Good morning. The U.S. Treasury Department hit a U.S. citizen with a $4.7 million fine, the maximum allowed, for engaging in real estate transactions connected to a sanctioned Russian oligarch, Risk Journal’s Richard Vanderford reports.

• Person 1: The Treasury on Monday said it would levy the penalty against an unnamed person, called Person 1, who was involved in the purchase and resale of an Atlanta-area home that had belonged to a sanctioned family member of a Russian oligarch. Treasury said Person 1, acting on behalf of Atlanta-area real estate company King Holdings, bought the property in foreclosure apparently not knowing about the sanctions issue.
   
• Do your homework: Sanctions freeze U.S.-based assets, and U.S. rules generally bar any transfer of blocked property without a license, Treasury said. All parties involved in real-estate transactions should conduct due diligence, including by using screening lists, to make sure they don’t deal in blocked properties, the agency added. 
   
• Boris Rotenberg: Treasury didn’t name the oligarch whose property was involved in the transaction, but it provided extensive details on the deal. Publicly available Georgia property records, compared against those details, show the home is an Alpharetta, Ga., mansion that belonged to Karina Rotenberg, the wife of sanctioned Russian businessman Boris Rotenberg.
   
• Putin support: Boris Rotenberg provided support for Putin’s projects, the U.S. has said in a previous sanctions order. The U.S. under President Biden sanctioned Karina Rotenberg in March 2022, though lifted sanctions on her earlier this year.

Insurers don’t want to cover AI’s errors. 

As businesses hustle to incorporate artificial intelligence in everything they do, their insurers want no part of it. Across the commercial insurance industry, new policies say they won’t cover losses caused by chatbots.

Early this year, word spread that the specialty insurer W.R. Berkley was putting an “absolute” exclusion of coverage for “any actual or alleged use, deployment, or development of Artificial Intelligence” in some liability policies for corporate directors and officers.

Other insurers are following, for fear that erroneous price quotes or medical diagnoses from a generative AI model could lead to thousands of claims. A Sunday article in the Financial Times reported that American International Group and the Great American Insurance unit of the American Financial Group have asked state regulators to approve policies that would bar claims for AI’s errors.

• The U.K. has expanded its sanctions exemption for Lukoil’s Bulgarian operations, adding two subsidiaries to a temporary general license that allows continued business with the Russian oil company’s assets despite U.K. sanctions, the Office of Financial Sanctions Implementation announced.
   
• It seemed like the perfect time to make a deal for local television-station owners: The Trump administration had promised a light touch on regulations, and the head of the FCC loudly backed changes to decades-old rules that limited the number of stations one company could own. But now, President Trump is saying not so fast.

Join us on Dec. 2 for a webinar examining how bank compliance should incorporate the national security priorities of the Trump administration. Speakers are Alessio Evangelista, partner at Skadden Arps and a former enforcement director at FinCEN; and David Schwartz, president and chief executive of the Financial & International Business Association. You can register here.

Dragonfly’s annual geopolitical assessment explores the key trends and risks businesses should expect to face in 2026. To attend the Nov. 27 event at the News Building in London, click here.

China’s Xi calls Trump in unusual move to discuss Taiwan, Ukraine.

In an unusual diplomatic move, China’s leader Xi Jinping initiated a phone call with President Trump on Monday to discuss Taiwan, a flashpoint that has surged to the forefront in recent days as Japan takes a more assertive stance on the island’s autonomy.

While Taiwan was Xi’s focus, Trump steered the conversation to Ukraine, said people familiar with the matter, as Washington-Kyiv peace talks appear to make progress and Trump tries to decisively end Russia’s war in Ukraine.

Fed’s Daly backs December rate cut, citing vulnerable labor market.

San Francisco Fed President Mary Daly said she supports lowering interest rates at the central bank’s meeting next month because she sees a sudden deterioration in the job market as both more likely and harder to manage than an inflation flare-up.

“On the labor market, I don’t feel as confident we can get ahead of it,” she said in an interview Monday. “It’s vulnerable enough now that the risk is it’ll have a nonlinear change.” An inflation breakout, by contrast, is a lower risk given how tariff-driven cost increases have been more muted than anticipated earlier this year, she said.

• Fed Chair Powell’s Allies Provide Opening for December Rate Cut
• U.S. Employment Trends Improved in September Ahead of Shutdown

• Kohl’s new CEO has a message for customers: “We hear you.” After years of missteps that included scaling back petite-size and fine-jewelry departments as well as popular private brands, Kohl’s has been trying to reverse course. That included naming its interim chief executive, Michael Bender, to the CEO role officially on Sunday.
   
• The Federal Reserve is struggling to persuade some banks to use a lending tool designed to improve the central bank’s control over short-term money markets.
   
• Diplomats from the U.S. and Ukraine thrashing out changes to a Trump-backed peace plan have left thorny decisions over territory to their countries’ presidents, according to European officials familiar with the discussions.
   
• Army Secretary Dan Driscoll met with a Russian delegation in Abu Dhabi on Monday and Tuesday, a sign that talks to end the war in Ukraine have hit a new phase involving direct negotiations with the Russians.
   
• Sanae Takaichi has been Japan’s first female prime minister for barely a month and already she has made an impression on the world’s two most powerful men. First, it was President Trump, who gushed on an October trip to Tokyo that she would prove to be one of Japan’s greatest leaders. Next, it was Chinese leader Xi Jinping, who was infuriated by her remark that Japan would likely get sucked into a war if China made a move on Taiwan.

• President Trump’s advisers are discussing a proposal to head off sharp increases in health-insurance costs for millions of Americans next year, the explosive issue at the heart of the recent government shutdown.
   
• A federal judge on Monday dismissed criminal charges against both former Federal Bureau of Investigation Director James Comey and New York Attorney General Letitia James, ruling that the prosecutor President Trump chose to bring the cases was unlawfully appointed.
   
• For Marriott International, the $15 million deal seemed like a low-risk way to add 9,000 rooms to its global portfolio. But the apartment-rental firm collapsed under high-cost leases.
   
• The Pentagon said it is probing allegations of misconduct against Sen. Mark Kelly (D., Ariz.) after he appeared in a video urging troops to disobey unlawful orders.
   
• Boeing’s troubled Starliner spacecraft will fly again early next year. This time it won’t be carrying astronauts.

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