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ANTIGUA ASKS WTO TO CONDEMN US BAN ON INTERNET GAMBLING
The move comes a fortnight after the US House of Representatives voted to ban credit-card payments to internet casinos, most of which are based overseas. Restrictions which bar US residents from betting at offshore Internet casinos are unfair and harm Antigua’s attempts to diversify its economy, said a senior foreign ministry official, Ronald Sanders.
But the US ambassador to the WTO, Linnet Deily said that Internet gaming does not fall under WTO rules that say countries should open up trade in services, and the United States is free to ban it.More on this story here and here.
TRANSPARENCY INTERNATIONAL REPORT SLAMS UK ANTI-LAUNDERING REGIME
Suggesting that the scope of the money-laundering problem in the United Kingdom is “staggeringly large”, and that around £18 billion is laundered through the country’s banking system each year, the TI report’s author -- Gibraltar Financial Services Commission chairman, Marcus Killick -- proceeded to heap praise on Crown dependencies such as Jersey and Guernsey.More on this story here.
MINISTER REITERATES IRELAND’S HOSTILITY TO TAX HARMONIZATION
Ireland is determined to defend its business friendly tax regime that has contributed much to the economy’s success in recent yeas, and not surprisingly is sensitive on the issue of losing control of its own taxation policy to Brussels bureaucrats through the introduction of qualified majority voting. At 31.2% of GDP, Ireland’s tax and social security burden as a proportion of the economy is the lowest in the EU, way below the European average of 41%.
However, Ireland is by no means alone in having reservations over the direction the new European Constitution will take the union. The UK has always held a firm anti-federalist stance, with Spain and Sweden also expressing criticism over aspects of the new constitution.More on this story here.
AMERICAN CARTOONISTS BETTER JOURNALISTS THAN JOURNALISTS?
British cartoonist Steve Bell claimed that US journalists are falling far behind their colleagues, the cartoonists, in exposing the truth. In an article in the Media Guardian, Bell says that the journalistic content even in the “supposedly great” New York Times, makes him wonder whether the hacks there would “ever say boo to a goose, let alone tell truth to power”. The net result of this timorousness, which is not exclusive to the New York Times by any means, is that Bush gets away with lies and murder while the press beats itself up about the ethics of Jayson Blair, the young, black New York Times journalist who notoriously faked stories.More on this story here and here.
Lessons for journalists from Iraq.
War, unlike any other news event, asks profound questions of journalists. How do we separate truth from propaganda? How do we overcome the dilemma of political and military leaders controlling access to vital information? What value do we place on what we see on the frontline as against what we are told back at headquarters?
Then come those tough questions which bedevil the relationship be-tween the media and the warriors. Is objectivity unpatriotic? Why should we be fair to both sides? Should we always suppress what we know in the interests of operational security?
It would appear from the media’s experiences during the invasion of Iraq by the US and Britain that we are no nearer to finding solutions.
More on this story here.
TONY BLAIR HUNG OUT TO DRY BY MICROSOFT WORD
An IT industry writer with some skills in computer forensics took a close look at the U.K. Government’s infamous plagiarized Iraq dossier and found proof that it was heavily edited after it left the professional hands of the British Intelligence services, by 10 Downing Street.
So much for blaming the spooks.More on this story here.
FREEDOM DEBATE SPLITS HONG KONG
Six years after Britain handed Hong Kong back to China with the promise that its freedom would be protected, the local legislature is close to enacting a law that would outlaw groups banned on the mainland and criminalize the handling of state secrets, provoking claims that Asia’s most open society is at risk of losing that distinction. Even the perception that civil liberties are being eroded could jeopardize Hong Kong’s status as Asia’s financial center, they say.More on this story here.
Hong Kong and China sign landmark free trade deal.
The Closer Economic Partnership Arrangement (CEPA), which many see as a precursor to more aid from Beijing, will eliminate mainland import tariffs on many goods made in the territory and is expected to save its exporters billions of Hong Kong dollars.
But some commentators have questioned the timing of the deal and see Hong Kong’s rush to enact anti-sedition laws as a sop to Beijing in return for economic favors.More on this story here.
Hong Kong’s moment of truth.
As scary as it was, SARS united Hong Kong as nothing has in years. Facing the specter of death arouses some primal emotions. Fearing the loss of your livelihood is pretty gut-wrenching, too, which is what the city’s entrepreneurial culture lived through from March until May.
Yet, as the economy shuddered to a halt under the influence of the World Health Organization travel advisory, Hong Kong citizens focused on what was most precious to them -- family, friends, and the beautiful, unique city they live in. Now, they are trying to figure out what should happen next.More on this story here.
SARS fails to dampen foreign investment in Hong Kong.
Despite the now receding SARS shock, which shook Hong Kong’s economy to its very foundations, recent figures have indicated that the level of foreign direct investment into the city remains as strong as ever.More on this story here.
China’s economy is having a growing impact on world trade.
SARS notwithstanding, China’s economy is still likely to grow far more quickly than most this year: it expanded by more than 9% in the year to the first quarter, its fastest pace for six years. Thanks to its membership of the World Trade Organisation (WTO) since the end of 2001, and the increasing contribution to growth made by its own voracious consumers, the economy now depends far less on the state. As a result, it is also exerting an unprecedented degree of influence over world trade.
Last year, China’s imports and exports had a combined value of about $620 billion and accounted for 4.7% of world trade -- nearly double the country’s share of 2.7% as recently as 1995. Such is the speed with which China’s industries are growing that the share is expected to jump again over the next few years.
A decade ago, Asia as a whole accounted for about a third of the world’s production and consumption of steel. Today, the figure is closer to half on both counts, with China alone accounting for a quarter of the world’s output and demand.More on this story here.
MLAT BETWEEN LIECHTENSTEIN AND U.S. TO COME INTO FORCE AUGUST 1ST
Although mutual legal assistance in penal cases was previously possible between the two countries, it has always previously been based on the principle of reciprocity, in line with international law. However, last July, the two states signed a treaty providing for enhanced cooperation, which was approved by Liechtenstein’s parliament in March 2003.
In addition to providing for legal assistance in the areas traditionally covered by such agreements, the treaty also allows legal assistance in cases of fiscal fraud.More on this story here.
OECD TARGETS SWISS TAX RULES
The Swiss have been under pressure to scrap tax rules that make the country attractive to foreign holding companies and so-called “PO box firms”. Daniel Eckmann, a spokesman for the Swiss finance ministry, on Friday confirmed the blacklisting which is contained in a preliminary report by the OECD’s “Forum on Harmful Tax Practices”. Switzerland -- which abstained from the forum when it was created in 1998 -- is the only OECD country to be named by the body.
In June 2000, Switzerland was listed among dozens of developed countries as having “potentially” harmful practices. Since then, governments around the world have been modifying their taxation systems. An OECD spokesman said that since then, Switzerland had not changed its tax practices.More on this story here.
UK CUSTOMERS FEEL ANTI-MONEY LAUDERING PROCEDURES HAVE GONE TOO FAR
Identity checks are required not just when first opening an account. Banks are now demanding a range of items when customers want to switch cash into a better account or, sometimes, even when they pay in cheques.
Most bank customers accept they should prove identity when they open an account to prevent fraud. But they object to rules that vary between banks which often insist on documents which they do not possess. And many account holders are fed up with loud demands from counter staff to prove who they are or to tell them where they got the cash or cheque they are paying in.
Many money laundering experts believe turning the screw on ordinary and often long-established customers with frequent demands for identity items, is far from the best use of resources in the anti-crime fight. They say there is a danger that the banks’ checks will obscure the real fight against crime and terrorism. They point out that serious money laundering rarely takes place on the high street.More on this story here.
BERMUDA’S EU TAX EXEMPTION MAY NOT LAST LONG
No one can say with certainty whether Bermuda’s exemption from the EU Savings Tax Directive will continue for much longer, according to Richard Hay, an expert in the field. It was agreed that the directive would apply to all Britain’s Caribbean territories, Mr. Hay explained -- but Bermuda is not in the Caribbean.
Mr. Hay then proceded to talk about the wider offshore financial world in his interesting speech. He asked why the offshore community has gone like lambs to the slaughter in the face of intervention by the G8 and its satellites, and answered his own question with refreshing candor. “The member countries of the OECD control 80% of the business in the world. They can turn off the lights (in any offshore jurisdiction) with the stroke of a pen.” It’s blackmail, then.More on this story here.
BELIZE TYCOON MICHAEL ASHCROFT VOWS TO HUNT DOWN THOSE SMEARING HIM
The former Conservative Party treasurer Lord Ashcroft has said that he will pursue the people who he believes fuelled a smear campaign against him. Those accused include civil servants, MPs and officials in Downing Street. The billionaire businessman said that he was prepared to stop at nothing to identify his detractors, who he claims were part of a “conspiracy” to ruin him in 1999.
Memos leaked to the press from Whitehall included details of his business activities in the tax haven of Belize and his suitability for a peerage. One leaked document mentioned his “laundry arrangements”. Clare Short, when International Development Secretary, pressed the government of Belize to clamp down on Lord Ashcroft’s tax-free status.More on this story here.
E.U. CITIZENS WILL SOON REAP THE VIRTUES OF INTERNATIONAL DIVERSIFICATION
Since the mid-1990s, technology and deregulation have worked a virtuous circle to spur cross-border investments. According to the IMF, world foreign portfolio investment flows -- financial investments that result in less than 10% ownership stakes in any one company -- increased dramatically from $219 billion in 1990 to $1.4 trillion in 2000. These flows have risen as countries have expanded their stock markets, debt has become securitized, and financial wealth holdings have risen. The National Foreign Trade Council reports that in 1999, market capitalization of foreign firms was more than $3 trillion on the New York Stock Exchange.
There are plenty of good reasons for investing overseas but the best one is diversification. Studies have shown that placing up to 20% of your assets in foreign stock reduces the risk in the portfolio without lowering returns. By neglecting foreign assets, European investors are passing up the chance to achieve higher investment returns. According to the European Commission, the opportunity cost of the “home bias” is €130 billion. This potential windfall could be unleashed once European financial markets are fully integrated.More on this story here.
GERMAN CHANCELLOR BRINGS TAX CUT FORWARD
Gerhard Schröder on Sunday announced additional income tax cuts next year worth more than €15 billion in an effort to boost economic growth in Europe’s largest economy. The decision, taken at a rare cabinet weekend retreat, would “send a signal of revival” to Germany and Europe, the chancellor said.
However, it remained unclear how the government would cover the tax shortfalls next year, given its severe financial problems. Germany’s budget deficit last year exceeded the 3% limit under the European Union growth and stability pact, and is almost certain to do so again this year.
Under the terms of the decision, income tax cuts planned for January 2005 will be brought forward to January 1 next year and combined with other cuts scheduled for that date. Top income tax rates will fall from 48.5% to 42%, while the lowest will go from 19.9% to 15%.More on this story here.
FINANCIAL PITFALLS AWAIT U.K. CITIZENS WHO MOVE ABROAD
More than 300,000 people move abroad to work each year, and every time they step into a money maze. Financial years are different as are tax rates. In many countries marital status can still impact on your tax bill. Inheritance tax too may need careful consideration as probate may be handled quite differently abroad. Many ex-pats are simply fleeing the weather with France, Spain, Florida, Italy and Cyprus being the most popular choices. But each has a different and complicated tax regime.
Employees become non-resident for UK tax purposes when they are employed abroad for a full tax year and do not return for more than 91 days each tax year. Despite this, any income earned in the UK, like interest on deposits or returns on investments, will be taxed in the UK. That is why some people transfer most of their assets offshore.More on this story here.
CANADIAN CORPORATE TAX REFORMS TOO SLOW SAYS THINK TANK
Plans in federal and provincial Canadian 2003 budgets to steadily reduce taxation on investment are a welcome step in the right direction, according to think-tank The C D Howe Institute. However, in a recent background report, the reforms are criticized as moving at a “snail’s pace”, and the foundation says the country will continue to lose out to the United States competitively unless the tax cuts are phased in much more quickly.
“Governments are constraining their tax cutting because of excessive, and often needlessly lavish, expenditure commitments. The corporate tax cuts they are planning are relatively modest and, had the spending increases pledged by governments -- as high as 11% at the federal level in the recent budget -- been held to lower levels, the reductions could be implemented soon without throwing budget balances out of whack,” said the report.More on this story here.
SPENDING GROWTH IN U.S. UPSETS CONSERVATIVES
Federal outlays jumped by $222 billion in President Bush’s first two years, a spending increase that is expected to accelerate under the administration-backed $400 billion prescription-drug bill that is speeding through Congress. In 2000, President Clinton’s last year in office, total outlays accounted for 18.4% of the GDP. By 2002, the budget consumed 19.5% of the GDP.
Democrats have been loudly complaining that domestic social welfare spending has been cut under the Bush administration. But congressional budget officials say that over the past two years such spending for education, job training, unemployment assistance, Medicare, Social Security, veterans benefits, food stamps and other “human resources” has risen from 11.5% of GDP to 12.7%.
“There’s a growing concern about big government, but it has nothing to do with the deficit. It has everything to do with expanding the size and scope of government,” said Michael Franc, vice president for governmental affairs at the Heritage Foundation.More on this story here.
Bush, looking to his right, shores up support for 2004.
By any measure, George W. Bush appears to have built up enough good will with his party’s right wing to provide him significant latitude as he seeks to appeal to moderate voters by taking positions that might roil conservatives. Indeed, on one potentially pivotal matter -- filling a Supreme Court vacancy, should one occur -- conservative leaders say the president enjoys a level of trust that would allow him to nominate a candidate without unambiguously conservative credentials, avoiding an ideological battle that could harm his re-election efforts.
Mr. Bush’s position among conservatives stands in marked contrast to the troubled relations his father endured with many of them when he lost his re-election bid in 1992.More on this story here.
WILMINGTON TRUST BANK OF DELAWARE MARKS 100 YEARS
Today, the multibillion-dollar financial institution is Delaware’s largest consumer bank and the 15th-largest personal trust company in the nation. Analysts say it is well positioned to take advantage of a boon in wealth management, as more than $12 trillion nationwide changes hands from one generation to the next in the coming three decades.
A century after its founding, Wilmington Trust remains independent, one of only 50 in the nation of its size or larger to last for at least 100 years without being acquired. Its history is rooted in its split personality, a dichotomy between its local banking business and its global trust businesses.
The company has paid a dividend every year since 1908 and has raised it every year since 1982. Only 159 other publicly traded companies have raised their dividend for at least 20 straight years.More on this story here.
AUSTRALIANS ONE OF THE MOST SPIED ON PEOPLE IN THE WESTERN WORLD
More than 17,000 Australians had their mail investigated, mainly by federal government agencies, last year -- almost 30 times the number checked a decade ago. Australian police forces are using electronic surveillance at 27 times the per capita rate of their US counterparts. The 2514 court warrants issued for phone taps last financial year -- almost double that issued in the US -- was a tenfold increase in the past decade and a 16% rise on the previous year.
The warrants apply to hundreds of thousands of individual phone calls, and police inspected 733,000 telephone bills, including inward and outward calls. Civil liberties groups claim that level of surveillance makes Australians some of the West’s most monitored people.More on this story here.
False Australian passports spark terror fear.
Scores of passports feared stolen from the mail have ignited concerns they may be falling into the hands of terrorists or criminals. Official concern over the lost passports, more than 2,000 a year, mounted after a man was found with a false Australian passport in the United States. Earlier this year the Department of Foreign Affairs and Trade (DFAT) admitted that more than 2,000 passports had been lost in the mail over 12 months.More on this story here.
PRESIDENT BUSH WALKS IN ON SOUTH AFRICAN TERROR BILL ROW
On the eve of George Bush’s visit to South Africa, the government is facing resistance from civil society and legal circles to its revamped Anti-Terrorism Bill, which has been panned for its vagueness, catch-all approach and ultra-broad definition of terrorism.
Submissions to parliament’s safety and security committee this week said the draft bill was in conflict with the constitution and cast its net so widely that a civil society group such as the Treatment Action Campaign could be classified as a terrorist group under the bill if it planned a protest march against the government’s Aids policy.More on this story here.
New South African law requires that banks leave no stone unturned.
Starting June 30, banks require additional personal information when opening an account. Banks are also legally obliged to report any suspicious or unusual transactions involving an account. This is a result of the introduction of the Financial Intelligence Centre Act, which aims to bring South Africa into line with international standards of combating money-laundering and identifying the proceeds of unlawful activities.More on this story here.
MASS PROTESTS HELD IN HONG KONG OVER RIGHTS
Dressed in black to represent the demise of human rights, waving banners and holding umbrellas to shield them from the summer sun, more than 250,000 people came out onto Hong Kong’s streets on Tuesday to protest against an anti-subversion law planned for the territory.
Official observers said it was the biggest crowd to demonstrate here since the pro-democracy march on June 4, 1989 when one million people participated. The Civil Human Rights Front, which organized the march, had planned for 100,000 to attend but estimated that more than 500,000 people actually participated, despite the 32 degree Celsius (90° F) temperature.
The high turnout can be interpreted as a vote of no confidence in the administration of Tung Chee-hwa, Hong Kong’s unpopular leader, who since he assumed control in 1997 has overseen a financial downturn, record unemployment, the Sars epidemic and growing dissatisfaction with his government’s accountability to the general population.More on this story here, here, and here.
Cato Institute: Liberty will survive Hong Kong’s new laws.
Hong Kong is one of the globe’s happier political oddities. Since its handover to China in 1997, the city that is widely hailed as the world’s freest economy has been part of a country that, if no longer quite communist, remains very much a repressive dictatorship. Yet freedom in Hong Kong extends not only to markets but to minds and tongues and printing presses as well.
Is this strange state of affairs known as “one country, two systems” really sustainable? Serious doubts have been raised in recent months by the local government’s plans for new security legislation. But critics of the new legislation overstate the actual threat to civil liberties, which are likely to remain essentially intact for the forseeable future.More on this story here.
FOREIGN LISTING IN SINGAPORE/HONG KONG “RISKY”
Foreign company listings are expected to rise in Singapore and Hong Kong but the floats pose risks for both cities’ corporate governance reputations, analysts said. Companies from mainland China, Indonesia and Malaysia will especially be looking to launch initial public offerings (IPOs) in the two cities after the Severe Acute Respiratory Syndrome (SARS) curtailed major regional business plans during the first half of this year.
However, an analyst warned that some foreign firms were using the city-state’s reputation to gain undeserved respectability.More on this story here.
Singapore gives five stars to toilet.
Singapore’s environment minister awarded the country’s first five-star rating to a public restroom, at the start of a nationwide drive to flush out dirty lavatories. Environment Minister Lim Swee Say launched the “Happy Toilet” campaign, which will rate public restrooms using a five-star system similar to that used for hotels.More on this story here.
AUSTRALIAN PM: OTHER PACIFIC STATES AT RISK BESIDES SOLOMONS
The sovereignty of a number of Pacific Islands states was at risk because of economic collapse, corruption and lawlessness, Australian Prime Minister John Howard warned. Mr. Howard’s warning came as Australia prepared to intervene to restore law and order in the troubled Solomon Islands.
He warned that the Solomons might not be the only nation in the Pacific to face economic collapse and lawlessness. “A number of our friends in the Pacific are experiencing economic collapse, corruption and lawlessness to a degree which threatens their very sovereignty. I think ... a failed state could be ruthlessly exploited by people like money launderers, drug traffickers, people traffickers and so on.”More on this story here.
OFFSHORE FINANCIAL SERVICES SUPPLYING THIRD LEG TO SEYCHELLES ECONOMY
The Seychelles’ economy, now able to attract overseas companies like American food giant Heinz, is undergoing further restructuring to meet the requirements of globalisation. The islands have for the past two decades been heavily dependent on tourism and fisheries, following the fall in importance of cash crop exports.
Seychelles is now busy erecting a third pillar for the economy. This is to turn the islands into a world trade center.More on this story here.
BUSINESS LEADER SOUNDS ALARM FOR SWITZERLAND
The outgoing president of the Swiss Employers’ Association, Fritz Blaser, has warned that Switzerland is heading for a major crisis. He has called for strong action and a “change of course” to stop the country sliding into mediocrity. He cited the “alarming” increases in public spending and taxes, which he considered a real threat to the country.
“We are calling on politicians to tell people clearly that we are living above our means, that we are leaving our children with debts that are impossible to repay and that no more new desires can be satisfied,” he said.More on this story here.
Lack of competition keeps Swiss prices high.
Switzerland is the most expensive country in Europe, ranking higher even than Scandinavian nations. The economics ministry has blamed high prices on a lack of competition and said the issue needed addressing.
For many years we justified our high prices because of our high quality goods and comparatively high prices,” Swiss economics minister, Joseph Deiss said. “But that’s not acceptable anymore. For Switzerland to remain economically attractive, it must maintain its quality while bringing prices down.”
Deiss believes major sectors such as electricity, health and agriculture need to be deregulated in order to boost competitiveness.More on this story here.
JERSEY NO SAFE HAVEN FOR MONEY LAUNDERERS, BAILIFF TELLS FRENCH
Sir Philip Bailhache, Bailiff of Jersey, was in France over the weekend where he attempted to convince French politicians that the island was no safe haven for tax dodgers and money launderers. He referred to a 2001 French report on the Channel Islands that concluded the finance industry there was still susceptible to money laundering.
“It was unfair and untrue,” stressed Sir Philip, “But the effect of such reports is to perpetuate the myth that Jersey is a weak link in the defence against organized crime.”More on this story here.
GIBRALTAR CONSIDERS LEGAL ACTION OVER SAVINGS TAX DIRECTIVE
The Chief Minister of Gibraltar Peter Caruana has recently sought legal advice on whether the territory has a case against the UK and the European Union to block their attempts to impose the rules of the Savings Tax Directive on the jurisdiction.
The agreement, reached earlier this month, will compel the dependent territories of member states to begin exchanging information on the savings interest of EU residents from January 2005. This will mostly affect the territories linked to the UK and Holland in the Caribbean, but also extends to Gibraltar and the Channel Islands.
Caruana has so far refused to comment on whether Gibraltar will be joining forces with the other affected territories such as the British Virgin Islands, Anguilla and the Cayman Islands.More on this story here.
CANADA’S TAX FREEDOM DAY HAS FINALLY ARRIVED
According to calculations from think tank the Fraser Institute, Canadians finally got to celebrate Tax Freedom Day on June 28 this year. This year’s figure is an improvement on the year 2000, when Tax Freedom Day did not arrive until July 2, the latest in the year it has ever fallen since calculations begin in 1961.
These latest calculations highlight the vast gulf between the United States and Canada in terms of their respective tax burdens. Tax Freedom Day in America fell this year on April 19, this gap is likely to grow wider in the coming years following the Bush tax cuts.More on this story here.
Legal marijuana. Gay marriage. Peace. What is going on up in Canada, eh?
Just when you had all but forgotten that carbon-based life exists above the 49th parallel, those sly Canadians have redefined their entire nation as Berkeley North. “It’s like we woke up and suddenly we’re a European country,” says Canadian television satirist Rick Mercer.
Majorities of Canadians support their government on the war, marijuana and same-sex marriage. The most negative reaction, at least to gay marriage, is coming from Alberta, which Canadians call their most “American” province: cowboys, oilmen. Maybe it is time to overhaul some old assumptions about national character.
At one time all you needed to know was that America was created through revolution under the slogan “life, liberty and the pursuit of happiness”. Canada was born of evolution and compromise under the slogan “peace, order and good government”. America invented itself, Canada sort of happened.
A new nonfiction bestseller in Canada is called Fire and Ice: The United States, Canada and the Myth of Converging Values. It is based on surveys of Canadians and Americans about their values as sampled in 1992, 1996 and 2000. “What emerges,” writes Toronto-based author and pollster Michael Adams, “is a portrait of two nations evolving in unexpected directions...”More on this story here.
CAYMANS: PARADISE LOST?
In John Grisham’s The Firm the Cayman Islands is portrayed as the home of tax evasion and money laundering. Perhaps it was a long time ago, but the reality in Cayman for at least 15 years is of probity and a spotless reputation in the banking community. Yet everyone else still has Grisham’s view and most TV shows that deal with the topic of money laundering mention Cayman. Cayman is the most famous of the low-tax centers, which are pejoratively known as “tax havens”.
They are under attack by high-tax European countries that want them shut down so that they lose fewer taxes. It is essential that the U.S. defend them, because they show the way to the developing, aspiring nations of the world. They demonstrate that an economy can be successful no matter how small it is, if it follows fiscally conservative measures. Furthermore, jurisdictional competition keeps government in check, so we all win when places like Cayman keep their taxes low.More on this story here.
MOODY’S DOWNGRADES BAHAMAS CREDIT RATING OUTLOOK
The fact that financial services account for just 15% of The Bahamas GDP and directly employs a relatively small number of people is somewhat misleading. As the largest offshore center in the region, the sector provides a very high profile for The Bahamas, attracting the attention of foreign investors as well as high-rolling tourists. International credit rating agencies -- such as Moody’s -- cite its ability to remain a competitive provider of financial services as one of its main economic strengths.
Moody’s recently downgraded The Bahamas’ credit rating outlook from “positive” to “stable”, noting that favorable budgetary trends had yet to be restored following the sharp economic shock experienced after 9/11.More on this story here.
BRAZIL SET FOR PROBE INTO CASH LAUNDERING
A special bicameral committee is investigating remittances of up to $30 billion from Brazilian to foreign bank accounts between 1996 and 1999. While such remittances in principle were legal, public prosecutors allege many of them were used to launder money from illegal activities including drug trafficking and contraband. They identified numerous letterbox companies in Brazil and in offshore tax havens used in the operations.
The Banestado inquiry -- named after one of the banks involved -- is being billed as the largest of its kind into money laundering in Brazil’s history. Indications of political leaders being involved have raised the prospect of political turmoil in Congress. Political analysts expect the inquiry to drag on for months or even years.More on this story here.
TREASURY PROPOSES DUE DILIGENCE RULES FOR CORRESPONDENT AND PRIVATE BANKING ACCOUNTS
Regulations that would require U.S. institutions to take steps to ensure that correspondent accounts with foreign banks are not used for money laundering have been proposed by the Treasury Department. In seeking to address concerns that foreign banks are depositing illicit funds in U.S. banks, the Treasury Dept. hopes to make it harder for traditional money laundering schemes to operate. Some banks in foreign countries have virtually no operations of their own, but instead distribute funds to the accounts of other, legitimate banks.
Under the proposal, which would implement Title III of the USA PATRIOT Act of 2001, certain U.S. financial institutions -- including banks and non-banks such as securities broker-dealers, futures commission merchants and introducing brokers -- would be required to establish a due diligence program for correspondent accounts they maintain for specified foreign financial institutions. These programs would be designed to detect and report money laundering and to conduct enhanced due diligence for accounts maintained for foreign banks from certain jurisdictions considered to be of higher risk for money laundering.More on this story here.
$6 BILLION IN WITHHOLDING TAXES LEFT UNCLAIMED WORLD-WIDE IN 2002
Investors from the United States left some $830 million in withholding tax on dividend and interest income from foreign investments unclaimed in 2002, according to new research. From the US point of view, it is thought that ignorance surrounding the rules concerning American Depository Receipts has played a large part in this shockingly high amount of unclaimed money. ADRs allow foreign firms to be traded on US-based exchanges and are also used to raise capital via dollar-denominated securities.More on this story here.
RON PAUL: HILLARYCARE, REPUBLICAN STYLE
In a late-night vote last week, the Republican congress managed to do what Hillary Clinton and Ted Kennedy tried to do ten years ago: take the next big step toward socialized medicine in America. More specifically, Congress voted for a huge expansion of Medicare that enriches pharmaceutical companies, fleeces taxpayers with billions in new spending, and forces millions of seniors to accept inferior drug coverage. Conservatives might ask themselves whether this is what they had in mind when the party of “limited government” gained control of the House, Senate, and White House.
Seniors have been terribly misled about this new Medicare scheme. The essence of the new plan is government control. Government will play an even greater role in deciding what drugs seniors get, how doctors and pharmacies are paid, how private medical information is distributed, and what drug companies benefit most. The plan moves America disastrously toward a complete government takeover of medicine.
In order to participate, seniors must choose between staying in traditional Medicare and joining an HMO/PPO organization. This means either a federal bureaucrat or a nominally private-sector bureaucrat will decide what drugs will be available. Both Medicare and HMO bureaucrats inevitably will be forced to control costs, because the demand for subsidized drugs will be unlimited. They will do so by rationing drugs, especially expensive drugs. Bureaucrats may even go so far as to forbid seniors from using their own money to buy Medicare-covered drugs, just as Medicare rules now prohibit use of private funds to buy unapproved health-care services.
Drug rationing, fewer choices, bureaucracy, subsidies, and a declining quality of health care -- these are the hallmarks of government medicine.More on this story here.
Bush urges Congress to send him “good Medicare bill”.
MIAMI: Visiting a politically pivotal state, President Bush on Monday urged the House and Senate to quickly resolve their differences on bills overhauling Medicare, so he could sign a measure into law giving seniors a new prescription drug benefit.
Both bills would add a prescription drug benefit under Medicare -- the government health insurance program for the elderly and disabled -- at a cost of about $400 billion over the next decade.More on this story here.
STOCKS RACK UP STRONGEST QUARTER SINCE 1998
The Standard and Poor’s 500-stock index, a broad collection of equities representing leading companies, finished its best quarter since the last three months of 1998, closing up 14.8% for the second quarter of 2003. The Dow Jones industrial average is up 12.4% for the quarter, and the Nasdaq composite index is up 20.9% for the past three months.
Since the beginning of the year, the S&P has gained almost 11%, while the Dow is up 7.8% and the Nasdaq has climbed nearly 22%. The rally, unlike previous upticks, is one of the broadest advances since the mid-1990s, encompassing increases among a variety of sectors.More on this story here.
INLAND REVENUE LAUNCHES INFORMATION EXCHANGE CONSULTATION
The Inland Revenue has begun a consultation exercise on the implementation of the European Savings Tax Directive which will require UK banking institutions to exchange savings information with other member states.
A recent statement outlined those most affected by the EU ruling:
“The scheme will mainly affect banks, registrars, custodians and other financial institutions that make interest payments to individuals in prescribed territories. But it may also affect market operators who purchase debt-claims from individuals in prescribed territories or redeem debt-claims held by individuals in prescribed territories. It will also be relevant to those who hold or administer debt-claims on behalf of others and those who advise paying agents (such as accountants, tax advisers or solicitors).”More on this story here.
SWISS DATA PROTECTION CHIEF CRITICIZES US
The head of Switzerland’s data protection commission says the United States’ war on terror is undermining personal privacy. Hanspeter Thür has called for tighter controls on the campaign against terrorism and for more money to safeguard individual rights.
He accused the Bush administration of pursuing a repressive policy which placed little value on data protection. In particular, Thür cited US requirements for incoming airlines to supply personal details of all passengers, including their religion, dietary preferences and credit card numbers. This regulation was forcing airlines such as Swiss to break Switzerland’s own laws on data protection, he said.More on this story here.
AMERICAN LAWYERS: LAST IN THE HEARTS OF THEIR COUNTRYMEN
The June 1 issue of American Enterprise magazine carried the results of a Harris Interactive poll that asked people how much confidence they have in various American institutions. Not surprisingly, the U.S. military came in first with a positive confidence rating of 62%. Dead last -- ranking 14th out of the 14 institutions included in the questionnaire -- were law firms, with only a 12% confidence rating. The U.S. Supreme Court, on the other hand, ranked third, well ahead of organized religion and television news.More on this story here.
WORTHY REFLECTIONS ON JULY 4TH
Have you ever wondered what happened to the 56 men who signed the Declaration of Independence? Five signers were captured by the British as traitors, and tortured before they died. Twelve had their homes ransacked and burned. Two lost their sons serving in the Revolutionary Army; another had two sons captured. Nine of the 56 fought and died from wounds or hardships of the Revolutionary War. They signed and they pledged their lives, their fortunes, and their sacred honor.More on this story here.
U.S. Declaration of Independence here.
U.S. Bill of Rights here.
Is the PATRIOT Act a threat to personal freedom?
HOUSTON: While many folks plan to barbecue and watch fireworks on July Fourth, community activist Maria Jimenez and a group of young concerned citizens will head to area parks to spark debate about a federal anti-terrorism law and civil rights.
Jimenez and other civil rights advocates say the PATRIOT act erodes the Bill of Rights under the guise of security. She said the law attacks personal liberty that the country’s founding fathers tried to protect.
Jimenez and her group will fan out in five Houston area parks Friday to find out what people know about the act and to prompt discussions about it. The group will compile and analyze the data and then distribute its findings to policy-makers and civil rights organizations by mid August, Jimenez said.More on this story here.
OECD’S GLOBAL GREED SCREED
The European Commission and the OECD are reprimanding and threatening several political and economic entities with blacklisting or other sanctions because of their economic policies. You are probably thinking they are going after Fidel Castro of Cuba, Hugo Chavez of Venezuela, or the rulers of several African countries -- all of whom have managed to greatly reduce the standard of living and liberties of their people while increasing misery and poverty.
No way. Instead, these European political leaders and bureaucrats have declared war on the political leaders and statesmen who brought their people record prosperity and economic opportunity, and upheld the rule of law and liberty.
According to new data just released by the World Bank, the six economies that have the highest per capita income (on a purchasing power parity basis) are: Luxembourg, Liechtenstein, the United States, Bermuda, Switzerland, and the Cayman Islands. These six entities are all free-market democracies.
In a rational world, you would expect other countries to applaud and try to emulate the success of the “top six”. Unfortunately, we live in a world of envy, corruption, and intellectual dishonesty. As a result, the “top six” are all under attack for engaging in the newly invented and oxymoronic “sin” of “unfair tax competition”.More on this story here.
4.1 MILLION AMERICANS (EXCLUDING MILITARY) LIVE IN 160-PLUS COUNTRIES
The Association of Americans Resident Overseas (AARO) has organized some data on these people. A map of where they live can be found here. They provide an interesting FAQ’s page here.
OFFSHORE FINANCIAL SERVICES DATABOOK 2003 PUBLISHED
Market research firm, Researchandmarkets.com announced the launch of its new Offshore Financial Services Databook, a quantitative study of the offshore investment market focusing primarily on European-owned assets. The 2003 edition of the Databook looks at 13 major offshore locations holding European assets, and provides information on various aspects of those holdings.
Researchandmarkets.com announced that in 2002, the offshore market declined for the first time in five years, with total offshore deposits and mutual funds standing at €3,612.7 billion, compared with €3,691.5 billion the previous year.More on this story here.
JERSEY LOCALS IN REVOLT OVER BID TO KEEP OFFSHORE STATUS
Jersey is required after 2005 to levy the same taxes on all its businesses -- from the brass-plate companies that have made it famous to the local newsagent and other firms engaged in the island’s “real” economic activity. Part of a long-term drive by Brussels to harmonise taxes across Europe, the move threatens Jersey’s existence as a tax haven.
The island plays host to tens of thousands of tax-exempt companies, which do not trade in Jersey at all, and international busi ness companies, which can park there and pay a very low rate of tax. Both are used as fronts and investment vehicles for the global rich and as depots for corporate royalties earned abroad. And both would instantly lose their appeal if forced to hand over the full corporate taxes paid by local firms.
To avoid this, Jersey has opted to turn the EU’s harmonisation drive on its head. Rather than wealthy guests being required to pay meaningful taxes at last, local businesses will have their own taxes removed. All Jersey-registered businesses will pay a zero per cent rate of corporate tax. That ought to preserve the offshore finance sector, but it could also halve government revenues.
Scrapping the corporate tax will leave an already cash-strapped government with a financial black hole. To recoup even some of its losses, Jersey will have to raise indirect taxes on goods and services, which inevitably fall more heavily on consumers. The protests are already beginning.More on this story here.
GUERNSEY DEFENDS ITSELF AGAINST BIAS ALLEGATIONS
The Guernsey Financial Services Commission was recently forced to defend itself against allegations of corruption and prejudice leveled by Sark businessman, Michael Doyle, who accused the regulator of bias against companies operating out of the island.More on this story here.
PRESIDENT BUSH SIGNALS START OF US-PANAMA TRADE PACT
In the first positive step towards the crystallizing of a deal between the two nations, Mr. Bush has assigned top US trade representative Rober Zoellick to the case, saying that he wishes to “accommodate” Panama in any future deal. However, precious little in the way of further details was offered.
Panamanian President Mireya Moscoso said that the trade deal may help Panama clear its massive trade deficit with the United States which currently stands somewhere around $665 million.More on this story here.
CAYMAN ISLANDS EXTENDS DUE DILIGENCE DEADLINE
The Cayman Islands government has extended the deadline for submission of due diligence information regarding bank accounts held in the jurisdiction until 30 September this year. The due diligence forms are a consequence of money laundering legislation passed in 2000, when banking institutions were required to comply with fresh “Know Your Customer” regulations. It is the second time that the deadline has been put back from its original date of 31 December 2002, and provided the new deadline remains, the regulations will come into force in March 2004.
The Caymanian authorities have yet to decide how to punish those who still fail to submit the due diligence forms, and penalties such as the freezing or closing of bank accounts have been suggested.More on this story here.
NEW BRITISH VIRGIN ISLANDS GOVERNMENT TO FOCUS ON FINANCIAL SECTOR
The newly elected Chief Minister of the British Virgin Islands, Dr. Orlando Smith, has announced his government’s intention to focus on the nation’s crucial financial services sector during its first term in office, which he said contributes around 50% of the government’s revenues.More on this story here.
THE CITY OF LONDON LAUNDERS AROUND £18 BILLION IN DIRTY MONEY A YEAR
This is the principal finding in a Transparency International policy report which analyzes the extent of money laundering in the UK. Clean Money, Dirty Money says that between $500 billion (£300 billion) and $1.5 trillion is laundered worldwide every year. This is around 2-5 per cent of global GDP. The UK figure of £18 billon represents 2 per cent of British GDP or a quarter of all revenues from VAT.
The report author points to the string of overseas UK dependent territories which have thriving financial services sectors. He commends Jersey, Guernsey and the Isle of Man for the quality of their anti money laundering rules and adds that they are more sophisticated than those in operation in mainland UK.More on this story here.
Money-laundering “swamping” City of London.
Dirty money investigations have grown from 15,000 in 2000 to 63,000 in 2002 with the number of Suspicious Activity Report (SAR) cases this year expected to grow to 100,000. There is also a backlog of 58,000 cases, according to a report commissioned by the Government from the investigation arm of accountants KPMG.
The crisis in dirty money investigation has led the Government to establish a taskforce to bolster the current SAR system that involves banks, accountants and lawyers being required to tell police of any deals that look suspicious.More on this story here.
U.K. laundering taskforce launched.
A new anti-money laundering taskforce to modernize the system for reporting suspect financial activity has been announced by the Home Office minister Caroline Flint, following new research by KPMG highlighting the need for reform.More on this story here.
ERNST & YOUNG TO PAY U.S. GOVERNMENT $15 MILLION IN TAX CASE
The big accounting firm will pay the fine because it did not properly register tax shelters and similar transactions or properly maintain lists of people who bought them. Details of the deals and customer names will now be turned over to the I.R.S.
Neither the firm nor the I.R.S. characterized the payment, other than to say it would not be tax deductible, which suggests that it was a penalty.
The I.R.S. said investigations were continuing into about 90 other tax shelter promoters that have resisted turning over their lists. Promoters who sold the fewest tax shelters to the fewest clients would have the highest incentive to settle.More on this story here.
¥35.7 BILLION WORTH OF JAPANESE TAXES EVADED IN FY 2002
Tax bureaus across Japan uncovered tax evasion by companies and individuals totaling about ¥35.7 billion in fiscal 2002, up ¥4.7 billion from fiscal 2001, according to a report compiled by the National Tax Administration Agency.
The report revealed some devious ways tax evaders concealed their money. In one case, nearly ¥2 billion in cash was hidden in a room rented under the name of a client, while in another case, more than ¥100 million in cash was buried and covered with concrete.More on this story here.
NEW ZEALAND FARMERS UP IN ARMS OVER “FLATULENCE TAX”
Farm Forestry Association national president Denis Hocking said New Zealand would be in “carbon credit” when the greenhouse gas-reducing Kyoto Protocol came into effect because of forestry plantations. But farmers were not being paid carbon credits for trees they owned because those credits were nationalized, while at the same time the government proposes a levy to fund research into reducing greenhouse gases -- the so-called “flatulence tax”.
Taranaki Federated Farmers senior vice president Bryan Hocken said: “If the Government goes ahead with this tax, farmers will demand to know whether officials will be using agricultural census information that we were told was confidential?”More on this story here.
WILL CHINA REVALUE THE YUAN?
What is good for Chinese manufacturers is raising howls of protest elsewhere in the world. Currency analysts such as Montreal’s BCA Research regard the yuan -- pegged at around 8.3 to the dollar for a decade -- as undervalued by 20%-30%, given China’s swelling foreign reserves, which increased 35%, to $286 billion, last year. Now, with the yuan even cheaper thanks to the dollar’s dive, China’s export machine is really roaring -- at the expense of Japan, Mexico, South Korea, and other nations with floating currencies. U.S. manufacturers also claim they are being hurt by an artificially cheap yuan. In May, China’s exports surged 37% above last year’s levels, despite tepid growth in the U.S., Europe, and Japan. Beijing University economist Song Guoqing expects China’s exports will be up 30% for the year, to $424 billion.
This success is sparking renewed calls for Beijing to revalue the yuan, or even let it float. And there are indications that the jawboning may be having an effect. On June 16, U.S. Treasury Secretary John Snow stoked speculation that Beijing may make a move by saying Chinese leaders had indicated “that they intend to create more flexibility” in the currency.
But absent a big political push by Washington, hopes for a Chinese revaluation may be misplaced. The reason: Exports are one of the few brights spots in the Chinese economy. The Chinese economy is in the midst of a painful transition. Private estimates put unemployment as high as 15%. And joblessness is rising, as Beijing continues to restructure agriculture and close state enterprises.
Meanwhile, Beijing is trying to put the brakes on new lending after allowing bank loans to soar by 34% in the past two years, an unsustainable pace. The easy-money strategy has worked wonders in propelling economic growth since the 1997 Asia crisis and through several years of domestic deflation. But it has come at a cost. China’s $1.8 trillion in outstanding bank loans are equal to 140% of its gross domestic product, compared with 88% in 1996. And nonperforming loans are high at China’s four major banks, all of which are technically insolvent. The lending spree also has fed a real estate bubble that Beijing is trying to gently deflate.More on this story here.
GERMANY “HEADING FOR RECESSION”
Germany may be slipping into recession despite government intervention to stimulate growth, according to a German think tank, DIW. The warning comes after Chancellor Gerhard Schroeder announced tax cuts in an attempt to boost consumer spending.
The European Union monetary chief Pedro Solbes welcomed the tax cuts but said structural reform must remain a priority. “The implementation of structural reforms is the decisive point. If that doesn’t happen, Germany will not progress,” he said.More on this story here.
U.S. GOVERNMENT CASH SEIZURE REJECTED
A federal appeals panel has told the government for a second time that it did not have the right to seize cash from the owner of a Miami import-export firm merely because she was carrying a large amount. Drug Enforcement Administration agents did not have probable cause to take $242,484 from Deborah Standford at Miami International Airport in December 1998, according to an 11th U.S. Circuit Court of Appeals ruling.
The ruling signals shifting court treatment of forfeiture cases in light of a 2000 federal law making it more difficult for the government to seize money, property or other assets. The Civil Asset Forfeiture Reform Act of 2000 (CAFRA) placed the burden of proof on prosecutors to show that seized assets are fruits of criminal activity rather than forcing the assets’ owners to show that they are not.
A prominent Miami criminal defense attorney said the opinion was indicative of a change in judicial thinking. “It used to be that the government just had to show up and everything would be forfeited,” said Roy Black, senior partner at Miami’s Black Srebnick Kornspan & Stumpf. “Now, fortunately, it’s not like that.”
According to the opinion, the facts of the case “[O]nly hint at crime: a suggestion well short of showing probable cause that a ‘substantial connection’ exists between the funds at issue here and a narcotics transaction.”More on this story here.
MEDICAL PRIVACY-LAW CHANGES AFFECT LIVING TRUSTS
At issue is access to medical records in cases where people become too infirm, injured or debilitated to handle their own financial affairs, possibly because of suffering a stroke, the onset of dementia, loss of sight or an ailment like Parkinson’s disease.
Living trusts are popularly known as probate-avoiding documents that may help shave or skirt estate taxes while ensuring your assets wind up with the intended beneficiaries at death. But trusts also typically contain language that may prove helpful while you are still alive but unable to handle affairs responsibly, from investments to bill paying.
The clauses contained in living trusts allow a successor trustee -- commonly an adult child or perhaps a bank trust department -- to step in when you no longer can do so. But as a safeguard against abuses, trusts typically require a certification from one or two doctors attesting to your weakened condition and its likelihood to persist before a successor trustee can step in. Now, with the tighter privacy rules on medical records, doctors have become less willing to reveal patient health issues, attorneys say.
If you are thinking about drafting a trust, make sure it addresses potential incapacity with reference to the new privacy rules. If you already have a trust, it might be time to update it. One attorney suggests an amendment in which you agree to submit to a neuro-psychological evaluation, at the request of a majority of your beneficiaries, to assess your ability to continue as trustee.
A confidentiality issue also could affect people with durable financial and health care powers of attorney -- documents often drawn up separate from a trust allowing someone else to act on your behalf in cases of incapacity.More on this story here.
Medical privacy? What medical privacy?
Despite the flurry of privacy notices and irksome new obstacles to normal patient-doctor interactions, private medical records have not been protected. Instead, the federal government has authorized 600,000 clinics, hospitals, insurers, and data processing companies to dig deep into the private lives of more than 280 million individuals. For the most part, patients will not be allowed to know who is doing the digging.
Topping the list of privacy violations in the federal rule are: 1.) No patient consent required for a broad list of activities, 2.) False assurance of an audit trail, 3.) Reporting loophole on the use of patients’ medical records, 4.) Psychotherapy notes -- private statements expressed by patients and the thoughts and conclusions, right or wrong, of the therapist -- are not protected, and 5.) Marketing and fundraising -- practitioners, clinics, hospitals, and insurers who hold patient data may engage in fundraising using the patient's name, address, age, other demographic data, and treatment dates -- is allowed.
Federal officials have declared private medical records to be public property. The rule makes medical records available without patient consent to individuals and organizations that claim a need or a right to them. That the term “privacy” is not even one of the 61 terms defined in the rule provides further evidence that, despite its title and statements to the contrary, the rule was not written to protect patient privacy. It was written to share patient data. It’s about to do a very good job.More on this story here.
U.S. DEVELOPS URBAN SURVEILLANCE SYSTEM
The Pentagon is developing an urban surveillance system that would use computers and thousands of cameras to track, record and analyze the movement of every vehicle in a foreign city. Police, scientists and privacy experts say the unclassified technology could easily be adapted to spy on Americans.
The project’s centerpiece is groundbreaking computer software that is capable of automatically identifying vehicles by size, color, shape and license tag, or drivers and passengers by face.More on this story here.
BELGIUM, FRANCE PREPARE TO ROLL OUT ELECTRONIC ID CARDS
Belgium is a year ahead of France in implementing its plan. New national ID cards have already been distributed to 11 communities in Belgium to about 360,000 residents. After an evaluation period, Brussels will decide how to expand the program. The goal is to distribute ID cards nationwide within three to five years. France will test its electronic national ID cards in several regions beginning in 2004, with an objective to roll out the project in 2005.More on this story here.
THOUSANDS OF BLANK PASSPORTS FROM RUSSIA AND MEXICO HAVE BEEN STOLEN
More than 2,500 blank Mexican passports were taken from a contract courier service in Mexico City in February, and about 2,500 Russian passports were reported missing by the Russian Ministry of the Interior, the FBI told police agencies in a weekly bulletin.
The numbers on the stolen Mexican passports begin with the letter “F” and range from 4125201 to 4128000, the FBI said. Any passports in that range are considered invalid, and anyone who has one of those passport numbers should be considered a suspect.More on this story here.
TRANSPORTATION SECURITY ADMINISTRATION UNDER PRESSURE TO STOP BAGGAGE THEFT
When John Latta flew to Reagan National Airport from Miami last month, he discovered that a $1,000 pair of binoculars was missing from his checked luggage.
“What can I do?” he asked an airline agent who took a report. Her answer, Latta said, was: “Nothing. Zero.”
The spotlight on luggage thefts intensified after two baggage screeners were arrested in Miami this week. The TSA employees were charged with stealing things from checked baggage. A federal security screener in New York was arrested in March on charges of stealing thousands of dollars in cash from passengers while inspecting their belongings at an airport checkpoint.
Travelers and members of Congress have expressed concern about people working in airport security who have criminal records. Hiring thousands of federal security workers after the Sept. 11, 2001, terrorist attacks was intended to inspire the confidence of travelers. But this month the TSA admitted that it has yet to complete background checks on 22,000 of its screeners. The agency has fired 85 felons who had been hired.
Even before the federal government took over, airports were a thieves’ playground. An FBI sting in 1994 at National Airport resulted in the arrest of eight baggage handlers who were caught on videotape stealing cameras and other valuables from luggage while it was being sorted onto planes. Similar theft rings have been found at airports in Los Angeles, New York and Miami.More on this story here.
U.S. SUSPENDS AID TO 35 COUNTRIES OVER NEW INTERNATIONAL COURT
The Bush administration suspended all American military assistance to 35 countries today because they refused to pledge to give American citizens immunity before the International Criminal Court. Officials said that in all, $47.6 million in aid and $613,000 in military education programs would be lost to the 35 countries.
The new court is the world’s first permanent forum for putting on trial people charged with genocide and other crimes against humanity. The administration strongly opposes it on the ground that Americans could be subjected to politically motivated prosecutions.More on this story here.
Cato Institute: The case against the proposed International Criminal Court.
The stated mission of the proposed ICC is to prosecute persons charged with the most serious international crimes, such as war crimes, crimes against humanity, and genocide. With 116 articles and more than 200 wording options to be debated, however, the ICC’s draft statute is replete with unresolved issues and alarming possibilities.
Specifically, the court threatens to diminish America’s sovereignty, produce arbitrary and highly politicized “justice”, and grow into a jurisdictional leviathan. Already some supporters of the proposed court want to give it the authority to prosecute drug trafficking as well as such vague offenses as “serious threats to the environment” and “committing outrages on personal dignity”. Even if such expansive authority is not given to the ICC initially, the potential for jurisdictional creep is considerable and worrisome. Endangered constitutional protections include the prohibition against double jeopardy, the right to trial by an impartial jury, and the right of the accused to confront the witnesses against him.Summary of policy analysis here. Full text of policy analysis here.
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