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UK CABINET STALLS ON ID CARDS; HOME SECRETARY SAYS HE WILL WIN ANYWAY
UK Home Secretary David Blunkett is pushing ahead with ID cards anyway, despite his failure to win the support of the cabinet, and despite having his plans spiked by Tony Blair in July. Reporting to the home affairs committee he stated his faith both in the cards and in ultimate triumph.
Blunkett wanted a paving bill for the cards to go before the next parliamentary session, but the cabinet has postponed a decision on this until next month, and has told Blunkett to produce an implementation plan for a sub-committee. Which is clearly something less than a green light, even before Blair’s earlier tooth-sucking on cost and complexity is taken into account. Blunkett however told the select committee that he is “working through the detailed consideration of the final presentation of the pros and cons of the technical, financial and administrative details.”
But he is probably right about his ultimate triumph. Warriors for freedom on the electronic frontier being somewhat thin on the ground in Blair cabinets, the current opposition will be almost entirely based on cost and fear of a giant IT screw-up. Whether or not the cabinet decides to go ahead with a national ID card does not make a material difference. ID systems from different agencies will happen anyway, and will be linked up, slowly and surely.More on this story here and here.
Principled opposition exists to ID cards.
Home secretary David Blunkett’s plans to introduce a national scheme of identity cards have been held up by objections from leading cabinet members, including Peter Hain, the leader of the Commons, Patricia Hewitt, the trade secretary, and Charles Clarke, the education secretary. While several ministers, alarmed by the scale of intrusion implicit in the government’s most grandiose version of the plan, are still concerned about the principle of the scheme, the debate has also turned to practical difficulties, including the likely £40 per person charge and 10-13 years it would take to bring into operation.
Principle, however, did not need to come into it at last week’s meeting. Chancellor Gordon Brown is reported as unenthusiastic, but prepared to let the scheme go ahead provided the Treasury does not have to pay. This agnosticism however opens the door to a “national ID card by stealth” approach, where the individual departments benefiting from ID cards contribute to the cost.More on this story here.
Dostoevsky once wrote that “in the end they will lay their freedom at our feet and say to us, ‘Make us your slaves, but feed us.’” His prophecy is relevant when examining the modern Information Age -- a dark, corporate-controlled society predicted by such artistic legends as Bruce Sterling, George Lucas, Ridley Scott, and William Gibson -- and is the focus of this article.
We want to be part of this information environment and feel more empowered with each new gadget, service, or digital connection in our lives. The concept of “information everywhere” provides instant gratification to satisfy our needs for books, music, porn, and digital interaction with others through web searches, e-commerce, wireless, instant messaging, e-mail, and streaming content over broadband. High-speed links enable organizations to operate around the world at light speed and conduct business on a twenty-four hour clock. The sun never sets in the Information Age; we are always plugged into the global matrix of the information domain. We are addicted to it and constantly awash in a sea of electronic stimuli.More on this opinion piece here.
CHANCELLOR BROWN’S TAX LAW THREAT TO CAYMAN ISLANDS
Gordon Brown has threatened to pass new laws to force the Cayman Islands, one of the world’s largest offshore centers, to comply with European Union savings tax rules. The chancellor told fellow EU finance ministers in Stresa, Italy, that the British dependent territory had not told the Treasury how it intended to apply the new rules.
Britain led the way in demanding new EU tax rules based on the exchange of information between tax authorities, as a way of increasing revenue and tackling avoidance and fraud. But it has been forced on to the back foot by the reluctance of some of its own territories to tighten up their financial regimes
The legalities of how, or if, the directive is to be applied in the overseas territories of member states, particularly Britain and the Netherlands, have been somewhat vague. While many of Britain’s overseas territories have agreed to implement the directive, which requires the sharing of interest income information with the member state in which the investor is resident, the Cayman Islands have been less willing to be dictated to by Whitehall and Brussels.More on this story here and here.
UK MINISTERS KEEN TO REFORM TAX ON FOREIGNERS
The government has signaled its increasing enthusiasm for sweeping reform of rules that enable wealthy foreigners living in Britain to pay little or no tax. Wealthy foreigners who are resident in Britain but claim their domicile is overseas pay no tax on their worldwide income and capital gains unless the money is brought into the UK.
The Treasury launched a review of the residence and non-domicile rules last year but ministers have been reluctant to comment because they do not want a confrontation with the foreigners. Some tax experts predict that if the government does reform the rules it will result in an exodus of foreigners. Many hold important positions in London’s financial services industry. Some multinational companies are concerned about the government’s appetite for reform because they fear any changes will make it harder to recruit and retain talented people.More on this story here.
Paymaster General Primarolo leaning towards reform of UK domicile rules.
It appears that the tide is inexorably turning in favour of reform to the UK domicile rules which currently allow many wealthy foreigners to pay no tax on their worldwide income in the United Kingdom. This follows comments made by the Paymaster General to the Financial Times that she was increasingly hard pressed to justify the current state of affairs to her constituents.More on this story here.
ESTONIA GIVES STRONG “YES” TO EU
Estonians have voted overwhelmingly to join the European Union in a referendum, crowning this small Baltic nation’s break with its Soviet past. With all votes counted, the “Yes” camp had 66.9% of the vote, with the “No” camp trailing at 33.1%, the election commission said. Total turnout was 63%.
The vote was seen by many as crowning more than a decade of painful reforms to return to mainstream Europe, despite some fears that Estonia’s dynamic and liberal economy might get bogged down in EU red tape. Supporters and the ruling coalition argue that membership will not only boost the economy, but also seal Estonia’s place in the European mainstream and safeguard its independence regained in 1991.
Estonia is the last country save neighboring Latvia to hold an EU referendum of eight east European countries invited to join the European Union next May in a historic enlargement to 25 members from 15.More on this story here.
SWEDISH VOTERS REJECT EURO
Sweden’s voters overwhelmingly rejected adopting the common European currency, the euro, in a referendum overshadowed by the assassination last week of the country’s popular, pro- European foreign minister. Near-complete results showed that 56.1% of voters cast ballots against dropping the current currency, the krona, in favor of the euro, with only 41.8% in favor. More than 5.4 million went to the polls, with turnout topping 80%. About 2 percent of the ballots were reported to be blank, confirming predictions that some Swedes who were undecided on the currency issue might cast their ballots as a show of support for democracy after the slaying of Anna Lindh.
Political analysts and some weekend opinion polls suggested that the stabbing of Lindh by an unknown assailant in a Stockholm department store Wednesday, and her death the next day, might create a last-minute surge of support for the “yes” campaign. Lindh was one of the most prominent of the country’s pro-euro campaigners.
Prominent “no” campaigner, Per Gahrton, a Green Party member of the European Parliament, said in an interview at a boisterous victory party: “This is a signal, I hope, to the Swedish government, and to the European elite, that this European project has to be less centralized. ... People are not against European integration -- they are against centralization.”More on this story here.
Hopes for UK euro ballot recede.
The already slim prospect of Britain holding a euro referendum before the next election has been further eroded by Sweden’s rejection of the single currency, euro enthusiasts conceded on Sunday night. The Swedes’ decision to vote No will reinforce the reluctance of Tony Blair, UK prime minister, to call a referendum he is not convinced he will win. The Swedish government faced a less overtly eurosceptic public than Mr Blair but still failed to convince them of the single currency’s merits.More on this story here.
VIENNA LOST IN TIME
Richard Bernstein, writing in the New York Times, described Vienna as a city of spectacular opulence “mixed with a sense of something missing, even at its core”. It is a good one, but I prefer a different one, the one about “a city that is like a grand opera sung by the understudies”. One drives from Passau into the metropolis through thickly forested German hills and vineyards, the onion domes glistening in the fading sunlight, the houses painted in light blue, pale pink and ocher.
What is missing is the present. Austria is a safe, socialist state, the Habsburg palaces are now museums, the grand houses turned into government buildings, the great figures that once made Vienna the center of the world gone for ever. The yellow Schoenburg palace lies empty, its walls covered with graffiti saying “make love, not krieg”.
However unrecapturable the past feels in Vienna, it is the opposite in Budapest, where in 955 the Holy Roman Emperor Otto the Great won a resounding victory over the Magyars -- a roving tribe of horsemen from the Steppes -- who did what no other defeated tribe ever did. They settled down and created their own country.More on this story here.
GIBRALTAR WILL NOT GIVE AN INCH ON SOVEREIGNTY ISSUE SAYS CHIEF MINISTER
As Gibraltarians celebrated National Day this week, the jurisdiction’s Chief Minister Peter Caruana made a speech that indicated in the strongest possible terms his government’s stance on the sovereignty issue, saying any attempt to revive joint-sovereignty talks would be opposed “every inch of the way” by Gibraltar.
“Spanish prime ministers come and go and we stay,” proclaimed Caruana. “One has come and one has gone in the last few days. They couldn’t wait fifteen minutes to re-state their permanent claim to Gibraltar. No Government of Gibraltar has ever been willing or will ever be willing to negotiate the transfer of any part of our sovereignty to Spain,” declared the Chief Minister.More on this story here.
SWISS CORPORATE REFORMS WELCOMED BY FOREIGN FIRMS
International business leaders have welcomed reforms to corporate regulations in Switzerland which mean that company boards no longer need a majority of Swiss citizens in order to be officially registered in the country.
Chairman of the British-Swiss Chamber of Commerce (BSCC), Howard Rosen observed that: “There is certainly no sense in having people on the board of a company just because they happen to hold a Swiss passport,” continuing: “And if you pack your board with people who are not fully au fait with what’s going on, it’s rather dangerous.”More on this story here.
BAHAMAS OFFSHORE INVESTMENTS EBBING AWAY?
Offshore Financial Services Databook 2003, which is published by Research and Markets Limited, a Dublin-based firm, predicted that while all offshore centers are expected to see growth in funds, Bermuda and the British Virgin islands will be among the fastest-growing centres and the Bahamas “will lag behind the rest of the markets.”
The Bahamas Financial Services Board, however, while not entirely disputing the “findings”, attributed some “erosion” in deposits to certain Central Bank initiatives, but, overall, The Bahamas has “continued to retain a strong market position.”More on this story here.
VAT appropriate for the Bahamas?
Despite a consensus that nobody likes paying taxes, there is general recognition that somebody must if government and all the services it provides are not to collapse. And there is equal recognition that Bahamian dependence on stamp taxes and customs is fraught with vulnerability to both economic cycles and massive abuse, through direct avoidance or through sloppiness and apathy at the collection point. Corruption also certainly finds a place in there.
About that point, consensus ends. There is wide variance on what kind of reformed tax should be applied, ranging from some form of user fees to value-added tax, collected by sellers of goods and services. Anything but the dreaded income tax. Several dozen countries use some form of VAT, theoretically a tax on final consumption in the home market, collected at every stage of production and distribution. But not everybody thinks VAT is a good idea.More on this story here.
HAS CHINA BEEN TAUGHT TO PUT PRAGMATISM BEFORE PRIDE?
The decision by Hong Kong’s chief executive, Tung Chee-hwa, on September 5th, to withdraw his government’s controversial “Article 23” internal-security bill is a victory for the territory’s people and another climb-down for its leader. On July 1st, half a million Hong Kongers took to the streets to protest against the legislation, and Mr. Tung has been on the back foot ever since.
But the real significance lies in what this U-turn says about his political masters in Beijing. Like any communist government, China’s leaders love political symbolism. In 1997, they sent tanks across the border into Hong Kong just hours after the ceremony marking the handover of the former British colony. Now, the party that crushed Beijing’s own Tiananmen Square protesters in 1989 has, highly uncharacteristically, backed down in the face of Hong Kong’s docile marchers. This triumph of expediency signals a more mature and possibly a more confident Chinese leadership. It also shows how rapidly the Chinese learn.More on this story here.
JOHOR BARU, MALAYSIA HAILS OFFSHORE BANKING PLAN
Johor hopes to make major gains from a proposal outlined in Malaysia’s Budget to enhance its lure as a logistics hub vis-a-vis Singapore. In presenting the Budget on Friday, Prime Minister Mahathir Mohamad said the government would allow offshore financial companies located in Labuan to set up marketing operations in Johor Baru, to support the increasing number of multinationals located there.
He said it would also complement the government’s efforts to turn the Port of Tanjung Pelepas and Senai airport into an international logistics hub. Commenting on the proposal, Johor Mentri Besar Abdul Ghani Othman said on Saturday that with offshore banking, Johor could emerge as competitive and attractive as Singapore.More on this story here.
SINGAPORE’S FOUNDING FATHER TO REMAIN IN GOVERNMENT
Lee Kuan Yew, modern Singapore’s founding father, who turns 80 on Tuesday, says he will remain in government as long as he is fit. The decision, announced in an interview with the Singapore Sunday Times, would mean that Mr. Lee and his son, Lee Hsien Loong, could soon hold two of the top positions in the Singapore government -- Goh Chok Tong, current prime minister, said last month that he would soon hand over power to the younger Mr. Lee, who is deputy prime minister and finance minister.
There had been speculation that the elder Mr. Lee might resign from the advisory cabinet post of senior minister to make way for Mr. Goh when he steps down. Mr. Lee also serves as a member of parliament. The elder Mr. Lee rejected criticism that he appeared to be creating a political dynasty by remaining as senior minister with his son as prime minister.
One recent informal opinion poll on the internet revealed that the younger Mr. Lee would be much less popular as prime minister than Mr. Goh.More on this story here.
Singapore likely to back regional common market.
Southeast Asian nations, faced with growing competition from China and India, are likely to endorse plans for a regional common market at their annual summit in Bali next month, according to Goh Chok Tong, Singapore prime minister. With international companies increasingly investing in China, Singapore has been the prime mover to create a common market in the 10-member Association of South East Asian Nations (Asean) to make the region more competitive.
But Singapore would stop short of accepting the free flow of labour because “we would be flooded in no time” as immigrants from the region would seek to enjoy the city state’s high living standards. Mr. Goh, who is seeking to reform the Singapore economy while managing a political transition to Lee Hsien Loong, his chosen successor, admitted things were “tough”. “You have blue-collar jobs going to China for the next five years, and white-collar jobs, some of them, are going to India,” he said.More on this story here.
DELEGATION VISITS GRENADA TO ASSESS JURISDICTION
A delegation comprised of representatives from the International Monetary Fund (IMF), the World Bank, and the Caribbean Financial Action Task Force (CFATF) arrived in Grenada this week to assess the jurisdiction’s regulatory and anti-money laundering regimes.More on this story here.
AMERICAN COMMUNITY BANKERS EXPRESS OPPOSITION TO PROPOSED INTEREST REPORTING RULE
A letter to Secretary of the Treasury John Snow begins: “The undersigned associations are writing to express strong opposition to the proposed regulation requiring U.S. financial institutions to report bank deposit interest paid to nonresident alien depositors. This proposed regulation, which was published on January 17, 2001, has been subject to public comment by various industry groups and lawmakers. We respectfully request that the Department of Treasury withdraw the proposed regulation.”More on this story here.
PATRIOT ACT EXTENDS ITS REACH
Don’t be surprised if your banker, broker or insurance agent gets a bit chummier sometime soon. New federal rules, which must be implemented by October 1, require financial firms to find out more about their customers. It is part of an effort to curb money-laundering activities that could be used to finance terrorism.
At a minimum, the new regulations will drive up costs for financial firms, slow the account-opening process and require customers to supply more personal information. At worst, you may find yourself the subject of a false alarm and even a government investigation, especially if you balk at providing certain information, make large-dollar transactions or come from a nation linked to heavy money laundering or terrorism.
Financial firms will need to verify customer information and check new-account applicants against the names of terror suspects, while running more credit checks. Companies that notice suspicious individuals or businesses must report them to authorities.More on this story here.
TAX TREATIES CLOSE THE NET ON EVADERS
All over the world revenue authorities are combating terrorism, drug trafficking and money laundering, assisting each other in the assessment and collection of taxes. Exchange of information is formalized by tax treaties and cooperation between international financial intelligence agencies and international tax authorities cracking down on tax havens. This is making it extremely difficult for individuals and multinationals to dodge taxes.
Although no statistics are available, exchange of information between revenue authorities is on the increase, say tax experts. International tax expert Barry Spitz says the principal formal exchange of information mechanism is the tax treaty. Most treaties contain an article providing for the exchange of information between tax authorities. Provision is also being made for tax authorities to render administrative and legal assistance to each other for the assessment and collection of taxes.More on this story here.
BEFORE MOVING OVERSEAS, PEOPLE NEED TO UNDERSTAND THE TAX CONSEQUENCES
... And look at ways of best organizing their financial affairs while they are away. Globalisation is giving many people opportunities to live and work in other countries. The first question is to determine the country a person will be resident of for taxation purposes.
At first glance this might seem simple, but taxation is rarely simple. Residency for tax purposes is not the same as citizenship.More on this story here.
CALIFORNIA LEGISLATURE OKS BILL TARGETING EXPAT FIRMS
The California legislature has approved a bill that would bar the state from contracting with companies that have relocated to offshore tax havens where they have no substantial business activities, the state treasurer said on Friday. The measure, sponsored by state Treasurer Phil Angelides, marks the latest attempt by the nation’s most populous state to crack down on companies that critics charge relocate to places like Bermuda to avoid paying taxes and to weaken shareholder rights. The bill now moves to Democratic Gov. Gray Davis for approval.
California, which has been stuck in a deep fiscal crisis, will lose an estimated $132 million over the next 10 years as a result of companies relocating offshore, according to the State Franchise Tax Board.More on this story here.
MISSING MILLIONS AT CENTER OF BANK FIGHT
Even on Miami’s glittering Brickell Avenue, with a history of both big money and big scandals, the case of Bank Espirito Santo International vs. E.S. Bankest is shocking for its purported size, allegations of misdeeds and troubling unanswered questions. The plaintiff: Part of the Portuguese banking organization that is among the largest in the world. It says it is owed an eye-popping $170 million. The defendant: E.S. Bankest, a little-known Miami firm that was a longtime partner and especially close customer of Espirito Santo for years.
Espirito Santo, which has about $40 billion in total assets, would like its money returned, but that is probably not going to happen soon. E.S. Bankest appears to be on the ropes, calling into question where the money is.More on this story here.
THERE IS VALUE IN CALCULATING WHERE YOUR NET WORTH STANDS
Net worth is the difference between what you own and what you owe. It is the single best measure of your family’s financial well-being. Tracking net worth over time will tell you whether you are headed in the right or the wrong direction.
“We all need guideposts to see how we’re doing, and that’s a good one to look at,” said Robin Delaney, a financial planner. “It’s certainly a lot healthier than looking at how many toys you’ve accumulated.”
If you have never calculated your net worth, the result can be an eye-opener. The toughest part is gathering your financial information before you add up all the pluses and minuses. Lots of people track the value of a 401(k) account, but focusing on a single asset tells only part of the story. It can even lead you astray if a rising balance prompts you to make early retirement plans without considering your burgeoning debt.More on this story here.
HOW TO RENEW OR APPLY FOR A PASSPORT
Applying for a passport should be as easy as signing on the dotted line. But with so many scenarios, from replacing chewed-up passports to expedited service, the process can be confounding. Here are some answers to common questions from travelers.More on this story here.
Before you go: a travel toolbox.
Did you know that the importation of any liquor with absinthe is prohibited? That some insurance policies cover terrorism, while others do not? That you can bring knitting needles in your carry-on luggage, but not a baseball bat? The Web offers all types of advice on topics such as money, weather, safety and maps. A selection of some of the best resources on the Web for assuring a successful trip before you hit the road.More on this story here.
RELIEF OVER DELAY ON U.S. PASSPORT RULE
When the United States delayed implementing a new rule that would require foreign visitors who do not need visas to carry computer-readable passports when they enter U.S. territory, the relief was perhaps greatest in Switzerland. The famously organized Swiss have clung to old-style passports, with only one in six nationals carrying the advanced model. While most of the other countries concerned appeared much more prepared Thursday for the eventual shift, which was prompted by U.S. security concerns, there were reports of potential visitors to the United States choosing other destinations.
American officials said that Washington planned to extend by nearly 13 months the October 1 deadline, which will affect citizens from 26 countries -- most of them in Western Europe but also including Australia, New Zealand and Japan -- that do not require visas to enter the United States. For some, the move to delay the rule came too late.More on this story here.
U.S. WANTS CANADIAN VISITORS TO CARRY PASSPORTS
Washington wants all Canadians traveling to the United States to carry a passport that will eventually include biometric markers such as iris scans, U.S. officials say. The proposal calls for passports issued after next year to be scanned by U.S. border authorities who would read biometric markers to confirm a traveler’s identity, a State Department official said.
It would be a stark change from today, when Canadians driving through U.S. border points are often asked a few questions and waved through without being asked to produce documentation. Canadian business travellers and tourists arriving at U.S. airports can enter the country with a simple photo identity card such as a driver’s licence. That kind of ease of flow of people, goods and services between the two countries is thought to be responsible for the $1.5-billion a day in business across the border.
There is a fear that if no border plan is agreed to by both countries, unforeseen events such as a future terrorist attack could provoke a backlash in the fickle U.S. Congress, which would lead to harsher measures imposed on Canadian travellers.More on this story here and here.
REWRITTEN U.S. CITIZENSHIP OATH WILL GET ANOTHER REVISION
Government officials who had planned to unveil a more modern citizenship oath next week are going back to the drawing board. The Bureau of Citizenship and Immigration Services has canceled plans to use the oath for the first time at a swearing-in ceremony in Washington on Wednesday, a spokesman for the agency, Russ Knocke, said on Friday. Eduardo Aguirre Jr., director of bureau said last week that his agency, which is part of the Department of Homeland Security, wanted the language of the oath to be less arcane so it would be more meaningful to immigrants.
In the current oath, immigrants swear to “renounce and abjure” allegiance to princes and potentates. The new oath would have had them say,“qSolemnly, freely and without any mental reservation, I hereby renounce all allegiance to any foreign state.” Domestic security and immigration officials decided to rewrite the oath again after receiving numerous letters and calls about the replacement, Mr. Knocke said.More on this story here.
U.S. SUPREME COURT TO HEAR PRIVACY CASE NEXT TERM
In June, the Supreme Court agreed to decide a dispute involving damages in a privacy matter. The basic issue comes down to how to parse a mildly confusing sentence in a privacy law applicable only to the government. The more interesting question is whether the Supreme Court values privacy.
The case is Doe v. Chao, and it arose under the Privacy Act of 1974. The act requires federal agencies to comply with principles of fair information practices. The law establishes comprehensive privacy rules, including a provision for lawsuits by individuals harmed by improper agency actions. The act is one of several privacy laws that allows an award of minimum statutory damages to successful plaintiffs.
The plaintiffs are coal miners who brought black lung disease compensation claims to the Department of Labor for adjudication. The department used the Social Security numbers of the miners as case numbers. The numbers were later published in a report that became part of legal databases. The result was that the Social Security numbers effectively became public. The basic argument is that this public disclosure of Social Security numbers violated the Privacy Act of 1974.More on this story here.
SATELLITE TRACKING OF SUSPECTS REQUIRES A WARRANT, STATE SUPREME COURT RULES
OLYMPIA, Washington: The police cannot attach a Global Positioning System tracker to a suspect’s vehicle without a warrant, the Washington Supreme Court said today in the first such ruling in the nation. The court refused, however, to overturn the murder conviction of the man who brought the appeal, William B. Jackson, who unknowingly led the police to the shallow grave of his 9-year-old daughter in 1999 after a G.P.S. device was attached to his vehicle. Spokane County deputies had a warrant for the tracking device used in that case, although prosecutors argued they did not need one.
“Use of G.P.S. tracking devices is a particularly intrusive method of surveillance,” Justice Barbara Madsen wrote in the unanimous decision, “making it possible to acquire an enormous amount of personal information about the citizen under circumstances where the individual is unaware that every single vehicle trip taken and the duration of every single stop may be recorded by the government.”
The closely watched case had evoked worries about the police using the satellite tracking devices to watch citizens’ every move. Doug Honig, a spokesman for the American Civil Liberties Union of Washington, said the ruling was the first of its kind in the country.More on this story here.
INTERESTING SITE: “THE BIO-RATIONAL INSTITUTE”
“Fostering personal fulfillment and social progress through an understanding of the evolutionary roots of human nature.”More on this story here.
TWO YEARS ON: MUCH HAS BEEN ACHIEVED, BUT THINGS ARE NOW GOING BADLY
One of George Bush’s best phrases, deployed between the atrocities of September 11th and the American invasion of Afghanistan later that year, was that the effort to win the battle that al-Qaeda’s suicide hijackers had launched would consist not of one big victory but rather of “the patient accumulation of successes”. Not everyone, either then or during the run-up to the invasion of Iraq last March, agreed that America’s behaviour was truly patient. No matter: it was certainly resolute and pretty relentless, and only the churlish or blinkered could deny that successes were indeed being accumulated. Now, however, on the second anniversary of those terrible events in New York, Washington and Pennsylvania, things feel different. “The hapless accumulation of failures” is sounding a more appropriate line.
That version would be unfair but, alas, not entirely. September 11th prompted America to embark upon a hugely ambitious project, both to punish terrorism and to bring change to the Arab world and to Central Asia, the areas from which the Islamic terrorists originated, and from the miseries of which their grievances were presumed to arise. Given such ambitions, two years is much too short a period over which to make a firm assessment. But things are not going well.
The Arab-Israeli conflict can be considered as in a world of its own, but failure to make progress there also damages America’s wider effort, in Iraq and beyond. For the manner in which it has happened has reinforced one of the most damaging accusations levelled by Muslim critics: that America has double standards. That, in turn, risks reinforcing one of America’s biggest failures in the past two years: that it has become even more unpopular in Muslim countries than before.More on this story here.
CELEBRITIES LINE UP TO CRITICIZE BUSH IN A.C.L.U. CAMPAIGN
As President Bush pressed for greater expansion of law enforcement powers, a new advertising campaign by the American Civil Liberties Union has been rolling out to oppose the tactics and proposals of the White House. The ads, which indirectly accuse the administration of trampling on the Bill of Rights, without actually mentioning the president, have already hit a nerve.
“It is absolutely outrageous,” said Mark Corallo, a spokesman for the Justice Department. “You have men and women who are sworn to uphold the Constitution who are literally putting their lives on the line to keep us safe and our lives intact, and the A.C.L.U. is making them out to be some sort of Gestapo-like organization.”
Feelings are bitter on both sides of the debate. Mr. Corallo accused the civil liberties union of trying to create an atmosphere of fear. The A.C.L.U. and its allies said the same about the Justice Department. “The definition of ‘crisis’ has been changed and been made much more elastic,” said Richard Dreyfuss, the actor, who appears in one ad. “Criticism of the administration is not looked upon as allowable or appropriate, because we’re in a ‘crisis’.”
With a budget of $3 million, the campaign is consuming much of the $4.5 million the civil liberties union typically spends on advertising in a year. Anthony D. Romero, executive director of the group, said the decision to spend so much on one effort reflected a belief that disaffection with the Bush administration and its policies was growing, and that opportunities to gain new support and members were growing along with it.More on this story here.
Some post-9/11 actions questioned.
As Americans have worked their way back into normal life routines, some are questioning the actions that government took in the immediate weeks following the 9/11 attacks and are speaking out against one such act that was passed. On a recent trip to Philadelphia, Attorney General John Ashcroft told an audience of police officers and prosecutors at the National Constitution Center that recent terrorism arrests would not have been possible if the USA Patriot Act had not erased communication barriers between law enforcement agencies.
But some do not see the act as that. “The biggest concern after the incident on Sept. 11, 2001 was a rush to protect the population and that resulted in Patriot Act I and II being passed,” said Chester County Attorney Samuel Stretton. “It went far beyond what is necessary to protect money laundering and terrorist acts.”
Stretton said he feels that it has “trumped” many basic rights of citizens detailed in the Fourth Amendment. “The act was passed out of ignorance, hysteria and misguided patriotism,” he said. “This cure is actually killing democratic society and what our country stands for,” he said.More on this story here.
Bush seeks to expand access to private data.
For months, President Bush’s advisers have assured a skittish public that law-abiding Americans have no reason to fear the long reach of the antiterrorism law known as the Patriot Act because its most intrusive measures would require a judge’s sign-off. But in a plan announced this week to expand counterterrorism powers, President Bush adopted a very different tack. In a three-point presidential plan that critics are already dubbing Patriot Act II, Mr. Bush is seeking broad new authority to allow federal agents -- without the approval of a judge or even a federal prosecutor -- to demand private records and compel testimony.
Mr. Bush also wants to expand the use of the death penalty in crimes like terrorist financing, and he wants to make it tougher for defendants in such cases to be freed on bail before trial. These proposals are also sure to prompt sharp debate, even among Republicans.
Opponents say that the proposal to allow federal agents to issue subpoenas without the approval of a judge or grand jury will significantly expand the law enforcement powers granted by Congress after the attacks of Sept. 11, 2001. And they say it will also allow the Justice Department -- after months of growing friction with some judges -- to limit the role of the judiciary still further in terrorism cases.More on this story here.
Ashcroft mocks librarians and others who oppose parts of Patriot Act.
The Attorney General accused the country’s biggest library association and other critics of fueling “baseless hysteria” about the government’s ability to pry into the public’s reading habits. In an unusually pointed attack as part of his latest speech in defense of the Bush administration’s counterterrorism initiatives, Ashcroft mocked and condemned the American Library Association and other Justice Department critics for believing that the F.B.I. wants to know “how far you have gotten on the latest Tom Clancy novel.”
The association, which has argued for months that the government’s new antiterrorism powers risk encroaching on the privacy of library users, took some satisfaction from the broadside. “If he’s coming after us so specifically, we must be having an impact,” said Emily Sheketoff, executive director of the library association’s Washington office.
Ashcroft’s speech was his 17th in the last month in defense of the sweeping counterterrorism act.More on this story here.
The PATRIOT Act’s assault on the bill of rights.
To the layperson looking at John Ashcroft’s now-infamous road show in defense of the USA PATRIOT Act, the whole ruckus -- complete with organized protestors and opportunistic reporters -- must look rather comical. In fact, with 91% of registered voters unaware of the Act’s encroachment on civil liberties, the entire dispute might even appear unnecessary. Unnecessary, that is, until you take a look at the Act in all of its 342 pages of verbose details and constitutional infractions. And then, somewhere between the elimination of privacy rights and abolition of checks and balances, it becomes startlingly apparent that over the furor of “preventive justice”, the White House has silently squandered our constitutional protections of due process and civil liberties.
The PATRIOT Act’s baleful abrogation of our right to due process under the law cannot be overstated. As defined in legal jargon, our constitutional right to due process endows every person with appropriate safeguards to protect against arbitrary or unreasonable treatment under the law. It is noteworthy to all, including the Department of Justice, that the framer’s used the term ‘person’ instead of ‘citizen’ in reference to due process. This makes the worst provisions of the PATRIOT Act all the more deplorable for their targeted discrimination of non-citizens. In essence, these provisions institute ideological censorship, authorize deportation for lawful group activities, and allow the Attorney General to detain foreigners with a piece of paper.
Such blatant constitutional violations by the PATRIOT Act, however, are not restricted to foreigners alone. The legislation expands terrorism laws to include “domestic terrorism”, which could subject common political organizations to surveillance, wiretapping, and harassment for political advocacy. Consequently, the mere threat of criminal action is employed to suppress peaceful dissent.More on this story here.
EDITORIAL: Stretching Patriot
Critics warned the expanded police powers authorized by the Patriot Act -- ratified weeks after the terror attacks of Sept. 11 -- would soon be used by opportunistic cops and prosecutors in areas far afield from any threat of al-Qaida-style terrorism.
“Nonsense”, supporters replied. New government powers to read every e-mail passing through an Internet Service Provider; to conduct roving wiretaps without informing their victims; to snoop on our book buying and library borrowing habits; to secretly rake through our private financial data; to hold some suspects indefinitely without right to counsel; to “enhance” criminal sentences till they stretch for decades ... would be used only when necessary to prevent for “another September 11”.
Guess what. “Within six months of passing the Patriot Act, the Justice Department was conducting seminars on how to stretch the new wiretapping provisions to extend them beyond terror cases,” reports Dan Dodson, a spokesman for the National Association of Criminal Defense Attorneys. The Justice Department does not even deny this.More on this story here.
UK SERVICE INDUSTRY HIT BY TERROR LAWS
New regulations aimed at stopping terrorists from laundering “dirty” money through banks could engulf British travel agents, property consultants and car dealers in a mass of red tape, a former offshore regulator claimed. The agents have come to the attention of US law-makers who believe high-value goods and services are being bought and sold by criminals evading the stricter international banking rules brought in after September 11.
On October 1, the Patriot Act comes into full force. It has been designed to be “extra-territorial”, giving the US jurisdiction over all transactions that are settled in America. It will make banks, credit unions, trust companies, mutual funds, stockbrokers, futures commission merchants and dealers in precious metals and stones collect information about their customers. They will also have to verify the identities of all customers, maintain records of the information used to verify identity and bear responsibility for determining whether any customers appear on US government lists of suspected terrorist organisations.
The financial institutions will be liable for any breaches and John Bourbon, managing director of the Cayman Islands Monetary Authority from 1999 to 2002, believes the extra costs of compliance could eat up as much as 20% of their profits.More on this story here.
BAHAMAS OFFICIAL: OECD REFORMS HELP BIG COUNTRIES, DISADVANTAGE SMALL
Giving the keynote address to a group of bankers attending The Bahamas Institute of Financial Services awards ceremony and dinner held at Sandals Royal Bahamian Resort and Spa, Attorney General and Minister of Education Alfred Sears discussed the issue of The Bahamas remaining competitive in the international financial services market.
While globalization leads to trade liberalization and certain benefits, Mr. Sears said, it can also have adverse effects on small and vulnerable countries, such as the removal of any protective or comparative advantages that these countries formerly enjoyed, while at the same time exposing them to unequal power relationships that left them at the mercy of more powerful countries.
According to Minister Sears, the OECD initiatives on the Elimination of Harmful Tax Practices, and the Financial Action Task Force’s review of non-cooperative countries with respect to money laundering, which resulted in the publication of a blacklist of jurisdictions in 1999 was an attempt to “name and shame” these jurisdictions into compliance with the standards these organizations had formulated. He described the subsequent threats by these organizations to take collective punitive economic actions as “most probably a derogation from the principle of non-interference”, as the ability of these organizations and their member countries to take such action did not admit “any clear basis in public international law.”More on this story here.
MONACO’S REGULATORY SYSTEM GETS THUMBS UP FROM IMF
The IMF recently published assessment of Monaco’s financial supervisory and regulatory regimes has confirmed the Principality’s reputation as a well regulated jurisdiction.More on this story here.
SWISSINFO LAUNCHES SPECIAL ELECTION WEBSITE
On October 19 the Swiss people go to the polls to elect a new parliament. swissinfo is launching a special site to help readers get to grips with the most important event in the Swiss political calendar.
Switzerland’s parliamentary elections take place every four years when the Swiss people elect a new House of Representatives and most of the Senate. And once again voters are spoilt for choice: there are 2,836 candidates on 262 party lists, all vying for a parliamentary seat. Top on the list of concerns is the stagnant economy and rising unemployment. The future of the welfare system is also a major concern, in particular proposals to lower pensions and raise the retirement age to 67. There are also concerns over healthcare costs, the environment and possible membership of the European Union.More on this story here.
swissinfo Special 2003 Election site here.
AUSTALIAN TAX GRAB: THE $19 BILLION STING
Australians paid about $19 billion [Australian dollars] more tax last financial year, with the national tax harvest now growing at almost double the rate of incomes. An analysis of the latest economic growth figures by The Age has revealed that the total tax take shot up by almost 9% in 2002-03, while income earned by individuals and companies grew by about 5.5%. Revenue is soaring from almost every source, including income tax, payroll tax, company tax, the GST, financial taxes, land taxes, council rates, stamp duty, fuel taxes, car taxes and travel taxes.
The surge in collections was fuelled in part by rising employment, strong profits and Australia’s record housing boom and consumer spending binge, with more than $235 billion pumped into federal, state and local government coffers last financial year. But the revenue boom is also being fed by the effects of bracket creep, where nominal wage increases push people into higher income tax brackets, and inflating property prices result in stamp duty being charged at higher rates.More on this story here.
WITHOUT GLUE OF THE EURO, BOND MAY DISSOLVE
One day after Swedish voters ruled out for years to come the likelihood of adopting the euro single currency, Europe’s great project to bond its disparate players into a single force to rival the United States seemed doubtful. The Swedish referendum rejecting euro membership by a staggering 14 percentage points not only bolstered euroskeptics in the other holdout countries -- Britain and Denmark -- but also reinforced the possibility that, far from being one, Europe could soon be perceived as falling into three castes.
The first, led by France and Germany -- architects of the single currency -- would embrace primarily the 12 nations using the single currency. Paris and Berlin are allies distinguished as much by their inability to inspire economic growth as by their refusal to support the United States in Iraq. The second, in terms of economic and political power, would be a loose alliance of eurozone holdouts, while the third would be drawn from the 10 countries, largely from the former Soviet empire, expected to gain their long-coveted European Union membership next year. Those nations are committed to joining the euro but must first make wrenching economic adjustments.
Some analysts suggested that the Swedish vote may have enshrined the idea that individual exceptions outweigh commitments to the pan-European ideal. Technically, for instance, Sweden had already agreed to accept the euro in a 1994 referendum on joining the European Union.More on this story here.
STATES JOIN IRS TO COMBAT TAX EVASION
The IRS announced a new partnership with state tax administrators aimed at cracking down on tax evasion. Under agreements with 40 states and the District of Columbia, the IRS will share information about abusive tax avoidance transactions and taxpayers that use them. The IRS expects more states to join the partnership shortly. Corporations and high-income individuals will be the first targets, along with those who promote the schemes.
IRS Commissioner Mark Everson said the agency sees evidence that there are fewer tax shelters marketed and used by the nation’s largest corporations and accounting firms. Scams aimed at individuals and smaller businesses continue to grow, including a few that encourage taxpayers to disappear from the tax system.
A handful of tax protesters, one target of IRS enforcement efforts, gathered outside the Treasury Department building to protest the agency’s legal authority to collect any taxes at all.More on this story here.
LAW ENFORCEMENT OFFICIALS CHASE “PERSONS OF INTEREST” RATHER THAN “SUSPECTS”
The vaguely sinister term has been applied to targets of terrorism investigations, the chief suspect in the murder of the Baylor basketball player Patrick Dennehy and Steven J. Hatfill, the scientist who has figured prominently in the investigation into the 2001 anthrax attacks. Law enforcement officials say that the term simply reflects the new tactics required to fight terrorism. But some legal scholars say officials are trying to create a more benign public image, even as their power expands. A phrase like person of interest, Georgetown law professor Paul Rothstein said, lets officials avoid having to say “this is the guy,” and having to later eat humble pie if they are wrong.
Or take the word “detainee”. It suggests a person held briefly for questioning. But for more than 700 illegal immigrants jailed after September 11 and more than 600 others captured in Afghanistan and elsewhere, detention in Guantánamo or the United States lasted months and in some cases up to two years, sometimes without formal charges.More on this story here.
RENEWED HOSTILITIES BETWEEN THE EC AND US OVER DATA ON AIRLINE PASSENGERS
Since March 2003, Washington has ordered airlines flying in to the USA to provide data on their passengers, including names, itinerary and dietary preferences. The US has refused to place limits on the use of such data as a means of combating terrorism.
In response, the European Commission considers that these demands could breach EU data protection laws and has sought assurances that the data provided will not be subject to abuses (constantly analyzed to determine the travel patterns of individuals), stored indefinitely and will not result in further demands for additional “sensitive” data related to religion or health problems.
The failure of the US to provide binding commitments that personal data obtained from airline passengers could not be abused and therefore violate EU laws on confidentiality has led to these “data” demands being rejected.More on this story here.
IP-BASED MONITORING CAMERAS COME OUT TO PLAY
Sony and Cisco Systems have teamed up to play Big Brother with the development of IP-based surveillance systems that target the increasingly security-conscious education sector. The partnership, which combines Sony’s IP video monitoring cameras, servers, NAS storage and Real Shot management software with Cisco’s networking infrastructure products, was touted by the firms as the answer to “critical challenges” in the education market.
The offering centers on Sony’s SNC-RZ30N or SNC-Z20N network cameras and FSV-M5 network attached storage servers running the Japanese firm’s Real Shot camera manager application software over Cisco networking kit.More on this story here.
EU PUSHES TO GAIN CONTROL OF TAX POLICY
The European Commission has made a further push to gain control over taxes in member states, a move that is being opposed by Ireland where low corporate taxes have attracted many US companies. Commission president Romano Prodi has called for less intervention by States in EU decision-making processes, including an end to the national veto on tax issues. He claimed that the veto would eventually harm businesses and that its removal would help streamline decision-making on tax fraud and evasion.More on this story here.
CENTER FOR FREEDOM AND PROSPERITY CHALLENGES OECD TO PARTICIPATE IN TAX CONFERENCE
The Center for Freedom and Prosperity announced a Tax Competition Conference to be held in Ottawa Canada on Monday, October 13. The Conference is being planned to coincide with the OECD’s Global Forum on International Tax Policy that starts the next day. This will be the Center’s fifth forum over the last few months discussing the virtues of tax competition and the folly of European-instigated tax harmonization policies.
The CF&P’s event is designed to give non-OECD policy makers useful information as they prepare to meet with the OECD. CF&P will bring together leading international tax experts to discuss how best to preserve tax competition, financial privacy, and fiscal sovereignty. The time and location for the event will be announced in the near future, and the OECD will be invited to participate.More on this story here.
THE MORAL CASE FOR TAX EFFICIENCY AND TAX HAVENS
Bermuda has a terrible reputation with foreign government elites. It is a mid-Atlantic affront to the American and European Governments who believe they have a right to tell the rest of the world how to live and what their tax laws should be. The guts of the problem is, that Bermudians do not pay income tax on their earnings, capital gains taxes, and even worse there are no corporate taxes on profits. This state of affairs is considered to be a greater menace to the financial well-being of Western civilisation than even Jesse Jackson.
Over the past ten years or so, governments (and other quasi governmental organizations such as the OECD) in the United States and Western Europe have been throwing rotten eggs and rotten arguments at the so-called tax havens like Bermuda and the Cayman Islands on the grounds that they siphon off legitimate tax revenues. This has been described as “harmful tax competition” (an oxymoron), or has been categorised as illegal tax evasion.
For years, orthodox economics has condemned tax avoidance as unproductive, as well as being unfair to other taxpayers. Yet public expenditures in almost every country one can name (including Bermuda) are unproductive and have risen steadily, absorbing over 50% of GDP in many countries. Most thoughtful people now belatedly understand that government bureaucracies (often employing about a fifth of the labour force) are not staffed by disinterested philosopher kings who somehow and magically understand what the people want and impose taxes accordingly. It is not overstating the case, to say that many public employees arrived at their desks with the objective of doing good, but somewhere along the way, they ended up doing very well for themselves.
Why should the activities of tax havens be put in the spotlight of public distaste in North America and Europe? An important reason is that high-spending Western governments desperately need lost revenues to keep the state machine ticking over while taxpayers resent the grasping mitt of government on their wallets.More on this story here.
SWISS BANKERS ATTACK EU AND OECD OVER TAX
Swiss bankers have accused the European Union of dragging its feet over the introduction of a controversial withholding tax on EU citizens’ savings. They also criticized efforts by the OECD to censure Switzerland for having “harmful tax practices”. The Swiss Bankers Association warned the government against making banks comply with the withholding tax, if the EU misses its 2005 start date.
“We implore [the Swiss authorities] not to make Switzerland the model pupil, thereby placing it at a competitive disadvantage vis-à-vis other countries,” Urs Roth, CEO of the Swiss Bankers Association, said.More on this story here.
UK FOREIGN SECRETARY ASSURES GIBRALTAR OVER EUROPEAN ISSUES
UK Foreign Secretary Jack Straw has given an assurance to the government of Gibraltar that he is willing to discuss the jurisdiction’s long-term interest in EU integration, though stating that he would not pressure the territory into changing its status in the EU. Straw made his comments in front of the parliamentary European Scrutiny Committee last week.More on this story here.
TAX HAVENS COST NEW ZEALAND MILLIONS, ENGLISH PROFESSOR SAYS
Tax avoidance through foreign tax havens threatens to load an unfair burden on New Zealand taxpayers, leading English academic Prof Prem Sikka warns. Prof Sikka is head of the accounting department at the University of Essex and is a frequent commentator on taxation issues on CNN and the BBC.
The United States Treasury was each year deprived of an estimated $170 billion in revenues through tax havens, such as in the Bahamas, Jersey and Nauru, Prof Sikka said in an interview. Parallel losses to the British Government were estimated at £25 billion to £85 billion. New Zealand was also clearly deprived of many millions of dollars a year in tax revenue through the use of offshore tax havens in Europe and elsewhere.
This ultimately meant less money to spend on social policies, including education and health. New Zealand wage earners and domestic manufacturing companies without access to tax havens faced having to shoulder a growing share of the tax burden resulting from an ageing population, he warned.More on this story here.
NEW EBOOK ON MOVING TO COSTA RICA
The Golden Door to Retirement and Living in Costa Rica is one of four new eBooks available from EscapeArtist.com. The author, Christopher Howard, has resided in Costa Rica for over fifteen years and is a Costa Rican citizen. Despite having one of the highest standards of living in Latin America, purchasing power is greater in Costa Rica than in the United States or Canada. The country is really a bargain compared to most places. In most areas housing costs less than what it does in the U. S. and hired help is a steal. Utilities -- telephone service, electricity, and water -- are cheaper than in North America. You never need to heat your home or apartment because of Costa Rica’s warm climate. You need not cook with gas, since most stoves are electric. These services cost about 30% of what they do up north.
A recent study by the Miami Herald rated Costa Rica the 27th safest country for investment of 140 countries surveyed. If you are not impressed by Costa Rica’s ranking, consider that the U.S. was ranked only 22nd. Another recent study found Costa Rica to be the least corrupt country in Latin America.
In addition, U.S. business magazine, Fortune ranked San José Latin America’s fifth best city to do business and placed it within the 25 best cities in the world. According to the report, Fortune considered the city’s ability to create opportunity for its residents, its business climate and how well it can satisfy the business needs of companies that invest there. San José ranked tops in the quality of its labor force, its business environment and the lifestyle it offers resident executives and investors.More on this story here.
September 2003 issue of Escape From America Magazine here.
HOUSE OF COMMONS LEADER CALLS FOR “HONEST DEBATE” ON TAX, WEALTH REDISTRIBUTION
Peter Hain has restarted the debate on whether Labour should make high earners pay more by urging the Government to use the tax system to redistribute money from the rich to the poor. Mr. Hain, the Leader of the Commons, was slapped down by Tony Blair and Gordon Brown in June when he suggested that the well-off should pay more tax to ease the burden on the middle classes. But he has returned to the fray by saying that Labour must do more to help the poorest people in society.
Although Mr Blair is wary of the tax issue, Mr Hain calls for “an honest debate about the limits of general taxation if we also wish to use taxation to redistribute to those on low incomes.”More on this story here.
A BIGGER IRS OR A SMALLER TAX CODE?
This week, the IRS announced a new program to combat tax avoidance by teaming up with state tax authorities. The new plan provides for greater information sharing between state and federal tax authorities in order to ensure compliance with state and federal tax laws. Yet in many ways such policies perpetuate the existing tax system, piling on greater authorities for tax collectors rather than addressing the root problem: an overly complex and obtuse tax code that invites creative accounting and shady practices. A simpler, flatter tax code would eliminate such opportunities, improve compliance, and reduce the need to continually expand the authority of the IRS.
The Treasury Department’s Assistant Secretary for Tax Policy, Pam Olson, views the new program as a way to restore the public’s faith in the tax system. Yet a tax code that treats neighbors making the same income differently based on particular circumstances is not likely to garner public confidence. Nor is a tax code that has five different definitions of a “child”.
The IRS has a budget of roughly $10 billion for 2003, with over 100,000 employees. It handles more than 100 million individual income tax returns every year, and imposes a paperwork burden of 6.7 billion hours on the economy. Of this, 25% falls on individuals -- 1.6 billion hours. The tax code itself has more than 1,395,000 words, 693 sections applicable to individuals and 1,501 sections applicable to businesses, and, as of June 2000, the IRS has issued 20,000 pages of regulations. The tax code’s complexity is symptomatic of tax policy driven by politics rather than common sense.More on this story here.
US Accounting Oversight Board mulls ban on tax shelter selling.
US Public Company Accounting Oversight Board membar Mark Goelzer has hinted that the organization is considering reforms that will prevent corporate auditors from offering certain tax planning and sheltering services to their audit clients. However, Goelzer went on to acknowledge that reforming this controversial area of tax planning was not going to be straightforward, as the boundaries between traditional tax advice and the advocation of tax shelters are often blurred.More on this story here.
SPOTTING FOREX FRAUD
With financial markets on the upswing, many consumers are re-evaluating their investment options. Solicitations to trade foreign currency contracts, also known as “forex”, are particularly tempting. Ads for high-return, low-risk investment opportunities in foreign currency trading are blanketing local newspapers, radio promotions and attractive Internet sites. Are these offers too good to be true?
Sometimes, they are. While much forex trading is legitimate, the Commodity Futures Trading Commission (CFTC) reports a sharp rise in foreign currency trading scams. How does one sort through the offers to select a reputable operation? The CFTC and the Better Business Bureau offer a list of warning signs of fraud to those who are considering forex investment opportunities.More on this story here.
$2.5 TRILLION WORTH OF MONEY LAUNDERED YEARLY SAYS BANK OF RUSSIA DEPUTY CHAIRMAN
According to Viktor Melnikov, a rise in money laundering is due to such factors as globalization, an increase in cross-border operations, the appearance of new financial tools, the development of the hi-tech sector, and, as a result, a decline in the possibilities of controlling agencies to control money laundering.
In particular, Mr. Melnikov specified the problem of banks’ correspondent accounts with so-called “bank-membranes” -- banks that do not have their offices in the country. In his opinion, such operations significantly increase the volume of money laundering.More on this story here.
COLORED DIAMONDS: THE WORLD’S MOST CONCENTRATED FORM OF WEALTH
While the most popular diamonds are colorless, attractively colored stones are much rarer and are generally superior investments. Of the estimated 88 million carats of diamonds mined each year, just 2,000 are considered top quality colored variety. Around 80% of those are various intensities of brown. Next, come yellow, pink, blue, green, orange and violet. Red is the rarest of all. Investment-grade colored diamonds are graded as Faint; Very Light; Fancy Light; Fancy Intense/Dark; and Fancy Vivid/ Deep.
Colorless diamond prices, as with any commodity, have experienced dramatic price fluctuation. In contrast, since formal records were first kept at the beginning of the 1970s, prices for fancy colored diamonds have increased in value by an average of between 10%-15%/year, varying from color to color as a factor of color rarity.
Carat for carat, fancy colored diamonds are the world’s most concentrated form of wealth. A multi-million dollar portfolio of colored diamonds easily fits in a small envelope. In addition, most countries, including the United States, do not require that the ownership of colored diamonds (or any other gem) be reported to any government authority. This is true even if you store them overseas. Any profits, of course, may be subject to capital gains tax in your home jurisdiction.More on this story here.
PLAN FOR COUNTERTERROR DATABASE UNVEILED
The Bush administration, hoping to overcome the government’s failures to share sensitive counterterror information, unveiled plans for a master database of “known and suspected terrorists” that would be used in background checks around the world. The FBI-run Terrorist Screening Center will cull information from nearly a dozen watch lists held by agencies throughout the federal government to provide “one-stop shopping” for U.S. consular officials, airport workers, border agents, local police and some private industries, officials said.
One of the key goals of the project is to avoid the type of communication breakdown that occurred prior to the September 11, 2001, attacks, when the CIA placed two of the future hijackers on its own terrorist watch list but failed to immediately notify the FBI and immigration authorities. By the time other agencies were informed in August 2001, Khalid Almihdhar and Nawaf Alhazmi had already entered the United States. They would later help hijack the flight that crashed into the Pentagon.
The master watch list will be tapped by thousands of federal law enforcement officers and many others -- from small-town cops making traffic stops to airport workers screening passengers to personnel managers checking on applicants for jobs at nuclear plants.More on this story here.
COLOR ME DANGEROUS: TRACKING MORE THAN LUGGAGE AT THE AIRPORT
First we got color codes from the Department of Homeland Security. Remember when they raised the terror alert to orange and urged us to clear the store shelves of duct tape? (By the way, did you know that almost half of the duct tape in this country is suspiciously made by one Ohio company whose owner happened to be a big Republican donor?) Now, the Transportation Security Administration, created after 9/11 with the intention of protecting us in the air -- and which is under attack for spending lots of money while still showing alarming lapses in safeguards -- has decided to color-code each and every one of us the moment we buy a plane ticket. You won’t know it, but they will be assigning you a hue, color-coding your name in a computer soon after you trudge into the airport. Think of it as electronic tattooing or high-tech branding, all in the name of the war on terror.
The new system, called Computer Assisted Passenger Prescreening System II (CAPPS II), which will go into effect next year, will have the airlines sending all of your personal information to the government, which will then check you against databases of private companies that collect information on your shopping habits, which will supposedly help the TSA confirm that you are who you say you are. I am not sure how that is exactly supposed to work. Perhaps they are going to look at your shoes and see that they are Prada, and then look at your shopping activity in the database and see that you actually buy at Payless. “Sorry honey, you’ve been colored red,” the nice ticket agent may tell you. “Guards, haul his ass off to jail -- but get those shoes first!”
“This system is going to be replete with errors,” Barry Steinhardt of the ACLU told the Post. “You could be falsely arrested. You could be delayed. You could lose your ability to travel.”More on this story here.
ASHCROFT: FBI TO REVEAL PATRIOT ACT DATA
The Patriot Act’s highly contentious authority for the FBI to obtain records from libraries, bookstores and other businesses has never been used, Attorney General John Ashcroft says. In a memo to FBI Director Robert Mueller obtained Wednesday by The Associated Press, Ashcroft said he decided to disclose the previously classified information to “counter the troubling amount of public distortion and misinformation” surrounding section 215 of the anti-terrorism law. “Public confidence in law enforcement is of paramount importance,” Ashcroft wrote to Mueller, “The number of times section 215 has been used to date is zero.” Ashcroft’s decision to declassify the information lifts a veil of secrecy surrounding one of the most controversial parts of the law
Critics have said the FBI’s authority to obtain the records threatens the privacy and First Amendment rights of library and bookstore patrons, as well as other businesses. Law enforcement officials say the power is rarely used, properly supervised by judges and essential to combat terror.
Laura Murphy, director of the ACLU’s Washington office, said Ashcroft’s declassification decision appeared to be mostly public relations aimed at tackling the fallout from a pair of speeches he delivered this week in which he denounced as “baseless hysteria” claims by the ACLU, the library association and others that the Patriot Act allows the FBI to snoop unchecked into Americans’ reading habits. “Is this the beginning of the Justice Department being more accountable, or is this just a bone to throw to the librarians?” Murphy said.“qI think the American people can see through that.”More on this story here.
LABOUR GOVERNMENT PLANS TO “REFORM” HOUSE OF LORDS
Under the proposals announced on Thursday by Lord Falconer, the constitutional affairs secretary, the 92 remaining hereditary peers will be removed from the Lords and a statutory commission will be created to oversee appointments. Legislation would be introduced when “when parliamentary time allows”, Lord Falconer said.
Peers convicted of an offence would lose their titles and their membership of the Lords, a change that would see Lord Archer, the Tory peer released this year after serving two years for perjury, stripped of his right to sit in the upper chamber. Lord Falconer said the government was pressing ahead with its reforms after MPs failed to agree on reform options in a free vote in February.
The government hopes to see through the Lords a raft of contentious legislation, including the criminal justice bill and the bill establishing foundation hospitals, before the end of this parliamentary session.
Opposition peers accused the government of an assault on the independence and authority of the House of Lords. “If you remove the hereditaries and do nothing else you drastically reduce the power of the opposition,” said Lord Oakeshott for the Liberal Democrats. The reforms will also face tough opposition in the Commons.More on this story here.
EBAY TO FEDS: COME AND GET WHAT YOU WANT
Law enforcement snoopers will have plenty of material to work with: Sullivan also boasts that eBay has logged every item of user information since 1995. eBay helps with over 200 a month, Haaretz reports.
It is the second privacy scandal this week. Host of privacy site Don’t Spy On.US, Bill Scannell, discovered that budget airline Jet Blue handed over 5 million passenger records to the Transport Security Administration and a contractor, which augmented them with credit records and passengers’ social security information.More on this story here.
NASTY WORM POSES AS MICROSOFT SECURITY UPDATE
Windows users were yesterday warned of the appearance of a worm that poses as a security update from Microsoft but actually causes all manner of mischief on infected PCs. Swen-A (AKA Gibe-F) is a mass-mailing worm that also attempts to spread through file-sharing networks, such as KaZaA and IRC, and over local area network shares. The worm attempts to de-activate antivirus and personal firewall programs running on an infected computer. AV vendors warn that the worm is spreading rapidly and that disinfection is difficult. As usual this is a Windows-only menace.More on this story here.
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