Slavery loophole closed by U.S. Senate
The U.S. Senate voted to close an 85-year- old loophole that has allowed products derived from forced labor to enter the country if in short supply, amid a new focus on slavery in the supply chains of global companies.
The Tariff Act of 1930, which bars goods made by convict, forced or indentured labor, contains a “consumptive demand” clause that says a product made by slaves can’t be blocked if the U.S. doesn’t make enough of it to meet domestic demand. Almost 21 million people are enslaved for profit worldwide, the United Nations says, annually providing $150 billion in illicit revenue.
The Senate vote was part of a wide-ranging trade enforcement bill approved 75 to 20, its passage led by Republicans. The House of Representatives passed the bill last year; it now goes to President Barack Obama for his signature.
Morgan Stanley settles mortgage-bond case
Morgan Stanley agreed to pay $3.2 billion to end a joint federal-state investigation into its handling of mortgage-backed securities, the fourth deal to be struck in a probe of the role played by big U.S. banks in the subprime mortgage meltdown and the financial crisis it spawned.
The settlement, announced Thursday by federal and state officials, includes $550 million in cash and other benefits for New York, on top of $2.6 billion in payments previously disclosed in a regulatory filing.
The additional relief for New York includes $400 million for lower-cost rental housing, mortgage principal reduction and community purchases of distressed properties, the state’s attorney general said in a statement. Illinois is receiving $22.5 million in a related settlement, the U.S. Justice Department said in a statement.
As part of the deal, Morgan Stanley admitted to having increased the level of risky loans that backed the securities it created. In a May 31, 2006, e-mail, according to the New York attorney general’s statement, the head of Morgan Stanley’s team responsible for scrutinizing the value of the securities asked a colleague, “Please do not mention the ‘slightly higher risk tolerance’ in these communications. We are running under the radar and do not want to document these types of things.”