|W.I.L. Home Page||Offshore News Digest Home|
WILL LIECHTENSTEIN’S AUTONOMY PREVAIL?
The Principality of Liechtenstein is a small State in Central Europe, situated between Austria and Switzerland. Though its geographical location and diminutive size make it a somewhat anonymous State, its independent political climate gives rise to an exemplary model for the study of political and economic phenomena.
The glory of Liechtenstein’s political freedom, overall, has been due to unequivocal banking secrecy; lax regulatory oversight; anonymity in business formation and banking; legal company structuring that is friendly to wealth-creating holding companies; overall moderate taxes; tax laws allowing for tax-efficient asset management; and a minimal licensing and permit environment.
However, the future could be bleak for this Principality. The Financial Action Task Force (FATF), a unilateral organization that operates under the auspices of “anti-money laundering”, had long ago made Liechtenstein a favorite target because of its tax haven status and its refusal to “cooperate” with regulatory measures. Essentially, the FATF is a pro-big government blackmail organization that adopts a fluffy and well-meaning name, but operates to rid the world’s individuals of financial wealth and privacy. By 2002, the Liechtenstein government had kowtowed under pressure to the organization’s decrees, agreeing to cooperate with the FATF in the establishment of various “anti-money laundering” programs and regulations. This was the trade-off to get off the organization’s blacklist.More on this story here.
GLOOMY ECONOMIC PROSPECTS IN SWITZERLAND
The chairman of the Swiss National Bank, Jean-Pierre Roth, says the Swiss economy is unlikely to pick up swiftly. Roth said the risk of a renewed downturn in Switzerland and abroad should not be underestimated given the uncertain economic and political environment.More on this story here.
Credit Suisse Group, the second biggest Swiss bank, reported its first quarterly profit in a year as revenue from bond trading rose and costs declined following 9,350 job cuts.More on this story here.
NEW ZEALAND PM CRITICAL OF OECD “BUREAUCRACY”
New Zealand Prime Minister Helen Clark, who will chair a ministerial gathering of the OECD next week, says the organisation’s bureaucracy should keep in mind the world’s social and political realities. Ms. Clark says for many years the OECD bureaucracy has had its own agenda -- which most countries have not followed.More on this story here.
TAX STRUCTURE IN AUSTRALIA
Australia taxes its residents on their worldwide income. For other resident individuals, Australian tax is due on income derived from all foreign sources with the exception of salary and wages derived in performing duties outside of Australia for a continuous period of at least 91 days, provided these earnings are not exempt from tax in the foreign country in which they are earned. Non-resident individuals are subject to Australian tax on income derived from sources in Australia.
An individual is treated as a resident for Australian tax purposes if they meet either of the following criteria: 1.) Their domicile and permanent place of abode is in Australia; or 2.) They have actually been in Australia for at least 183 days in the tax year (ending 30 June), unless their usual place of abode is outside Australia and they do not intend to reside in Australia on a permanent basis.More on this story here.
DRUG FEARS OVER STOLEN AUSTRALIAN PASSPORTS
Fears are growing that tens of thousands of Australian passports reported lost or stolen each year are falling into the hands of drug traffickers, people smugglers and terrorists. The Australian National Audit Office revealed today that in the year to June 2002, 32,497 passports were reported stolen or lost, 11,502 of them overseas.More on this story here.
ARGENTINA VOTE GOES TO RUN-OFF
Argentina’s flamboyant ex-president Carlos Menem says next month’s run-off presidential election will be a formality and that his victory is guaranteed. Mr. Menem won the most votes in Sunday’s first round, but not enough to avoid a run-off. With almost all votes counted, Mr. Menem won 24.3%, while provincial governor Nestor Kirchner had 22%.
Sunday’s election was the first time the country’s 25.5 million eligible voters had the chance to go to the polls since the collapse of Argentina’s economy in 2001. Polls were busy as voting is mandatory.More on this story here.
PARAGUAY RULING PARTY HOLDS ONTO POWER
ASUNCION: Colorado Party leader Nicanor Duarte extended his party’s 55-year grip on power, winning a presidential election by handily defeating two challengers seeking to tap building anger over the country’s deepening economic crisis. The Colorados have dominated the politics in this South American nation of 5.5 million people since 1947, governing both in times of dictatorship and civilian rule.
With 92% of the ballots counted from 8,400 polling stations nationwide, Paraguay’s Electoral Court said Duarte garnered just over 37% of the vote. Second place went to opposition leader Julio Cesar Franco of the Authentic Radical Liberal Party with nearly 24%.More on this story here.
RULING PARTY WINS RE-ELECTION IN TURKS AND CAICOS
Chief Minister Derek Taylor and his ruling People’s Democratic Movement narrowly won re-election in the British Caribbean colony Turks and Caicos, according to unofficial results from government radio Friday. The PDM won a third consecutive term by taking seven seats in the Legislative Council to six for the opposition Progressive National Party. The results from balloting Thursday were subject to a recount. Three seats were decided by fewer than 10 votes.More on this story here.
EASTERN CARIBBEAN STATES AGREE TO ECONOMIC UNION, COMMON PASSPORT
ST JOHN’S, Antigua: Leaders of the Organisation of the Eastern Caribbean States (OECS) agreed yesterday to set up an economic union, as well as introduce a common passport by as early as next year. St. Vincent prime minister, Ralph Gonsalves, urged members to expedite measures to create a single market economy by 2005, when the region is likely to be exposed to tough competition as it joins Latin American and North American countries in signing onto the Free Trade Area of the Americas.
Governments have passed laws allowing freedom of movement between the seven OECS members, which include Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines. The British Virgin Islands and Anguilla are associate members.More on this story here and here.
Attorney-General of Antigua and Barbuda, Gertel Thom, returned home from the UK this week after a series of legal discussions with, among others, the Lord Chancellor, Lord Irvine. The main issues discussed were the proposal for a Caribbean Court of Justice to settle trading disputes, and the continuing role of the Privy Council as the final place of appeal in civil and criminal cases.
While in London, the Attorney-General met with lawyers representing Antigua and Barbuda at the World Trade Organisation in its case against the United States’ ban on internet gambling. Moves in the US Congress such as the Kyle and Leach Bills which ban US citizens from gambling via the internet are reckoned to cost the jurisdiction some $30 million, Antigua and Barbuda Prime Minister Lester Bird claimed earlier in the year.More on this story here.
PUERTO RICO REPRESENTATIVE TRIES TO ADD RIDER TO BUSH’S TAX PROPOSAL
Representatives of Puerto Rico Governor Sila Calderon have quietly tried to hijack the President’s proposal. They want to make it a vehicle for the approval of her top federal priority: permanent tax exemption for profits that companies based in the States receive from subsidiary companies in Puerto Rico and other U.S. territories.
In addition to policy problems, Calderon’s quiet maneuver also threatened to create a cost problem for Bush’s proposal -- a proposal that already is seriously endangered because of its cost. Calderon’s proposal would cost at least $6 billion in tax revenues. The primary congressional objections to Bush’s proposal are its $396 billion cost at a time of record -- and rapidly increasing -- federal budget deficits.More on this story here.
PRIVATE BANKING CONTINUES TO GROW
Experts say several factors are driving the growth in private banking, which typically caters to individuals with $500,000 or more in investable assets. First, even in a vicious investing environment, there has been a slight growth in the investable assets of the affluent. Also, bankers are gearing up for the $41 trillion transfer of wealth from one generation to the next that is slated to happen over the next five decades.
But the more immediate push comes from wealthy investors disillusioned with the advice they have gotten. Bankers are trying to wrest these clients from brokerages and trusts.More on this story here.
SURVEY: WEALTHY AMERICANS ARE SPENDING LESS
Nearly 40% of 820 wealthy people interviewed for the McDonald Financial Group Affluent Consumer Confidence Index this month say they will invest less money in the stock market over the next three months. Although 44% of the people interviewed said they had lower debt now than a year ago, 57% attribute this to cutting back on personal spending rather than paying down debt, up from 43% in January.More on this story here.
BANKRUPTCY NOT ONLY CHOICE FOR DEBT SWAMPED
Last year, a record 1.6 million households sought protection from creditors in bankruptcy. Over the past five years, personal bankruptcy filings totaled 7.1 million - or 7% of all U.S. households. Families are staggering under an estimated $1.7 trillion in debt, not including mortgages and home-equity loans -- a 32% increase since 1998.
As common as personal bankruptcy has become, however, few consumers know much about the system. Instead of taking time to consider their options, debt-stressed families often turn for help to the lawyer or credit-counseling agency with the biggest ads.
If you are struggling to make ends meet, it is important to explore all your options and find out where you can go for good advice.More on this story here.
OFFSHORE FUNDS ARE ON THE ROPES
Global money managers hoping for some good news after three years of down markets came away disappointed. Just 30 of the world’s 500 biggest mutual funds managed outside of the U.S. and tracked in BusinessWeek’s quarterly Offshore Funds Scorecard emerged from the first quarter with positive returns.
Offshore funds are typically based in tax havens such as Luxembourg and the Isle of Man, and cannot be marketed to U.S. residents because they do not file reports with the Securities & Exchange Commission. Yet it is a vast market that represents the collective judgment of fund managers around the world.More on this story here.
IRS CHARGES OFFSHORE-BANKING EXPERT
PORTLAND, Oregon: The author of books on avoiding taxes was indicted on charges of conspiring to help clients cheat the IRS by routing millions of dollars through offshore banks. The federal indictment alleges that Terry Neal and three others -- his son-in-law Lee Morgan, Aaron Young and James Fontano -- had promoted and sold various tax-evasion schemes since 1995. Their customers may also face charges, said assistant U.S. attorney Robert Ross.
Neal, who has a history of run-ins with federal regulators and whose books include The Offshore Advantage, is a high-profile advocate of offshore asset-protection strategies. The indictment, issued Thursday, alleges that he and the other three set up sham corporations both offshore and domestically for their clients. With the defendants’ help, clients allegedly could route money through the sham businesses and then back to themselves to elude the IRS, the indictment says.More on this story here and here.
BYPASS TRUSTS SHIELD MORE OF AN ESTATE
A couple has two estate tax exemptions, but when, say, the husband dies first, the exemption dies with him. On its face, that does not seem so bad, because the husband can usually leave an unlimited amount of money to his wife free of estate taxes. But when the wife eventually dies and the assets go to the children, anything more than the exemption, $1 million this year, will be subject to estate taxes. With a bypass trust, the husband’s exemption is kept alive and shelters an additional $1 million.
A trusts and estates partner in Manhattan explained that the bypass trust would keep some of the husband’s money, usually up to the exemption, out of the wife’s estate upon his death. When she died, the trust would then pass the money tax-free to the beneficiaries, who are usually the children.More on this story here.
HOW TO JUMP THE UK INHERITANCE TAX NET
With house prices in the UK rising by more than 26% last year, many people who have never considered themselves particularly wealthy, now find themselves caught in the inheritance tax net.
Say a married couple’s house is worth £500,000 and they have £150,000 in savings. If everything is left to the surviving spouse, he or she will have an estate worth £650,000. When the surviving spouse dies, everything over £255,000 will be taxed at 40%, leaving a tax bill of £158,000. But if everything is divided between the couple, each partner will have an estate worth £325,000. The inheritance tax bill will be £28,000 each -- a saving of £102,000.
The first step a couple should take is to change the ownership of their home from joint tenancy to “tenants in common”, so that each owns half the property. The couple should state in their wills that the other tenant can have the other share of the house when the first dies in exchange for an IOU, which is put in trust. If the house is worth £500,000, the IOU is made out for £250,000. By doing this, the couple have made sure they keep their home -- but half the value is removed from their estate for tax purposes. When the survivor dies, the IOU is repaid to the trust, removing the amount of the debt from the estate. The trust only comes into existence when the first person dies and is known as a nil-rate band discretionary will trust.
Single people, those widowed or divorced, unmarried couples with children and couples with a home worth in excess of £500,000 have to resort to a more complicated and expensive method of reducing the tax bill.More on this story here.
HARRY POTTER’S CREATOR RICHER THAN THE QUEEN
Ten years ago, she was a single mother living on £70 a week in state benefits. Now J. K. Rowling, who wrote her first children’s book in an Edinburgh cafe while her baby daughter slept beside her, is worth £280 million -- a figure which puts her 11 places higher than the monarch. Rowling’s fortune has quadrupled in the past two years, thanks to carefully negotiated film and merchandising deals. The 37-year-old first entered the Rich List in 2001, with personal wealth of £65 million.More on this story here.
PRELUDE TO AN AMERICAN POLICE STATE
A theme has emerged in this week’s articles in the Colorado Freedom Report. Whether it is the police persecuting blue-collar workers for selling alcohol to undercover adult cops, or the police arresting gay men for having sex in the privacy of their own home, or the police abusing the Fourth Amendment on the side of the road, the police in the United States are too often out of control. The Police State rises ominously all around us. The image of the helpful peace officer keeping people safe from thugs is quickly fading into memory. Instead, the modern police force more resembles an occupying army. But the police are “merely” the agents: the primary fault lies with the legislators. “Just following orders!”
What we are talking about precisely is fascism. Not the fascism of the death camps, but a banal, tedious, petty fascism that slowly leaches the spirit of freedom from the American soul. Fascism is defined as state control of nominally private property. Such as the property of a restaurant owner. Or our property in our own bodies in our own houses.
America is a law-respecting society. When the laws are simple and honest and their focus is the prevention of violence, respect for the law is a virtue. But today, as the prohibited and the mandatory slowly squeeze out what is left of our liberty, the worship of laws makes us subjects of an oppressive state.
Whereas dystopian novels like 1984, Brave New World, and Fahrenheit 451 might be read as frightening warnings, sometimes it seems like some politicians view these books as training manuals.More on this story here.
SYBASE’S “PATRIOTCOMPLIANCE” SOLUTION
The USA PATRIOT Act requires that financial institutions know their customers and, to the greatest extent possible, their customers’ customers. Sybase PATRIOTcompliance solution is a comprehensive, end-to-end, real-time solution to help DFIs comply with the USA PATRIOT Act. The solution rapidly satisfies the requirements of the Act by implementing an automated process for continuous monitoring that is operationally unobtrusive, secure and cost effective.More on this story here.
AMERICANS MORE FREE THAN EVER? IT JUST AIN’T SO!
In a November 2002 Washington Times column titled “Americans Enjoy More Freedom Today Than Ever,” Jonah Goldberg stated, “Today, we worry desperately about our personal and political freedom even though we are more free today than at any time in our history.”
There are several problems with Goldberg’s methodology: First, he carves out a subgroup of people and considers whether they are freer. Second, he simply ignores the myriad of ways in which we are less free. Third, he confuses freedom with wealth. And fourth, he finds dark periods in our history in which we were less free than today and then implicitly assumes that those comprise the total of our history.
Many of us get nervous when we see Americans thrown in prison indefinitely without being charged with a crime, as Jose Padilla recently was. How does Goldberg handle this concern? He changes the subject by pointing out, correctly, that the situation is not nearly so bad as that in World War II, when over 100,000 Japanese-Americans were placed in U.S. concentration camps. The situation today is much better than that. But what does that have to do with his initial claim - that we are freer than ever.More on this story here (PDF file).
ACLU FIGHTS BAN ON IRWIN SCHIFF’S ANTI-INCOME TAX BOOK
A Las Vegas federal judge has called the anti-tax writings of civil defendant Irwin Schiff “nonsense” and enjoined him from distributing a book that is based on them. The book describes in detail how to file a zero-tax return. It also includes a legal-theory form to attach to the zero-tax return. The book warns readers that getting sued or arrested for filing such a return is possible and describes how to resist IRS attempts at collection if an audit finds the filer’s legal theories wanting.
The case has sparked a legal battle that pits federal tax law against First Amendment rights. While the government’s complaint is thick with details and weighted by exhibits, the allegations boil down to this: Schiff and his associates are tax cheats. But aspects of the case fly in the face of the First Amendment, according to Schiff’s lawyer, the American Civil Liberties Union of Nevada and some legal scholars. The ACLU’s involvement concerns three components of the injunction that it says violate First Amendment protections.More on this story here.
ASHCROFT: U.S. CAN HOLD ILLEGAL IMMIGRANTS INDEFINITELY
The Attorney General says the government can detain illegal immigrants indefinitely when federal authorities determine they pose a threat to national security. In a 19-page opinion requested by the Department of Homeland Security in a case involving a Haitian immigrant, Mr. Ashcroft said “such national security considerations clearly constitute a reasonable foundation for the exercise of my discretion to deny release on bond.”
In his ruling, Mr. Ashcroft said the release of illegal immigrants in custody without performing adequate background checks would undercut U.S. immigration policy. “Surges in such illegal migration by sea injure national security by diverting valuable Coast Guard and [Defense Department] resources from counterterrorism and homeland security responsibilities,” he said.More on this story here.
Cato Institute: Don’t Blame Immigrants for Terrorism. Immigration and border control are two distinct issues. Border control is about who we allow to enter the country, whether on a temporary or permanent basis; immigration is about whom we allow to stay and settle permanently. The majority of aliens who enter the United States return to their homeland after a few days, weeks, or months. Reducing the number of people we allow to reside permanently in the United States would do nothing to protect us from terrorists who do not come here to settle but to plot and commit violent acts. And closing our borders to those who come here temporarily would cause a huge economic disruption by denying entry to millions of people who come to the United States each year for lawful, peaceful (and temporary) purposes.
The problem is not that we are letting too many people into the United States but that the government is not keeping out the wrong people. Immigrants come here to realize the American dream; terrorists come to destroy it. We should not allow America's tradition of welcoming immigrants to become yet another casualty of September 11.Editorial here.
CREDIT SCORE COULD DETERMINE FLIGHT STATUS
As the government tightens security in the wake of 9-11, it is creating a plan to access credit histories to find out if someone buying a plane ticket could be a terrorist. The theory is that some factors in a credit report can be matched against a government profile of someone who is a security risk.
The Transportation Security Administration will not say what those factors are. But one source said they include a lot of high and unpaid credit card balances and a bunch of different addresses. The project is called CAPPS II, which stands for Computer-Assisted Passenger Pre-Screening System II, and a limited test is now being conducted with Delta Air Lines.More on this story here.
MEXICO CLAIMS CHOICEPOINT STEPPED ACROSS THE LINE
Even before the 9-11 attacks, the United States was quietly purchasing dossiers on millions of citizens in 10 Latin American countries from an Georgia firm. The reason: to help verify the identities of Latin American nationals accused of committing crimes in the United States and help in the larger effort to find potential terrorists.
Now, ChoicePoint, the firm that collected the data, finds itself the target of growing criticism abroad and investigations in Nicaragua, Costa Rica and Mexico over whether privacy laws were violated. Latin American media have decried the company’s actions, including what Mexico claims was the illegal sale of confidential voter registration records of more than 65 million of its citizens.
At the heart of the controversy is the question of what constitutes a confidential record. Besides contracts with the U.S. government, including a five-year, $67 million deal with the Department of Justice, ChoicePoint sells information about consumers to 60% of the Fortune 500. Those files include names, addresses, property ownership and other information that ChoicePoint says can be found in public records.More on this story here.
BIOMETRIC CHIPS IN UK PASSPORTS BY 2005
According to the UK Passport Service’s list of main projects, biometrics/chips in passports are due to be delivered in 2004-5. The chip would map personal, uniquely identifying attributes, e.g., the distance between a traveller’s eyes and the interval spacing his/her nose and chin.
A supplementary passport card resembling a credit card, onto which would be loaded still other biometric singularities -- possibly iris scans and fingerprints -- is on the table as well, and could be teamed with the hard-copy document by 2006.More on this story here and here.
LEARNING HOW TO DISAPPEAR
Advice from a professional skip tracer on how to truly “disappear”. Starting point: Do not just pick up and go. Take your time, do your research and enjoy the beach.More on this story here.
BAHAMAS SET TO OVERHAUL “HURRIED” FINANCE LAWS
It has been over two years since a package of new legislation was passed, radically transforming the country’s financial services sector. Analysts believe that The Bahamas’ economy has suffered as a result. Prime Minister Perry Christie said on the Island FM talk show Parliament Street that his government is committed to reviewing the Financial Transactions Reporting Act, and the International Business Companies Act.
“My position has not changed,” Mr Christie said in response to a question. “Very clearly, what we have as a government decided to do was to create a specific ministry with a minister responsible for financial services, therefore giving it full-time attention.” The appointed minister, Mrs. Allyson Maynard-Gibson, was mandated to review the financial laws passed “in a hurry” by the former government, without sufficient consultation.
It is said that it is more dififcult to open a bank account in The Bahamas than anywhere else.More on this story here.
“ALL COUNTRIES ARE TAX HAVENS RELATIVE TO THE MOST HEAVILY TAXED NATION”
Stanley Works recently announced that it was going to eliminate 1000 jobs and close four plants and five warehouses to cut costs. The cost to the United States taxpayer is $60 million! Compare that to Stanley Works’ desire to invert its headquarters to Bermuda to save $30 million in taxes last year. The arithmetic does not add up.
For companies to elect to invert their headquarters outside the United States, they must be desperate because these structural changes are expensive, time consuming and very complex. In addition, because of the emotion involved with patriotism at the moment, companies must also be willing to endure the stigma that will be attached to their name by such groups as the Bermuda project.
Stanley Works tried to exercise its right to move freely while at the same time keeping people employed and maintaining its presence in the United States by inverting its headquarters in Bermuda. Unfortunately because of the emotions involved, its board felt pressured to remain in the United States and as a consequence of this bullying tactic, 1000 American tax paying citizens have lost their jobs. The cost to the Bermuda economy because Stanley Works elected to remain in the United States, is negligible.
The biggest tax haven in the world is the USA and the biggest island tax haven is Manhattan. Bermuda and others are positive contributors to the economic welfare of the global economy by continuing to have their main source of taxation consumption taxes not income or corporate taxes.More on this story here.
IBC (AMENDMENT) ACT 2003 ENACTED IN BRITISH VIRGIN ISLANDS
Lawmakers in the British Virgin Islands have enacted legislation which will radically alter the jurisdiction’s bearer share regime at the end of 2004. Chief Minister and Finance Minister, the Ralph O’Neal revealed that from December 31, 2004, all international business companies located in BVI will be required to establish and maintain a Register of Directors, and must appoint their first director within 30 days of the IBC’s incorporation.
He went on to add that: “A new section of the principal act prohibits authorized custodians from transferring bearer shares to anyone other than an authorized custodian.”More on this story here.
FINANCIAL INSTITUTIONS MOVING OFFSHORE
SINGAPORE: Over the next 5 years, the world’s 100 largest financial-services companies expect to transfer an estimated $356 billion of their operations offshore in an effort to significantly reduce their costs, according to a survey conducted by Deloitte Research. The survey also found that 2 million jobs would be moved offshore, with India receiving about half of those jobs. Ireland and South Africa are also attractive offshore centers, with China, Malaysia and Australia growing in popularity.More on this story here.
GUERNSEY BUSINESS SURVEY SUGGESTS FALLING CONFIDENCE
The annual survey by the Young Business Group found that 50% of those firms that took part did not increase their staffing levels last year, and there is expected to be a substantial decrease in the numbers recruiting this year. The survey results highlight a growing concern that business confidence is falling, and is likely to continue to wane in the coming months.More on this story here.
“OLD” VERSUS “NEW” EUROPE? A NEW “GENERATION E” DOES NOT SEE IT THAT WAY
Poland is the heavyweight among the 10 countries set to join the European Union a year from now: it represents about one half their total population, and half their total GDP. A crowd of two dozen university-age Poles are steeped in America. Virtually all of them have relatives in the States. Far away as it is, America was their parents’ and grandparents’ land of opportunity. So -- on the cusp of EU membership, with the American colossus dominating the world -- where do these students expect to be living and working a decade from now? Europe? A forest of hands fills the room. America? Not a hand.
As the students gathered in Warsaw made clear, the Europe that will emerge from enlargement is not necessarily a boon to America. On the one hand, as they take their place at EU councils in Brussels, these cold-war-hardened states of Central Europe will inevitably weaken the Franco-German partnership that has guided European integration for half a century. On the other, the younger generation in these “accession” countries is warier of America than its elders, and quicker to challenge Washington on power plays like Iraq.
Thus the future of Europe will be something other than old versus new. The New Europe will simply be (remarkably and importantly) different. The EU has grown before -- from 6 to 9 to 12 to 15. But never have East and West met as they will next year. The newcomers have known totalitarianism firsthand.More on this story here.
NEW US RULES FOR NATIONALS OF U.K. COMMONWEALTH RESIDENTS IN CANADA
Nationals of Commonwealth countries including India, who are residents of Canada and Bermuda, will now have to present passports and non-immigrant visa documents to enter the US. New interim rules will affect nationals of approximately 54 countries, including India and Britain.More on this story here.
BORDER PLAN RAISES WORRIES
NOGALES, Arizona: Some Mexican nationals say they are suspicious of a new U.S. security plan that will eventually track all foreign visitors as they enter and leave the United States. The Department of Homeland Security’s National Security Entry-Exit Registration System will be implemented by next year at the 50 largest land ports of entry in the United States.
Some Mexican residents who cross frequently into the Arizona to shop, visit or work are concerned about how the government will use the tracking data. Others wonder how the new plan will affect the time it takes to cross back into Mexico. Crossing into the United States, they say, already can take a long time.
“We’re not coming here to commit any crimes. We’re coming here to shop,” said Amelia Acuña of Nogales, Sonora, as she carried three bags of clothing she had just purchased. If shopping in the United States means her comings and goings will be tracked and recorded, “it’s better not to come,” she said.
It is comments like Acuña’s that make Arizona border city officials cringe as they contemplate what the new tracking system might do to their cities’ economic security in the name of homeland defense.More on this story here.
THE US DOLLAR: FURTHER TO FALL, OR NOT?
One minute the dollar weakens, reflecting disappointment at America’s economic performance, the next minute it is the euro’s turn to sink, as the markets take stock of the economic mess that some of Europe’s biggest economies have got themselves into. Even sterling is unsteady, with the markets responding to every twist and turn of the debate about whether Britain should join the euro area.
The dollar has been now been steadily weakening against the euro for months: markets are concerned about both the outlook for America’s economy and the international political situation. They are also influenced by regular pronouncements from economists fretting about America’s large and growing current-account deficit, now more than 5% of GDP. One school of thought argues that such a large deficit is unsustainable and that a significant fall in the value of the dollar is inevitable sooner or later, in order to reduce the deficit. The current-account deficit has nevertheless exerted significant downward pressure on the dollar already. Is there more to come?
Opinion, as always, is divided. There is no shortage of experts ready to argue that the dollar has a long way still to fall; but plenty of economists are at least sceptical about this forecast. You pays your money and takes your choice.More on this story here.
Chart of the biggest foreign debtors, in terms of total debt as well as debt service as a percentage of exports, here.
INDIA’S PASSION FOR GOLD WANING
Indians spend about $8 billion a year on gold, which amounts to 2 percent of the nation’s income and one fifth of all the gold sold worldwide. For years India has been passing laws to reform the oppressive tradition of gold dowries and its offshoot: a massive black market with retarding effects on the national economy.
Now changing fashion is achieving what changing the law could not. Indian gold sales peaked in 1998 and dropped 36% in the first nine months of 2002, as an increasingly sophisticated middle class gives up gold wedding gifts in favor of mobile phones, Honda scooters, even Western MBAs for the groom.
Global gold traders last year commissioned a study of the Indian market, which found that urbanization, rising literacy, female emancipation and increasingly sound investment options all bode ill for gold. Coauthor Gary Mead, an analyst at Virtual Metals of London, says we may be seeing the death throes of India’s ancient love affair with gold, “the last twitch of the dinosaur tail.” If he’ is right, investors betting on a long bull run for the price of gold could find themselves in for a surprise.More on this story here.
UN PURGES IRAQ DOCUMENTS WITH $15 BILLION IN QUESTION
Increasing attention has been focused on the United Nations administered oil-for-food program that was intended to provide the people of Iraq with medicine and food, but deprive its power elite of any spoils until it complied with disarmament requirements. The reverse has occurred.
Several writers, notably Claudia Rosett and William Safire in the New York Times, have already documented the lack of transparency, secret audits and penchant for non-humanitarian spending that characterizes the program. Now, as scrutiny mounts, every effort is being made to ensure the truth is never revealed. Well placed sources say that sensitive records and correspondence related to the program have been purged from the computer system at UN headquarters in New York.More on this story here.
GOVERNMENT SHOULD NOT HAVE THE POWER TO LEGISLATE MORALITY
At issue is whether the government should have the power to legislate morality.
If you want to live in a free society, the answer is: No.
To answer “No” does not mean we should throw out laws punishing murder. It means the government’s function is not to become the thought police, charged with ensuring that citizens act on correct ideas. The government’s function is only to stop an individual from taking action (e.g., murder) that violates the rights of other individuals. It means that the absolute moral principles at the foundation of a free society preclude the government from becoming policeman of morality.More on this story here.
VERIZON LOSES RECORDING INDUSTRY ASSOCIATION OF AMERICA PIRACY CASE
Verizon has vowed to continue its fight to refuse to reveal the identity of one of its customers accused of pirating music, claming the matter could have a “chilling effect” on Internet users. Its continued stand for online privacy comes as a US judge upheld an earlier decision forcing Verizon to hand over the information. Verizon has 14 days to surrender the data although it is embarking on a last-ditch appeal to try and get the decision blocked.
The case stems from lawsuit filed last summer by the RIAA. The RIAA demanded that Verizon Online hand over the name of a customer it alleged held illegal copies of copyrighted music files. The U.S. Department of Justice had weighed in earlier on behalf of the RIAA.
Verizon has maintained that divulging the suspect’s identity without a proper court order -- that is, one based on solid evidence of criminal activity and approved by a real judge -- violates Constitutional guarantees of due process of law and unduly burdens free speech.
RIAA lawyers are arguing that a simple subpoena obtained from a court clerk, which any fool can file against anyone suspected of copyright violation, should afford adequate protection of due process, as the dreaded Digital Millennium Copyright Act (DMCA) provides.More on this story here and here.
THE EMPIRE SLINKS BACK
In many ways the biggest mystery about the American occupation of Iraq is its probable duration. Recent statements by members of the Bush administration bespeak a time frame a lot closer to ephemeral than eternal. But we know the kind of time frame the president has in mind. In a prewar speech to the American Enterprise Institute, Bush declared, “We will remain in Iraq as long as necessary and not a day more.” It is striking that the unit of measure he used was days.
The British Empire has had a pretty lousy press from a generation of “postcolonial” historians anachronistically affronted by its racism. But the reality is that the British were significantly more successful at establishing market economies, the rule of law and the transition to representative government than the majority of postcolonial governments have been. The policy “mix” favored by Victorian imperialists reads like something just published by the International Monetary Fund, if not the World Bank: free trade, balanced budgets, sound money, the common law, incorrupt administration and investment in infrastructure financed by international loans. These are precisely the things Iraq needs right now. If the scary-sounding “American empire” can deliver them, then I am all for it. The catch is whether or not America has the one crucial character trait without which the whole imperial project is doomed: stamina. The more time I spend here in the United States, the more doubtful I become about this.More on this story here.
$1.4 BILLION WALL STREET PACT: WHAT IS IN IT FOR INVESTORS?
Just what does the $1.4 billion settlement between Wall Street firms and regulators mean for investors? Under the settlement, $387.5 million of the money paid by Wall Street’s 10 largest firms will go into a compensation fund. To qualify, investors had to have bought stock specifically named in the regulators’ complaints and purchased it from one of the 10 firms that signed the agreement.
Other details, such as how to apply and how much will be paid out, have not yet been decided. The agreement gives the fund administrator wide latitude over how money will be distributed, though the final payment plan must be approved by the Securities and Exchange Commission and the courts.More on this story here.
NEW YORK: New York State Attorney General Eliot Spitzer signaled that criminal charges against individuals could follow the landmark $1.4 billion civil settlement with Wall Street’s major brokerages that he spearheaded. Ten top financial firms, while admitting no wrongdoing, agreed in a settlement unveiled Monday to pay fines to resolve allegations that analysts issued slanted reports to curry favor with corporate managers and gain investment banking business.
Some lawyers and activists have criticized the settlement for not going far enough to punish those responsible for issuing the tainted research, but in an online forum held on the Washington Post’s Web site, Spitzer suggested more action could lie ahead.More on this story here.
ELIMINATING TAX BREAK FOR AMERICANS LIVING ABROAD UNDER CONSIDERATION
Senate Republicans seeking to meet President Bush’s call for a big tax cut on corporate dividends are eyeing a list of potential tax increases in other areas, including elimination of a break enjoyed by U.S. citizens working abroad. Individuals living abroad can exclude up to $80,000 of income a year, and couples can exclude $160,000.More on this story here.
TREASURY OFFICIAL MISREPRESENTS CLINTON-ERA IRS REGULATION IN TESTIMONY
Leading taxpayer activists criticized Pam Olson, the Treasury Department’s Assistant Secretary for Tax Policy, for inaccurate testimony to the House Small Business Committee. Specifically, Ms. Olson made several incorrect assertions about a Clinton-era proposed IRS regulation that would require financial institutions to report deposit interest paid to nonresident aliens.More on this story here.
WHAT IS THE OECD FOR, ANYWAY?
Its essence, argues Donald Johnston, the OECD’s secretary-general, is to be “a steering group for the world economy”. The OECD does not concern itself with the grand themes of global macroeconomics, instead pondering unglamorous but worthy subjects such as agricultural reform in China, or educational development in Denmark.
Someone has to do this sort of thing, presumably. But there seems to be a growing body of opinion that the OECD may not be the right agency to do it.
The OECD was born in the early Cold War, as a means of distributing American cash and economic wisdom to war-weary Europe. As Europe boomed, the OECD seemed to have a coherent identity as the rich countries’ club. Now, though, that identity is looking dangerously blurred.More on this story here.
The OECD has been called a think tank, a monitoring agency, a rich man’s club and an unacademic university. BBC News Online looks at what it really is and does.More on this story here.
OECD: SHIPOWNING SECRECY POSES “MARITIME 9/11” RISK
The veil of corporate secrecy that hides the true ownership of ships could allow extremists to launch a “maritime September 11” attack, experts from the OECD said. Tougher rules on declaring ownership and a crackdown on the widespread use of flags of convenience could help combat both tax-dodging magnates and extremists, said officials from the organization.
Oil or gas tankers could be transformed into “floating bombs” and other ships could be used to transport men and materiel secretly or to finance terrorist activities, a report by the OECD’s maritime transport committee said.
France and other European Union states are also pushing for tougher maritime safety rules after the 26-year-old, Bahamas-registered tanker Prestige broke up and sank off northwest Spain last year, spilling tens of thousands of tonnes of fuel oil.More on this story here.
EU OFFERS EXPAT WORKERS LONGER STAY
Expats from outside the EU may soon be granted a doubled length of stay in Europe in a deal with Brussels to lower global barriers to business. The EU offer, during World Trade Organization discussions, would let non-EU companies in industries such as computing, banking, architecture, legal and engineering send employees to the 15-nation bloc for six months instead of the current three. It would also allow self-employed contractors to enter the EU to provide services such as engineering, computer or management consultancy for six months in any one year.More on this story here.
WHAT IS WRONG WITH THE BAHAMAS, AND WHAT TO DO?
The Bahamas is going through a difficult period causing people to talk about what went wrong and what should be done. A good case in point is an article “20 Years of Lending Show Banks Holding Bahamas Back” by Catherine Kelly in the “BIZ BUZZ” column of the April 7th Punch. The author’s reasoning seems faulty and incomplete as an explanation for the present slowdown.Editorial here.
ANALYSIS: SWITZERLAND’S CHEESY ECONOMY
Last month, Switzerland’s annual rate of inflation dipped to 1.3%. Once a cause for celebration, it is now construed to be a worrisome sign of lurking deflation. Growth has been below trend for years now. Demand is ever weakening and capacity is idle. Taxes are high, the national debt soaring. Interest rates are vanishingly low, having been chopped by half a percentage point in March. But the Swiss franc, impervious to these monetary gambits, is at a five-year high against the dollar.
With 7 million inhabitants (one-fifth are immigrants) Switzerland is among the richest polities on Earth. Income per capita is more than $38,000. The economy’s openness -- its weakness -- is also its fount of strength. It endows Switzerland with enviable resilience and flexibility.
The country survived intact the first and second world wars, fought on its doorstep. It has reinvented itself, metamorphosing in the process from a backward rustic landlocked domain to a financial cum engineering global empire. It will emerge, as it always does, invigorated and ready for new challenges.Rest of analysis here.
BERMUDA GETTING ADVICE ON TURNING UP THE HEAT ON MONEY LAUNDERERS
Switzerland’s ambassador to Bermuda, Bruno Spinner, is hoping his trip to the Island this week will turn out to be beneficial in more ways than one. For while the UK-based diplomat is in Bermuda meeting with his honorary consul Leo Betschart, he is also planning to meet with the Bermuda Monetary Authority to share information on anti-money laundering practices, and other financial institutions.
“We (Switzerland and Bermuda) are very much concerned with and very much in favour of very clean financial markets. We will be looking, for example, to see if political people, such as Iraqi leaders, tried to put monies in our countries. And we will be discussing money laundering in all its forms – we have to fight that,” said Mr. Spinner.More on this story here.
UK DOMICILE LAWS UNDER REVIEW YET AGAIN
Once again the issue of UK domicile tax and in particular the apparent “loophole” in the legislation, which allows non-domiciles in the UK to pay zero tax on their overseas earnings or money kept offshore, has reared its head in time for the Chancellor of the Exchequer’s budget on April 9. The Chancellor will publish a consultation paper with the budget, which will detail his plans to reform the tax legislation relating to non-domiciles.
Currently, non-domiciles, foreigners resident in the UK but not domiciled there, do not pay tax in Britain by claiming their true domicile is the country of their family’s origin. The review of the legislation is said to be an attempt to redress the inequality of tax treatment between UK domiciled and non-domiciled residents.
The Treasury has estimated that there are some 60,000 “non-dorms” in Britain, some of whom are high profile donors to the Labour party, they are considered to contribute quite significantly to the UK’s economy and the fear is that any reform to the tax laws would encourage an exile of non-domiciles and their wealth.More on this story here and here.
NEW UK LAW ON CORRUPTION WILL HAVE A LONG ARM
The past few years have seen a significant escalation internationally in the fight against corruption. The impetus for this comes from the 1997 OECD Convention on Combating Bribery of Foreign Officials in International Business Transactions. This obliges its signatories, including the UK, to enact legislation that criminalises the corruption of foreign public officials by individuals or corporations national to them.
The basic principles of the OECD Convention were incorporated into the UK AntiTerrorism, Crime and Security Act 2001. The new Bill repeals and replaces that part of the 2001 statute, supersedes or tidies up other much older anti-corruption law (some of which dates back to the Victorian era) and extends the scope of corruption offences beyond that required by the OECD Convention.
Strange though this may seem, the Bill defines corruption for the first time in UK law. Corruption is not confined to the payment of bribes but also covers the conferring or obtaining of any form of advantage.
Up to seven years’ imprisonment and/or an unlimited fine beckon for those convicted of corruption. The excuse that you are operating in a country where everyone is at it and you will not get far without greasing a few palms is conspicuous by its absence as a defence under the Bill. The Bill contains no de minimis exemption. Corruption is measured qualitatively rather than quantitatively. Even a small gift might be deemed to be corrupt if it is believed by the giver to be the primary motivator for the recipient to do or omit to do something.More on this story here.
NEW LAW PUSHES FOR UK-BASED WEB CASINOS
This fall, the Government in the UK is set to push for new laws on “remote gambling” that would allow Internet casino companies to base their servers in the UK. The term “remote” would include technologies outside the Internet, such as WAP. It is anticipated that US gaming companies will try to capitalize on the deregulation.More on this story here.
IRS SAYS 1,200 ADMIT OFFSHORE ACCOUNTS
More than 1,200 people have stepped forward to reveal they used offshore accounts or credit cards to avoid paying more than $100 million in taxes, the IRS said Thursday. Those who turned themselves in avoided prosecution and some penalties, and they led the IRS to 80 new promoters who will be pursued for marketing and selling illegal offshore accounts.
Those who applied for the partial amnesty program had to provide full details of the promoter who arranged the offshore accounts. About 240 applicants claimed the offshore promoters had scammed them out of their money.More on this story here.
THE IMMORALITY OF THE U.S. INCOME TAX SYSTEM
Unique among countries of the world, the foundation of the United States rests on self-evident moral principles. These are simply, that all men are created equal, that they are endowed by their creator with certain unalienable rights. These moral principles pervade every institution and aspect of life in the United States except one -- tax.
In the United States, 16% of the federal budget goes for defence and less than 2% goes to criminal justice. The rest goes to welfare and wealth redistribution programs. Essentially, the government extracts money by force of law from one small segment of the economy and gives it to a larger group in return for their votes. Ignored in the current tax system, is something which Chief Justice John Marshall observed in 1819, when he said that any tax system creates a threat to individual liberty because, “the power to tax involves the power to destroy”.
While the Constitution embodies in legal terms the moral principles of the United States, it is clear that Constitutional rights, such as financial privacy, do not apply when taxes are involved. While the presumption of innocence is the foundation of English and American law, the tax code does not follow this principle. Information provided on the tax returns is a waiver of all Fifth Amendment protections, yet failure to provide the information and sign under penalties of perjury is a violation and the tax return is considered not filed. A cornerstone of the American legal system is a guarantee of equal protection under the law. Nowhere is it more prominently violated than the US tax system. The difference in tax burden on taxpayers on different income levels is shocking to say the least.
There is something radically wrong with the income tax system. It is for the most part driven by errant socialist policies by a runaway government’s insatiable desire to create more programs for newly created societal needs. Our politicians feel no remorse in either abusing the taxpayer’s money or virtually regulating away our constitutional rights. It is not enough to say that the income tax system is unfair or inequitable or even unreasonable. It is beyond that. It is immoral.More on this story here.
NEW ANTI-MONEY LAUNDERING RULES FOR SECURITIES AND COMMODITIES TRADING ADVISERS
The U.S. Treasury has proposed new regulations that would require advisers involved in the trading of securities and commodities to set up comprehensive programs to combat money laundering. In an April 29 news release, Treasury said the new rules would also require futures commission merchants to report “suspicious activity”.More on this story here.
NEW TREASURY RULES REQUIRE BANKS TO VERIFY CUSTOMERS’ IDENTITIES
Banks, credit unions and other companies will be required to verify the identities of new customers and maintain those records under government regulations that take effect October 1. They will have to collect identifying information including name, address, date of birth and a taxpayer identification number -- in most cases a Social Security number -- and to document procedures used to verify the data. Also, they must check whether the customer appears on any list of suspected terrorists.
The regulations are aimed at helping to prevent money laundering, identity theft and terrorism funding as part of the Patriot Act passed by Congress in 2001. Banks will not be required to perform the checks on all their existing customers, as initially proposed.More on this story here.
The U.S. division of British banking giant HSBC has agreed to tighten its internal controls to ensure compliance with federal anti-money-laundering rules, the Federal Reserve and the bank announced Wednesday.More on this story here.
BOOK REVIEW: MURRAY ROTHBARD’S A HISTORY OF MONEY AND BANKING IN THE UNITED STATES
Money, in a free market system, is like any other commodity: subject to economic laws, and equally subject to distortion in the face of government interference. In reality, of course, money has rarely gone unregulated by governments. Since the earliest days of civilization, governments have sought out ways to manipulate the money supply whether it be through clipping coins, schemes of bimetallism or outright fiat currency. Governments have always done this, and they have realized the great power that comes with control of the money supply. The government that controls its money supply has gone a long way toward controlling its subjects. As a modern State, the United States has never escaped this impulse itself.
Murray Rothbard’s posthumously released new book examines the development of the American State’s control of the money supply and its economic consequences. As Joseph Salerno notes in the introduction, a key to Rothbard’s analysis is his concern with the question of Cui bono? -- Who benefits? -- from changes in how the American money supply is regulated and manipulated. While the 8th grade version of American history that most people cling to dictates that no public figure in the history of American civilization has ever been motivated by mere self-interest, Rothbard seems to believe that policies that benefit one group greatly over another just might be the result of design rather than mere good intentions gone awry. At the very least, this makes for better reading. The method employed by Rothbard here, known as “power elite” analysis, examines the inner workings of those in power with the greatest financial and/or ideological interests in controlling the money supply. This method has often been derided as a kind of conspiracy theory, yet such criticisms rest on an assumption that all political actions are somehow without motive, sinister or otherwise. Daily experience would tend to argue against such assumptions, not to mention the entire body of “pressure group” research in political science.
Rothbard makes clear that the control of the money supply is indeed profoundly powerful, and this is why for so many centuries, governments everywhere have benefited from that control, and have always sought to increase it not just over their own subjects, but over foreign lands as well. The United States has never been any different; not even in the earliest days of the Republic. Nor is the United States any different from any other country in that some day, like has happened to a thousand other regimes, confidence in the American money supply will collapse, and when that day comes, woe to those whose life savings, incomes, and investments are dependent on the value of the dollar.More on this story here.
FOREIGN INVESTMENT POURING INTO SOUTH AFRICA’S HOTELS
As part of the growing foreign interest in South Africa’s tourism and leisure industry, Golding Hotel Investment Consultants (GHIC) has concluded deals in excess of R220-million for the financial year ended February 2003. This represents an increase of 76% over the previous year.
At the same time, according to GHIC’s managing director, a survey of 25 of the major hotel operators in the industry in the centres of Cape Town and Johannesburg reflected an average increase in revenue per available room of 25% to 35% for the 12-month period ended December 2002, compared with the previous year.More on this story here.
AUSTRALIAN INVESTORS POUNCE ON BROTHEL SHARES
Australian stock market investors plunged enthusiastically into the world’s oldest profession when the country’s largest brothel, the Daily Planet, became the world’s first listed bordello. The Daily Planet, which hired Hollywood Madam Heidi Fleiss to spice up its stock listing and touts itself as a recession-proof, five-star hotel, raised $A3.75 million after selling 7.5 million shares in the property arm of its business.
The stock soared to 75 cents in the first minutes of trade -- a hefty 50% premium on its 50 cent float price in an otherwise depressed equity market, and then settled back at around 70 cents.More on this story here and here.
CANADA IMPEDES WAR ON TERROR, U.S. REPORT SAYS
The United States said yesterday Canadian government policies are inhibiting the work of investigators in the war on terrorism. In its latest annual report on global terrorism trends, the U.S. State Department said Canadian laws intended to guard against government intrusion “sometimes limit the depth of investigations”.
The report highlighted Canada’s privacy laws and police funding levels as problematic, saying they “inhibit a fuller and more timely exchange of information and response to requests for information.”
Despite the report’s criticism of certain Canadian practices, it included effusive praise for the federal government’s overall efforts to work with the U.S. in the fight against extrem-ism, calling the relationship “a model for bilateral co-operation on counter-terrorism issues.”More on this story here and here.
MEXICAN DATA SOLD TO U.S. GETS PERSONAL
A Mexican company sold U.S. law enforcement agencies an array of data about private citizens that was more detailed than previously suspected, such as Mexicans’ blood types and tax identification numbers, investigators said Wednesday.More on this story here.
PROPOSED SOUTH AFRICAN ANTI-TERROR BILL NOT A GOOD LAW
Most worrying are provisions enabling the government (subject to judicial approval) to outlaw organizations defined as terrorist and that criminalize membership of such organizations. These go beyond the provisions of the 1998 Prevention of Organised Crime Act, which outlaw activities that contribute to the perpetration of criminal acts, but do not criminalize membership of an organization.
Ironically, the Bill is now being promoted by a government led by a political party that itself was previously outlawed. Were a less democratically minded government to be elected in South Africa, legal provisions of this kind could be used to silence political opposition, in the same way the African National Congress was once silenced.Editorial here.
HIGH COURT UPHOLDS IMMIGRANTS’ CUSTODY
The Supreme Court yesterday upheld a seven-year-old federal law that says immigrants, including permanent residents, who have committed certain crimes must be detained while the federal government decides whether to deport them.
The decision puts the nation’s estimated 11 million permanent resident immigrants, or “green card” holders, on notice that if they commit certain “aggravated” offenses or offenses of “moral turpitude”, they will serve their sentences -- and then be locked up again by immigration authorities if removal proceedings against them are pending.
Civil libertarians, immigrant rights groups, the American Bar Association and prominent former immigration officials had urged the court to rule that the Constitution requires giving criminals who are permanent resident immigrants a hearing to determine whether they would jump bail or commit another crime.
But by a 5 to 4 vote, the court ruled that Congress had ample reason to treat such immigrants as a group when it passed the 1996 law requiring immigration authorities to jail them. There is enough evidence that many would escape or endanger the public, and most face relatively short detention, the court noted in concluding that the law does not violate immigrants’ right to due process of law.
“[T]his court has firmly and repeatedly endorsed the proposition that Congress may make rules as to aliens that would be unacceptable if applied to citizens,” Chief Justice William H. Rehnquist wrote, backed by Justices Sandra Day O’Connor, Anthony M. Kennedy, Antonin Scalia and Clarence Thomas.More on this story here.
REPORT FINDS LAW ENFORCEMENT SOUGHT FEWER WIRETAPS IN 2002
Law enforcement officials sought fewer court orders last year for eavesdropping on private conversations, a report says, but that does not include hundreds of wiretaps approved by the Foreign Intelligence Surveillance Act court to track down suspected terrorists and spies.
Federal and state judges authorized all but one of the 1,359 wiretap applications submitted in 2002. The requests represented a 9 percent decrease from the 1,491 applications logged the previous year, according to the annual report by the Administrative Office of the U.S. Courts.
The lack of spy court data in the annual wiretap report makes the document less useful than it used to be, said Jameel Jaffer, a staff attorney for the American Civil Liberties Union. “This report used to give us a comprehensive picture of the government’s use of the wiretap provision in criminal cases,” he said. “It no longer does because the government is using the Foreign Intelligence Surveillance Act to conduct surveillance in certain criminal investigations.”More on this story here.
RIDGE FAVORS NATIONAL ID SYSTEM FOR LIVESTOCK
The Bush administration’s homeland security czar on Monday endorsed an ambitious concept for nationwide identification of all commercial livestock. “Some of these thoughts are certainly preliminary in nature, but given the economic significance of the livestock industry ... it seems to us to be a very good initiative to undertake,” said Tom Ridge, secretary of the Department of Homeland Security.
Ridge’s support is the latest, vivid signal of progress toward a national animal identification plan. Spurred partly by post-Sept. 11 fears of bioterrorism, industry and government officials are speeding up work on the proposals.
The costs and complications, though, can boggle the mind.More on this story here.
SMARTCARD INDUSTRY SET TO SOAR
Increased security demands in government, financial services and healthcare will drive major growth in the smartcard industry over the next three years, according to analysts. Datamonitor’s Global Smart Card Opportunities report predicts that worldwide smartcard shipments will rise from 14 million in 2002 to 36 million in 2006, representing a compound annual growth rate of 27%.More on this story here.
PATRIOT RAID ACCOUNT SHOULD GIVE ONE PAUSE
A month ago I experienced a very small taste of what hundreds of South Asian immigrants and U.S. citizens of South Asian descent have gone through since 9/11, and what thousands of others have come to fear. I was held, against my will and without warrant or cause, under the USA PATRIOT Act. While I understand the need for some measure of security and precaution in times such as these, the manner in which this detention and interrogation took place raises serious questions about police tactics and the safeguarding of civil liberties in times of war.
Every American citizen, whether they support the current war or not, should be alarmed by the speed and facility with which these changes to our fundamental rights are taking place. And all of those who thought that these laws would never affect them, who thought that the Patriot Act only applied to the guilty, should heed this story as a wake-up call. Please learn from my experience. We are all vulnerable so speak out and organize, our Fourth Amendment rights depend upon it.More on this story here.
HARD DRIVES EXPOSED
Old hard drives do not always die -- or fade away. Often they are salvaged and reused in other computers. And when that happens, the data and sometimes-grimy secrets of previous users go with them. An examination of ten used hard drives that PC World bought or salvaged in the Boston area disclosed a wealth of sensitive data. On all but one of them, they found data, including confidential business, medical, and legal records; Social Security, credit card, and bank account numbers; e-mail; and even pornography.
The only sure way to destroy data on your hard disk is to overwrite it. There are several programs, including two that are free, that can effect this. Note that performing a high-level format on a drive using the utility included with Windows obliterates practically none of the previous data.More on this story here.
|Previous||News Digest Index||Next|
|Back to top|