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JON RAPPOPORT RUMINATES ON THE NATURE OF FREEDOM
It’s appropriate, on this July 4, to think about freedom and what it really implies. I have always thought that the freedom established at the beginning of America contained far more possibility than most people want to accept.
Freedom is a platform, from which individuals can create something from nothing. We are not limited by permissions of a king, and we are not limited by any concept of a prior Super-Reality which we can only copy.
Freedom goes a lot farther than that.
I happen to think, along with a minority of scholars, that there was a good chance Thomas Paine actually wrote the Declaration of Independence. For one thing, the prose sounds like him. Paine was a political poet. He knew what his own freedom was, and he exercised it. He saw the political realities of the time with great lucidity, and he was quite willing to invent a new seed.
Remember him on this day.More on this story here.
RON PAUL: INDEPENDENCE FROM ENGLAND, DEPENDENCE ON WASHINGTON?
On July 4th, we celebrate not only our political independence from England, but also our independence from the feudal notion of loyalty to King and Crown. We celebrate victory by the American colonies over a government that taxed them too much and sought too much control over their affairs. We also celebrate the Founding Fathers themselves, and the great principles contained in the Constitution and the Declaration of Independence.
Today some Americans, including many members of Congress, view both the Constitution and our Founders as quaint anachronisms at best. Times have changed, they argue, and we hardly should be bound by rules established by a bunch of dead white men who could not possibly understand our modern society. The Constitution is relevant only if it “evolves” to allow for new realities, and the federal government certainly should not be constrained by outdated notions about its proper role. This viewpoint steadily gained acceptance throughout the 20th century, exemplified by the blatantly unconstitutional New Deal and Great Society programs, Supreme Court activism, the virtual abolition of states rights, and uncontrolled growth of the federal government.
As we celebrate the Fourth of July, we might consider what our Founders would think of present-day America. Would they find the ideal of a servant government intact? Would they see a society that abides by the principles established in the Constitution?
Unfortunately, the answer is no. They would discover a society completely dominated by the federal government, totally at odds with the weak central state they envisioned. They would find the people over-taxed, over-regulated, and far too dependent on government in every sphere of human activity. They would find most Americans woefully ignorant about our own history and Constitution, despite the prevalence of college degrees. Worst of all, they would find an attitude of complacency and subservience toward government, a mindset of accepting whatever Washington hands down.
And on this Fourth of July, they would outrageously find that fireworks displays all across the nation have been canceled, because communities did not obtain federal licenses for handling explosives.More on this story here.
MASSACHUSETTS INSTITUTE OF TECHNOLOGY LAUNCHES WATCH ON U.S. GOVERNMENT
The M.I.T. Media Lab has built a fully web-enabled system promoting “Government Information Awareness”. The MIT system’s name consciously echoes the DARPA “Terrorist Information Awareness” program -- a comprehensive domestic snooping plan meant to collect and collate every obtainable scrap of data about everyone in the US population, as betrayed by the name initially given the proposal: “Total Information Awareness”.
M.I.T.’s system is intended to counter-balance the US government’s grasp of information about its citizens by providing them with effective ways to gather, organize and share information about governmental activities. It will hold data about elected and appointed officials at all levels of government, political campaign contributions and legislative action (and the implicit links between those that now so corrupt American politics), regulatory affairs, defence contracts -- everything people can learn.More on this story here and here.
ALL EURO COINS ARE NOT CREATED EQUAL
Twelve nations, plus the small states of San Marino, Monaco and the Vatican, have issued their own versions of the euro -- all legal tender throughout the euro zone. The coins look the same on the front, but the reverse sides are different in each country. On the euro coins in Ireland, for instance, there is the image of a harp and “Eire”, Irish Gaelic for Ireland. A bust of Mozart graces the one-euro coin in Austria.
Because the number of coins minted in each country roughly reflects the size of its economy, the coins of smaller countries are considered more valuable by dealers because of their relative scarcity. A specially minted proof set of the eight coins issued last year by Vatican City has a total face value of 3.88 euros, but it sells for up to 2,000 euros, or about $2,300.
The Vatican, the smallest of the euro zone members, mints just 670,000 euros a year and issues only 65,000 prepackaged sets of uncirculated coins. By contrast, Germany, with the largest economy in the European Union, mints roughly a third of the tens of billions of euros in circulation.More on this story here.
I.R.S. TAKES AIM AT BIG SHELTERS AND HOPES MESSAGE FILTERS DOWN
In recent weeks, the Internal Revenue Service and the Treasury and Justice Departments have moved against Ernst & Young and other big accounting firms, a prominent Dallas law firm, and wealthy individuals and corporations that used tax shelters that the Treasury has declared invalid. Courts may yet uphold the validity of some of the shelters.
These actions come after a decade in which enforcement of the tax laws grew so lax that the tax-shelter industry flourished and tax crimes, like opening secret offshore bank accounts [sic], were openly advertised.
In its attack on tax shelters the government is using a strategy known as general deterrence. Instead of trying to catch every offender, a policy known as specific deterrence that is applied against street criminals like drug dealers, the government is going after only a few big name firms and individuals. By doing so in highly public ways the government hopes to persuade others that it is in their best interest to reform their tax shelter business, which is just what Ernst & Young has done.More on this story here.
MORE WEALTHY AVOID U.S. TAXES
The IRS found that 2,328 wealthy people avoided U.S. income taxes in 2000, the most recent year for which statistics are available. That was a 45% jump compared with the previous year. The number is still a tiny percentage of taxpayers that the government considers wealthy -- those who report earning $200,000 or more. A larger, but still very small group, eliminated nearly all of their tax liability using various deductions and tax advantages.
Among the most common ways taxpayers reduced U.S. tax bills were deductions for investment-interest, medical and dental expenses. More than half of those who avoided paying taxes worldwide reported income from tax-exempt interest.More on this story here.
DEBTS COULD SWALLOW UP TAX CUT CASH
According to a USA Today/CNN/Gallup Poll, more than twice the number of Americans who have seen an increase in take-home pay or who expect an IRS bonus check will pay off bills rather than spend it -- 45% vs. 22%. The poll suggests muted public enthusiasm for the new money from the tax cut, which also lowers tax rates on dividends and capital gains. Just 34% say the legislation is likely to help their finances. At 44%, Americans with household incomes of $75,000-plus are the most likely to say the tax act will help them.
To jolt the economy and to curry political favor, the $350 billion tax cut signed into law last month by President Bush calls for getting much of the money out quickly. Employers by now should have reduced tax withholding, leaving more take-home pay. On July 25, the IRS will start sending 25 million checks to parents who qualify for an increased tax credit -- up to $400 per child under age 17. Follow-up mailings on Aug. 1 and Aug. 8 should deliver the money to most who qualify.
Mark Zandi, chief economist at Economy.com, disagrees with the new poll. He says about $25 billion -- roughly two-thirds of the tax cut money -- will find its way into new spending.More on this story here.
HONG KONG U-TURN ON SUBVERSION LEGISLATION
Hong Kong’s government was on Sunday night forced to abandon attempts to enact an anti-subversion bill after a key cabinet member resigned. Government plans to bulldoze the bill through the Legislative Council led half a million people to protest last week. The anti-subversion law provoked antipathy because many residents saw it as a sign of Hong Kong kow-towing to Beijing and eroding the autonomy that the former colony was guaranteed when it reverted to Chinese rule.
The Hong Kong leader, Tung Chee-hwa, tried to defuse the row on Saturday by making some concessions, but did not do enough to avert a political showdown.
James Tien, chairman of the pro-business Liberal party and a member of Mr Tung’s executive council, triggered the climbdown by resigning because he believed the government should postpone the reading. Without the Liberal Party’s seven votes, Mr. Tung had little chance of passing the bill.More on this story here and here.
People power in Hong Kong.
Mr. Tien had been so worried by the scale of the protest -- up to half a million people -- that he had flown to Beijing to consult the Hong Kong and Macau Office, then said he believed the government should postpone the reading of the bill. Mr. Tien’s departure not only deprives Mr Tung of the Liberal Party’s eight votes in the 60-member council, but also of the appearance of unity. The future of the bill, and of Mr Tung’s administration, is now in doubt.
The new law is, according to the government, a straightforward national security measure. Under the proposals, which have been criticised by America, among other foreign governments, people can be jailed for life if convicted of subversion, treason or forcefully advocating secession from China. The new law also gives police sweeping search powers without court order.
The marchers, including many first-time protesters, were also angry about the government’s handling of the economy and SARS. Hong Kong’s once-lively economy has stalled and its sky-high property prices have plummeted since its handover to China. The slowdown is not merely due to fears about democracy. Cities on the Chinese mainland, such as Shanghai and Shenzhen, are increasingly seen as the gateway to China, but without Hong Kong’s high costs.
David Chu, a Hong Kong legislator as well as a member of China’s parliament, says that last week’s protest signifies the emergence of a “new political force” in Hong Kong. “Gradually the establishment will have to recognise this new force” and pay more attention to public opinion, says Mr. Chu, whose views often coincide with China’s.More on this story here.
A victory for Hong Kong’s democrats.
The protests over Article 23 are the most pointed signal yet that business as usual will not work in Hong Kong. They are also proof that the doomsayers are wrong: democracy has not been fatally undermined in Hong Kong. They are a reminder, however, that vigilance is required to keep democracy strong. The people of Hong Kong proved last week that they are still ready to fight for their rights and freedoms.Rest of this editorial here.
SWISS SEEK ITALIAN BACKING IN EU TALKS
Switzerland is hoping to win Italy’s support to wrap up a second round of bilateral negotiations with the European Union. The Swiss president, Pascal Couchepin, is due to hold talks in Rome with the current EU president, Italian Prime Minister Silvio Berlusconi. Couchepin will also meet the Pope.
Switzerland and Italy have clashed on a number of occasions over the issue, with Swiss banking secrecy the main bone of contention. It is also a key stumbling block to Switzerland joining the Schengen and Dublin agreements on crime and asylum. Bern has been negotiating with the EU to become an associate member to both treaties since July 2002.
The meeting comes just days after EU ministers failed to agree on a compromise deal put forward by Greece, which held the last six-month presidency.More on this story here.
Growth in Europe’s single currency area could stutter to just 0.7% in 2003, Pedro Solbes, the European Union’s monetary affairs commissioner, has warned. The latest downgrade in the growth forecast confirms the gathering gloom about the state of Europe’s economy, which is feeding through into rising government deficits. With Germany teetering on the brink of recession and other big eurozone countries such as France virtually stagnant, hopes of an accelerated recovery in the second half of 2003 may have to be put on hold.
The rising strength of the euro against the dollar has hit exporters, while Wim Duisenberg, the European Central Bank’s governor, gave no indication last week that another interest rate cut was imminent.
Europe’s static growth has caused government borrowing to rise sharply, and Germany, France and Portugal have all breached the EU’s stability and growth pact deficit ceiling of 3 per cent of gross domestic product.More on this story here.
NON-EU CITIZENS FACE TRAVEL OBSTACLES FROM SWITZERLAND
Citizens from most non-EU countries, who are living in Switzerland, now need a visa to travel to European countries which have signed the Schengen agreement aimed at combating illegal immigration.
A Swiss delegation is heading to Brussels to demand that the requirement be lifted. Under the Schengen accord, many non-EU citizens will require a visa to enter any of the 15 signatory countries. The restrictions do not apply to nationals of countries which already have visa-free access to the Schengen bloc, such as the United States. For those affected, the application process for a visa is likely to take several months.
The Swiss government announced last week that it was close to reaching an agreement with the EU over the Schengen accord. Negotiations began in 1992, but there are still some sticking points over tax fraud.More on this story here.
SWISS BELIEVE CORRUPTION IS RIFE
People in Switzerland believe corruption is widespread in politics and business. The stark assessment was revealed in a survey of 47 countries commissioned by the corruption watchdog, Transparency International.
The group’s first Global Corruption Barometer asked more than 40,000 people in 47 countries how corruption affected their lives. Almost 80% of Swiss questioned said corruption had a significant impact on political life. And if given a magic wand and the ability to eliminate corruption from one institution, the Swiss -- in tandem with three out of four countries surveyed -- put political parties at the top of their list.
Switzerland’s business community also came in for criticism. The survey found that almost nine out of ten Swiss believe that the business world is affected by corruption to a significant degree.More on this story here.
PRESSURE ON BARBADOS OFFSHORE SECTOR
Barbados’ international financial services sector, which brings in some $200 million annually, is under pressure again to show its transactions are above board. This time the pressue is from the FATF, an international regulatory body fighting money laundering and terrorist financing.
Barbados which boasts of being a low-tax jurisdiction for off-shore business successfully battled with the Organisation for OECD in 2000 to remove its name from a “blacklist” of nations deemed to be involved in harmful tax practices.
The FATF has now introduced for off-shore business domiciles a Revised List of 40 Recommendations which could have serious implications for the sector and the several professionals involved such as attorneys-at-law, realtors and accountants. Furthermore, the recommendations which the FATF expects nations to implement as a matter of urgency, could also be attached to future financing from the World Bank and International Monetary Fund (IMF).
In its most far-reaching declaration, the FATF has outlawed shell banks, some of which operate in Barbados and other Caribbean off-shore domiciles. The FATF has called on governments to shut down these entities that are usually registered off-shore to help companies in places like the United States reduce the level of corporate taxes they pay back home. Furthermore, financial institutions in Barbados would be prevented from doing business with any shell bank anywhere in the world.More on this story here.
FATF will hurt lawyers most.
A leading accountant, Berkeley Greenidge, senior manager in Global Risk Management Solutions Practice with PriceWaterhouseCoopers, has assessed that attorneys will be the most affected of all the professionals targeted in the revised recommendations from the Financial Action Task Force on Money Laundering.
Greenidge said that the FATF was putting pressure on the “gatekeepers”. “People could use these intermediaries -- lawyers and accountants and real estate agents. You could buy a house and not go to a bank and you can launder the funds then by selling the house,” he explained. According to the accounting professional, the FATF is indicating, “we are going to put pressure on you. If your client turns out to be a criminal, you are just as guilty as he”.More on this story here.
BRINGING REGIME CHANGE TO AFRICA
Some thought North Korea or Iran or maybe Syria might be next on President George Bush’s list for regime change, after Iraq. But it now seems likely that the strife-torn former American colony of Liberia, whose 14-year civil war has inflamed conflicts across West Africa, will be the next to undergo American-led military intervention to bring about a change of government. Last week, Mr. Bush told Mr Taylor he must step down immediately.
Unlike in the case of Iraq, American armed intervention in Liberia has the full backing of both the United Nations and France. The French, and several West African states, have offered to contribute to a peacekeeping force for Liberia. West African leaders on Tuesday renewed their calls on Mr Bush to intervene.
America has been reluctant to intervene militarily in Africa since its humiliating withdrawal from Somalia in 1993, after 18 American troops were killed. But the success of the British and French interventions in Sierra Leone and Côte d’Ivoire shows that a fairly small number of well-armed, professional soldiers can quickly overcome ill-disciplined rebels.
Mr. Bush and his secretary of state, Colin Powell will not be visiting Liberia on his first official visit to Africa, nor will they visit Zimbabwe, whose state-controlled media have attacked Mr. Powell for putting pressure on the country’s dictatorial president, Robert Mugabe, to resign, by promising that massive American aid would be sent to the impoverished country as soon as he is gone. Mr. Bush and Mr. Powell will be bombarded with demands for attention as they tour Senegal, South Africa, Botswana, Uganda and Nigeria -- from governments and oppositions, from charities and pressure groups, from businesses and from the UN.More on this story here.
ASSETS MANAGED BY INDEPENDENT FINANCIAL ADVISERS SERVING WEALTHY CLIENTS UP 11% IN 2002
Despite the worst three-year stretch for investors since the 1930s, assets under management by independent financial advisers serving wealthy clients rose more than 11% in 2002, according to an annual ranking released today by Bloomberg Wealth Manager magazine.
More than 20% of the 370 firms ranked said their biggest challenge was how to handle growth, the magazine reports. In fact, forty-two of the firms saw their assets rise by 30% or more over the previous year. Along with rising assets, firms ranked also saw median client-account size rise by 3.2% in 2002, to $702,868. In contrast, the Standard & Poor’s 500 index was down 22.1% last year.
“It seems that during 2002, wealthy individuals whose portfolios had suffered at the hands of their broker or because of their own poor judgment continued to turn to independent advisers for counsel,” reports executive editor Kieran Beer, who wrote the story.More on this story here.
A LITTLE-NOTICED GUILTY PARTY IN THE STOCKMARKET’S BOOM AND BUST
After the bubble, the blame. Over the past two years, investors, regulators and prosecutors have competed to hurl mud and lawsuits at anybody they could plausibly hold responsible for causing such big losses to so many. Bosses have been blamed for cooking the books and inflating their pay; auditors faulted for being too cosy with their charges and even helping in the cooking; investment bankers singled out for dodgy research and touting dubious stocks. But one set of actors in the tragedy has so far escaped largely unscathed: the fund managers who look after investors’ money.
However, fund managers were far from blameless. Indeed, they were right at the heart of the bubble. Throughout the 1990s, they were urging investors to pile into equities, often of the riskiest variety. They reaped enormous profits from their clients’ gullibility, since their pay depended largely on the market value of the assets they had under management. Their fees and charges were typically buried in the small print. And they were just as guilty as Wall Street banks of misleading investors: tales of heroic past performance and of safe double-digit returns reinforced the foolish notion that markets would rise forever. The truth is that, for the most part, fund managers have offered extremely poor value for money.
Two specific lessons that investors should learn from their experience with fund managers: One is the merits of indexed investing. The second is the need to balance risks and returns more carefully.More on this story here.
AMERICA’S BIG BANKS RAKING IN RECORD PROFITS
Over the years, have banks repeatedly lost their shirts -- in property, Latin America, new technologies, you name it. After a party as wild as the late 1990s mania, one might have expected a decidedly queasy banking sector. Yet far from being confined to bed for the foreseeable future, as Japan’s banks have long been, America’s banks have jumped out looking astonishingly hale, hearty and smug.
This unexpected break with precedent is perhaps why banks’ shares have outperformed the equity market by a wide margin over the past three years (though banks’ inherent leverage has helped). Profits have held up; a few banks have even been making record amounts.
There are three possible explanations for this extraordinary performance: the world really has changed; banks have changed; or banks have got lucky.More on this story here.
THE SECRET LIFE OF RUSSIA’S MILLIONAIRES
Smiling and mumbling platitudes about transparency and corporate governance, the financiers charmed a number of attentive British investors. Once vilified as “robber barons” and plunderers of their motherland, Russia’s so-called oligarchs have acquired a silvery sheen of respectability in recent years. Boosted by high oil prices and renewed confidence in Russian markets, these super-rich businessmen are extending their tentacles into Europe.
Russia today has 17 billionaires, a staggering amount for a country that is poorer on a per capita basis than Portugal. Keen to protect their wealth and bring in foreign capital, the oligarchs have recently cleaned up their act, giving grudging respect to minority shareholders in their business empires and feigning openness in their corporate affairs.
Some have styled themselves as victims of political oppression, champions of civil liberties, or generous donors to charity. This may fool foreigners at glitzy forums, but few Russians have forgotten the beginnings of these Armani-trousered philanthropists.More on this story here.
CHINA’S NEW PRESIDENT MAY LET CURRENCY INCREASE, ANALYSTS SAY
China, the world’s sixth-largest economy, has fixed the exchange rate of the yuan at about 8.3 to the dollar since 1995. Fred Hu, China strategist at Goldman Sachs Group Inc., said the government may move toward a flexible exchange-rate policy after the end of 2003. Letting the yuan trade more freely will probably mean an increase in its value, he said. “It could be undervalued by as much as 15 percent.”
The country, which joined the World Trade Organization in 2001, has lured about $308 billion in foreign direct investment since the peg began and the country’s trade surplus amounted to $2.2 billion in May. The dollar’s drop against the euro and the yen has led to calls from South Korea, Japan and manufacturing lobbies in the U.S. for China to allow the yuan to rise.
A stronger yuan may make it less expensive for government- controlled companies, including China National Offshore Oil Corp. and PetroChina Corp. to buy overseas assets and businesses. The government has been encouraging state companies to expand abroad.More on this story here.
NEARLY 8 OF 10 U.S. LAWYERS FAVOR GLOBALIZATION OF LAW
Although legal experts cite the difficulties of standardizing laws internationally, nearly eight of 10 U.S. lawyers surveyed believe the legal profession would benefit from the convergence of numerous laws across international borders. The survey -- the first comprehensive international study on issues facing the legal profession -- was conducted by the International Bar Association (IBA) and sponsored by LexisNexis(TM) U.S., a leading provider of legal, news and business information services.
“We cannot make these laws on a nation-by-nation basis if they are to be really effective. They must be standardized so there are fewer perceived barriers to cross-border enforcement,” said Alan M. Kindred, the U.S. country representative of the IBA for the Western United States.More on this story here.
ANGER OVER PLAN FOR MANDATORY £40 U.K. ID CARD
Civil liberties groups reacted with fury yesterday after a leaked document revealed that the government is planning to make everyone over the age of 16 pay £40 for a mandatory identity card. In a letter to his Cabinet colleagues, David Blunkett, the Home Secretary, confirmed he has ditched his original plan for a voluntary entitlement card in favour of an ID card.
Although it will not be compulsory to carry the card, everyone will be required to possess one and, if requested, show it to the police or other agencies. The card will carry biometric data, most likely an image of a person’s iris, and could incorporate information already found in passports and driving licences.
The government will stress that Britain is out of kilter with Europe, where 11 of the 15 European Union states have identity cards. However, a spokesman for Liberty, the human rights pressure group, said the cards were a £40 stealth tax that would benefit no-one but gangsters “who would make a fortune forging the cards. They will not prevent a single crime and make suspects out of us all.”More on this story here.
PIERRE LEMIEUX: CANADIAN LAW NOW FAVORS ROBBERS AND OPPRESSORS
By welcoming the prosecution of Harjeet Singh Saini on charges of aggravated assault against a burglar inside his dépanneur (“Vigilante Policing No Way to Fight Crime,” July 2, 2003), The Gazette is insulting common sense, violating morality, ignoring economic and criminological research and negating a few centuries of Western tradition.
The moral argument was already in John Locke’s Second Treatise of Civil Government, a seminal book in the history of Western liberty, published in 1690. Locke explained that it is “lawful for a man to kill a thief who has not in the least hurt him, nor declared any design upon his life, any farther than by the use of force, so to get him in his power as to take away his money, or what he pleases, from him; because using force, where he has no right to get me into his power ... I have no reason to suppose that he who would take away my liberty would not, when he had me in his power, take away everything else.”
As things are going, Canada will soon be like Britain, where honest citizens are forbidden to defend themselves, where only criminals have guns and where the population lives in fear, including fear of reporting criminals. Not only has the Canadian population gradually been disarmed by three major pieces of firearm-control legislation over a quarter of a century -- the last act being played now -- but the right of individuals to defend themselves, even with baseball bats, is now openly under attack.More on this story here.
FORGET IT, AUSTRALIAN STUDENTS TOLD
IT Manager Australia members were asked if students in Australia would be discouraged from considering IT as a career if offshore outsourcing continued to shrink the local employment market. More than 90% of members said based upon current conditions, they would not recommend information technology as a viable career path.
ITM member James Michaels, who works for a telecommunications company in Sydney, said there was a huge “disconnect” in the supply and demand chain. “I think we’ve reached a saturation point... there’s just too many skilled techies out of work and they’re all fighting for either the same pie or the scraps left behind post-outsourcing,” he said.More on this story here.
US ELECTION FRAUD SCANDAL?
From Tammany Hall’s machine politics in the 19th century through Mayor Daley’s grasp on Chicago elections, right up to Lyndon Johnson’s first election and John Kennedy’s 1960 cliff-hanger defeat of Richard Nixon, many US elections have been thought to have had “irregularities”.
So much so that it is not really certain where “Vote early, and often!” originated, whether in Boston, New York, or Chicago. It is also well known that many lesser US cities had political corruption, including rampant election fraud, at one time or another in their histories.
Now a New Zealand political activist has published suspicions, along with supporting evidence, that electronic voting in the US is being manipulated by right-wing politicians with the connivance of several voting machine manufacturers. The story revolves around some highly volatile conjectures and might be explosive, if fully investigated.More on this story here.
SWISS BACK BANKING SECRECY
About 58% of Swiss support Switzerland’s controversial banking secrecy laws in their current form, according to an opinion poll released by the Swiss finance ministry. The poll was published as the Swiss authorities relaunched a campaign to clean up the country’s international reputation, arguing that Switzerland is not an “offshore center” and is not an ideal place to hide illegal funds.
About 27% of those polled said it should be possible to lift banking secrecy in cases of tax evasion, against 25% in the same poll in 2001. 11% felt that banking secrecy should be abolished.More on this story here.
Swiss Market Index up over 30% since March.
Swiss market experts remain divided about the consequences of the recent surge, which followed a sharp decline in markets during January and February. The 27-stock SMI started the year at around 4,630 points, before slumping to 3,618 points in March, ahead of the war in Iraq. Recently the benchmark index has been hovering around the 4,900 mark -- a net increase of over 3% for the first half of 2003.More on this story here.
EUROPEAN COURT OF JUSTICE RULING MAY UNBLOCK EU SAVINGS TAX DIRECTIVE
Belgium is expected to withdraw its threat to block the progress of the European Union’s savings tax directive following an ECJ ruling in its favor last week. The EC had announced that tax breaks offered to multinational groups with service units established in Belgium constitute illegal state aid, and must therefore be discontinued.
The ECJ has suspended the EC’s decision pending an official ruling from the court. However, given that this is unlikely to be forthcoming for at least two years, it appears that Belgium’s request for current contracts -- and the tax breaks which go with them -- to remain valid until 2005, has been indirectly granted.More on this story here.
BELGIUM ANNOUNCES TAX AMNESTY FOR FOREIGN FUNDS
The Prime Minister’s office of the incoming Belgian government announced last week that it is planning to declare a tax amnesty for undeclared money held abroad. In common with similar amnesties that have come and gone around the world, taxpayers will escape prosecution in return for a levy on the funds they repatriate to the country. It is thought this levy will vary between 2% and 10%.More on this story here.
CHANGES IN PORTUGAL PROPERTY TAXATION FOR OFFSHORE OWNERS
The proposed changes will affect all existing and potential property owners, but are especially punitive for those who own or plan to own Portuguese property through an “offshore” corporate structure. The new legislation introduces large tax increases for property owned in offshore jurisdictions appearing on the Portuguese blacklist. The blacklist includes Gibraltar, Isle of Man and British Virgin Islands -- all favored jurisdictions for Portuguese property holding.
The proposals to introduce punitive taxes appear to make offshore property holding structures a less favorable option but the good news is that the advantages are still available. The key is to find a corporate structure offering the benefits of offshore ownership without the new tax liability. This means incorporating in a non-blacklisted territory with a favorable tax regime.More on this story here.
“CRACK” INLAND REVENUE TEAM TARGETS OFFSHORE ASSETS
The unit, based in Liverpool, is approaching banks and other financial companies demanding lists of customers with offshore interests. Most institutions are understood to be co-operating rather than face legal action from the Revenue. The tax authority is concentrating on British firms with offshore subsidiaries, including accountants and high-street banks.
Investigators are also planning regular trips to tax havens such as the Channel Islands and the Isle of Man to exert pressure on local offices.
Thousands of people whose names appear on lists passed to the Revenue will be contacted. They will be asked to disclose any information that they may previously have kept from the authorities. Those who agree are expected to be allowed to repay any unpaid tax with interest. Those who do not co-operate can expect a far more intrusive analysis of their affairs.More on this story here.
Who really owns Chelsea football club?
One of the great unsolved riddles of corporate Britain -- has only deepened with the £140 million takeover bid from Russian tycoon Roman Abramovich. Chelsea has long been regarded as one of the most opaque quoted companies, with a share register dominated by an extraordinary array of obscure island-based trusts and farflung investment companies.
The takeover is starting to flush out more details about the companies, but the real identities of the beneficial investors behind them remains -- for now -- as obscure as ever.More on this story here.
HONG KONG REFORMERS SEE OPENING
After Hong Kong authorities bowed to public opinion and shelved the internal security bill that set off last week’s mass street protests, the debate in this city turned today to what else should be done to quell rising public frustration with a government chosen not by local voters, but by Communist Party chiefs more than 1,200 miles away in Beijing.
Democracy advocates, hoping to capitalize on their surprise victory against the legislation, immediately urged Tung Chee-hwa, the city’s embattled chief executive, to move forward with political reforms that could lead eventually to direct elections to choose his successor. That would be a first for a city leader’s post anywhere in China.
The problem for the party is that any response to the demonstrations in Hong Kong -- whether by replacing Tung or allowing political reform -- carries the risk of triggering similar protests and demands for change on the mainland.More on this story here and here.
Hong Kong’s property market comes under pressure.
Hong Kong’s all-important property market still appears to be stuck in the doldrums, adding to pressure on Chief Executive Tung Chee-hwa to step aside as popular discontent mounts. A period of global weakness, war in Iraq, as well as SARS, have adversely impacted the local economy in the first half of this year.
Property consultants Jones Lang LaSalle says the first half of this year saw mass residential prices fall by another 14%. Joseph Tsang, International Director, Jones Lang LaSalle, said: “As a result, overall rentals are basically under huge pressure. There’s more pressure to come, the situation continues with more expatriates leaving Hong Kong and actually in-bound expatriates with housing budget are being cut by 20 percent.”More on this story here.
$140 MILLION OF FROZEN IRAQI ASSETS “GIFTED” TO US BY CAYMANS
Banks in the Cayman Islands have transferred $140 million in frozen Iraqi assets to the US Federal Reserve. The Iraqi government apparently deposited the funds in Cayman banks in previous years, and the funds were frozen during the 1990s as part of economic sanctions imposed under UN resolutions.
The Treasury Department says the United States has returned to Iraq more than $681 million of $1.7 billion in assets previously frozen in the United States. The money is being used to pay civil servants and pensioners, and to help buy equipment for local police forces.More on this story here.
TORONTO-BASED SCOTIABANK TO ACQUIRE SOME OPERATIONS OF THE FAILED DOMINICAN BANK
The authorities agreed to let Scotiabank acquire 35 bank branches and various credit cards of the failed Banco Intercontinental, commonly known as Baninter. The Dominican Republic’s Central Bank seized control of the bank in May, saying the bank had collapsed after losing some 55 billion pesos ($2.2 billion) through embezzlement, fraud and bad deals. Three executives and a former ambassador to France have been arrested in the scandal.
Baninter was allegedly manipulated since 1989 to secretly grant off-the-books loans worth millions of dollars to shareholders and issue checks for fraudulent purposes.More on this story here.
PLENTY OF MAGAZINE CHOICES FOR EXPATS
In Belgium you have The Bulletin. In the south of France you have The Riviera Reporter and in Lucca you have Grapevine. It seems that anywhere you have a reasonable sized expatriate population you will find a magazine that caters to their needs. It seems that each publication has its own website too and there is too much choice.More on this story here.
ERNST & YOUNG SOLD “SPRINT” TAX STRATEGY TO MANY
Ernst & Young LLP sold the same type of tax shelter used by executives at Sprint Corp. to at least dozens of individuals, while at least three rival firms sold variations, in indications that sales were wider than generally has been thought, people familiar with the matter told The Wall Street Journal.
The tax strategy has been at the center of controversy at the phone company since early this year, prompting the ousting of its longtime chief executive and his heir apparent. The two executives had used the Ernst & Young-recommended shelter to avoid paying taxes on more than $100 million in exercised stock options. With the approach since challenged by the IRS, they now both face potential financial crisis. Ernst & Young, Sprint’s longtime auditor, had provided financial-planning advice to the executives as well as completing their tax returns.More on this story here.
CFP: IRS’S INTEREST REPORTING REGULATION WILL HARM U.S. ECONOMY
U.S. banks and financial institutions benefit greatly from the bank deposits of nonresident aliens. These deposits, in turn, benefit every American by helping to create jobs, finance small business loans and improve the general welfare of all. For decades, United States lawmakers have understood the importance of attracting capital to America, which is why Congress has chosen not to tax the interest paid on bank deposits of nonresident aliens and, the further step, of not reporting this deposit income to their home governments.
Unfortunately, despite the clear intent of Congress, the IRS is seeking to require the reporting of bank deposit interest paid to nonresident aliens. This information, according to the proposed regulation, would then be turned over to foreign tax collectors. The price is high, especially given that the IRS does not have the authority to issue this rule.More on this story here.
PRIVATE BANKS SEE ASSETS GROWING AT SLOWER RATE, SURVEY SHOWS
Private banks worldwide expect their assets to grow more slowly as wealthy clients remain wary of investing after being stung by the longest bear market for stocks in at least 50 years, a PricewaterhouseCoopers LLP report said.
European private banks see assets swelling by 3% during the next year while those in North America expect an 8% increase, the report released in London said. That compares with predictions of 13% in the last report, two years ago.More on this story here.
FRAUDS FIND EASY PICKINGS IN AUSTRALIA
Complacency has made Australian businesses among the world’s easiest targets for fraud and theft, a new survey claims. Nearly half of Australian companies -- 47% -- said they had been victims of fraud in the past two years.More on this story here.
“The real weak point is Europe, where growth has really stalled,” Jorma Ollila, the chief executive of Nokia, says in an interview. Growth in Germany is zero, at best, and in France is only slightly better, he notes. “There is no sense of where growth could come from in Europe.”
Ollila’s worries about Europe are telling. For if there is any company that sees the world whole, it is probably Nokia, whose ubiquitous cellular phones have become symbols of globalization around the planet.
One explanation for Europe’s woes is that it simply does not work hard enough to compete. A panelist at a conference on European business leadership noted that because of their long vacations and generous holidays, Europeans on average work 30% less per year than Americans do. Hours worked per person are 15 to 20% less than in the States, he said.More on this story here.
IT’S REFORM OR BUST, OECD TELLS FRANCE
The OECD cut the growth outlook for France to less than one percent this year, forecasting a growth rate of 2.0% in 2004 and urging the government to pursue reforms to avoid a vicious circle of debt. The OECD predicted that the French public deficit would increase to 3.5% of output this year, far beyond the euro-zone ceiling of 3.0% and that debt would also breach the euro limit of 60% of output, rising to 61%.More on this story here.
Just what is going on in France, this country which so narrowly pulled back from a political brink last year and then found salvation in talk of shared “republican values” and a “political re-awakening”?
For the lofty foreign observer, there are comparisons drawn with the last limb twitches of a dying dinosaur. But from within French society, this is a period of collective confusion, of self-doubt and fear of the future.More on this story here.
THE NEW EUROPE LOOKS A LITTLE LIKE 1984
Europe recently paid homage to George Orwell, whose 100th birthday fell on June 25. Europe tipped its hat to Orwell in a different way as well. Orwell, of course, is famous for his writings about the rise of the totalitarian state in the name of a utopian ideal. Well, Europeans got a taste of that when the Financial Times uncovered a secret directive dreamed up by the European Commission’s Social Affairs Commissioner Anna Diamantopoulou.
In the name of ending sexual stereotypes of men and women, she opined that some European media and advertising should be banned. In her grand scheme, the official arbiter of what are stereotypical portrayals of men and women would be the EC’s Big Brothers and Sisters in Brussels, or, if necessary, the courts. The most breathtaking thing about this plan is that none of the terms are defined. Just what are stereotypical portrayals? In whose eyes is a television program or movie depicting an “unacceptable image”? This is the world Orwell created for us half a century ago. In Oceania’s Super State the Party elites decide what is truth.
From one of its most powerful commissioners, we get a glimpse into the attitudes of Europe’s ambitious, new, young post-war leaders.More on this story here.
AUSTRALIAN GOVERNMENT’S EYES ARE ON ITS CITIZENS
The federal government has announced plans to link individual databases in different departments together to create an uber-database containing personal information that will be available to official agencies. The database is promoted as a means of fighting fraud on government programs, fraud on electronic commerce and -- the perennial favorites of the Government -- terrorism, people smuggling and illegal immigration.More on this story here.
NEW ZEALAND POLICE GET TECH CRIME POWERS
Police and security agencies in New Zealand have been given broad powers to intercept intercept emails, faxes and text messages after the passage of new legislation that also boosted hacking laws. The Crimes Amendment Act extends existing police powers to tap phone lines with the approval of a High Court judge. It was overwhelmingly approved by 111 of the New Zealand parliament’s 120 members.More on this story here.
NEW PASSPORT RULES FOR FOREIGNERS VISITING U.S.
Come fall, traveling to the United States will get more complicated. Foreign visitors from 27 countries must get a computer-friendly passport by October, or they will need a visa to enter the United States.
The new requirement for “machine-readable” passports is the latest in a series of measures designed to keep better track of foreigners entering and exiting U.S. borders. But for the travel industry, it is one more thing that may discourage tourists from choosing the United States for their vacations.
Latin American and Caribbean nationals, and other citizens who are required to have visas, already are facing tightened visa requirements such as personal interviews. The nonrefundable visa application fee recently soared 53% -- to $100, a considerable sum in many Third World countries.More on this story here.
THE DREAMS OF TECHNICIANS ARE BECOMING THE INSTRUMENTS OF GOVERNMENT CONTROL
Each year $380 million will be spent on new facial recognition and iris scan technologies to get everyone’s image on to the state computer systems. Scientists are being employed to study both hand geometry recognition and voice recognition systems to see if the American state can use them, too, to monitor the movement of individuals in and out of the Homeland.
A U.K. Cabinet memo written two weeks ago and leaked at the weekend, shows that Home Secretary David Blunkett is going all guns blazing for a national ID card scheme. The entire country will be enmeshed in an identity supervision system.
There will, of course, be a need for a central computer on which our faces, our fingerprints, our eye colours, our names, our addresses, our criminal records and our nationality status will all be recorded. But relax ... We are only doing this to make you safer.
Nothing about your income tax, your earnings, your relationships past and present, nor anything the security services might have discovered about you, nor your personal secrets, nor your acknowledged failures or vulnerabilities, nor your sexual inclinations, your debts, your promises, your past indiscretions, none of that, of course, will come anywhere near the computer.More on this story here.
GRANDIOSE SCHEMES FOR ELECTRONIC EAVESDROPPING MAY HURT MORE THAN THEY HELP
When it comes to the electronic gathering of intelligence information, it appears that no amount of information is enough. These two concepts have collided in America with the result that creating the very capability of gathering electronic intelligence is putting all of us in greater danger. The supposed cure may be worse than the disease. Maybe -- and only maybe -- we know a little more about what the bad guys in our society are doing, but it is coming at what might be a horrible cost.
The FBI administers the Communications Assistance to Law Enforcement Act (CALEA), which was passed by Congress in 1994. CALEA was a response to advances in digital communications. It was a way for law enforcement and intelligence agencies to go beyond old-fashioned phone taps and listen in on mobile phone calls, pagers, the Internet and any other form of electronic messaging that might be used by enemies of the state. Not only can the authorities listen to your phone calls, they can follow those phone calls back upstream and listen to the phones from which calls were made. They can listen to what you say while you think you are on hold. This is scary stuff.
But not nearly as scary as the way CALEA’s own internal security is handled. The typical CALEA installation has a direct connection to the Internet because, believe it or not, that is how the wiretap data is collected and transmitted. And by just about any measure, that workstation does not meet federal standards for evidence integrity.
And it can be hacked. And it has been.More on this story here.
CONGRESSIONAL REPORT ON SEPTEMBER 11 TO BE RELEASED THIS MONTH
A long-awaited final report on the Sept. 11, 2001, attacks will be released in the next two weeks, containing new information about U.S. government mistakes and Saudi financing of terrorists.
One former House Intelligence Committee member who has read the report, Rep. Tim Roemer, D-Indiana, described the findings as “highly explosive”. He said it was “compelling and galvanizing and will refocus the public’s attention on Sept. 11.” Roemer predicted that “certain mistakes, errors and gaps in the system will be made clear.”
A source familiar with the investigation, speaking on condition of anonymity, said two “sensitive areas” of the public report are especially likely to make headlines.
One section provides new information on ties between the Saudi royal family, government officials and terrorists. The FBI may have mishandled an investigation into how two of the Sept. 11 hijackers received aid from Saudi groups and individuals. The other section is a narrative of intelligence warnings, some of them ignored or not shared with other agencies, before the attacks.More on this story here.
Links to relevant Cato Institute papers here.
FINANCIAL CRIMES TARGETED BY U.S. HOMELAND SECURITY OFFICE
Tom Ridge, secretary of the Department of Homeland Security, outlined “Operation Cornerstone” in a speech to financial executives at New York’s Federal Reserve bank -- a new investigations program that will be operated by the Bureau of Immigration and Customs Enforcement, or ICE. The program will focus on money-laundering crimes, Ridge said, and ICE agents will work with private industry to gather intelligence in the financial system.More on this story here and here.
STOCKBROKER ISSUES GLOOMY ASSESSMENT OF JERSEY ECONOMY
Stockbroking firm Collins Stewart argued that increasing pressures on costs from both outside the jurisdiction and from within, as the result of a depressed market place and increasing levels of regulation, are taking their toll on the island’s economy, leading major institutions to scale down their operations -- a situation that the firm believes will worsen.More on this story here.
NEW FATF RULES MUST BE APPLIED FAIRLY SAYS GUERNSEY REGULATOR
Guernsey’s Financial Services Commission director General Peter Neville has said that major structural changes to the jurisdiction’s regulatory regime will not be required after the publication of the FATF’s revised recommendations on anti-money laundering. According to Neville, Guernsey already has a perfectly adequate set of regulations in place, and insists that the island will not implement further rules that are not required of other financial centers.More on this story here.
BATTLE OVER HUMAN RIGHTS BETWEEN BAHAMAS’ GOVERNMENT AND BAR ASSOCIATION
The issue goes back three years, to a package of financial laws enacted in response to pressure from industrialized countries trying to protect their tax bases. The constitutional arguments relate to freedom from unreasonable search and freedom to keep information confidential.
The financial laws created a compliance commission that requires anyone handling other people’s money to follow strict new rules aimed at preventing criminal abuse of financial services through money laundering and tax evasion. While financial institutions are toeing the line to stay in business and conform to what many now call “international best practices”, lawyers continue to argue that required on-site examinations of client files “affect the fundamental right to legal professional privilege... which includes documents and information generated in the course of an attorney-client relationship.”More on this story here and here.
PHILIPPINES CONGRESS OKS SELECTIVE LIFTING OF BANK SECRECY LAW
The implementing rules and regulations approved by Congress for the amended Anti-Money Laundering Act (AMLA) provide for the selective lifting of the Bank Secrecy Law. The provision allows the Anti-Money Laundering Council (AMLC) and the Bangko Sentral ng Pilipinas (BSP) to examine bank deposits and investments in the course of their investigation of suspected money laundering activities and other crimes specified under the AMLA.More on this story here.
£6 MILLION OF GANGSTERS’ ASSETS FROZEN BY U.K. ASSETS RECOVERY AGENCY
The Assets Recovery Agency has frozen £6 million of assets from 20 criminals in its first 100 days of operation. The agency, set up at the end of February to confiscate the proceeds of crime, said this was an “excellent” start. It aims to freeze at least £10 million by the end of this financial year, it said.
Under the Proceeds of Crime Act, the ARA has the power to apply in the High Court to seize criminal assets even if the owner has not been convicted of a crime. The agency only has to convince the court that someone is enjoying a lifestyle which they cannot possibly have earned legally.
A judge can then order their possessions to be confiscated and sold.More on this story here.
CATO INSTITUTE ON UPHOLDING LIBERTY IN AMERICA AGAINST NEOCONSERVATIVE ASSAULTS
More and more anti-terrorist laws and rules straightjacket the nation. There is a congruent danger: the rise of neoconservatism on the right. The movement is using the threat of terrorism to expand government at home and abroad. America must safeguard its freedoms in the fight against terrorism, but protect itself from pernicious policies that erode freedom in the name of liberty.
James Buchanan, the Nobel laureate, argues that governments will acquire more power when the opportunity arises. History shows this to be true, and the Patriot law reflects it. Today, with the war on terrorism, the opportunities for the state to expand are ubiquitous. Both liberals and conservatives are casting a blind eye toward unnecessary usurpations of power, if not openly calling for them.
Underlying neoconservatism is a desire to reshape America and the world through the efforts of a robust federal government. For years, the Weekly Standard, the neoconservative magazine, has promoted the need for initiatives to reinforce America’s international power. Merely living in a free society appears to be insufficient for neoconservatives.More on this story here.
EMBOLDENED HONG KONG PROTESTERS CALL FOR FREE ELECTIONS
After an estimated 500,000 people marched against a proposed stringent internal security bill, the government toned down that bill on Saturday and then postponed a vote on it early Monday, and has not set a new schedule for its consideration. In the latest rally -- estimates start at 30,000 people, speakers called not only for the security legislation to be redone entirely but for Hong Kong’s chief executive and all lawmakers to be elected by universal suffrage, making the territory a democratic model for the rest of China.
There were signs that last week’s demonstration may have broadened the range of people willing to attend rallies here. Ho Chin, a 69-year-old retired electrician, said that he had never attended a political demonstration until last week, but came again tonight because, he said, “I want to have a vote.”More on this story here.
Hong Kong’s little step forward.
The most important legacy of recent events is that Hong Kongers now have their own proof that standing up for their rights and freedoms can bring results. Since 1997, when Britain handed Hong Kong over to the Communists, against the will of the vast majority of Hong Kong residents, locals have been afraid to test the will of their new masters in mainland China. The popular timidity has finally been broken.
In standing up to their communist keepers, Hong Kongers showed their more than 1 billion countrymen in mainland China that resistance to tyranny can work so long as those who want freedom do not give up.More on this story here.
Hong Kong, Singapore, top “economic freedom” index.
Hong Kong, Singapore, and the United States rank first, second and third, respectively, in the latest edition of the Economic Freedom of the World annual report released by the Cato Institute and more than 50 other libertarian think-tanks around the world.
The 160-page report, which ranks 123 economies, concludes that citizens and businesses in Africa, Latin America and the former Soviet bloc comprise among the least economically free countries in the world, with Myanmar claiming the cellar position.
The report is based on 38 variables in five major categories designed to measure economic freedom: the size of government, as determined in part by spending, taxes and state enterprises; the legal structure and security of property rights; access to sound money that is not weakened by high inflation rates; the freedom to exchange goods and services with foreigners unencumbered, for example, by tariffs or quotas or currency controls; and the degree to which business and credit and labor markets are regulated by the government.
Despite being ranked first overall, Hong Kong’s legal structure and security of property rights were only ranked 27th out of 123 nations, with a rating of seven. That was the same as countries such as Botswana and Slovenia. The latest rating is based on data collected in 2001.
An economist said the national security bill would damage economic freedom while the absence of an anti-trust law and incidences of government favoritism might also damage Hong Kong’s ranking.More on this story here and here.
THE EVOLUTION OF MAN ... THE ISLAND
Once a playground for the workers of northern England, Scotland and Ireland, the Isle of Man suffered from changing holiday habits more than most destinations in the British Isles. With its steam engines, water wheels and seaside resorts, its name has been nostalgia for the last 40 years. Times are changing, though: Man is quietly evolving.
The landscape on the 33 mile long by 13 mile wide island is lush and lovely. There are medieval strip-fields and palm trees, electric-green glens and moorland ablaze with fuchsia and gorse. The heritage is equally rich. Man was settled first by the Celts, then the Norse, later becoming part of the Kingdom of the Isles reaching down from the west of Scotland.
Unemployment on Man is less than one per cent, and the financial services sector is a major industry. Plane-loads of pinstriped businessmen fly in from the City each day to attend meetings, while a policy of low income tax attracts high-earners.More on this story here.
JERSEY FREEZES €8 MILLION OF ALLEGED MAFIA MONEY
A Jersey court ordered frozen the account of Gerardo Cuomo, who is under trial for complicity with the Mafia, on request from an Italian anti-Mafia magistrate in the southern Italian town of Bari.
“This is an important operation because it is the first time a state considered a tax haven has helped the Italian state (in an anti-Mafia action),” Francesco Fontanarosa, a senior police officer in Bari, told reporters.More on this story here.
GIBRALTAR GAINS THIRD PASSPORTING “BADGE”
The UK has given its approval for passporting rights that will allow local investment firms in Gibraltar to offer services to individuals in other member states. This is the third passporting “badge” that the jurisdiction has received following banking and insurance passports and means that firms regulated by a recognized competent authority such as the FSA do not have to seek regulatory approval from regulators in other member states.More on this story here.
ITALY TO PUSH FOR EU TREATY ON TAXATION
In a move likely to alarm EU member states such as the United Kingdom and Ireland, Italian Finance Minister, Giulio Tremonti -- whose country has recently assumed the rotating EU presidency -- announced plans to push for an Europe-wide taxation treaty.
According to reports in the UK media, Mr. Tremonti revealed that the treaty would replace more than 200 current bilateral double taxation accords between member states, and described it as “a symbol of the EU’s ever greater integration”. More controversially, the Italian Finance Minister also suggested that the proposed treaty could contain provisions dealing with: “the standardisation of corporate tax rates”.More on this story here.
ANGST CONTINUES IN MAURITIUS OVER FINANCIAL SERVICES COMMISSION’S REGULATORY GRIP
Attempts by the Mauritius’ FSC to impose stringent “know your customer” regulations on the local financial services sector have been attacked as overly bureaucratic by companies in the offshore sector of the economy. But a continued flow of new registrations in the offshore sector during 2002 and 2003 (running at more than 200 a month) suggest that Mauritius is certainly not suffering from bad perceptions on the part of incoming business. There are now more than 20,000 registered offshore companies in the jurisdiction.More on this story here.
BAHAMAS TRADE MINISTER SUGGESTS BILATERAL FTA WITH THE US
Bahamian Minister of Trade Leslie Miller, has indicated that it may be to the Bahamas advantage to opt out of joining the FTAA (Free Trade Association of the Americas) and instead negotiate a bilateral free trade agreement directly with the United States. Mr. Miller noted how the Bahamas was somewhat “different” from its Caribbean counterparts, not least because of its proximity to the United States.More on this story here.
BARBADOS CONTINUES TO ATTRACT INTERNATIONAL BUSINESS
The Barbados Investment and Development Corporation reported that at the end of December, 329 offshore entities had been licensed during the year, an increase of 84 over 2001. The BIDC said attributed the increase to focused efforts to ensure that Barbados was actively promoted among potential investors as a preferred location for offshore investment continued, and major expenditure on advertising in leading industry magazines and publications in key target markets.More on this story here.
SOME CURRENT OR FORMER CANADIAN RESIDENT U.S. TAXPAYERS HAVE A NIGHTMARE AHEAD
The United States is aiming some heavy vocabulary and even heavier penalties at some taxpayers who either live in Canada, or who used to live here. Those who use a registered retirement savings plan or registered retirement income fund to shelter or receive income must decipher some ponderous tax-speak and submit complicated forms by August 15.
Be a hero and pass on the word to any friends or family who might have some cross-border tax obligations.More on this story here.
ISRAEL’S BANK SUPERVISOR: BLOCK ACCOUNTS WITH UNDISCLOSED BENEFICIARIES
Supervisor of Banks Yoav Lehman is calling on customers to cooperate with the banks in implementing the Prohibition on Money Laundering Law, by completing within six weeks the identification particulars and beneficiary and controlling declaration forms for their accounts.
Lehman emphasized that in the absence of customers identification and verification of their particulars by August 17, the bank will be constrained from carrying out any transaction in the customers’ accounts, except for the withdrawal of the existing balance, closing the account, and paying of debts.More on this story here.
U.S. BORDER TRACKING SYSTEM WILL BE PARTIALLY OPERATIONAL BY YEAR’S END
One of the Bush administration’s most ambitious and complicated homeland security initiatives -- the tracking of about 35 million foreign visitors as they enter and exit the United States annually -- will be partially operational by the end of the year, Homeland Security Department officials said.
The department plans to collect two fingerprints and a photograph from every visitor and enter those records into a system used by federal law enforcement and border control agencies to track suspicious individuals entering the country.More on this story here.
WORLD TECHNOLOGY SUMMIT EXPOSES FUTURE PRIVACY INVADING TECHNOLOGIES
The Summit showcases smart people from around the world who mingle, listen to talks by other brainy folks, and look for opportunities to combine their ideas with others. I learned more in the first four hours of this conference than I have in four days at some.
One thing I learned is that the world may be an increasingly scary place for privacy advocates in the coming years. Even as the National Do Not Call Registry goes live, technology is rapidly moving forward that could provide government agencies and private companies with details down to your underwear size.More on this story here.
PENTAGON DEVELOPS URBAN SURVEILLANCE SYSTEM
Police can envision limited domestic uses for an urban surveillance system the Pentagon is developing but doubt they could use the full system which is designed to track and analyze the movement of every vehicle in a city. The project’s centerpiece would be groundbreaking computer software capable of automatically identifying vehicles by size, color, shape and license tag, or drivers and passengers by face.
Scientists and privacy experts -- who have seen face-recognition technology used at a Super Bowl and monitoring cameras in London -- are concerned about the potential impact of the emerging DARPA technologies if they are applied to civilians by commercial or government agencies outside the Pentagon.More on this story here.
BUSH URGES CRACKDOWN ON IDENTITY THEFT
Bemoaning a crime that could claim a million new victims this year, Treasury Secretary John Snow said lawmakers should implement a national security-alert system. Such a system would allow victims of identity theft to, with a single phone call, alert all financial institutions that a person’s credit information has been stolen.
Mr. Snow, appearing before the House Banking and Financial Services Committee, also proposed a series of other changes, including increased surveillance by banking regulators, to ensure that financial institutions are doing all they can to guard against identify theft.More on this story here.
CREATOR OF M.I.T. SITE THAT LETS CITIZENS MONITOR “BIG BROTHER” TALKS ABOUT THE PROJECT
Concerned about expanded government monitoring of individuals, Ryan McKinley, a graduate student at the Massachusetts Institute of Technology, has created an Internet repository for citizens to provide information about public officials, corporations and their executives.
The result, he hopes, will be a giant set of databases that show the web of connections that often fuel politics and policymaking, such as old school ties, shared club memberships and campaign donations.
McKinley, 26, was inspired by the military’s Terrorism Information Awareness program, a controversial effort to use computers to look for patterns from seemingly disparate financial and other personal data as a way of tracking and halting potential terrorists.
“In order to avoid a totalitarian world, we need to figure out ways to make sure it doesn’t become unilateral,” said McKinley, who is careful not to disparage efforts to combat terrorism.More on this story here.
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