Americas: Vitol facing corruption-related fallout in Mexico, Ecuador, Brazil amid US probe
Sectors: oil and gas
Key Risks: frustration of process, contract reviews; business risks; fines

 In Latin America, Swiss-based commodities trading firm Vitol is facing mounting corruption-related fallout amid a US investigation into bribery schemes in Brazil, Ecuador and Mexico. On 3 December Vitol agreed to pay US$163.8m in penalties to US and Brazilian authorities to settle the graft allegations. The probe prompted PMI Comercio Internacional, the trading arm of Mexico’s state-owned oil company Pemex, to reportedly temporarily suspend its business with Vitol on 10 December. Ecuador’s state-owned oil firm Petroecuador had already excluded Vitol from its list of suppliers on 4 December and reports suggest that it is considering taking legal action against the trader. Petroecuador is reportedly assessing the total costs caused by the graft scheme to file a lawsuit over the coming months. Further fallout should be expected to affect commodity traders and state-owned oil firms involved in the wrongdoing. 


Asia Pacific: Opposition tables no-confidence motion to oust PNG’s Prime Minister Marape
Sectors: all
Key Risks: political instability

In Papua New Guinea, parliament reconvened following a Supreme Court order. The latter also overturned Speaker Job Pomoat’s decision to hold a parliamentary session on 17 November, which was possible due to high-profile defections to the opposition. With 55 MPs on the opposition side, opposition leader Belden Namah tabled a motion of no-confidence against Prime Minister James Marape. The motion is expected to be introduced on 17 December. Yet, the opposition’s attempt to oust Marape stalled after the Speaker adjourned parliament until 16 December to seek legal clarification from the Supreme Court regarding opposition MP Bari Palma’s eligibility to be in parliament due to his bankruptcy claims. With the numbers evenly split, the court’s ruling will have a significant impact on the no-confidence vote should MP Bari be allowed to return, giving the opposition a slim one-seat majority. 

Nord Stream 2 resumes despite likely sanctions; Belarus opposition to meet EU leaders
Sectors: oil and gas; various
Key Risks: sanctions; political instability

Construction of the Nord Stream 2 pipeline resumed as a Russian pipe-laying ship restarted work on a 2.6 km stretch of pipe in the part of the Baltic Sea demarcated as Germany’s exclusive economic zone. Despite vocal US opposition and a sanctions regime first implemented a year ago, the Russian-backed project looks set to be completed in 2021. US lawmakers are likely to strengthen sanctions this month, targeting companies involved in the insurance and certification of the pipeline, including Zurich Insurance Group and Det Norske Veritas, a Norwegian company responsible for authenticating the project’s safety standards. Meanwhile, the leader of Belarus’s opposition Svyatlana Tsikhanouskaya will meet German President Frank-Walter Steinmeier and EU Foreign Affairs Representative Josep Borrell on a European tour this week. The trip is unlikely to have a concrete impact on Lukashenko’s regime. 

: Brexit negotiations to continue; Polish protests persist
Sectors: all   
Key Risks: economic; political instability

EU and UK negotiators agreed to extend talks aimed at securing a trade deal in advance of the imminent expiry of the Brexit transition period on 31 December. Discussions will focus on creating a vehicle that both sides could use to protest perceived divergences of labour standards, environmental commitments and state aid. Previously, such a mechanism had been ruled out by the UK. While officials in Brussels and London have distanced themselves from reports of significant progress, both sides have a mutual interest in securing a deal in view of the potentially significant consequences of a no-deal scenario. Talks are likely to continue through the next fortnight or until a deal is secured. Meanwhile, in Poland anti-government protests which have been ongoing since October are likely to continue as the movement’s support base broadens, though significant political upheaval remains unlikely.


MENA: Lebanon government formation protracts; US could sanction Turkey over S-400s
Sectors: all
Key Risks: political instability; economic and political risks; sanctions

Hopes for a Lebanese government under ousted former premier Sa’ad al-Hariri continue to be disappointed, despite reports that a cabinet line-up was presented on 4 December. The delays are a manifestation of Lebanon’s entrenched political stagnation. The country has been without a government since the previous government resigned following the catastrophic 4 August port blast. French President Emmanuel Macron’s visit to Lebanon on 21 December is viewed as a deadline to form a government. Widespread strikes and protests are also expected over proposed subsidy reductions. After EU officials decided on 12 December to place some limited sanction on Turkey over drilling activities in disputed Mediterranean waters, the outgoing US administration may sanction Ankara over its 2019 purchase of Russia’s S-400 air defence system, at odds with Turkey’s NATO membership. Even limited US sanctions may increase difficulties for the already stressed economy.


Sub-Saharan Africa: 400 students kidnapped by armed bandits in Nigeria’s Kankara, Katsina state
Sectors: all
Key Risks: crime

In Nigeria, armed bandits kidnapped about 400 students from the Government Science secondary school in Kankara district in the north-western Katsina state. One officer was injured when security forces exchanged fire with the group, allowing some students to flee during the attack. It was reported that security forces engaged in fighting after the group was located in a nearby forest on 12 December. The incident marks the first time bandits have abducted hundreds of students from a school, a tactic frequently used by Islamist militant group Boko Haram, indicating that criminal groups in the north-west are replicating Islamist militant’s methods. Several security force operations were conducted in Katsina and neighbouring Zamfara state in the week of 24 November to counter bandit activity such as civilian-targeted attacks and kidnap for ransom. However, there is a high risk of further attacks.