Tuesday, November 3, 2015

Hong Kong, Singapore rise in global finance secrecy rankings

Hong Kong, Singapore rise in global finance secrecy rankings

[SINGAPORE] Hong Kong and Singapore have increased their ranking for financial secrecy, with the Chinese territory rising to number two behind only Switzerland in a 2015 index of the world's offshore havens compiled by the Tax Justice Network.
Both Asian financial hubs have made insufficient reforms to their corporate secrecy regimes, according to the London-based TJN, which campaigns for greater transparency in finance. Singapore's ranking moved to fourth from the fifth place it held in the organization's previous index in 2013, when Hong Kong placed third.
"Singapore, in fourth place, poses many of the same threats that Hong Kong does: a lack of serious reforms to its corporate secrecy regime; a lack of interest in creating country-by- country reporting or in creating public registries of beneficial ownership," the TJN said.
The two cities each account for about 4 per cent of the global market for offshore financial services, the organisation said. The hubs are well exposed to offshore flows because of rising assets under management and their status as regional financial hubs, according to the TJN.
"We do not have laws protecting bank secrecy and so we have never attracted foreign capital by such means," a spokesman for Hong Kong's Financial Services and the Treasury Bureau said in an e-mailed response to the TJN survey.
"Hong Kong has all along been highly supportive of international efforts to enhance tax transparency and combat tax evasion," the spokesman added.
The US was ranked third for secrecy by the TJN for its refusal to take part in a global system for exchanging bank data created by the Organization for Economic Cooperation and Development.
BLOOMBERG

China to gradually scrap quota limit for inbound and outbound investment

China to gradually scrap quota limit for inbound and outbound investment

[BEIJING] China will gradually remove quota limits for inbound and outbound investment over the next five years, the country's ruling Communist Party said on Tuesday.
The reform pledge was carried in a communique issued nearly a week after the Party's Central Committee held a high-level policy meeting to set a 13th Five-Year Plan.
REUTERS

US to keep operating in South China Sea: US defence chief

US to keep operating in South China Sea: US defence chief


[KUALA LUMPUR] US Defence Secretary Ashton Carter on Tuesday told his Chinese counterpart Chang Wanquan that the American military would continue to operate in the South China Sea, a senior US defence official said.
"(Carter) once again reaffirmed that the United States will continue to fly, sail and operate wherever international law allows. And he clearly made the case that the South China Sea would not be an exception," the official said after the two defence chiefs met in Kuala Lumpur.
AFP

Update: Standard Chartered axes 15,000 jobs, announces US$5.1b capital raise

Update: Standard Chartered axes 15,000 jobs, announces US$5.1b capital raise

[HONG KONG] Asia-focused British bank Standard Chartered said on Tuesday it would axe 15,000 jobs and raise US$5.1 billion in capital after posting a "disappointing" third-quarter loss as it struggles to return to growth.
The job losses are part of a major restructuring that will cost around US$3 billion, the bank said.
A Standard Chartered spokeswoman said she could not give any further detail on the job cuts.
More than half of the restructuring costs would come from potential losses on liquidating assets and businesses, the bank said in a statement.
The remaining charges would be from "potential redundancy costs" of a planned headcount reduction of 15,000, as well as goodwill write downs, it added.
The bank reported an unexpected pre-tax quarterly loss of US$139 million compared with US$1.53 billion profit a year earlier in a performance described as "disappointing" by group chief executive Bill Winters.
Revenue was down 18.4 per cent to US$3.68 billion and impairment losses increased from US$536 million to US$1.23 billion for the quarter.
The bank announced a plan to raise US$5.1 billion in capital in the wake of the results and a strategic review that upped its cost reduction target to US$2.9 billion between 2015 and 2018.
It added it was refocusing on "affluent retail clients" rather than corporate and institutional banking businesses.
"The business environment in our markets remains challenging and our recent performance is disappointing," Standard Chartered chief executive Bill Winters said in a statement filed to the Hong Kong stock exchange.
"The plans we have outlined today significantly reallocate resources to change fundamentally the mix of the group towards more profitable and less capital intensive business," Winters said in a separate statement detailing the strategic plan.
The bank already said in January it would axe 2,000 jobs around the world in 2015 in an attempt to make savings of US$400 million in a structural overhaul.
It had already shed 2,000 jobs in the three months before January.
Standard Chartered saw its profits plunge in the first half of the year, with net profit slumping 36.7 per cent in the six months to June compared to the period in 2014.
Bosses at the bank gave up their bonuses after profits fell by more than a third in 2014, sliding 37 per cent to US$2.51 billion.
AFP

Here's the official list of banks that are too big to fail

Here's the official list of banks that are too big to fail

Barclays bird blue protest protestorAP Photo/Alastair GrantA protester outside Barclays Bank's annual shareholders meeting in central London in 2013.
"Too big to fail" became a household phrase during the financial crisis, when bailouts in 2008-2009 provided a safety net for the crumbling global banking system.
As a response to the crisis, the G20 countries set up the Financial Stability Board, a global watchdog for financial institutions. One of its responsibilities is to identify the banks that can't go bust without causing a domino effect.
The FSB calls such institutions global systemically important banks, or GSIBs, and on Tuesday it published a list of them.
The banks are split into buckets, with each corresponding to higher loss absorbency requirements based on how important to the global financial system the bank is. The higher the number, the more important the bank and the more capital it will be required to hold.
Here's the full list:
too big to fail GSIBsFinancial Stability Board
There's only one change this year — the Spanish lender BBVA is out, and the China Construction Bank is in, reflecting the way that the world economy is changing.
Other than that, all the groups stay the same — bucket Nos. 2, 3, and 4 are still precisely where they were.

Merkel says bundle of measures needed to solve refugee crisis

Merkel says bundle of measures needed to solve refugee crisis

German Chancellor Angela Merkel makes her speech at the Federation of German Industry (BDI) conference in Berlin, Germany, November 3, 2015. REUTERS/Fabrizio BenschThomson ReutersGerman Chancellor Merkel makes her speech at the Federation of German Industry (BDI) conference in Berlin
BERLIN (Reuters) - German Chancellor Angela Merkel said on Tuesday a bundle of national and European measures were needed to help stem the number of refugees arriving in Germany.
"We are taking national steps, it is a bundle of measures, from transit zones to the fast implementation of the laws, and above all to intensify the deportation of asylum seekers whose applications are rejected," Merkel said ahead of a regular meeting of conservative lawmakers in Berlin.
Merkel's Christian Democrats (CDU) and their Bavarian sister party the Christian Social Union (CSU) agreed at the weekend to set up transit zones on the border with Austria, where migrants deemed to have no solid claim to asylum will be denied entry.
But their Social Democrat (SPD) coalition partners have yet to back the plan.
(Reporting by Caroline Copley and Joseph Nasr; Editing by Paul Carrel)
Read the original article on Reuters. Copyright 2015. Follow Reuters on Twitter.

China, U.S. defense chiefs discuss cyber, South China Sea disputes

China, U.S. defense chiefs discuss cyber, South China Sea disputes

U.S. Defense Secretary Ash Carter answers a reporter's question at the truce village of Panmunjom, in the demilitarised zone (DMZ) separating the two Koreas, South Korea, November 1, 2015.  REUTERS/Korea Pool/YonhapThomson ReutersU.S. Defense Secretary Ash Carter answers a reporter's question at the truce village of Panmunjom
KUALA LUMPUR (Reuters) - China's actions in the South China Sea are primarily for humanitarian and navigational benefit to other countries but China will defend its sovereign territory, the Chinese defense minister told his U.S. counterpart on Tuesday, senior U.S. defense officials said.
U.S. Defense Secretary Ash Carter and Chinese Defense Minister Chang Wanquan met for forty minutes in the Malaysian capital Kuala Lumpur on Tuesday and discussed cyber hacking and China's building of artificial islands in the South Chija Sea, the officials said. It was the first meeting of the two men as heads of their countries' defense establishments.
Chang told Carter that China's activities in the body of water are primarily meant to help other countries.
"'But that said, we need to do things that help us defend our sovereign territory and I need to be very clear to you that there is a bottom line to this,'" a senior U.S. Defense official said, recounting Chang's comments.
(Reporting by Yeganeh Torbati; Editing by Raju Gopalakrishnan)
Read the original article on Reuters. Copyright 2015. Follow Reuters on Twitter.

Exclusive: Vatican inspectors suspect key office was used for money laundering

Exclusive: Vatican inspectors suspect key office was used for money laundering

Pope Francis delivers Thomson ReutersFile photo of Pope Francis delivering "Urbi et Orbi" message from the balcony overlooking St. Peter's Square at the Vatican
By Philip Pullella
VATICAN CITY(Reuters) - Vatican financial investigators suspect a department of the Holy See which oversees real estate and investments was used in the past for possible money laundering, insider trading and market manipulation, according to a report seen by Reuters.
The information in the confidential document, which covers the period from 2000 to 2011, has been passed on to Italian and Swiss investigators for their checks because some activity tied to the accounts allegedly took place in these countries, a senior Vatican source said.
While most of the media focus of the Vatican's murky finances has for decades centered on its official bank, the Institute for Works of Religion (IOR), a department called the Administration of the Patrimony of the Holy See (APSA), acted as its own financial powerhouse.
APSA, a sort of general accounting office, manages the Vatican's real estate holdings in Rome and elsewhere in Italy, pays salaries of Vatican employees, and acts as a purchasing office and human resources department.
One of its two divisions also manages the Vatican's financial and stock portfolio. The 33-page report suspects this division was used by an outsider for non-Vatican business, with possible complicity of APSA staff, in violation of its own regulations.
The internal investigation is part of a drive by Pope Francis to give Vatican financial authorities free rein to dig deep, over-ruling some cardinals who would prefer to forget the past now that the Vatican has enacted major reforms and instituted controls to thwart irregular practices.
Under Francis, the Vatican has overhauled its scandal-plagued bank, given more power to its Financial Intelligence Authority, appointed its first auditor-general and set up a new ministry to oversee economic activities of all departments, which previously ran their budgets with little or no control.
It is not clear whether this will be enough to bring full financial transparency to the traditionally secretive Vatican.
PAPAL USHER
The report by Vatican financial investigators zeroes in on the activity of Giampietro Nattino, chairman of Banca Finnat Euroamerica S.p.A, a family-run private Italian bank.
Vatican investigators suspect Nattino used the APSA accounts for personal trades on the Italian stock market, the report says, adding that the balance of more than 2 million euros was moved to Switzerland when the accounts were closed days before the Vatican introduced stricter new laws against money laundering that put money transfers under more scrutiny.
From May 22, 2000 to March 29, 2011 Nattino, who has served on the board of many Italian firms and volunteered as an usher in the papal palace, was the owner of APSA "Portfolio 339", which consisted of four separate accounts, the report says.
The report speaks of the "dubious origin and dubious final destination of the funds in the closing of portfolio 339" and asks why Nattino was allowed to have accounts at APSA in the first place in apparent violation of department regulations.
Those regulations, which are published on the Vatican's website and mentioned in the internal report, say the department can carry out financial transactions for third parties only on an "exceptional basis" and only with prior permission of the cardinal in charge.
Financial investigators gave their findings to the Vatican's Promoter of Justice, or chief prosecutor, Gian Piero Milano, a senior Vatican source said, adding that Milano had opened his own investigation.
The investigators asked the prosecutor to look into possible money laundering, insider trading and market manipulation related to Nattino's accounts at the conclusion of their report, which includes some 30 charts and graphs detailing stock holdings and transactions and bank transfers.
Vatican investigators suspect that on one occasion when his bank handled a stock placement, the APSA accounts were used to buy shares before they were allocated to other investors, according to the document.
The investigators also asked the prosecutor to look into "potential co-responsibility" by APSA staff in execution of the activity in the accounts and if the procedures followed "rules and internal practices" at the department.
Nattino's daughter Paola, who acts as company spokeswoman, declined to comment about Portfolio 339 and suspicions of irregularities connected to the accounts, saying in an email to Reuters that "it is our custom not to issue statements".
Milano's office did not return phone calls about the case. It has said in the past that it does not comment on investigations.
ANOMALY
The cardinal in charge of APSA from 2002 to 2011, eight of the 11 years covered by the investigation, was Italian Attilio Nicora, who is now retired.
The report does not specifically mention Nicora but cites the APSA regulation that only its head can exceptionally authorize financial operations for third parties.
In a letter to Reuters, Nicora said only that APSA was not a bank "because it does not lend money", but declined to comment on a list of questions sent by email via his secretary.
In one apparent anomaly, a 2012 evaluation of the Vatican by Moneyval, an arm of the Council of Europe that assesses compliance with international anti-money laundering standards, says APSA officials had told it that in 2001 the department decided to phase out individual account holders and that no new funds had been allowed to enter such accounts since then.
But the report on the internal investigation seen by Reuters says money was deposited into such APSA accounts from outside sources or moved between them in APSA as late as 2009.
APSA made headlines in June 2013 with the arrest of Monsignor Nunzio Scarano, who worked there for 22 years as a senior accountant. He is on trial in two cases. The first is on charges of conspiracy to smuggle 20 million euros in cash into Italy from Switzerland to help friends avoid taxes and the other is on charges he used the Vatican bank for money laundering. He denies all wrongdoing.
(Additional reporting by Stefano Bernabei; Editing by Crispian Balmer and Timothy Heritage)
Read the original article on Reuters. Copyright 2015. Follow Reuters on Twitter.

Sprint signed a major deal with Cuba

Sprint signed a major deal with Cuba

Cuba signed a roaming agreement with U.S. telecom Sprint Corp during its first annual trade fair since rapprochement with the United States and told 600 companies from 70 countries at that it was eager for more business.
The Havana International Fair (FIHAV) promotes Cuba's changing business climate and seeks badly needed foreign investment. Last year's event championed a new tax-cutting foreign investment law, while this year's boasted of improved ties with the United States.
In a historic breakthrough on Dec. 17, the former Cold War foes vowed to normalize relations, although the U.S. trade embargo on Cuba remains in place.
Cuba's critics denounce the fair as hype, noting that all business deals must go through the communist government or one of its tightly controlled state companies.
Cuba acknowledged the central role of the state but also plugged its growing private sector, mostly farm cooperatives and small businesses so far.
"We are continuing to create the conditions for separating state and business functions and to improve the role that should be played by socialist state enterprises..., guaranteeing more flexible functioning," Foreign Trade Minister Rodrigo Malmierca told the opening ceremony.
Sprint, one of about 30 U.S. companies attending, has taken advantage of the limited commercial opening afforded by U.S. President Barack Obama, who has chipped away at the embargo and created a telecommunications exemption.
Among the companies hopeful of doing business here some day was PepsiCo, which had a stand in one of the exhibition halls.
Sprint signed an interconnection agreement with Cuba's state telecoms monopoly Etecsa on Sept. 25 and added the roaming agreement on Monday. Sprint competitor Verizon has been offering voice and data roaming in Cuba since September through a third party.
"We signed this agreement in record time," Sprint Chief Executive Marcelo Claure told reporters, saying he was "blown away" with how fast the Cuban government negotiated the deal.
A woman uses her phone as she walks past a Sprint store in New York's financial district, October 15, 2012. REUTERS/Brendan McDermid Thomson ReutersA woman uses her phone as she walks past a Sprint store in New York's financial district
"They were a pleasure to work with. Like with anybody else, there were tense moments. We would like to pay a lower rate. But it's a start," Claure said.
American companies will lag behind those from Cuba's strategic partners Venezuela, China and Russia. Spain also has enjoyed a long business relationship with Cuba and has the largest presence at the fair with 150 companies.
"We're not afraid of competition," said Jose Manuel Soria, Spain's minister of industry, energy, and tourism. "We think that the more countries that come, the better. 
(Reporting by Daniel Trotta and Jaime Hamre; Editing by Cynthia Osterman)
Read the original article on Reuters. Copyright 2015. Follow Reuters on Twitter.

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