens,” he stressed.

He said the Israeli army did not “aspire” to harm any innocent people; it was operating only against terrorist targets and genuinely regretted any civilian loss of life. At the same time, there was “no line Hamas will not cross”, no depth to which they would not sink, no site off-limits. Hamas was storing weapons in family homes and establishing headquarters in hospitals. UNRWA said yesterday it had found missiles in the basement of a school. Hamas was targeting Israeli citizens while hiding behind Palestinian civilians. How many more Palestinians must fall before President Abbas, who was President of a unity Government that included a “murderous terror group”, would finally break his partnership with Hamas? In the nine years since Israel’s withdrawal from Gaza, Hamas had fired rockets “each and every month”. When Israel informed the international community of the thousands of rockets being smuggled into Gaza by Hamas, it had been met with silence; it was time it faced the consequences of its inaction. Israel wanted to live in peace, but it was being forced to wage a war against a terrorist group committed to its destruction.

EIHAB OMAISH ( Jordan) said he had called for this meeting on behalf of the Arab Group. He rejected and condemned, in the strongest terms, what he described as Israel’s aggression in Gaza, which he said had caused hundreds to become martyrs. He asked how the world could be so unmoved by the death of children, calling on Israel to immediately end military operations, withdraw from the Gaza Strip and stop targeting civilians anywhere. In that light, he supported the Egyptian initiative for a ceasefire. Jordan had increased the capacity of its health facilities for the wounded in Gaza and sought more humanitarian aid for the residents of the enclave. Only a political solution based on an equitable two-State strategy would sustainably end the violence, he stressed.

SAMANTHA POWER ( United States) said she was deeply concerned over the impact of the crisis on both Israeli and Palestinian civilians and cited President Barak Obama’s strong support for Israel’s right to self-defence, as well as his plea to stem the suffering in Gaza by de-escalating the violence. Even though Hamas had squandered efforts to establish a ceasefire, her country was accelerating efforts to end the fighting. She welcomed the humanitarian pause, saying that the situation in Gaza was grave and getting worse. Calling for protection of civilians, she condemned the use of UNRWA schools and other civilian facilities to store weaponry. She also called for the end of rocket fire from Gaza and de-escalation of hostilities. “Too much blood has been shed,” she said.

LIU JIEYI ( China) expressed deep concern at the situation, condemning use of force that resulted in civilian deaths. He urged the parties to immediately cease hostilities and for Israel to remove its troops from Gaza and lift the blockade. He called on the Council to take a strong stand to protect civilians and preserve peace and stability in the Middle East. Both parties must immediately agree to a ceasefire and refrain from action that would again raise tension. His Government was in contact with both parties and would soon send another delivery of humanitarian aid to Gaza. The re-emergence of violence there underlined the importance of a political solution to the Israeli-Palestinian conflict. Israel must create the environment for the resumption and success of those talks.

U. JOY OGWU ( Nigeria) said that despite the calls from around the world for a de-escalation of the violence, the conflict had worsened. Israel’s response must be proportionate and in concert to international law. The killing of women and children was unconscionable. Hamas must also cease its attacks, as “violence begets violence”, making political solutions impossible. Leaders on both sides must show restraint and the international partners must do everything possible to forge a return to negotiations, which was the only way to a sustainable peace. The doors to a diplomatic solution must remain open towards a two-State solution.

GÉRARD ARAUD ( France) pointed out that the current violence had not been unprecedented. Each and every time conflict broke out it was the inhabitants who were caught between the rockets and the firing. History in the meantime kept repeating itself, as a deadly spiral continued, with peace more and more unattainable. The Council’s priority should be to obtain a ceasefire, and his country’s Foreign Affairs Minister was in the region to support that goal. Hamas rockets must stop, as must the strikes by the Israel Defense Forces, as civilians were bearing the brunt of those attacks. Paying tribute to the many humanitarian agencies in the regions, which were discharging a “holy mission”, he said Gaza should not be a base to destroy Israel, nor should it be a prison. He called for an immediate ceasefire and for parties to accept the Quartet’s recommendations. Because “misery swells the ranks of Hamas”, he also called for the lifting of the blockade. Meaning must be restored to the political process, and Europeans, Arabs, and Americans must, side by side, assist parties to transcend their fears. Twenty years of traditional efforts had not worked. New ideas and renewed efforts were needed to help the parties along a path which they were reluctant to take.

PHILIPPA KING ( Australia) called for steps to reduce tensions and to restore peace. She said the decision by Hamas to reject the Egyptian-brokered ceasefire proposals, and the continued firing of rockets indiscriminately into Israel, was “inexcusable”. With that, she urged the parties to find a peaceful resolution. She condemned the murders of three Israeli teenagers and the murder of a Palestinian teenager on 2 July, which had led to the current escalation. She called for restraint from all parties and for an end to the escalation of violence by restoring the November 2012 ceasefire. She urged both Israel and the Palestinians to resume negotiations towards a just and lasting two-State solution.

CRISTIÁN BARROS MELET ( Chile) deplored the lack of a commitment by the parties to de-escalate the conflict in Gaza and southern Israel. He supported United Nations efforts to facilitate a ceasefire and warned against the targeting of civilians, including children, by both parties, condemning as well the use of schools for storing weaponry.

DAINIUS BAUBLYS ( Lithuania) deplored the growing number of civilian casualties and expressed concern that the violence could increase further. She strongly condemned Hamas’ launching of rockets, as well as the storing of weaponry in schools. Recognizing the right of Israel to defend itself, she stressed, however, that the country must abide strictly by humanitarian law. She urged leaders of both parties to immediately commit to negotiating a ceasefire, and reiterated her country’s support for a two-State solution.

MARK LYALL GRANT ( United Kingdom) called for an immediate de-escalation and ceasefire agreement, with steps taken to address the underlying causes of the conflict. He welcomed the Egyptian initiative in that light, as well as the humanitarian pause and condemned rocket fire at civilian areas. He stressed however, that in exercising its right to self-defence, Israel must take all measures to avoid civilian casualties. He also called for unhindered humanitarian access to Gaza, noting his Government’s strong support for UNRWA. As part of a ceasefire, a viable verification and monitoring mission should be considered, and efforts to improve conditions in Gaza should be increased. However, only a negotiated two-State solution could bring about durable peace.

MAHAMAT ZENE CHERIF ( Chad) expressed his outrage by the indiscriminate violence and called on Israel to stop all ground and air offences aimed at schools, civilians and hospitals. He urged Palestinians to cease all attacks against Israel, including rocket firing across borders. After decades on the United Nations agenda, there had been no hope of settling the Palestinian question. The situation was dangerous to the region and the world, and the Council must act firmly and swiftly to put an end to the violence and create the conditions necessary for peace. With the Gaza blockade thwarting economic activities and fuelling an almost 50 per cent unemployment rate, the Palestinian population was marginalized and living in poverty. How then could they believe in something called a peace process? The situation was a threat to international peace and security and dialogue must be re-engaged for a fair lasting peace based on a two-State solution. Israel should not use inter-Palestinian issues to undermine the process.

VITALY I. CHURKIN ( Russian Federation) called for an end to the armed conflict as the victims were increasingly civilian women and children. It was also alarming to hear reports of Israel’s attacks on hospitals and residential housing. International and humanitarian law called for demilitarizing civilian areas, yet Hamas also had been found to be utilizing schools for military purposes and to fire on residential parts of Israel. He backed Egypt’s initiative, which could be the basis for a truce and ceasefire by both parties. Gaza must be under a single unified Government, as called for in Security Council resolutions. The Quartet also needed to step up its efforts and design solutions elaborated jointly with the Arabs to ensure they were part of the solution.

SYLVIE LUCAS ( Luxembourg) said the crisis represented one of the greatest diplomatic failures. “More war will not bring more security. It will only bring more tragedy,” she stated, recounting the recent killing of several young boys on the beach in Gaza. Israel had the right to protect itself from rockets, but its actions should be proportionate and protect civilians. The recent death toll, including so many women and children, was shocking. All parties were fully obligated to protect civilians trapped by the hostilities; that applied to Hamas as well. Noting the 20 rockets found in a school in Gaza, she stressed that it was unconscionable to play with the lives of children in that way. All international efforts should focus on the cessation of the hostilities, she said, calling on all parties to cease fire and voicing support for Egypt’s initiative, as well as for the Secretary-General’s upcoming visit to the region.

MARÍA CRISTINA PERCEVAL ( Argentina) firmly condemned the fact that the Council’s calls for peace had been disregarded, that a ground offensive had begun and that rocket fire continued into Israel. She urged both parties to support Egypt’s efforts to negotiate an immediate and lasting ceasefire. Conditions underpinning the conflict must be then dealt with, including improvement in the conditions in Gaza and consolidation of one political voice for the Palestinians. Genuine negotiations according to internationally agreed parameters must become a priority again. Her country was committed to help the Council fulfil its responsibilities in that context. Deeming the leaders on both sides responsible for this tragic situation, she stressed that impunity must not prevail.

OH JOON ( Republic of Korea) expressed deep concern over the accelerating turmoil in the Middle East and its effect on civilians on both sides. He condemned indiscriminate rocket attacks into Israel and at the same time was alarmed by the increasing toll on Palestinian civilians. The humanitarian situation was also dire; in that context, he commended the work of UNRWA and welcomed the humanitarian pause. He called for maximum restraint from both sides and redoubled efforts to negotiate an immediate ceasefire. He affirmed that the only long-term solution to the violence was a negotiated two-State solution.

EUGÈNE-RICHARD GASANA (Rwanda), speaking in his national capacity and recalling Council action over the past month on violence in the Middle East, said unfortunately the parties on the ground had not heeded those calls. He urged more humanitarian pauses and expressed strong support for the Egyptian ceasefire agreement. Hamas must halt its rocket fire and Israel must exercise maximum restraint. For a long-term solution, he called on the Quartet and the rest of the international community to redouble efforts for a negotiated two-State peace.

FedEx is innocent of the charges brought today by the Department of Justice. We will plead not guilty. We will defend against this attack on the integrity and good name of FedEx and its employees.

FedEx has a 42-year history of close cooperation with law enforcement agencies. We’re proud to say that we have partnered with the FBI, the Department of Homeland Security, DEA, and other federal, state and local law enforcement teams around the world to help stop illegal drug activity and bring criminals to justice. These efforts include providing assistance to the DEA in combatting rogue internet pharmacies. We have repeatedly requested that the government provide us a list of online pharmacies engaging in illegal activity. Whenever DEA provides us a list of pharmacies engaging in illegal activity, we will turn off shipping for those companies immediately. So far the government has declined to provide such a list.

FedEx transports more than 10 million packages a day. The privacy of our customers is essential to the core of our business. This privacy is now at risk, based on the charges by the Department of Justice related to the transportation of prescription medications.

We want to be clear what’s at stake here: the government is suggesting that FedEx assume criminal responsibility for the legality of the contents of the millions of packages that we pick up and deliver every day. We are a transportation company – we are not law enforcement. We have no interest in violating the privacy of our customers. We continue to stand ready and willing to support and assist law enforcement. We cannot, however, do the job of law enforcement ourselves.

WASHINGTON – In response to Russia’s continued attempts to destabilize eastern Ukraine and its ongoing occupation of Crimea, the U.S. Department of the Treasury today imposed a broad-based package of sanctions on entities in the financial services, energy, and arms or related materiel sectors of Russia, and on those undermining Ukraine’s sovereignty or misappropriating Ukrainian property. More specifically:

Treasury imposed sanctions that prohibit U.S. persons from providing new financing to two major Russian financial institutions (Gazprombank OAO and VEB) and two Russian energy firms (OAO Novatek and Rosneft), limiting their access to U.S. capital markets;
Treasury designated eight Russian arms firms, which are responsible for the production of a range of materiel that includes small arms, mortar shells, and tanks;
Treasury designated the “Luhansk People’s Republic” and the “Donetsk People’s Republic,” which have asserted governmental authority over parts of Ukraine without the authorization of the Government of Ukraine; and Aleksandr Borodai, the self-declared “prime minister” of the Donetsk People’s Republic, for threatening the peace, security, stability, sovereignty, and territorial integrity of Ukraine;
Treasury designated Feodosiya Enterprises, a key shipping facility in the Crimean peninsula, because it is complicit in the misappropriation of state assets of Ukraine; and
Treasury designated four Russian government officials, including Sergey Beseda, a senior Russian Federal Security Service official.

These actions do more than build upon previous steps to impose costs on separatists and the Russian government. By imposing sanctions on entities within the financial services and energy sectors, Treasury has increased the cost of economic isolation for key Russian firms that value their access to medium- and long-term U.S. sources of financing. By designating firms in the arms or related materiel sector, Treasury has cut these firms off from the U.S. financial system and the U.S. economy.

“Russia has continued to destabilize Ukraine and provide support for the separatists, despite its statements to the contrary,” said Under Secretary for Terrorism and Financial Intelligence David S. Cohen. “Because Russia has failed to meet the basic standards of international conduct, we are acting today to open Russia’s financial services and energy sectors to sanctions and limit the access of two key Russian banks and two key energy firms to U.S. sources of financing, and to impose blocking sanctions against eight arms firms and a set of senior Russian officials.”

Identification of the Financial Services Sector of Russia and the Prohibition of Certain Types of Activities with Two Russian Banks Pursuant to E.O. 13662

Today, Treasury Secretary Jacob J. Lew determined that persons operating within Russia’s financial services sector may now be subject to targeted sanctions. Following Secretary Lew’s determination, Treasury imposed measures prohibiting U.S. persons and persons within the United States from transacting in, providing financing for, or otherwise dealing in new debt of longer than 90 days maturity or new equity for Gazprombank OAO and VEB, their property, or their interests in property. As a practical matter, this step will close the medium- and long-term U.S. dollar lending window to these banks, and will impose additional significant costs on the Russian Government for its continued activities in Ukraine.

We have not blocked the property or interests in property of these banks, nor have we prohibited transactions with them beyond these specific restrictions. However, the scope of the prohibited transaction types and the number of financial institutions may be expanded under E.O. 13662 if we decide to do so.

Gazprombank OAO is a Russian financial institution, which was originally established to provide financial services to companies in Russia’s energy industry, but has expanded to provide services to more than 45,000 companies and 3 million private individuals. Gazprombank OAO has more than 40 branches across Russia, and a number of international subsidiaries. Gazprombank OAO specializes in the private banking and corporate financing services.

VEB is a Russian state-owned financial institution that acts as a development bank and payment agent for the Russian government. It was formed June 8, 2007, pursuant to Russian federal law and is the legal successor to Vnesheconombank of the USSR, which was a specialized Russian state bank. VEB’s supervisory board is chaired by the Russian prime minister, and the chairman of the bank is appointed by the Russian president. VEB acts as an agent for the Russian Government for the purposes of accounting, servicing, and repaying the sovereign debts of the former USSR and Russia; accounting, servicing, and repaying government loans issued by the former USSR and Russia to foreign borrowers; collecting debts from legal entities of Russia and municipal governments; providing and executing state guarantees of Russia and monitoring projects implemented by Russia with involvement of international financial institutions.

Identification of the Energy Sector of Russia and the Prohibition of Certain Types of Activities with Two Russian Energy Firms Pursuant to E.O. 13662

Today, Secretary Lew determined that persons operating within Russia’s energy sector may now be subject to targeted sanctions. Following Secretary Lew’s determination, Treasury imposed measures that prohibit U.S. persons and persons within the United States from transacting in, providing financing for, or otherwise dealing in new debt of longer than 90 days maturity for Russian energy firms OAO Novatek and Rosneft, their property, or their interests in property. As with the financial institutions, we have not blocked the property or interests in property of these companies, nor prohibited transactions with them beyond these specific restrictions. However, the scope of the prohibited transaction types and the number of energy companies may be expanded under the authorities of E.O. 13662, if the Russian government does not take steps to de-escalate the situation in Ukraine.

OAO Novatek is Russia’s largest independent natural gas producer.

Rosneft is Russia’s largest petroleum company and third largest gas producer. Treasury designated Rosneft’s President and Chairman of the Board, Igor Sechin, on April 28, 2014, pursuant to E.O. 13661.

Imposition of Sanctions on Eight Firms Pursuant to E.O. 13661 for Operating in the Arms or Related Materiel Sector in the Russian Federation

Treasury today has also designated and blocked the assets of Almaz-Antey, Federal State Unitary Enterprise State Research and Production Enterprise Bazalt, JSC Concern Sozvezdie, JSC MIC NPO Mashinostroyenia, Kalashnikov Concern, KBP Instrument Design Bureau, Radio-Electronic Technologies, and Uralvagonzavod pursuant to E.O. 13661 for operating in the arms or related materiel sector in the Russian Federation. The designated firms are responsible for the production of a range of materiel, from small arms to mortar shells to tanks. As a result of today’s action under E.O. 13661, any assets of the entities designated that are within U.S. jurisdiction must be frozen. In addition, transactions by U.S. persons or within the United States involving the entities designated today under E.O. 13661 are generally prohibited.

Almaz-Antey manufactures surface-to-air missile systems currently used by the Russian military.

Federal State Unitary Enterprise State Research and Production Enterprise Bazalt (“Bazalt”) is involved in the design and construction of air launched ordnance, rocket propelled grenades, and armored fighting vehicle ammunition. Bazalt’s manufacturing interests include aerial bombs, mortar shells, grenades, anti-tank and anti-saboteur grenade launchers, and projectiles of all types and calibers.

JSC Concern Sozvezdie develops and produces high-tech control and communication systems, radio electronic warfare and special equipment for military forces. JSC Concern Sozvezdie focuses on three primary lines of production: military-oriented production, dual-purpose products, and dual-purpose products and professional communication and control systems. JSC Concern Sozvezdie’s main activities include producing and developing materiel including automated control systems and communication systems for the tactical sector, automated control systems and communication systems for anti-missile defense and air defense systems, and automated communication systems and electronic warfare tools. The company produces systems and devices related to electronic warfare, such as small manpack and portable jammers. The products are designed to disrupt enemy army operations, to reduce staff and equipment loss, and to improve the operation of armed forces by radio jamming of enemy weapon control systems based on radio frequencies.

JSC MIC NPO Mashinostroyenia is a leading Russian rocketry company responsible for defense programs involving cruise missile complexes capable of surface, underwater, and ground platform-based launches. JSC MIC NPO Mashinostroyenia’s involvement in Russia’s strategic nuclear forces includes the manufacture of intercontinental ballistic rockets and the development of space systems, spacecraft, and automatic and manned orbital stations in support of Russia’s Ministry of Defense.

Kalashnikov Concern produces a number of military weapons, including multiple grades and versions of assault rifles, grenade launchers, sniper rifles, military shotguns, and aircraft cannons. Kalashnikov Concern is the largest firearms producer in Russia and is a subsidiary of Russia’s State Corporation of Russian Technologies (Rostec).

KBP Instrument Design Bureau is a research and production center that creates precision-guided weapons. KBP Instrument Design Bureau develops antitank missile systems and assault armaments, weapon systems for main battle tanks and lightly armored vehicles, guided artillery projectiles and guided missile systems, short-range air defense systems, gun armament and associated ammunition, combat small arms, and hunting/sporting guns.

Radio-Electronic Technologies designs and produces electronic warfare equipment including weapons-control systems, friend-or-foe identification (IFF) systems, avionics, operational and tactical systems, electronic warfare and intelligence equipment, special measuring instrumentation, and plugs, electric connectors, and cable products.

Uralvagonzavod is a Russian government-owned company that builds a variety of military equipment, including tanks.

Imposition of Sanctions on Two Entities and One Individual Pursuant to E.O. 13660

The following two entities and one individual are being designated and blocked today pursuant to E.O. 13660 for threatening the peace, security, stability, sovereignty, or territorial integrity of Ukraine.

The Treasury Department has determined that the Luhansk People’s Republic (LPR) has asserted governmental authority over a part or region of Ukraine without the authorization of the Government of Ukraine. The self-proclaimed LPR has asserted governmental authority through a number of actions, including issuing a declaration of martial law; banning the sale of corporate rights, production facilities, companies, and other assets; controlling the border guard checkpoints of Izvarino, Dolzhanskoye, and Krasnyi Partizansk on the Ukrainian-Russian border; and, shooting down a Ukrainian military transport jet as it attempted to land in Luhansk. The LPR also elected a leader and passed its own constitution on May 11, 2014.

The Treasury Department has also determined the Donetsk People’s Republic to have asserted governmental authority over a part or region of Ukraine without the authorization of the Government of Ukraine. The militia in the self-proclaimed Donetsk People’s Republic is defying the peaceful settlement regime, continues combat operations, and has seized and occupies regional government buildings, using them as its headquarters and firing positions. Igor Strelkov, the leader of the militia of the Donetsk People’s Republic, rejected Ukrainian President Petro Poroshenko’s peace plan.

Aleksandr Borodai is the self-declared “prime minister” of the “Donetsk People’s Republic” in Ukraine and has vowed to expel Ukraine’s army from his new domain and resist any bid to recapture the city. Borodai was in Crimea as an advisor to Sergei Aksyonov, the separatist prime minister who oversaw the territory’s purported annexation by Russia. Treasury designated Aksyonov pursuant to E.O. 13660 on March 17, 2014.

Imposition of Sanctions on Crimean Entity Pursuant to E.O. 13660

The following Crimea-based entity is being designated pursuant to E.O. 13660 for being complicit in the misappropriation of state assets of Ukraine.

Feodosiya Enterprise operates a key shipping facility in the Crimean peninsula for oil imports and exports. Prior to Russia’s purported annexation of Crimea, Feodosiya Enterprise had been controlled by the Ukrainian state-controlled gas company Naftogaz. On March 25, 2014, the separatist self-styled “Crimean Parliament” nationalized Feodosiya Enterprise and decreed that the self-styled “Crimean Ministry of Fuel and Energy” would be the governing body of Feodosiya Enterprise. The separatist “Minister of Fuel and Energy” asserting authority in occupied Crimea has confirmed that, as of April 15, 2014, separatist authorities in Crimea were provided with fuel by Russian oil companies using the storage facility operated by Feodosiya Enterprise.

Imposition of Sanctions on Four Individuals Pursuant to E.O. 13661

The following four individuals are being designated today pursuant to E.O. 13661 for their status as Russian government officials.

Sergey Besesda heads Russia’s Federal Security Service (FSB)’s Fifth Service, also known as the Service for Operational Information and International Communications.

Oleg Savelyev is Russia’s Minister for Crimean Affairs. In this capacity, Savelyev is responsible for the integration of occupied Crimea into the Russian Federation following Russia’s purported annexation of Crimea from Ukraine.

Sergei Neverov is the Deputy Chairman of the State Duma of the Russian Federation. Neverov is responsible for initiating legislation to integrate the purportedly annexed Ukrainian region of Crimea into the Russian Federation.

Igor Shchegolev is an Aide to the President of the Russian Federation.

As a result of today’s actions under E.O. 13660 and E.O. 13661, any assets of the entities or individuals designated that are within U.S. jurisdiction must be frozen. Additionally, transactions by U.S. persons or within the United States involving the entities or individuals designated today under E.O. 13660 or E.O. 13661 are generally prohibited

The Justice Department, along with federal and state partners, today announced a $7 billion settlement with Citigroup Inc. to resolve federal and state civil claims related to Citigroup’s conduct in the packaging, securitization, marketing, sale and issuance of residential mortgage-backed securities (RMBS) prior to Jan. 1, 2009. The resolution includes a $4 billion civil penalty – the largest penalty to date under the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA). As part of the settlement, Citigroup acknowledged it made serious misrepresentations to the public – including the investing public – about the mortgage loans it securitized in RMBS. The resolution also requires Citigroup to provide relief to underwater homeowners, distressed borrowers and affected communities through a variety of means including financing affordable rental housing developments for low-income families in high-cost areas. The settlement does not absolve Citigroup or its employees from facing any possible criminal charges.

This settlement is part of the ongoing efforts of President Obama’s Financial Fraud Enforcement Task Force’s RMBS Working Group, which has recovered $20 billion to date for American consumers and investors.

“This historic penalty is appropriate given the strength of the evidence of the wrongdoing committed by Citi,” said Attorney General Eric Holder. “The bank’s activities contributed mightily to the financial crisis that devastated our economy in 2008. Taken together, we believe the size and scope of this resolution goes beyond what could be considered the mere cost of doing business. Citi is not the first financial institution to be held accountable by this Justice Department, and it will certainly not be the last.”

The settlement includes an agreed upon statement of facts that describes how Citigroup made representations to RMBS investors about the quality of the mortgage loans it securitized and sold to investors. Contrary to those representations, Citigroup securitized and sold RMBS with underlying mortgage loans that it knew had material defects. As the statement of facts explains, on a number of occasions, Citigroup employees learned that significant percentages of the mortgage loans reviewed in due diligence had material defects. In one instance, a Citigroup trader stated in an internal email that he “went through the Diligence Reports and think[s] [they] should start praying . . . [he] would not be surprised if half of these loans went down. . . It’s amazing that some of these loans were closed at all.” Citigroup nevertheless securitized the loan pools containing defective loans and sold the resulting RMBS to investors for billions of dollars. This conduct, along with similar conduct by other banks that bundled defective and toxic loans into securities and misled investors who purchased those securities, contributed to the financial crisis.

“Today, we hold Citi accountable for its contributing role in creating the financial crisis, not only by demanding the largest civil penalty in history, but also by requiring innovative consumer relief that will help rectify the harm caused by Citi’s conduct,” said Associate Attorney General Tony West. “In addition to the principal reductions and loan modifications we’ve built into previous resolutions, this consumer relief menu includes new measures such as $200 million in typically hard-to-obtain financing that will facilitate the construction of affordable rental housing, bringing relief to families pushed into the rental market in the wake of the financial crisis.”

Of the $7 billion resolution, $4.5 billion will be paid to settle federal and state civil claims by various entities related to RMBS: Citigroup will pay $4 billion as a civil penalty to settle the Justice Department claims under FIRREA, $208.25 million to settle federal and state securities claims by the Federal Deposit Insurance Corporation (FDIC), $102.7 million to settle claims by the state of California, $92 million to settle claims by the state of New York, $44 million to settle claims by the state of Illinois, $45.7 million to settle claims by the Commonwealth of Massachusetts, and $7.35 to settle claims by the state of Delaware.

Citigroup will pay out the remaining $2.5 billion in the form of relief to aid consumers harmed by the unlawful conduct of Citigroup. That relief will take various forms, including loan modification for underwater homeowners, refinancing for distressed borrowers, down payment and closing cost assistance to homebuyers, donations to organizations assisting communities in redevelopment and affordable rental housing for low-income families in high-cost areas. An independent monitor will be appointed to determine whether Citigroup is satisfying its obligations. If Citigroup fails to live up to its agreement by the end of 2018, it must pay liquidated damages in the amount of the shortfall to NeighborWorks America, a non-profit organization and leader in providing affordable housing and facilitating community development.

The U.S. Attorney’s Offices for the Eastern District of New York and the District of Colorado conducted investigations into Citigroup’s practices related to the sale and issuance of RMBS between 2006 and 2007.

“The strength of our financial markets depends on the truth of the representations that banks provide to investors and the public every day,” said U.S. Attorney John Walsh for the District of Colorado, Co-Chair of the RMBS Working Group. “Today’s $7 billion settlement is a major step toward restoring public confidence in those markets. Due to the tireless work by the Department of Justice, Citigroup is being forced to take responsibility for its home mortgage securitization misconduct in the years leading up to the financial crisis. As important a step as this settlement is, however, the work of the RMBS working group is far from done, we will continue to pursue our investigations and cases vigorously because many other banks have not yet taken responsibility for their misconduct in packaging and selling RMBS securities.”

“After nearly 50 subpoenas to Citigroup, Trustees, Servicers, Due Diligence providers and their employees, and after collecting nearly 25 million documents relating to every residential mortgage backed security issued or underwritten by Citigroup in 2006 and 2007, our teams found that the misconduct in Citigroup’s deals devastated the nation and the world’s economies, touching everyone,” said U.S. Attorney of the Eastern District of New York Loretta Lynch. “The investors in Citigroup RMBS included federally-insured financial institutions, as well as a host of states, cities, public and union pension and benefit funds, universities, religious charities, and hospitals, among others. These are our neighbors in Colorado, New York and around the country, hard-working people who saved and put away for retirement, only to see their savings decimated.”

This settlement resolves civil claims against Citigroup arising out of certain securities packaged, securitized, structured, marketed, and sold by Citigroup. The agreement does not release individuals from civil charges, nor does it release Citigroup or any individuals from potential criminal prosecution. In addition, as part of the settlement, Citigroup has pledged to fully cooperate in investigations related to the conduct covered by the agreement.

Michael Stephens, Acting Inspector General for the Federal Housing Finance Agency said, “Citigroup securitized billions of dollars of defective mortgages, after which investors suffered enormous losses by purchasing RMBS from Citi not knowing about those defects. Today’s settlement is another significant step by FHFA-OIG and its law enforcement partners to hold accountable those who committed acts of fraud and deceit in the lead up to the financial crisis, and is a necessary step toward reviving a sound RMBS market that is crucial to the housing industry and the American economy. We are proud to have worked with the Department of Justice, the U.S. Attorneys’ Offices in the Eastern District of New York and the District of Colorado. They have been great partners and we look forward to our continued work together.”

The underlying investigation was led by Assistant U.S. Attorneys Richard K. Hayes, Kevin Traskos, Lila Bateman, John Vagelatos, J. Chris Larson and Edward K. Newman, with the support of agents from the Office of the Inspector General for the Federal Housing Finance Agency, in conjunction with the President’s Financial Fraud Enforcement Task Force’s RMBS Working Group.

The RMBS Working Group is a federal and state law enforcement effort focused on investigating fraud and abuse in the RMBS market that helped lead to the 2008 financial crisis. The RMBS Working Group brings together more than 200 attorneys, investigators, analysts and staff from dozens of state and federal agencies including the Department of Justice, 10 U.S. Attorneys’ Offices, the FBI, the Securities and Exchange Commission (SEC), the Department of Housing and Urban Development (HUD), HUD’s Office of Inspector General, the FHFA-OIG, the Office of the Special Inspector General for the Troubled Asset Relief Program, the Federal Reserve Board’s Office of Inspector General, the Recovery Accountability and Transparency Board, the Financial Crimes Enforcement Network, and more than 10 state Attorneys General offices around the country.

The RMBS Working Group is led by its Director Geoffrey Graber and its five co-chairs: Assistant Attorney General for the Civil Division Stuart Delery, Assistant Attorney General for the Criminal Division Leslie Caldwell, Director of the SEC’s Division of Enforcement Andrew Ceresney, U.S. Attorney for the District of Colorado John Walsh and New York Attorney General Eric Schneiderman.

PALO ALTO, Calif. — HP, Cotchett, Pitre & McCarthy, LLP, and Robbins Geller Rudman & Dowd LLP today announced they have reached an agreement to settle shareholder derivative litigation arising from the acquisition of Autonomy. The settlement is subject to court approval.

Following HP’s announcement in November 2012 that Autonomy had engaged in accounting improprieties, misrepresentations and disclosure failures before HP acquired the company, lawsuits were filed against current and past HP directors, officers and advisors.

HP’s board appointed an independent committee of directors to evaluate the claims asserted in the derivative suits and related demand letters, including claims that HP could assert against Michael Lynch, Autonomy’s former chief executive officer; and Shushovan Hussain, Autonomy’s former chief financial officer. Based on the committee’s recommendations, the HP board concluded HP had claims against Lynch and Hussain, among others. The board also cleared HP’s present and former directors and officers (other than Lynch) of any wrongdoing.

HP met with lawyers for the shareholders in a mediation conducted by retired U.S. District Judge Vaughn R. Walker. The settlement announced today is a result of that mediation.

Under the terms of the settlement, HP and the lawyers for the plaintiffs in three suits have agreed:

Plaintiffs and their counsel at Cotchett, Pitre & McCarthy, LLP, and Robbins Geller Rudman & Dowd LLP will assist HP in bringing claims against Lynch, Hussain and potentially others.
All claims against current and former directors, officers and advisors of HP (other than legacy Autonomy officials and Autonomy’s advisors) related to or arising out of the Autonomy acquisition will be dismissed.
HP is in the process of adopting enhancements to policies and procedures in evaluating potential mergers and acquisitions that were developed with the assistance of plaintiffs and their lawyers.
The three lawsuits are In re Hewlett-Packard Company Shareholder Derivative Litigation, Case No. C-12-6003-CRB, which is pending in the U.S. District Court for the Northern District of California, as well as Gould v. Whitman, et al., Case No. 1:13-cv-250220 and Noel v. Whitman, et al., Case No. 1:13-cv-251346, both of which are pending in California Superior Court for Santa Clara County.

Amazon.com, Inc. has billed parents and other account holders for millions of dollars in unauthorized in-app charges incurred by children, according to a Federal Trade Commission complaint filed today in federal court.

The FTC’s lawsuit seeks a court order requiring refunds to consumers for the unauthorized charges and permanently banning the company from billing parents and other account holders for in-app charges without their consent. According to the complaint, Amazon keeps 30 percent of all in-app charges.

Amazon offers many children’s apps in its appstore for download to mobile devices such as the Kindle Fire. In its complaint, the FTC alleges that Amazon violated the FTC Act by billing parents and other Amazon account holders for charges incurred by their children without the permission of the parent or other account holder. Amazon’s setup allowed children playing these kids’ games to spend unlimited amounts of money to pay for virtual items within the apps such as “coins,” “stars,” and “acorns” without parental involvement.

“Amazon’s in-app system allowed children to incur unlimited charges on their parents’ accounts without permission,” said FTC Chairwoman Edith Ramirez. “Even Amazon’s own employees recognized the serious problem its process created. We are seeking refunds for affected parents and a court order to ensure that Amazon gets parents’ consent for in-app purchases.”

The complaint alleges that when Amazon introduced in-app charges to the Amazon Appstore in November 2011, there were no password requirements of any kind on in-app charges, including in kids’ games and other apps that appeal to children. According to the complaint, this left parents to foot the bill for charges they didn’t authorize.

According to the complaint, kids’ games often encourage children to acquire virtual items in ways that blur the lines between what costs virtual currency and what costs real money. In the app “Ice Age Village,” for example, the complaint noted that children can use “coins” and “acorns” to buy items in the game without a real-money charge. However, they can also purchase additional “coins” and “acorns” using real money on a screen that is visually similar to the one that has no real-money charge. The largest quantity purchase available in the app would cost $99.99.

The complaint highlights internal communications among Amazon employees as early as December 2011 that said allowing unlimited in-app charges without any password was “…clearly causing problems for a large percentage of our customers,” adding that the situation was a “near house on fire.”

In March 2012, according to the complaint, Amazon updated its in-app charge system to require an account owner to enter a password only for individual in-app charges over $20. As the complaint notes, Amazon continued to allow children to make an unlimited number of individual purchases of less than $20 without a parent’s approval. An Amazon employee noted at the time of the change that “it’s much easier to get upset about Amazon letting your child purchase a $99 product without any password protection than a $20 product,” according to the complaint. In July 2012, as set forth in the complaint, internal emails again described consumer complaints about in-app charges as a “house on fire” situation.

The complaint alleges that in early 2013, Amazon updated its in-app charge process to require password entry for some charges in a way that functioned differently in different contexts. According to the complaint, even when a parent was prompted for a password to authorize a single in-app charge made by a child, that single authorization often opened an undisclosed window of 15 minutes to an hour during which the child could then make unlimited charges without further authorization. Not until June 2014, roughly two and a half years after the problem first surfaced and only shortly before the Commission voted to approve the lawsuit against Amazon, did Amazon change its in-app charge framework to obtain account holders’ informed consent for in-app charges on its newer mobile devices, as explained in the complaint.

According to the complaint, thousands of parents complained to Amazon about in-app charges their children incurred without their authorization, amounting to millions of dollars of charges. For example, one mother noted in the FTC complaint told Amazon that her daughter was able to rack up $358.42 in unauthorized charges, while others complained that even children who could not read were able to “click a lot of buttons at random” and incur several unauthorized charges.

The company’s stated policy is that all in-app charges are final and nonrefundable. According to the complaint, even parents who have sought an exception to that policy have faced a refund process that is unclear and confusing, involving statements that do not explain how to seek refunds for in-app charges or suggest consumers cannot get a refund for these charges.

This is the Commission’s second case relating to children’s in-app purchases; Apple, Inc. settled an FTC complaint concerning the issue earlier this year. The Commission is seeking full refunds for all affected consumers, disgorgement of Amazon’s ill-gotten gains, and a court order ensuring that in the future Amazon obtains permission before imposing charges for in-app purchases.

The Commission vote authorizing the staff to file the complaint was 4-1, with Commissioner Joshua D. Wright voting no. The complaint was filed in the U.S. District Court for the Western District of Washington.

This is courtesy of www.ftc.gov

WASHINGTON, D.C.—The U.S. Chamber of Commerce, Partnership for a New American Economy, American Farm Bureau Federation, Business Roundtable, AmericanHort, Western Growers, and the National Association of Manufacturers today urged Congress and the administration to work together to enact immigration reform during a Day of Action with events in Washington, D.C. and in more than 60 congressional districts across 25 states.

The national press conference in Washington, D.C. featured leading business association CEOs discussing the critical need for immigration reform to drive job creation and economic growth in the United States. Local events across the country, including, among other states, Arkansas, California, Indiana, Illinois, Louisiana, Minnesota, Ohio, Oklahoma, South Carolina, Texas, Utah, Virginia, Washington, and Wisconsin featured representatives from state and local employer associations, state farm bureaus, local businesses, and other industry leaders. The coordinated events aim to show that, across industries, sectors, and geographies, the business community needs our immigration laws to be modernized.

“While our lawmakers are deadlocked on this issue, business leaders are more determined than ever to fix our immigration system,” said Thomas J. Donohue, president and CEO of the U.S. Chamber of Commerce. “We need meaningful immigration reform to revitalize our economy and to remain a nation ruled by law, guided by principle, and driven by compassion and common sense. We’re going to continue to make the case in the nation’s capital and in every corner of this country, and will use every tool and resource at our disposal. We’re not going to let up until the job gets done.”

“Immigration reform can immediately make our businesses and workers more competitive and should be done as soon as possible,” said Business Roundtable President John Engler. “Our respective organizations understand the impact a broken immigration system is having on America’s economy and are committed to reform that boosts economic growth and job creation and brings best-in-the-world talent right here to America.”

“Our problems will not run away from us – it is time we face them head on and do the hard work necessary to make immigration reform a reality,” said NAM President and CEO Jay Timmons. “It’s good for our economy, critical to innovation, and at the core of who we are as a nation. Manufacturers will not give up until immigration reform crosses the finish line.”

“The effect of inaction on immigration reform is devastating to the fresh produce industry and consumers. We rely on people to plant and harvest the nutritious and domestic supply of food for Americans and for export. Many of these workers are unauthorized, but are willing and able to do the work. It’s been demonstrated many times that Americans won’t work in the fields, so why won’t our elected officials provide us the means to have a legal, reliable workforce? If no solution is provided, production will continue to move overseas along with the jobs agriculture supports in rural communities across America,” said Tom Nassif, president and CEO of Western Growers.

“The need for immigration reform is not going to go away – and conservative leaders and business owners from every corner of the country agree,” said Jeremy Robbins, executive director of the Partnership for a New American Economy. “It’s time for leaders in Congress to listen to their constituents and do what’s best for our economy: pass immigration reform now.”

“As a nation, we can’t afford to continue with an immigration system we’ve long outgrown and is working more and more against our overall national interest,” said Bob Stallman, president of the American Farm Bureau Federation. “We urge Congress and the administration to work together and with us to achieve real immigration reform that addresses the needs of farmers, the economy, as well as the country’s need for border security.”

About the National Day of Action for Immigration Reform

Today, a coalition of leading business groups, including the U.S. Chamber of Commerce, Partnership for a New American Economy, American Farm Bureau Federation, Business Roundtable, AmericanHort, Western Growers, and the National Association of Manufacturers launched a Day of Action for immigration reform. These compelling business voices are best positioned to speak on why immigration reform is in our national interest: we need changes to our immigration laws in order to drive job creation and economic growth for our country.

Despite a stalemate in Washington, business leaders are more united than ever, and we are not giving up on the importance of fixing this problem. We join today to deliver the message to the administration and members of Congress that immigration reform is an economic imperative. In order to drive this message home, we coordinated a Washington, D.C. national press conference with events in more than 60 congressional districts in 25 states – all in a single day.

Today’s national press conference highlights leading business association CEOs talking about the need for reform. The in-district events feature state and local employer associations, state farm bureaus, local businesses, and industry leaders. The goal is visible activity across the country, including, among other states, Arkansas, California, Indiana, Louisiana, Ohio, Oklahoma, South Carolina, Texas, Utah, Virginia, Washington, Minnesota, Illinois, and Wisconsin. The coordinated events aim to show that, across industries, sectors, and geographies, the business community needs our immigration laws to be modernized.

The U.S. Chamber of Commerce is the world’s largest business federation representing the interests of more than 3 million businesses of all sizes, sectors, and regions, as well as state and local chambers and industry associations.

NEW YORK– American International Group, Inc. (AIG) insurers have introduced a new policy endorsement that ensures primary D&O policy funds are immediately available to clients named as defendants in securities lawsuits for the preparation of “event studies.”

The endorsement was developed in anticipation of the U.S. Supreme Court’s June 23, 2014 decision in Halliburton Co. v Erica P. John Fund, Inc., which places added importance on costly event studies early in the litigation process as a way to determine whether securities actions can be certified as a class.

AIG, one of the largest D&O carriers in the world, is first to market with this new D&O policy endorsement. The endorsement has no retention requirement. Additional premiums are not required.

In Halliburton, the Supreme Court addressed a significant challenge to the long-standing “fraud on the market” theory in class action litigation. The theory asserts that the price of shares traded in an “efficient market” reflects all available information, including alleged misrepresentations by defendants, so that investors are presumed to have relied on those alleged misrepresentations when making their investment. This presumption effectively allowed plaintiffs to bring securities suits as class actions.

In the ruling, the Court declined to reject the fraud on the market theory entirely. It held, however, that defendants were entitled to rebut plaintiff’s presumption of reliance on the theory with evidence that alleged misstatements had no ”price impact” on share value. Presenting this evidence, in the form of event studies prepared by expert economists, may lead to significant costs for plaintiffs and defendants early in the litigation process.

“During the Halliburton oral argument, we noted several Justices mention the event study as a form of expert evidence to assess price impact. We felt if the Court left fraud on the market standing, it would probably permit the parties to produce event studies in defense of the class certification process,” said Chris Sparro, President, Financial Lines for AIG’s Americas Region. “We created our endorsement to provide funds to our clients, free of retention requirements, so they could obtain the event studies early in the litigation process, potentially to head off class certification.”

AIG’s D&O underwriters and claims professionals will continue to monitor interpretation of the Halliburton decision to determine whether additional policy endorsements or changes are necessary.

AIG offers market-leading primary and excess coverage to directors and officers of domestic and multinational public and private companies, non-profit entities, and financial institutions to protect against board level risks.

American International Group, Inc. (AIG) is a leading international insurance organization serving customers in more than 130 countries and jurisdictions. AIG companies serve commercial, institutional, and individual customers through one of the most extensive worldwide property-casualty networks of any insurer. In addition, AIG companies are leading providers of life insurance and retirement services in the United States. AIG common stock is listed on the New York Stock Exchange and the Tokyo Stock Exchange.

Additional information about AIG can be found at www.aig.com | YouTube: www.youtube.com/aig |Twitter: @AIGInsurance | LinkedIn: http://www.linkedin.com/company/aig |

AIG is the marketing name for the worldwide property-casualty, life and retirement, and general insurance operations of American International Group, Inc. For additional information, please visit our website at www.aig.com. All products and services are written or provided by subsidiaries or affiliates of American International Group, Inc. Products or services may not be available in all countries, and coverage is subject to actual policy language. Non-insurance products and services may be provided by independent third parties. Certain property-casualty coverages may be provided by a surplus lines insurer. Surplus lines insurers do not generally participate in state guaranty funds, and insureds are therefore not protected by such funds.

In a complaint filed today, the Federal Trade Commission is charging mobile phone service provider T-Mobile USA, Inc., with making hundreds of millions of dollars by placing charges on mobile phone bills for purported “premium” SMS subscriptions that, in many cases, were bogus charges that were never authorized by its customers.

The FTC alleges that T-Mobile received anywhere from 35 to 40 percent of the total amount charged to consumers for subscriptions for content such as flirting tips, horoscope information or celebrity gossip that typically cost $9.99 per month. According to the FTC’s complaint, T-Mobile in some cases continued to bill its customers for these services offered by scammers years after becoming aware of signs that the charges were fraudulent.

Excerpts from an actual T-Mobile bill. Page 1 hides third party charges. Summary item ‘Usage charges’ includes third party charges for ‘Brain Facts’ text alerts. 123 pages later, under Premium Services, Other Service Provider Charges, the ‘Brain Facts’ text alerts show in the Description field as 8888906150 BrnStorm23918, total $9.99.
Excerpts from an actual T-Mobile bill showing cramming charges. (click to view full-size)
“It’s wrong for a company like T-Mobile to profit from scams against its customers when there were clear warning signs the charges it was imposing were fraudulent,” said FTC Chairwoman Edith Ramirez. “The FTC’s goal is to ensure that T-Mobile repays all its customers for these crammed charges.”

In a process known as “third-party billing,” a phone company places charges on a consumer’s bill for services offered by another company, often receiving a substantial percentage of the amount charged. When the charges are placed on the bill without the consumer’s authorization, it is known as “cramming.”

The FTC’s complaint alleges that in some cases, T-Mobile was charging consumers for services that had refund rates of up to 40 percent in a single month. The FTC has alleged that because such a large number of people were seeking refunds, it was an obvious sign to T-Mobile that the charges were never authorized by its customers. As the complaint notes, the refund rate likely significantly understates the percentage of consumers who were crammed. The complaint also states that internal company documents show that T-Mobile had received a high number of consumer complaints at least as early as 2012.

The FTC has made significant efforts to end mobile cramming. In the last year, in addition to holding a public workshop on mobile cramming, the Commission has filed several lawsuits against alleged mobile cramming operations Jesta Digital, Wise Media, and Tatto Inc. According to today’s complaint, T-Mobile billed its customers for the services of these FTC defendants as well as an operation sued by the Texas Attorney General.

The complaint against T-Mobile alleges that the company’s billing practices made it difficult for consumers to detect that they were being charged, much less by whom. When consumers viewed a summary of their T-Mobile bill online, according to the complaint, it did not show consumers that they were being charged by a third party, or that the charge was part of a recurring subscription. The heading under which the charges would be listed, “Premium Services,” could only be seen after clicking on a separate heading called “Use Charges.” Even after clicking, though, consumers still could not see the individual charges.

The complaint also alleges that T-Mobile’s full phone bills, which can be longer than 50 pages, made it nearly impossible for consumers to find and understand third-party subscription charges. After looking past a “Summary” section as well as an “Account Service Detail” section, both of which described “Usage Charges” but did not itemize those charges, a consumer might then reach the section labeled “Premium Services,” where the crammed items would be listed.

According to the complaint, the information would be listed there in an abbreviated form, such as “8888906150BrnStorm23918,” that did not explain that the charge was for a recurring third-party subscription supposedly authorized by the consumer. In addition, the complaint notes that consumers who use pre-paid calling plans do not receive monthly bills, and as a result the subscription fee was debited from their pre-paid account without their knowledge.

When consumers were able to determine they were being charged for services they hadn’t ordered, the complaint alleges that T-Mobile in many cases failed to provide consumers with full refunds. Indeed, the FTC charged that T-Mobile refused refunds to some customers, offering only partial refunds of two months’ worth of the charges to others, and in other cases instructed consumers to seek refunds directly from the scammers – without providing accurate contact information to do so.

The complaint also notes that in some cases, T-Mobile claimed that consumers had authorized the charges despite having no proof of consumers doing so.

The FTC’s complaint seeks a court order to permanently prevent T-Mobile from engaging in mobile cramming and to obtain refunds for consumers and disgorgement of T-Mobile’s ill-gotten gains.

The FTC thanks the Federal Communications Commission and its Enforcement Bureau for their invaluable assistance with and close cooperation and coordination in this matter.

The Commission vote authorizing the staff to file the complaint was 5-0. The complaint was filed in the U.S. District Court for the Western District of Washington.

This news is courtesy of www.ftc.gov