Americas Brief newsletter:15-21 May 2019
This edition of the Americas Brief analyses a ban on facial recognition technology in San Francisco's public sector, calls for 'civil disobedience' in Nicaragua, and fuel shortages in Venezuela.
United States & Canada
- United States - San Francisco imposes facial recognition technology ban
- United States - Severe weather poses threat to life in Texas, Oklahoma
- United States & China - US grants Huawei three-month partial reprieve
- United States, Mexico & Canada - Removal of metals duties eases trade risks
Mexico, Central America & Caribbean
- Costa Rica & United States US FAA downgrades Costa Rica air safety rating
- Nicaragua Calls for protests, civil disobedience after opposition leader killed
- Brazil Mining giant warns of dam collapse in Minas Gerais state
- Colombia Indefinite truck drivers strike heightens risk of travel disruption
- Venezuela Army oversees fuel distribution as shortages worsen
- Venezuela & United States US suspends passenger and cargo flights
United States & Canada
United States San Francisco imposes facial recognition technology ban UNITED STATES Political risk: Low
14 May: The city legislature of San Francisco, California, voted 8-1 to ban local government agencies, including the police, from using facial recognition technologies. The rule is part of the city's new anti-surveillance law which comes into force in June.
Why it matters: The decision does not impact businesses or private users, while San Francisco International Airport (SFO) and the Port of San Francisco are not affected, as these are run by federal, not local, agencies. The ban is likely to be followed by similar legislative initiatives at local- and state level, particularly supported by pro-privacy campaigners. Critics of the technology believe it is unreliable, especially when applied to women and individuals with darker skin tones. Firms which develop, supply or use facial recognition technology should factor the decision into strategic planning and monitor local legislative developments for similar policy proposals.
United States � Severe weather poses threat to life in Texas, Oklahoma UNITED STATES Natural hazard risk: Elevated
20 May: Dozens of tornadoes were recorded in parts of the states of Texas and Oklahoma, affecting at least two million people, with the US National Weather Service warning the risk from such storms was the highest in the region for years and with more expected to develop in the next few days. According to the federal government's Weather Prediction Center, the area under greatest threat reaches some 650km from Stillwater, Oklahoma, to Snyder, Texas, where heavy rainfall from powerful thunderstorms could lead to flash flooding. In addition, more than 50 million people are at risk from severe weather, including high winds, hail and flash flooding, across the south-central states. Air travel has been disrupted due to flight cancellations and the redeployment of aircraft to protect them from storm damage.
Why it matters: A2 Global advises all companies and their staff in the affected regions to follow the instructions of local emergency service and law enforcement agencies while monitoring media outlets for updated information. Those in the areas identified at the highest levels of risk should seek shelter in locations designed to withstand the impact of tornadoes. Road movements in these areas should be restricted to emergency travel only. Airline passengers departing or planning to visit the affected regions should check with their carriers to assess the status of their flight.
United States & China � US grants Huawei three-month partial reprieve UNITED STATES Political risk: Low CHINA Political risk: Medium
The US Department of Commerce granted Chinese telecommunications giant Huawei Technologies Co Ltd (Huawei) a three-month partial reprieve from trade restrictions it imposed on the company on 15 May. The reprieve, which expires on 19 August, allows Huawei to purchase US products to maintain existing networks and provide software updates to smartphones.
Why it matters:
The reprieve aims to reduce the immediate disruptive impact on Huawei's customers, particularly mobile phone users who would otherwise be unable to download software updates. The reprieve does not, however, allow Huawei to purchase goods from US suppliers to make new products. A2 Global considers that a further extension to the reprieve is possible, yet highly dependent on progress in Sino-US trade negotiations and on the legal status of detained Huawei CFO Meng Wanzhou. Suppliers and consumers of Huawei products should adjust immediate operational planning and monitor further updates.
United States, Mexico & Canada � Removal of metals duties eases trade risks UNITED STATES, MEXICO & CANADA
The US removed its tariffs on steel and aluminium imported from Mexico and Canada, following an agreement on 17 May. Concurrently, Mexico and Canada removed their retaliatory tariffs on the same metals, as well as tariffs on US consumer goods. The duties 25 per cent on steel and 10 per cent on aluminium had been in place for approximately one year.
Why it matters:
The removal of the tariffs serves both economic and political purposes. Firstly, it clears the way for the Canadian and Mexican legislatures to ratify the USMCA North America's renegotiated trade pact ahead of Canada's federal election, which must take place before 21 October. Secondly, it de-escalates the US's trade tensions with its second and third biggest trading partners, thereby counterbalancing the escalating commercial conflict with China. Firms with North American operations should adjust strategic planning and anticipate the ratification of the USMCA in the three-month outlook. Businesses which trade in steel and aluminium should adjust operational, strategic, and financial planning immediately.
Mexico, Central America & Caribbean
Costa Rica & United States US FAA downgrades Costa Rica air safety rating UNITED STATES Aviation risk: Low COSTA RICA Aviation risk: Medium
13 May: The US Federal Aviation Authority (FAA) announce that Costa Rica does not meet the International Civil Aviation Organization (ICAO) safety standards, and downgraded it to the FAA's Category 2 rating. This decision followed a reassessment of Costa Rica's civil aviation authority, the DGAC, in October 2018.
Why it matters: As a Category 2 country, Costa Rican carriers can continue to fly existing routes to the US. However, they cannot establish new services. US airlines are not impacted. The decision likely reflects an FAA assessment that its Costa Rican counterpart has significant failings in areas such as technical expertise, trained personnel, record-keeping, and inspection procedures. Airlines and insurance companies should factor the FAA's decision into risk assessments.
Nicaragua Calls for protests, civil disobedience after opposition leader killed NICARAGUA Travel risk: High
17 May: The National Blue and White Unity (UNAB) movement an alliance of groups opposed to President Daniel Ortega's government called for a series of protests and acts of civil disobedience, after an influential opposition leader was shot dead in a failed prison rebellion. US citizen Eddy Montes, who was born in Nicaragua but served in the US army, was shot by security forces on 16 May amid an attempted uprising at a prison in the capital Managua.
Why it matters: Nationwide violent civil unrest began in April 2018, when Ortega's proposed pension reform sparked a broad, nationwide movement against his government. UNAB has encouraged its large number of followers to participate in sit-ins and marches, and boycott shopping centres the latter likely seen as a means to deflate the economy. Furthermore, it has called on private enterprises not to pay taxes in a so-called 'fiscal strike'. Individuals and companies with interests in Nicaragua should factor the heightened protest risk and proposed consumer boycott into two-week operational planning. Staff with planned visits to the country should postpone non-essential travel in the same period.