Month: November 2011

U.S., BRITAIN, CANADA CUT IRAN OFF FROM FINANCIAL SYSTEM AS NEW ECONOMIC SANCTIONS

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U.S., Britain, and Canada imposed significant steps to cut Iran off from the international financial system, announcing coordinated sanctions aimed at its economics. The measures, a response to a recent United Nations report warning about Iran’s nuclear activities, tighten the vise on Iran but still fall short of a blanket cutoff. The combined actions were a show of resolve in the face of a report earlier this month by the U.N. nuclear agency that voiced serious concerns that Iran, despite its denials, is seeking to acquire nuclear weapons. U.S. sanctions target Iran’s oil and petrochemicals industry and Iranian companies involved in nuclear procurement or enrichment activity. The U.S. also declared Iran’s banking system a center for money laundering – designed as a stern warning to financial institutions around the world to think twice before doing business with Tehran.
http://www.taiwannews.com.tw/etn/news_content.php?id=1765653

SWITZERLAND MOVES TO AVERT THREAT TO PRIVACY PRIVILEGES

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Switzerland has made extraordinary progress towards a goal that many thought unachievable as recently as a year ago. Rather than being forced to do away with its hallowed secrecy arrangements for private banking clients, in August it signed deals with Germany and the UK that preserve confidentiality. More such agreements may be in the pipeline: Italy and France, two neighbouring countries that have traditionally provided much business for Swiss banks, have shown cautious interest and Greece has held direct talks with Bern. These developments come less than two years after private banking in Switzerland appeared to be in trouble, as UBS was forced to divulge the names of 255 rich US clients.
http://www.ft.com/intl/cms/s/0/8b2a76b0-0f68-11e1-88cc-00144feabdc0.html#axzz1eY4zhzqR

CAYMAN ISLANDS ‘LET DOWN’ BY UK

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A public consultation with the people of the Cayman Islands formed the basis of the report, entitled United Kingdom and Cayman Islands Relationship Review, and revealed that while loyalty to the Crown is still strong, there is a sense of dissatisfaction among islanders. The feedback will be used by the UK Government as it prepares a new white paper outlinining the UK’s strategy for the Overseas Territories. The biggest concern among Caymanians was the deterioration in relations with the UK and whether this would ultimately lead to Cayman being cut off completely and left to either “sink or swim”. The report said: “The dissatisfaction with the way in which the relationship is presently operating has largely coalesced around the perception that the two parties have often appeared to be at ‘loggerheads’ with one-another and that as a consequence, the Cayman Islands may simply be left to ‘sink or swim’.
http://www.telegraph.co.uk/finance/personalfinance/offshorefinance/8906967/Cayman-Islands-let-down-by-UK.html

TAX EVASION LAW “COULD COST BIG BANKS $100 MILLION”

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A U.S. law aimed at curbing tax evasion by citizens using foreign accounts could cost large multinational banks as much as $100 million apiece to implement in one-off systems costs, a top asset manager and a tax lawyer told a conference on Friday. The overall costs of implementing the Foreign Account Tax Compliance Act (FATCA), could approach the more than $8 billion FATCA is due to raise over 10 years, he said. FATCA was introduced after high profile tax evasion cases. “With FATCA there is a cost on us in Europe but benefits in the U.S.. The benefit is $8.5 bln over 10 years … for multinational banks I have seen estimates of $100 million (each, in one-off costs),” said James Broderick, head of Europe, Middle East and Africa for JP Morgan Asset Management.
http://www.reuters.com/article/2011/11/18/us-usa-tax-idUSTRE7AH19120111118

PLANS TO CRACK DOWN ON TAX AVOIDANCE

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Plans for a powerful new weapon against “highly abusive, contrived and artificial” tax schemes will be published in a Treasury-commissioned report on Monday. The proposals come as the government faces public pressure to curb tax avoidance. The report has tried to overcome business objections to a general anti-avoidance rule (GAAR). The Treasury will consider the recommendations before reporting back at the time of the next Budget. Business groups are likely to welcome the report, while reserving judgment on whether the proposed GAAR would succeed in retaining a tax regime that is attractive to companies while deterring avoidance.
http://www.ft.com/intl/cms/s/0/8fbfda34-139c-11e1-9562-00144feabdc0.html#axzz1eY4zhzqR

ANGER RISES AS MF GLOBAL CLIENTS SEE BILLIONS FROZEN

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Three weeks after MF Global’s collapse, furious former customers are still fighting for access to billions of dollars as they question why as much as two-thirds of their money is still frozen. While authorities have touted the fact that they are returning 60 percent of the collateral and cash that had been frozen in the wake of the broker’s October 31 bankruptcy, a closer look shows that in fact only about 40 percent of customers’ total funds have been authorized for release so far. The remainder, more than $3 billion, ostensibly remains on hand to cover a shortfall originally estimated by MF Global to regulators at just $600 million. Because the bankruptcy trustee, regulators and exchanges have made no comment on the missing funds in weeks — and have given no information as to how much cash they are retaining — customers are left guessing exactly how much might end up in the creditors’ process of the bankruptcy. http://www.reuters.com/article/2011/11/20/us-mfglobal-customers-funds-idUSTRE7AJ0PW20111120