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Russia says bond payments sent in default stand-off

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Russia’s finance ministry mentioned on Thursday it made $117mn in curiosity funds due on its dollar-denominated bonds to Citi in London, nevertheless it was not clear whether or not the cost would have the ability to attain traders and permit Russia to keep away from defaulting on its $38.5bn of overseas debt.

The ministry added that it will remark afterward whether or not Citi — the cost agent for the bonds — had accepted the cost. The coupon funds have been due on Wednesday, and Russia will default if it fails to pay up after a 30-day grace interval. One European bondholder mentioned on Thursday morning that he had not but obtained the cash. Citi declined to remark.

Moscow has repeatedly claimed that western sanctions are stopping it from servicing its debt, with finance minister Anton Siluanov saying earlier this week that Russia was being pressured into an “synthetic default”. US sanctions, nevertheless, say that US traders can proceed receiving curiosity funds from the Russian finance ministry or central financial institution till Might 25.

“The entire thing is bizarre,” mentioned one rising markets bond fund supervisor. “It’s fairly clear cost could possibly be made in the event that they actually wished it to be. The US rules include a transparent exemption for coupon funds.”

Russian foreign-currency bonds rallied on Thursday, extending positive aspects which started on Wednesday when the Monetary Instances reported that Russia and Ukraine had made progress on a tentative peace plan. A greenback bond maturing in 2043 — one of many two with coupon funds due — rose to 40 cents on the greenback from 38 cents on Wednesday. Every week in the past it traded at lower than 20 cents.

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Traders and score companies had broadly anticipated Russia would default on its overseas debt after western sanctions over the warfare in Ukraine froze about $300bn of Moscow’s $640bn foreign money reserves. Siluanov has additionally mentioned it will be “completely honest” for the Russian authorities to make funds on its greenback debt in roubles till these sanctions are lifted.

Though a few of Russia’s greenback bonds include a clause permitting reimbursement in roubles, the 2 bonds due with coupons on Wednesday will not be amongst them. Fitch Rankings mentioned earlier this week that cost within the Russian foreign money would represent a default.

A default can be Russia’s first since 1998, when a shock devaluation of the rouble and restructuring of Moscow’s native debt despatched shockwaves via world markets. Then, Russia additionally defaulted on some Soviet-era greenback debt, however stored up funds on foreign-currency bonds issued because the fall of the Soviet Union. The final full exterior default got here in 1918 when the Bolshevik regime refused to recognise Tsarist-era money owed.

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Venezuelan gang’s arrival shakes Latin America’s safest nation

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Venezuelan gang’s arrival shakes Latin America’s safest nation

The grand Beaux-Arts Portal Fernández Concha building was once a fashionable hotel in downtown Santiago. Now, the 19th-century property in Chile’s capital has become the face of the country’s gang-driven crime wave.

As Venezuela’s Tren de Aragua gang made its first push into Chile — one of Latin America’s safest and most developed economies — over the past five years, men alleged to be members of the gang turned rented rooms in the downtown building into the base for a sex trafficking ring.

Police said they dismantled the operation in 2023, but on a recent afternoon, young women still hovered in the square outside, approaching passing men.

“At the peak, we had 1,500 people entering every day,” said a security guard at the building. “I was seeing knife fights outside most weeks. I had never seen anything like it.”

The historic Portal Fernández Concha building has become a hub for the sex trade © Vanessa Volk/Alamy

Experts say Chile has fallen victim to a regional trend, in which organised crime groups have embraced business models less tied to their home territories in the wake of the pandemic. Cells in different countries exercise autonomy while communicating with their home base and taking on contract-based work, enabling the gangs to expand into new regions.

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The Tren de Aragua, which was formed in a Venezuelan prison in 2014, has been one of the most successful. It has taken advantage of an exodus of some 7.7mn refugees from its home country’s economic collapse, which expanded the pool of poor, jobless and marginalised people vulnerable to exploitation across the region.

While Peru, Ecuador and Colombia have all reported its presence, Chile’s lack of criminal competition and relative wealth have made it an especially desirable target.

“The Tren de Aragua and other foreign groups saw a big business opportunity in the flow of vulnerable people towards the country,” Ignacio Castillo, director of organised crime at Chile’s public prosecutor’s office, told the Financial Times.

“They have fundamentally changed the nature of crime in Chile.”

Chile’s murder rate has nearly doubled since 2019 to 4.5 per 100,000 people in 2023, very slightly down from 2022. Last year it lost its spot as the country with the region’s lowest murder rate to El Salvador, where a crackdown on homegrown gangs dramatically cut violence, according to a ranking by watchdog group Insight Crime.

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Chilean Investigative Police officers take part in an operation against Los Trinitarios criminal gang in an area known as Nuevo Amanecer or New Dawn, in the Cerrillos commune of Santiago
The police launch a raid against an international criminal gang in the capital Santiago © Esteban Felix/AP
Members of the Chilean police work at the site where three policemen were murdered, in a Mapuche area in Cañete, Biobio region
Chilean society was stunned when three policemen were killed in April © Guillermo Salgado/AFP/Getty Images

Kidnappings, extortion and sex trafficking have also increased in Chile, Castillo said.

Fears over the gangs have transformed the country’s politics. Seven in 10 Chileans rank crime as their top concern, according to a March Ipsos poll. That has pulled attention away from economic inequalities that sparked mass protests in 2019, and helped to sap the popularity of leftist president Gabriel Boric even as his government works to beef up security policy.

“Crime and organised crime are the greatest threats we face today,” Boric said in his State of the Union address in June. “Without security, there is no freedom, and without freedom there is no democracy.”

On a recent afternoon in Maipú, a suburb of Santiago, salsa music played loudly from one of hundreds of homes improvised from MDF and corrugated iron beneath an underpass, which house mainly Haitian and Venezuelan migrants.

In March, a body was found here, stuffed in a suitcase and buried under cement: the corpse of Ronald Ojeda, a former Venezuelan soldier and critic of Venezuelan president Nicolás Maduro’s authoritarian regime.

Chile’s public prosecutor said the Tren de Aragua had carried out Ojeda’s high-profile assassination. He later added that the killing had been “organised” from Venezuela and was probably politically motivated.

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Maduro’s foreign minister responded by claiming the gang “does not exist”, triggering a diplomatic dispute.

Similar migrant settlements to the one in Maipú have sprung up across Chile as the state failed to absorb millions of new arrivals: the country’s foreign-born population grew from just 1.8 per cent in 2013 to 13 per cent in 2023.

“The state loses control in these areas, and there is a generation of young people who aren’t getting access to education, healthcare and employment,” said Claudio González, director of the University of Chile’s Citizen Security Studies Centre. “It’s a perfect hunting ground for crime groups.”

Fears over organised crime have fomented anti-migrant sentiment among Chileans, polls show, but González said the gangs’ victims themselves were mostly migrants. Cases of violent gang crime targeting Chileans were “very exceptional”, he said.

Relatives and friends of Mayra Castillo, a 13-year-old victim of violence, hug during a protest against criminal violence outside La Moneda government palace in Santiago
Relatives and friends of 13-year-old Mayra Castillo who was killed in gun violence hold a protest outside the president’s office © Esteban Felix/AP

A volunteer working with children on a community art project in the settlement, who declined to give his name because he also works for the government, said authorities had only carried out “isolated interventions” such as pop-up health clinics, and failed to reach undocumented migrants.

“Mostly they treat these communities as a security problem — they don’t prioritise their quality of life, so they won’t solve the problem,” the volunteer said.

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The Tren de Aragua differs sharply from more famous groups like Mexico’s cartels, said Ronna Rísquez, a Venezuelan journalist who published a book on the gang last year.

“Those groups are militarised, and [tend to stay in] fixed territories, while the Tren de Aragua is more fluid, with loosely connected cells,” she said, adding that the group numbered 3,000 people at most.

The gang picks up contract jobs, such as assassinations or transporting drugs for other gangs, González said.

“These are basically predators who look for niches to exploit — they do a lot of harm, but they’re not very sophisticated,” he added.

The arrival of organised crime in Chile, combined with a conflict with separatist indigenous groups in the south, has pushed security to the top of the political agenda ahead of elections next year.

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Chile’s rightwing has seized on Boric’s history as a critic of the country’s police. Its approval ratings have surged to an all-time high of 84 per cent amid the crime wave, according to pollster Cadem.

The situation has become a major headache for Boric, who had hoped to expand Chile’s social safety net and human rights protections, but has instead been forced to focus on security.

Since 2022, the government has created organised crime units within the public prosecutor’s office and police, launched the first national organised crime policy, and passed dozens of crime-related reforms.

Having imprisoned some 100 members of Tren de Aragua, according to authorities, Chile is preparing to launch the region’s first mass trial of the group, with 38 people — 34 Venezuelans and four Chileans — facing charges including murder, kidnapping, and human and drug trafficking.

However, the country is not immune from the institutional corruption that enables organised crime to expand. In April, Chilean media reported two members of Chile’s investigative police had shared information with the Tren de Aragua.

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“Our institutions have reacted very efficiently in an exemplary way,” Castillo said. “But when it comes to this type of crime, you have to be permanently vigilant.”

Additional reporting by Martín Neut and Benjamín Martínez in Santiago

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Large chunk of Wyoming's Teton Pass road collapses; unclear how quickly it can be rebuilt

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Large chunk of Wyoming's Teton Pass road collapses; unclear how quickly it can be rebuilt

JACKSON, Wyo. (AP) — A large chunk of a twisting mountain pass road collapsed in Wyoming, authorities said Saturday, leaving a gaping chasm in the highway and severing a well-traveled commuter link between small towns in eastern Idaho and the tourist destination of Jackson.

Aerial photos and drone video of the collapse show the Teton Pass road riven with deep cracks, and a big section of the pavement disappeared altogether. Part of the guardrail dangled into the void, and orange traffic drums marked off the danger area. The road was closed at the time of the collapse.

The section that failed first drew attention Thursday when a crack and drop in the road contributed to the crash of a motorcycle.

Geologists and engineers who were sent to the area that day noticed “that crack and that drop started to move a lot,” said Stephanie Harsha, a spokesperson for District 3 of the Wyoming Department of Transportation. A paving crew temporarily patched the road, and traffic began moving again that night.

But that was short-lived as maintenance crews were sent to respond to a mudslide a couple of miles away in the pre-dawn hours of Friday, prompting the road to be closed once again.

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Crews then noticed that the damage to the pavement had become more pronounced. Workers trying to figure out a detour around that section left for the night, “and by 5 a.m., this morning, WYDOT had discovered that the road had completely failed,” Harsha said Saturday.

“We were very, very lucky that no crews were harmed. No equipment was damaged,” she said. “So now, engineers and geologists are doing geological assessments on the pass. They’ve been looking at it all day.”

The transportation department said via social media that the road “catastrophically failed” at milepost 12.8.

It was not immediately clear how long it will take to reopen the road, a vital artery for people who live across the border in Idaho and work in pricey Jackson, which is also close to the popular Grand Teton National Park.

Harsha said an alternate route between Jackson and the area of Victor, Idaho, goes more than 60 miles (97 kilometers) out of the way and adds “quite a bit to any commute.”

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Gov. Mark Gordon signed an executive order declaring an emergency, which his office said would help the state access additional resources from the Federal Highway Administration to begin repair work.

In a statement, the governor said the transportation department is working on “a long-term solution to rebuild this critical roadway.”

“I recognize the significant impacts this closure has to Teton County residents, regional commuters and the local economy,” Gordon said.

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Colombia halts coal exports to Israel in protest against war in Gaza

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Colombia halts coal exports to Israel in protest against war in Gaza

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Colombia is suspending exports of coal to Israel in protest over the war in Gaza, the South American country’s president announced on Saturday.

“We are going to suspend coal exports to Israel until the genocide stops,” president Gustavo Petro posted on X.

Petro shared a draft decree issued by the ministry of trade which stated that exports will only be resumed once Israel complies with orders from the International Court of Justice last month to halt its military offensive in Rafah.

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The trade ministry said the ban will come into effect five days after publication in the country’s official gazette. Shipments to Israel that have already been approved will not be affected.

Colombia is Israel’s largest supplier of coal, according to the American Journal for Transportation. Coal exports to Israel were worth $320mn in the first eight months of last year, according to government data, while Colombia’s leading mining agency reports that taxes, royalties and other payments related to coal exports to Israel are worth around $165mn per year to the treasury.

Colombia’s announcement of trade sanctions on Israel follows a broader move by Turkey, which last month halted trade with the Jewish state until it allows an “uninterrupted and sufficient flow” of humanitarian aid to Gaza. Last Sunday, the Maldives announced a ban on Israeli tourists in solidarity with Gaza.

Despite long historical ties and collaboration on defence between the two countries, Petro — Colombia’s first leftist president — has been one of the most vocal critics on the world stage of Israel’s conduct in Gaza following the attack by Hamas on October 7. 

In May, after breaking diplomatic ties with Israel, Petro traded barbs with Israeli Prime Minister Benjamin Netanyahu, who called the Colombian president an “antisemitic supporter of Hamas”.

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Petro, a leftist former guerrilla member who took office in August 2022, has also requested that Colombia join South Africa’s case against Israel for genocide at the International Court of Justice.

The spat between Colombia and Israel breaks with decades of warm relations. Israel is a major supplier of weapons to Colombia, which are used by the Colombian military to fight drug traffickers and insurgent groups.

In 2020, during the tenure of Petro’s rightwing predecessor Iván Duque, a free trade agreement between the two countries came into effect. Petro in February suspended new Israeli weapons purchases.

Colombia’s mining association ACM warned on Thursday that suspending coal exports to Israel would hurt Colombia’s economy. “This decision would not comply with international commitments by Colombia that should be respected and puts at risk the confidence of markets and foreign investment,” ACM said in a statement.

Petro has also sought to position Colombia as a global leader on climate change, pledging to wean the country off fossil fuels despite oil and coal products together making up over half of exports. 

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A tax reform passed in late 2022 prohibited extractive companies from deducting royalties from their taxable income, though the constitutional court ruled that provision illegal in November last year.

Speaking at a banking conference on Friday night, Petro said that the court’s decision was the reason for a recent shortfall in government tax take, necessitating spending cuts.

Sergio Guzmán, director of Bogotá-based consultancy Colombia Risk Analysis, said that the decision to suspend coal exports to Israel was “shortsighted” as the global market for the fossil fuel continues to dwindle amid a transition to greener energy sources.

“Petro is making a grandiose geopolitical move that is poised to hurt Colombia potentially more financially than Israel, the target of the action,” Guzmán said.

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