Good morning. The Trump administration is targeting Chinese forced labor with the largest-ever addition to a trade blacklist that bans imports from companies accused of exploiting Uyghur workers, Richard Vanderford reports for Risk Journal (free link).

• What was added? The Department of Homeland Security added 43 companies to the Uyghur Forced Labor Prevention Act entity list, effectively prohibiting goods tied to those companies from being imported.

• Major increase: The additions announced Friday up the size of the list to 187 entities, a 30% increase. The companies targeted Friday are involved in the aluminum, apparel, copper and cotton sectors.

• Why is this significant? The administration hadn’t previously made any additions to the entity list and reduced the number of detentions at the border, prompting questions about its UFLPA enforcement approach. “We have waited 18 months for these new additions,” said Laura Murphy, a Biden administration policy adviser on forced labor. “What’s important now is that the U.S. keep up a steady drumbeat of releases.”

• Background: The UFLPA effectively bans all imports tied to Xinjiang, a region of China that is home to the Uyghur people and other minority groups. The U.S. says China has subjected those groups to widespread human rights abuses, including forced labor.

In case you missed it: The latest Risk Journal podcast features companies experimenting with using AI that can participate in board discussions, and Risk Journal’s Max Fillion reporting from the Aspen Security Forum on a world of strained alliances. Listen to new episodes every Friday on Apple Podcasts, Spotify and Amazon.

AI chatbot, deepfake labeling rules kick off in Europe.

New European Union transparency rules for artificial technology just went into effect, a sea change that will give consumers fresh insight into when businesses employ AI, Risk Journal’s Clara Hudson reports (free link).

The requirements under the EU AI Act that started on Aug. 2 follow a flurry of recently issued EU guidance on how to comply, while the enactment of other rules for high-risk AI systems were pushed back.

FinCEN director leaves for Citigroup.

The head of the U.S. Treasury’s financial intelligence unit will soon leave to join Citigroup’s compliance team as the bank’s head of sanctions, Risk Journal’s Max Fillion reports (free link).

Andrea Gacki, the director of the Financial Crimes Enforcement Network, will remain at the agency for several weeks to smooth out the transition, a Treasury spokesperson said. Her acting replacement will be Jenna Casanova, who has held several roles at Treasury since 2023.

• Israel said it plans to reduce the licensing burden on its defense technology industry to increase arms and dual-use exports, Risk Journal reports (free link).

• California Gov. Gavin Newsom has expressed concerns about the state’s antitrust lawsuit that seeks to block Paramount’s acquisition of Warner Bros. Discovery, and the ramifications of it for Hollywood, according to people close to the suit.

• Former congressman George Santos will pay more than $35,000 to settle a regulator’s claim that he manipulated wagers on prediction market Kalshi over whether he would attend the State of the Union.

• The Council of the EU sanctioned seven individuals and three entities on Thursday over human trafficking, torture and other abuses tied to scam center operations across Southeast Asia, targeting two of the region’s largest scam-compound conglomerates and an armed group accused of protecting them (free link).

• Four years ago, the French cement company Lafarge agreed to a first-of-its-kind guilty plea in which it acknowledged funding Islamic State and an al Qaeda affiliate to protect its Syrian plant and paid the U.S. $778 million in penalties. Victims of attacks by those terrorist groups in Syria have said they are entitled to some of that money.

• A federal judge in New Orleans paused a lawsuit over a lost cargo shipment, ruling that the Treasury Department’s Office of Foreign Assets Control should first decide whether the ship that carried the cargo was linked to a U.S.-sanctioned Syrian shipping magnate (free link).

• California’s Democratic Party has endorsed a ballot initiative that would impose a one-time 5% tax on the state’s billionaires.

Estimate of the number of states hit by cyberattacks on their water and wastewater utilities last week, according to the Federal Bureau of Investigation and Environmental Protection Agency.

Trump pivots back to diplomacy as Iran victory eludes him.

President Trump is pursuing diplomacy with Iran after calling off a planned military offensive at the request of Middle East countries.

Can they make progress? The question is whether Trump’s Gulf partners can make enough headway in the days ahead to reopen the Strait of Hormuz to shipping, at least temporarily, and lay the groundwork for eventual nuclear talks.

• Trump Calls Off Planned Attack on Iran, Citing Diplomatic Progress

• Gulf States Pressed Trump to Hold Off on Iran Strikes and Pursue Talks

• Iran War Pushes Companies to Raise Prices on Beer, Paint, Fries and More

Wave of hacks hits U.S. water facilities.

Water and wastewater utilities in at least seven states have reported cyberattacks last week targeting systems that monitor and operate facilities, the Federal Bureau of Investigation and Environmental Protection Agency said late Thursday.

What they did. The agencies said hackers changed passwords and network settings on affected systems, preventing operators from monitoring or controlling equipment in some cases. One utility also reported unauthorized modifications to software that automates plant operations.

• Security Flaw Placed 30 Years of DNA Evidence at Risk of Hacking

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