2025 Risk Bulletin:
Merchant and Bankruptcy Risk
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Q1 Merchant Risk Bulletin
For all the latest updates in the Merchant Risk space, check out our curated news below!
In response to European regulatory changes, G2RS updated regional reporting categories for disposable e-cigarettes
European regulators are cracking down on disposable e-cigarettes. Here are some examples:
Belgium: Since 1 January 2025, disposable vapes—with or without nicotine—have been banned in Belgium.
France: On 25 September 2024, the European Commission approved France’s bid to
ban disposable e-cigarettes. French regulators are amending the Code of Public Health to enforce the ban, and stakeholders expect it to be approved.
United Kingdom: On 1 June 2025, a UK-wide ban on disposable vapes will go into effect as part of government plans to tackle the rise in youth vaping.
In response to these regulatory changes, G2RS updated its e-cigarette reporting categories in Europe as follows:
pVIO–Prohibited E-cigarettes: This category applies to merchants that sell: (1) flavored e-cigarettes; and/or (2) disposable e-cigarettes.
pVIO–E-cigarettes: This category applies to merchants that sell: (1) reusable e-cigarettes containing nicotine; and/or (2) nicotine e-liquids.
G2RS introduces new reporting category for regulatory hot topics
Over the past few months, there has been an uptick in assessments for tainted products (e.g., OPMS Black Liquid Kratom, De Luxe Nadinola Bleaching Cream, and The Goat sexual enhancement supplement).
In response, G2RS has been scouring client portfolios for these high-risk products. We have also created a new reporting category specific to products/ingredients that have been the subject of regulatory alerts: VIO–High-Risk Regulatory Alerts.
This category brings visibility to merchants selling products that may be at higher risk for card brand scrutiny. There are three subcategories: (1) tainted supplements, (2) tainted cosmetics, and (3) other regulatory alerts. The last subcategory applies to products that do not fit into the first two buckets (e.g., edible amanita muscaria mushrooms).
What is kava, and why does G2RS report it?
What is kava?
Kava, also known as kava-kava and Piper methysticum, is a plant indigenous to the islands in the South Pacific. In the United States, kava is permitted in dietary supplements but prohibited in conventional foods. Since kava has been associated with rare cases of liver injury, its use is restricted in some other countries, including Australia, the Netherlands, Singapore, and the United Kingdom.
Regulatory background
In the early 2000s, a German study found kava was associated with rare cases of severe liver injury. In response, many countries have restricted or banned kava use. However, the results of the German study were ultimately contested, and regulations regarding kava were relaxed in some jurisdictions. For details, see New York Times, New Questions About Kava’s Safety (Jan. 16, 2002); also see Planta Medica, German Kava Ban Lifted by Court (Dec. 2015).
US regulatory response
In 2002, the FDA published a consumer advisory about kava; however, the agency did not prohibit its use in dietary supplements. See FDA, Consumer Advisory: Kava-Containing Dietary Supplements May be Associated With Severe Liver Injury (March 25, 2002). Please note: According to the FDA, kava is not: (1) GRAS (Generally Recognized As Safe) in conventional foods; or (2) approved for use in foods as an additive. See, e.g., FDA, Warning Letter to Herbal Junction (March 11, 2016) (“Kava kava [is] not approved for use in any conventional food. Therefore, your liquid concentrates, coolers, herbal infusions, and bars which contain kava kava […] are adulterated within the meaning of [the Food, Drug, and Cosmetic Act].”). This means kava is prohibited in conventional foods in the US.
Where is kava restricted?
Kava is restricted in many countries. Here are a few examples:
- Australia: When taken orally, kava is a Schedule 4 prescription-only medicine, except at specified lower dosages.
- Netherlands: Kava is prohibited in herbal preparations.
- Singapore: Kava is prohibited in health supplements.
- United Kingdom: Kava is prohibited in both medicines and food.
Employee Spotlight
Name: Amber Payne
Role: Senior Enterprise Sales Executive
Why I joined G2RS: I joined G2 Risk Solutions for a few different reasons. First of all, the people are great and very experienced. Plus, there’s a very tenured leadership team to learn from. When evaluating different companies, G2 Risk Solutions’ niche risk solutions stood out as go-to critical assets necessary for financial institutions and businesses to thrive. Additionally, they are the leading experts in the industry, proven by the impressive portfolio of large and small, well-known clients they support.
Background: I have been in a quota-driven outside sales role for the last 20+ years with the most recent 10 years focused in the Financial Services sector selling Enterprise SaaS solutions, data, regulatory, and compliance into banks, credit unions, and global corporations.
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