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Google Faces Fresh Grilling Over Low Tax Bills

th1sf8te — Thu, 16 May 2013 09:54:54 -0400

Google has denied trying to "disguise" the way its business operates in order to minimise its tax bill in the UK. The internet giant's vice president Matt Brittin was questioned by the Commons' public accounts committee (PAC) for a second time about the firm's practices. His appearance came as newly-published accounts revealed Amazon.com's main UK unit only paid lb2.4m in tax in 2012 on sales of lb4.2bn. Committee chair Margaret Hodge branded Google "devious, calculated and unethical" and accused the company of "deliberately manipulating the reality of their business". She added: "You are a company that says you do no evil and I think that you do do evil in that you use smoke and mirrors to avoid paying tax." But Mr Brittin replied: "We comply fully with the laws that are set down by politicians. Tax is not a matter of choice, tax is a matter of following the law." Mrs Hodge warned the Google executive that it was a "very serious offence" to mislead Parliament as she raised conflicting evidence about the firm's sales. She claimed documents seen by MPs and evidence from a "stream of whistleblowers" who said sales were happening in the UK contradicted Mr Brittin's comments last November. "It was quite clear from all that documentation that the entire trading process and sales processes took place in the UK," she told him. Mr Brittin refused to budge, saying: "I stand by what I said. I described very clearly how we operate." MPs were told that Google's largest operation in Europe was based in Dublin and that any advertiser in Europe contracts with Google in Ireland. "We set that up because we wanted to be able to contract with customers across the whole of Europe, not just the UK," Mr Brittin said. Mrs Hodge said she had seen a Google invoice from a London address and a presentation about how to sell involving UK-based staff. A senior salesman has also contacted the committee, claiming he was paid commission for sales and "closing deals", she continued. "This is a UK sale and should be subject to UK tax. I would ask you to reconsider what you are telling us, because it doesn't make sense to your own staff, it doesn't make sense to the committee, it doesn't make sense to any of your clients. "The only people it seems to make sense to are Google - you arethe last man standing on this." Mr Brittin admitted sales staff in the UK promoted Google and encouraged people to spend money but said the transactions all took place in Ireland. But Mrs Hodge said: "We all accept the billing is in Ireland. If sales activity is taking place in the UK, you are misleading both Parliament and the taxpayers in suggesting that is not happening." Amyas Morse, head of the National Audit Office and Comptroller & Auditor General, told Mr Brittin the issue was not "going away" because people remained sceptical. "There are a ton of people who are listening and saying we think they are selling in the UK," he said. Mrs Hodge also sharply criticised HM Revenue and Customs chief executive Lin Homer over the way her staff interpreted the law in relation to companies like Google. "It is an issue of judgement," she said. "I think your judgement belies common sense. We don't trust your judgement. I think your staff are being bamboozled." Ms Homer, appearing after Mr Brittin, insisted that HMRC was better qualified than MPs to determine what taxes were due. "That is a matter for the application of expert tax knowledge. I'm afraid that that is something I think we do rather better than a select committee," she said. "Unless and until you change the law, we cannot collect the tax people would like us to collect." The hearing came after it was revealed Google had described its London offices on its website as a base for sales teams and advertised dozens of London-based sales vacancies. Amazon could also now be dragged back to face further questions about its own finances after the new tax figures which emerged on Thursday. It is believed the company was able to report the relatively small corporate income tax bill because its sales to British customers are routed through a Luxembourg affiliate, Amazon EU Sarl. The lb2.4m paid in corporation tax in the UK is less than the amount it receives in UK Government grants which stands at lb2.5m. A report last December by the PAC accused Google and Amazon, along with Starbucks, of "immorally" minimising their UK tax bills. The firms were criticised for the "unconvincing and, in some cases, evasive" evidence they gave on why their corporation tax payments are so low. A Google spokesman said: "As we have always said, we fully comply with all of the tax rules in the UK. "We stand behind Matt Brittin's testimony over the course of two sessions in front of Parliament, and we disagree with the committee's view of our tax structure."

Banking Mafia Exposed !!

omniradar — Thu, 09 May 2013 14:15:42 -0400

These are the very people trying to take over Syria & Iran & then impose a central banking system. and the very ones who stole lb6 billion of gold from Libya, the biggest physical robbery ever carried out ! The Basel Committee on Banking Supervision (hereinafter - the Committee) is closely associated with supranational organisations like the Bank for International Settlements in Basel (BIS), which is often called the <>, the <> of central banks or the <>. The Committee's office is situated in the BIS building. At the end of 1974, following the disequilibrium of international currencies and banking markets caused by the collapse of the Herstatt Bank in West Germany, the heads of central banks in the G10 countries established the Committee under the auspices of the BIS to develop common international rules with regard to banking supervision. The Committee formulates common standards for banking supervision and recommendations for their implementation, on the assumption that national authorised bodies (first and foremost central banks) will push them forwards in their own countries. With regard to G10, this is the group of countries that signed a general agreement on borrowing with the IMF in 1962 (Belgium, Great Britain, West Germany, Italy, Canada, the Netherlands, France, Sweden, the USA and Japan). Switzerland, which was not a member of the IMF, joined in 1964, but the name of the group remained as before. Representatives from Luxembourg were also included in the Basel Committee from the very beginning and, from 2001, the Committee has included representatives from Spain. At present, the Committee includes representatives from central banks and national authorities on banking supervision from 27 countries (the 13 countries already mentioned along with Argentina, Australia, Brazil, China, Hong Kong, India, Indonesia, Korea, Mexico, Russia, Saudi Arabia, Singapore, South Africa and Turkey, which all joined the Committee in 2009). Over almost four decades of its activities, the Committee has published tens of documents on different areas of activity, including general issues on the organisation of supervision, capital adequacy, all kinds of risk, the corporate governance of lending and borrowing organisations and so on. The Committee's key area of activity is the definition of standards on capital adequacy for banks. All of the Committee's documentation is centred around an incredibly simple ratio: equity : a bank's capital = capital adequacy ratio. Kabbalists of the money world are looking for this ratio's magic number, which would guarantee the stability of the banking system. In fact, the Committee is seeking to legitimise what is a crime. In Europe, a system of so-called partial, or incomplete, coverage of obligations by banks as borrowing and lending organisations has already existed for a long time (at least since the 18th century). Figuratively speaking, this system allows banks to make money <>. For example, for every 1 dollar of lawful money that depositors place in a deposit account, banks are allowed to release 5 or 10 dollars of non-cash (credit) money by way of credit. This used to be called counterfeiting and was strictly punishable by law. Nowadays, it is called the <> or <> of banking, legalised by national laws, and in economic textbooks it is known as the <>. The principle of <> coverage (reservation) is <> by a supranational structure called the <>, which lends the principle an appearance of respectability. No cunning standards and formulae will remove the main effect of the <> coverage (reservation) of obligations - the banking crises. In the almost four decades that the Committee has existed, the world has been witness to a countless number of banking failures and crises. In order to prevent such problems, obligations need to be covered 100 percent, but then banks would be deprived of the opportunity to engage in their own <>. There is a strict taboo on the honest and frank discussion of <> reservation both in central banks and the Committee: they are trying to convince the public that it is possible to invent a <> for capital adequacy so that banks can continue to make money <> as before. This is outright deception. Basel I and Basel II - straws for the drowning Up to the end of 2012, two fundamental documents had been implemented by the Committee that defined the <> for capital adequacy and recommended that this formula be used by national authorities on banking supervision - Basel I and Basel II. The first of these came into existence in 1988 and had the very respectable name of the <> (Basel I). This agreement defined the minimum capital adequacy ratio as 8 percent, calculated as the ratio of equity (regulated by the supervisory authority) to risk weighted assets. Only credit risks are taken into account (although a bank's capital can be made up of investments as well as credits). In fact, the Committee gave the go-ahead for a financial-monetary orgy, respectfully called <> in economic textbooks. The markets began to <>, the <> began to burst and the real economy and ordinary people suffered the most. To date, more than 100 countries in the world adhere to the rules of Basel I, according to the official declaration. At the turn of the century, a new version of the standard began to be prepared called Basel II, which was to start in 2004. The new version contained extremely feeble attempts to take account of new banking risks (besides credit risks), especially in view of the rapid development of derivatives markets, the emergence of hedge funds and other institutional speculators, with which banks were extremely closely linked. At the height of implementing the new standard, the financial crisis of 2007-2009 broke out. It once again demonstrated that the Basel standards are no more than a fig leaf covering the tyranny of the world's usurers. Basel II was unable to cure the world's moneylenders of their greed, the global banking giant Lehman Brothers sank to the depths in front of everybody's eyes and, in order to save others, America was forced to spend upwards of three trillion dollars from the public purse, with Europe spending about the same. There were even attempts to prove that it was the implementation of Basel II that had caused the start of the financial crisis, since in order to make up for the lack of equity, banks decided to use extremely risky methods to attract capital and had to go as far as falsification and outright deception (accounting offences, the use of off-balance sheet transactions, etc.). During the financial crisis, the Committee began to spasmodically introduce changes and amendments to the Basel II standard. The features of Basel III At long last, a new document emerged called Basel III. Proposals for Basel III were approved at the G20 Summit in Seoul in November 2010. Participants at the Summit also approved the timeline for the phased implementation of the standard. 1 January 2013 was given as the start date. The new document is exceedingly complex and voluminous, numbering nearly 800 pages. I would like to draw your attention to the following features: 1. The timeline for implementing the standard stretches to 2018; in other words, the standard is not <>, it gives banks enough time for manoeuvre; 2. The bar for the capital adequacy ratio of banks was raised, but not so much that it would avoid new crises; 3. The role of the <> in the assessment of banks by supervisory authorities was increased; and 4. Within equity, a special role has been given to gold as a financial asset. In my opinion, the last feature is the most important; it is a high-quality innovation that distinguishes Basel III from Basel II. In previous Basel standards, only cash (which comes under the heading of <> in all countries) and government debt securities - Ministry of Finance and Treasury bonds - were regarded as high-quality equity. Moreover, this did not include all bonds, only those given the highest rating by leading international rating agencies. For a long time, the highest quality form of equity was considered to be US Treasury bonds. In other words, the banks in those countries that took part in Basel I and Basel II must have been helping Uncle Sam by purchasing US bonds and covering up the holes in the US budget, thereby supporting the US dollar and working against gold as the main rival to <>. <>: the partial rehabilitation of gold Before the 1970s, when the Bretton-Woods currency system existed in the world and there were not yet any <> standards, everything was different. Banks were principally valued in terms of the amount of gold in their equity. The more gold there was relative to the total amount of capital and the total amount of assets, the safer the bank was believed to be. It was all simple, clear and logical. However, those good old times came to an end with the collapse of the gold standard and the IMF's decision to carry out a full and final demonetisation of gold. Gold was demoted to a run-of-the-mill exchange commodity like oil, wheat or coffee. As a last resort, banks could use gold as an investment medium, but the metal stopped being regarded as a valuable financial asset. Up to now, the Bank for International Settlements (BIS) has stored the gold in its <>, so to speak. On the whole, the rules of the game were such that there was no benefit in banks hoarding their gold. At best, bankers regarded the yellow metal with the eyes of speculators buying and selling gold to make short-term profits. Basel III has raised the status of gold dramatically. New rules have been provided to transfer gold to a bank's tier 1 capital at 100 percent of its value. Banks now have the opportunity to replace their paper assets (primarily US Treasury bonds) with gold. Experts have calculated that such a practice will create additional demand for the precious metal to the extent of at least 1700 tonnes. There have been even higher estimations of up to 3000 tonnes. A number of experts believe that the development of Basel III was carried out with powerful lobbying from the Rothschilds, who have an interest in restoring the monetary status of gold in the world. For the last two centuries, the Rothschilds have had control over the main gold reserves, been involved in the extraction of gold and are <> in the precious metals market. In September 2012, before the Basel Committee's new standard had even come into force, the heads of one of the world's largest banks, Deutsche Bank AG, which falls within the Rothschilds' sphere of influence, made a public statement that gold had again been transformed from a commodity into money. The statement caused a painful reaction on the other side of the Atlantic Ocean, first and foremost in the US Federal Reserve System. The chairman of the Federal Reserve, Ben Bernanke, once again issued a standard statement that gold was far from the best type of money. It is not difficult to see that Basel III is a blow to the US dollar and the American economy. America's reaction was sufficiently prompt and harsh. At the end of last year, America's monetary and financial regulators (the Federal Reserve system, the Deposit Insurance Agency and the Office of the Comptroller of Currency) reported that they had been sent a petition by leading American banks stating that the new Basel standards were crippling for lending and borrowing organisations. After this, the Federal Reserve System and other US financial regulators went to the Committee and announced that the introduction of Basel III in America was being postponed, and no date for transition to the new standard was given. At this point, European banks started to feel anxious, believing that if they began the transition to the new standard, they would find themselves uncompetitive in comparison with American banks. Therefore, they also refused to shift to Basel -III. So who exactly has embraced Basel III since 1 January 2013? The list is not very long, with a total of 11 countries in all: Australia, Hong Kong, Canada, China, Mexico, Saudi Arabia, Singapore, Thailand, Switzerland, South Africa and Japan. It is also possible to add India here, which announced it would be joining Basel III from 1 April 2013. It is remarkable that the list contains just four countries from the <> zone: Australia, Canada, Switzerland and Japan. Turkey's absence from the list is mysterious. The country actively encourages the wide use of gold in banking operations, and the proportion of gold in the equity and assets of Turkey's banks compared with other countries is high. In reality, the Turkish banking sector is completely ready to implement the Basel III standards. As the London newspaper the Financial Times observed, the policy of the governor of the Central Bank of Turkey, Erdem Basci, has yielded impressive results for Turkish banks: they have attracted 8.3 billion US dollars in new deposits through gold programmes over the last 12 months and are now able to channel these resources into lending. One can observe that nearly all the leading gold producers are on the list given above: China, South Africa, Canada and Australia. A number of the countries on the list are leading importers of gold (China, Hong Kong, Switzerland, Saudi Arabia and India). China, which has been included on the list of <> leaders, has long been hinting at the possibility of transforming the Yuan into a gold standard. Switzerland, meanwhile, is pushing forward a project to introduce a parallel currency within the country in the form of a gold franc. <>: banks' U-turn on gold The implementation of the new Basel rules could lead to a radical change in the positions of individual countries' banks in the global financial system. To begin with, it is expected that the positions of Chinese banks will become stronger, bearing in mind that for several years in succession, China has ranked first in the world in terms of the volume of gold both extracted and imported. The positions of those banks that bravely embraced Basel III will also become stronger, since the price of gold over the last 12 years has shown an unprecedentedly high growth rate - an average of 17 percent per year. In 2012, a troy ounce of gold cost 1700 dollars. According to many gold traders, meanwhile, the <> (<>) value of metal is at a level of no less than 5000 dollars. Whoever managed to get on the <> by buying low-cost tickets will be much more likely to find themselves on the global financial Olympus tomorrow. Even those banks that have still not entered the zone of Basel III activities understand that their future depends on how quickly they will be able to turn towards gold. IMF and World Gold Council statistics do not give a clear picture of gold purchases by the entire banking sector. However, there are statistics for the purchase and sale activities of central banks in the gold market. Following the collapse of the Bretton-Woods currency system, central banks across the world sold more gold than they bought for more than three decades. After the recently concluded financial crisis, the situation changed dramatically. In 2011, net purchases of gold by the world's central banks amounted to 457 tonnes. This is more than 10 percent of the total demand for precious metals on the world market (4400 tonnes). During the 15 years preceding the crisis, meanwhile, net purchases totalled an average of 400 tonnes per year. Thus, the central banks made a sharp about turn and started to purchase gold in the kinds of volumes that had not been observed since the 1960s. Last year was a record year in terms of the amount of net purchases of gold by the world's central banks since 1964. According to preliminary data released by the World Gold Council, a new record will also be set in 2012: the net purchase of gold by the world's central banks rose to 536 tonnes. With regard to commercial banks, before the introduction of the Basel III standard they only saw gold as a way to increase their own profits through speculation and/or investment, but they had no incentive to establish their own considerable reserves of precious metals. I think their attitude to gold is going to change in 2013, they will buy it for themselves with a view to improving the sustainability of their business and attracting clients. The validation of the Basel III standards in a number of countries in 2013 is a serious indication that gold has returned to the world of money. We are not yet talking about the classical gold standard, of course, whereby banks are able to freely exchange paper money for metal. But metal may become more widely used to cover banks' liabilities and be a financial asset of the <>. Who knows, maybe in the future, when banks have accumulated enough gold, the issue of the reinstatement of the gold standard will be put back on the agenda...

EU China solar panel trade war looms...... Big Oil Wins Again ?

omniradar — Wed, 08 May 2013 13:42:16 -0400

EU China solar panel trade war looms...... Big Oil Wins Again ? Well I think this would only benefit the big oil companies, once more stifling green energy !! Lets hope the tariffs effort comes to nothing. The European Commission is on the verge of a trade war with China over the import of solar panels worth 21bn euros (lb18bn) a year. It is considering imposing an average "anti-dumping" import tariff of 47%, with a decision expected by 5 June. The EC argues China unfairly subsidises its solar panel firms, putting Europe's manufacturers at a disadvantage. But some European solar panel makers are warning that such a move would amount to "dangerous protectionism". "Protective duties are poisonous for the solar industry", said Udo Mohrstedt, chief executive of IBC Solar, a Germany-based global manufacturer. "These guarding measures will endanger more than 70,000 jobs in medium-sized companies in Germany alone. The Commission must stop this dangerous protectionism." Wouter Vermeersch, chief executive of the Belgian company Cleantec Trade, agrees. "The solar business is very price sensitive", he said in a statement issued by the Alliance for Affordable Solar Energy , where Cleantec is a member. "Solar companies already had to cope with continuously decreasing feed-in tariffs in the past. "If prices are artificially increased by punitive tariffs, the European solar market would simply come to a standstill with disastrous effects on green jobs." Trade dispute Trade officials from all 27 countries in the European Union are expected to be briefed on the proposals at in meeting on 15 May. The provisional tariffs would be imposed even though the EC's official investigation is only nine months into its 15-month duration. The EC can do this if it considers there is clear evidence that companies are being harmed. If the EC believes China has not altered its trade practices after the full 15-month investigation comes to an end in December, the provisional tariffs could be imposed for five years. The case, involving over 100 Chinese companies exporting photovoltaic and solar panels worth 21bn euros (lb17.8bn; lb27.7bn) a year, is the EU's largest ever trade dispute. The Chinese could appeal against the EU's decision to the European Court of Justice in Luxembourg and to the World Trade Organisation.

Half of EU countries support labeling settlement goods from West Bank, East Jerusalem

Catalytic — Tue, 23 Apr 2013 16:42:16 -0400

13 foreign ministers ask EU Foreign Minister Catherine Ashton that she formulate rules identifying goods from West Bank, East Jerusalem. By Barak Ravid 17:07 20.04.13 84 United Kingdom, France, Spain among countries signed on petitionJTA - Foreign ministers from 13 European Union member states have expressed their support for labeling products made in what they regard as illegal Israeli settlements. According to a report Friday in El Pais, the Spanish daily, the request was made to Catherine Ashton, the European Union's foreign policy chief, in a letter co-signed by ministers from Spain, Portugal, France, the United Kingdom, Ireland, Denmark, Finland, the Netherlands, Belgium, Austria, Slovenia, Luxembourg and Malta.Get The Times of Israel's Daily Edition by email and never miss our top stories Free Sign up! "This is an important step to ensure correct and coherent application of EU consumer protection and labeling legislation, which is in fulfillment of our previous commitments and is fully consistent with long-standing EU policy in relation to Israeli settlements in the Occupied Palestinian Territories," they wrote on April 12 to Ashton, the High Representative of the Union for Foreign Affairs and Security Policy for the European Union.The ministers also wrote: "We stand ready to assist you in taking forward this important work," in reference to guidelines published in 2012 after a meeting by the EU's 27 foreign ministers that said that "the European Union and its members are obligated to fully and effectively implement existing EU legislation and agreements with Israel regarding products from the settlements." The European Union considers Israeli settlements in the West Bank and the Golan Heights illegal, and some of its members have said that labeling products from such settlements as "made in Israel" is misleading. "The correct labeling of products is necessary to assure that our consumers are not misled by false information," the ministers wrote. Israel annexed eastern Jerusalem and the Golan Heights, both areas captured in the 1967 Six-Day War, and does not consider those areas settlements. The final status of the West Bank, also captured during the '67 war, has yet to be determined. http://www.haaretz.com/news/diplomacy-defense/half-of-eu-countries-support-labeling-settlement-goods-from-west-bank-east-jerusalem.premium-1.516578

Burma: Video Shows Police Does Nothing to stop Mass Killing of Muslim Minority

AntiPropagaanda — Mon, 22 Apr 2013 09:28:59 -0400

Much of the footage was shot by the Burmese police. This report contains images of violence which you may find upsetting police video showing officers standing by while Buddhist rioters attacked minority Muslims in the Burmese town of Meiktila. The footage shows a mob destroying a Muslim gold shop and then setting fire to houses. A man is seen on fire. It was filmed last month, when at least 43 people were killed in Meiktila. Meanwhile the EU is expected to decide whether to lift sanctions imposed on Burma, in response to recent reforms. It is thought likely that despite concerns about the treatment of minorities, Brussels will confirm that the sanctions, which were suspended a year ago, are now permanently lifted. UK Foreign Secretary William Hague has said this is the right time to permanently lift all sanctions against Burma, except the arms embargo. Speaking at the EU meeting of foreign ministers in Luxembourg, Mr Hague said he had spoken to opposition leader Aung San Suu Kyi, who agreed with lifting the sanctions. He did not comment directly on pictures obtained by the BBC which show Burmese police looking on as Buddhist mobs attack Muslims. The sanctions include the freezing of assets of more than 1,000 Burmese companies, travel restrictions on officials, and a ban on EU investment in many areas. However, an arms embargo is expected to remain in place. The move is a response to political change under President Thein Sein, who came to power after elections in November 2010. His administration has freed many political prisoners and relaxed censorship. Ms Suu Kyi, who was under house arrest for many years, leads a pro-democracy opposition which has a small presence in parliament. Documented violenceSome human rights groups, however, have warned that sanctions should not be lifted until the government addresses issues including recent violence against Muslims. The video from Meiktila, in Mandalay Region, is remarkable both for the comprehensive way it documents the violence and because much of it was shot by the Burmese police themselves, the BBC's Jonah Fisher reports from Singapore. In the sequence where policemen look on as a man rolls on the ground having been set on fire, someone in the watching crowd is heard to say: "No water for him - let him die." Another sequence shows a young man attempting to flee and getting caught, after which he is beaten by a group of men which includes a monk. Finally he is struck with a sword strikes him and left on the ground, apparently dead. Only in one shot are the police seen escorting Muslim women and children away from their burning homes. The footage corroborates eyewitness testimony. A row at a Muslim-owned gold shop on 20 March was said to have started the violence, when a dispute involving a Buddhist couple escalated into a fight. This was followed by an attack on a Buddhist monk who later died in hospital. News of that incident appeared to have sparked off sustained communal violence. The violence then spread to other towns and led to curfews being imposed. There were reports of mosques and houses being torched in at least three towns. The gold shop's owner, his wife and an employee were convicted of theft and assault on 12 April and jailed for 14 years. Dozens of other Muslims and Buddhists are said to be under investigation. 'Ethnic cleansing ' Muslim children hanged by Buddhist extremists Violence between Buddhists and Muslims erupted in another part of Burma, Rakhine state, last year following the rape and murder of a young Buddhist woman in May. Clashes in June and October resulted in the deaths of about 200 people. Thousands of people, mainly members of the stateless Rohingya Muslim minority, fled their homes and remain displaced. On Monday, the New York-based organisation Human Rights Watch (HRW) presented a report containing what it said was clear evidence of government complicity in ethnic cleansing and crimes against humanity against Muslims in Rakhine state. It said security forces stood aside or joined in when mobs attacked Muslim communities in nine townships, razing villages and killing residents. It said HRW also discovered four mass grave sites in Rakhine state, which it said security forces had used to destroy evidence of the crimes. However, the allegations were rejected by Win Myaing, a government spokesman for Rakhine state, AP news agency reported. HRW investigators didn't "understand the situation on the ground," he said, adding that the government had no prior knowledge of the impending attacks, and had deployed forces to quell the unrest. President Obama shaking hand with Burma dictator who is accused of attempting to ethnic cleanse the Muslim population using its army. The leader of opposition party of Burma who in response to the question of ethnic cleansing of Muslims responded he believed "they were not from Burma". The Muslim community has been living in Burma for hundreds of years.

EU governments get cold feet on transactions tax

gemini — Mon, 22 Apr 2013 09:27:13 -0400

22 April 2013 http://euobserver.com/economic/119882 London's financial centre - a key source of UK-EU disputes By Benjamin Fox BRUSSELS - Prospects of an EU tax on financial transactions have been put into question by confusion on how it would work and a legal challenge by the UK. A six-page-long memo drafted by civil servants in the EU Council last week - seen by EUobserver - indicates cooling enthusiasm among the 11 EU countries which supported the introduction of a financial transactions tax (FTT). The officials say the FTT, which includes a 0.1 percent levy on bonds and shares and 0.01 percent on derivative products, would hit repurchase agreements on sovereign bonds, forcing up the cost of financing government debt.They warn that it could "create an inappropriate burden on short term bonds, repo operations etc, compared to long term bonds." They also ask a string of questions about the scope and definition of the tax and on how it is to be collected in practice. One EU source told this website: "There's still very little clarity on the proposal and so many unanswered questions. Member states do not know how the FTT will actually work nor do they have answers about the impacts. That 11 countries came together to table six long pages of questions ... just shows how much uncertainty there is over the commission's FTT proposal." For its part, the UK, a staunch opponent of the levy, last week submitted a legal challenge to the European Court of Justice (ECJ). Speaking on Friday, (19 April) a spokesman for the UK treasury said that the case had been filed because of potential knock-on effects for countries outside the EU-11. He added that "a European-only tax would hit people's savings and pensions and hit jobs and growth". Luxembourg finance minister Luc Frieden over the weekend did not rule out joining the British legal challenge. He told press on the margins of a meeting of the International Monetary Fund that he is "not sure whether this project of an FTT in Europe will go ahead." Under the EU treaties, groups of countries can press ahead with legislation provided that it does not "undermine the internal market or economic, social and territorial cohesion." A contact from one of the pro-FTT countries said the British objection is about "defending one rather rich square mile," in a reference to London's financial quarter. France and Germany have led support for the levy, with policy-makers regarding the tax as a way to make the financial sector bear some of the costs of the economic crisis. The commission says it will reap between EUR30-35 billion per year for the 11 countries involved, although its impact assessment indicates that the tax could also lead to a 0.3 percent reduction to the EU's GDP. The EU executive also estimates that it could lead to a 15 percent decline in the trade of shares and bonds and a 75 percent reduction in the volume of derivative trading - widely regarded as the most risky form of financial speculation. Measures have been put in place to prevent traders from circumventing the system by operating from outside the EU-11. The use of an "issuance" principle as well as "residence" criteria means that some traders operating outside the FTT-11 would still be liable to pay the tax.

Hungary to pay EU fines via new tax on own citizens

gemini — Wed, 17 Apr 2013 12:52:45 -0400

17 April 2013 http://euobserver.com/justice/119835 Hungarian leader Orban is also being scrutinised by his own centre-right EPP group in the European Parliament By Nikolaj Nielsen BRUSSELS - Hungarian authorities will pass on the cost of EU fines through a tax on its own citizens whenever it breaches EU law. Giving details of the new Hungarian initiative, EU justice commissioner for justice Vivian Reding told euro-deputies at the Strasbourg plenary session on Wednesday (17 April) that: "in practice citizens would be penalised twice: once for not having had their rights under EU law upheld and a second time for having to pay for this." The so-called ad hoc tax was introduced into Hungary's latest constitutional reform in March, its fourth in the past 15 months. The latest changes are said to undermine the rule of law by limiting the power of the constitutional court. Hungary denies the charge. But the commission wants it to repeal rules that entitle the president of a judicial administrative body to decide where cases should be tried, to repeal the ad-hoc EU fine tax, and to scrap restrictions placed on political adverts during election cycles. The Venice Commission - an expert body composed of former constitutional judges in the Strasbourg-based Council of Europe - and the European Parliament are also drafting separate reports on Hungary, both of which are due by the EU assembly's June plenary Hungarian Prime Minister Viktor Orban in a letter addressed to commission chief Jose Manuel Barroso on 12 April said they will review the two issues but did not comment on the ad-hoc tax. For her part, Reding noted that she has drafted a bundle of infringement letters against Hungary but that she is waiting for Orban's response on the ad-hoc tax issue - due by May - before sending them out as a single package. "We will not wait until June before we come out with ... infringement proceedings," she said. The constitutional changes, among others, were pushed through a parliament which is dominated by Orban's centre-right Fidesz party. The two-thirds Fidesz majority has made the Hungarian assembly dance to its tune since 2010, with civil liberty groups saying the Orban government is abusing its position of power to entrench its power and conservative values. Outspoken critic, Belgian liberal leader Guy Verhofstadt, told fellow MEPs the commission should remove Hungary's voting rights in the council under a never-before-used rule for countries said to breach EU values. "The commission should launch the procedure without delay, or else we in the parliament should have the courage to do it ourselves," he said. Meanwhile, the threat of a commission fine on Hungary is looming as Budapest has yet to implement in practice a November decision by the EU court in Luxembourg to reinstate judges who were forced into early retirement. The outstanding issue dates back to another set of two infringement procedures launched against Hungary last year. Reding in late March asked Hungary's justice minister to detail the number of judges who have been reinstated. The Hungarian justice minister replied in April but gave only figures of how many judges and prosecutors have been affected, not reinstated. Hungary had until 6 January to implement the court's decision on the judges but missed the deadline by about three months. While the rules have since been amended, a handful of Hungarian judges informed the commission last week they have yet to be reinstated. "Here we can launch an infringement as well which could lead to immediate fines," an EU official close to the issue told this website. Under Hungary's new law, the fine, if imposed, would be the first to be passed on to the Hungarian tax payer.

Cyprus to appeal to EU for extra bailout funding

gemini — Fri, 12 Apr 2013 06:35:06 -0400

12 April 2013 Last updated at 11:02 http://www.bbc.co.uk/news/business-22116270 Cyprus president Nicos Anastasiades has said he will appeal for extra funding assistance from the European Union. On Thursday, it emerged that Cyprus would need to raise an extra 6bn euros ($7.8bn; lb5.1bn) to secure a 10bn euro bailout from Brussels and the IMF. The president now says he is writing to EU leaders, asking them to change their policy towards Cyprus. Mr Anastasiades made the announcement ahead of a eurozone finance ministers meeting in Dublin. According to a draft document prepared by the country's creditors, the cost of the rescue has risen to 23bn euros from 17.5bn euros, with Cyprus now having to find 13bn euros of this. 'Critical times' The Dublin meeting will review how Cyprus can raise its contribution to the bailout being put together by the EU and IMF. Mr Anastasiades said he had already spoken to EU Economy and Euro Commissioner Olli Rehn ahead of the Dublin meeting. He also said he would also be writing to European Commission chief Jose Manuel Barroso and to EU President Herman Van Rompuy. "The letter to Mr Barroso and Mr Rompuy will refer to the need for EU policy to change towards Cyprus by giving it extra assistance, given the critical times we are going through as a result of the economic crisis and the measures imposed on us," Mr Anastasiades said. The finance minister of Luxembourg, Luc Frieden, said on Friday that Europe and the IMF could not increase their 10bn euro share of the bailout. "I believe the policy will be that the volume will remain at 10bn ," he told a German radio station. Late on Thursday, a Cypriot government spokesman confirmed that one fundraising option being considered was the sale of some of the country's gold reserves. "The Cypriot government put various options forward, including this," Christos Stylianides told a news conference. He blamed the gulf between the original bailout total and the new 23bn figure on the previous administration and the time it took to negotiate a bailout, delays which pushed the cost of recapitalising its banks much higher. Mr Stylianides accused former President Dimitris Christofias of failing to "take responsibility, and complete indecisiveness" in promptly negotiating a bailout. 'Big burden' Analysts said the increase in the cost of the bailout meant Cyprus faced huge new challenges. Jonathan Loynes, chief European economist at Capital Economics, said that the "biggest burden of the increase in the bailout will fall on depositors and bank bond-holders, whose combined contribution will rise from an expected 5.8bn euros to 10.6bn euros." Under bailout terms agreed in March, depositors with more than 100,000 euros in savings will bear part of the cost of the rescue. The bank sector on which much of the Cypriot economy was dependent is shrinking, and thousands of jobs are being lost. Laiki Bank is being wound up and its healthy assets transferred to the Bank of Cyprus. Capital controls Late on Thursday, Cyprus relaxed restrictions that were imposed last month on access to accounts in order to head off a run on banks. The capital controls, the first that any eurozone country has applied, were put in place when banks reopened on 28 March after they were closed until a bailout agreement. A new decree, which will remain in place for seven days, lifts all restrictions on transactions under 300,000 euros, a move aimed at helping cash-starved domestic businesses which had difficulty paying suppliers and employees. Also, the daily limit on transactions outside of Cyprus not requiring prior approval is raised from 5,000 to 20,000 euros. However, the daily cash withdrawal limit of 300 euros stays in place. Meanwhile, eurozone officials at the meeting in Dublin are also due to review Slovenia's growing problems. There will be no discussion at the meeting of finance ministers, and the country will not make an application for bailout funds. But Slovenia's finance minister, Uros Cufer, is expected to present to EU and European Central Bank officials his plan to shore up the country's finances. Slovenia, which adopted the euro single currency in 2007, has been forced to recapitalise its main banks and the economy is struggling.

Tax Haven Revelations: German Offenders Face Tough Road Ahead

Candlelicht — Sat, 06 Apr 2013 15:22:08 -0400

The large-scale secret tax haven dealings exposed this week are of an enormous scope, covering the transactions of more than 100,000 individuals, including many Germans. Several hundred, in fact, according to the S"uddeutsche Zeitungnewspaper, which along with German public broadcaster NDR was among the network of journalists who analyzed some 2.5 million leaked documents from tax havens that detailed dubious dealings with offshore accounts and shell companies. So far, the only German to be named is the late society playboy Gunter Sachs, who was briefly married to Bridget Bardot in the 1960s. But the S"uddeutschehas announced it plans to reveal more names in the coming days. The revelations, first published on Thursday, sparked immediate demands from German politicians and officials for further details to aid in their fight against tax evasion . Both the German Finance Ministry and the finance minister in the country's most populous state, North Rhine-Westphalia, said they expected relevant documents to be handed over promptly. But justice officials, including state prosecutors in Bochum und D"usseldorf, have said they don't yet see cause to launch new investigations. They would prefer to wait until individual names are released before finding out whether these people have evaded paying taxes or engaged in money laundering. Still, the "Offshore Leaks" revelations, which include 130,000 people from more than 170 countries, could trigger an avalanche of legal cases. Those under suspicion are likely to be worried. In Germany, tax evaders can face up to 10 years behind bars, and anyone who hides funds exceeding EUR1 million is excluded from the possibility of a suspended sentence. 'The Really Big Fish' Criminal tax lawyer Wolfgang Joecks, who is also a constitutional judge in the state of Mecklenburg-Western Pomerania, says the investigations could be complicated because they are also likely to involve international tax law. At the same time, he says: "I can imagine that the search will be very fruitful." That's because those under suspicion are likely to confess quickly, thus providing investigators with tips and clues for further probes. "Then I'd recommend that those in question pack their toothbrushes in a suitcase and prepare for pre-trial detention," he adds. But this case is quite different from those in recent years that saw German officials purchase CDs containing data on tax cheats from sources in Switzerland or Luxembourg, Joecks says. "Offshore tax havens aren't usually dealing with the kind of people who drive to Luxembourg to make a deposit, but with complex constructs and networks that are set up to conceal capital flows," he says. "To put it colloquially, this is about the really big fish." Indeed, the sums of money bunkered in tax havens around the world could be enormous. Thomas Eigenthaler, the head of the country's DSTG union of financial administration workers, told daily Bild that Germans allegedly have some EUR400 billion ($516 billion) in untaxed money hidden abroad. Still, that doesn't necessarily mean that all of these offshore accounts are illegal. "Accounts in tax havens can also take advantage of legal room for maneuver," says Thilo Schaefer, a tax expert at the Cologne Institute for Economic Research. This activity also isn't always about tax evasion, but simply favorable investment opportunities, or spreading financial risks. "The general suspicion that every arrangement in a tax haven is illegal just isn't appropriate," he adds. Self-Indictments Won't Be Easy However, those who have engaged in tax evasion can still get off scot free if their activity exceeds the statute of limitations, though this will likely apply in very few cases, says tax lawyer Joecks. Investigators will probably focus not just on rich private individuals, but also companies whose activities have been uncovered. That's because businesses often transfer bribes through secret accounts in tax havens. Or, perhaps they have evaded corporate tax, which would not only have to be paid back, but would also require criminal prosecution of the executives responsible for the decision. Another scenario could involve company owners hiding capital gains, which is also a criminal offence. While tax evaders in recent years have sometimes been offered immunity for turning themselves in, this time it won't be that easy, because lawmakers have since significantly tightened the rules against offenders. Suspects must provide exact details of their finances for each year, and when this information is found to differ from the reality by even 5 percent in a single year, the entire self-indictment is void, Joecks says. "Because of the nature of these complex structures and high sums, most of the suspects won't be able to manage this before someone turns up for them," he adds. German officials are demanding details on hundreds of alleged tax cheats uncovered by the "Offshore Leaks" report this week. With tighter laws in place, anxious violators probably won't get off as easy as before.

Slovenia could be next candidate for eurozone bailout

gemini — Sat, 30 Mar 2013 06:27:48 -0400

Josephine Moulds Thursday 28 March 2013 15.04 GMT http://www.guardian.co.uk/world/2013/mar/28/slovenia-next-candidate-eurozone-bailout A bank branch in Ljubljana. Slovenian banks have EUR7bn of bad loans on their books. Slovenia - famed for not very much - is fast emerging as the latest contender for a eurozone bailout. Nestling between Croatia and Italy, this country of almost 2 million people may be best remembered in the UK for losing to England at the last football World Cup. With risotto from Italy, goulash from Hungary and strudel from Austria, its cuisine is heavily influenced by its neighbours. But when it comes to its finances, Slovenia follows more closely in the footsteps of Spain and Ireland, with a large, troubled banking sector that threatens to bring down its economy. The once-booming former Yugoslav republic was plunged into recession by the economic crisis, which dented demand for its exports of manufactured goods, machinery and transport equipment, chemicals and food. The economy is expected to shrink by at least 2% this year. But the statistic that has everyone concerned is the EUR7bn (lb6bn) of bad loans on Slovenian banks' books, an amount equivalent to around a fifth of its GDP. The rating agency Moody's has already downgraded Slovenia's second largest bank, and the IMF has estimated that the government needs to recapitalise Slovenian lenders to the tune of at least EUR1bn. Perhaps most worrying is the fact that the prime minister, Alenka Bratusek, was moved to say this week that her country would not be seeking a bailout. Bond investors are not taking any chances. Prices of Slovenian government debt have plunged, sending yields rising by an eye-watering 0.8% on Wednesday alone. Slovenia's 10-year debt is now yielding around 6.15%, not far from the 6.49% yield on 10-year bonds from Portugal, which is already in a bailout programme. Laurence Wormald at SunGard Financial Systems said: "The evidence suggests that action will be needed by Slovenia within the next two, three months. However, a bail-in is likely to be less drastic than the one in Cyprus, since Slovenian banks are much less leveraged than those of Cyprus. Also Slovenia is different from Cyprus in one crucial respect, in that Slovenia has not created a large offshore banking centre." After Slovenia, who's next? The research house Capital Economics has its money on Malta and Luxembourg.

United States Armed Forces

Endovelicus — Fri, 29 Mar 2013 15:43:27 -0400

God Bless the United States! United States main allies: Albania, Australia, Austria, Belgium, Bulgaria, Canada, Chile, Croatia, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania, Luxembourg, Netherlands, New Zealand, Norway, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, Turkey, United Kingdom Others: Andorra, Azerbaijan, Bahamas, Bahrain, Belize, Botswana, Cyprus, Dominican Republic, East Timor, Federated States of Micronesia, Fiji, Georgia, Guyana, Kiribati, Malta, Marshall Islands, Monaco, Nauru, Palau, Panama, Papua New Guinea, Samoa, San Marino, Saudi Arabia, Singapore, Solomon Islands, Suriname, Switzerland, Tonga, UAE

Cyprus rescue fuels a growing rift that endangers EU integration

gemini — Thu, 28 Mar 2013 15:12:00 -0400

Cyprus may have been saved, but monetary union is impossible to sustain in the absence of a political union across Europe Harold James Thursday 28 March 2013 16.14 GMT http://www.guardian.co.uk/business/economics-blog/2013/mar/28/cyprus-rescue-growing-rift-eu-integration Customers outside the Laiki Bank Limassol in Cyprus. The rescue package may have saved Cyprus for now, but European integration is in jeopardy. Europe can choose its own musical accompaniment to its latest crisis. In Berlin, 50 Cent's film All Things Fall Apart has just had its premiere, so that soundtrack might be appropriate. Or the continent can reach back to Giuseppe Verdi, born 200 years ago, whose penultimate, and probably greatest operatic achievement starts on the coast of Cyprus with a storm of fantastic violence and the opening words of its hero, Otello: Esultate, rejoice! The war has been won; but Otello's achievement is later destroyed by his jealousy. Cyprus now appears to have been rescued. But the rescue has fuelled a growing rift that jeopardises the future of European integration, partly owing to the way that the upheaval of the early 20th century - especially the Great Depression - has been re-enacted in the debates about the post-2008 financial meltdown and the subsequent euro crisis. The interwar economic slump became intractable because it was also a crisis of social stability, democracy, and the international political order. Widespread bankruptcy and unemployment increased social tension, ultimately making normal democratic politics impossible. In Germany, the epicentre of democracy's collapse, radicals on both the right and the left raged against the postwar peace settlement and the Versailles treaty. In the last years of the increasingly unstable Weimar Republic, as democracy was fraying, German governments started to use their opponents' radicalism in an effort to extract security concessions from western powers. Domestic political pressure became a source of heightened international tension. That is true in today's Europe as well. Democracy has become a central target of complaints by the European elite. Luxembourg's prime minister, Jean-Claude Juncker, a former chairman of the euro group, has lamented that European leaders know what the right policies are, but do not know how to be re-elected after implementing them. Similarly, after his recent crushing election defeat, Italian prime minister Mario Monti wistfully explained that Italy's voters were too impatient to bear reforms whose benefits would only become evident beyond the electoral cycle. Events in Cyprus have exposed two other dimensions to the clashes over Europe's dual sovereign debt and banking crisis. First, the discussion of a levy on bank deposits, and whether small customers should be exempted, put class conflict front and center. Second, the question of foreign, and especially Russian, depositors - along with proximity to Syria - has turned the rescue of the Cypriot banking sector into an international relations problem. The initial proposal to impose a one-time tax on accounts holding less than EUR100,000 came not from the European Union or from Germany, but from the Cypriot government, which must have known that it was likely to generate outrage, and that the Cypriot parliament would never vote for it. Perhaps the government believed that mass protests - with placards denouncing the EU as a fig leaf for revived German domination of Europe - would strengthen its hand. After all, even moderate Cypriots were outraged by the bullying of their small island by Germany and by Europe. The other side in the negotiations also played class politics. At one of the tensest moments, as Cyprus was seeking an alternative rescue package from Russia, the German Bundesbank announced the results of a new European Central Bank study indicating that average German wealth was lower than in the southern European states, largely because fewer Germans own houses. The message seemed clearly intended to influence the negotiations: why should poorer Germans be expected to sacrifice to support Mediterranean millionaires? In the aftermath of the financial crisis, income and wealth distribution have moved to the centre of political debate. Even the Catholic church seems to reflect the new mood. The election of Jorge Mario Bergoglio as Pope Francis is a clear reference to St Francis of Assisi and the church's mission to stand up for the poor. On the international relations front, after 2010, as deposits from Europe left Cypriot banks, deposits from Russian businesses and individuals increased - and Russia has many reasons to use money as a way of buying political control. Cyprus is a crucial staging post for American security operations in the eastern Mediterranean, and the gas fields off the Cypriot coast might be developed as an energy source that would - at least after 2017 - reduce European dependence on Russian supplies. In an earlier phase of the crisis, Russia gave Cyprus a $3bn credit. Now, however, a new credit would serve only to make the burden of government debt unsustainable; what is needed is a purchase of all or some of the problematic Cypriot banks. In the aftermath of a crisis that has been intensified by the rhetoric of class conflict, Russia might be able to extend its control more significantly, and at a lower price. Deepening social polarisation, its use in financial negotiations, and the intrusion of a new security element provide further evidence of what most economists and commentators on Europe have long argued: a monetary union is impossible to sustain in the absence of a political union. A state, especially in the modern form of the European welfare state, depends on effective mechanisms for arbitrating and resolving social disputes - mechanisms that, as the turmoil surrounding Cyprus has shown, the EU lacks. As long as that remains true, European integration may be doomed by the time the music stops. Harold James is professor of history and international affairs at Princeton University and professor of history at the European University Institute, Florence. He is the author, most recently, of Making the European Monetary Union