Year: 2017

Colombian President Juan Manuel Santos, in response to his name appearing in a trove of leaked documents about offshore investments, said he left a company registered in tax haven Barbados before taking a ministerial post with a previous government. The so-called Paradise Papers published on Sunday showed the investments of wealthy people and institutions ranging from United States Commerce Secretary Wilbur Ross to Britain’s Queen Elizabeth. Reuters has not independently verified the documents. Santos was listed in the leaked documents as a board member of insurance company Nova Holding in April and May 2000 and also Global Tuition, an insurance firm focused on education, from April 1999 to May 2001. Santos said in a statement on Sunday that he left Global Tuition before taking up his duties as Finance Minister in the government of then-President Andres Pastrana in August 2000. He said he was not a partner, did not invest any money and was not paid for serving on the board. “I imagine they delayed in officially registering the changes,” Santos said in answers given to El Espectador newspaper and released by his office. “I participated until before I became Finance Minister.” Santos said that after 2000 he was a Global Tuition client “for some of their insurance for the education of my three children.” Global Tuition’s office was closed in Colombia for a public holiday on Monday and could not be reached for comment. The company’s office in the United States said any comment would come from the Colombia …

Media organizations across the world revealed a massive leak of millions of financial documents Sunday that outlined the elaborate steps taken by elite politicians and other wealthy individuals to shield their wealth from tax collectors. The leak, which has been dubbed the Paradise Papers, contained more than 13 million files taken mostly from a single Bermuda-based legal services company, Appleby. The files were initially leaked to the German newspaper Sueddeutsche Zeitung, which then shared them with around 100 different media outlets affiliated with the International Consortium of Investigative Journalists (ICIJ). The disclosures date back as far as 70 years ago and show the murky, but mostly legal, ways in which some of the biggest names in politics and media protect their wealth through various offshore schemes. So far, the documents have revealed how millions of dollars’ from the Queen’s private estate wound up in a Cayman Islands fund, numerous offshore dealings by high-ranking members of President Donald Trump’s cabinet and shown how Russian state financial institutions invested millions of dollars in Twitter and Facebook. Also implicated in the Paradise Papers is Canadian Prime Minister Justin Trudeau’s chief fundraiser, Stephen Bronfman, who helped move millions of dollars through a complex web of offshore accounts. Appleby claims to have investigated all the allegations contained in the Paradise Papers and found “no evidence of wrongdoing, either on the part of ourselves or our clients.” “We are a law firm which advises clients on legitimate and lawful ways to conduct their business. We do …

The writers of the television drama series “Game of Thrones” would be hard pressed to pack into one episode what happened in Saudi Arabia Saturday, which saw breathtaking arrests of scores of princes and ministers once considered untouchable. The kingdom-wide swoop has left international investors shocked and analysts scrambling. It drove up the price of oil to its highest close in two years. Included in the unprecedented roundup ordered by King Salman and overseen by his son, Saudi Arabia’s Crown Prince, was one of the world’s richest men, Prince Waleed bin Talal, the billionaire businessman who co-owns the Four Seasons hotel chain and is a major investor in Rupert Murdoch’s worldwide media empire. Others among the 50 who have been detained and corralled in opulent hotels across the Saudi capital include Alwaleed al-Ibrahim, the owner of the largest satellite television network in the Middle East, MBC, and Bakr bin Laden, brother of Osama bin Laden and chairman of the Gulf kingdom’s biggest construction company. And along with them prominent military figures, including Prince Fahd bin Abdullah bin Muhammad, a former defense minister, and Prince Miteb bin Abdullah, the minister of the elite 100,000-strong National Guard and son of the late King Abdullah, whose death two years ago led to Mohammed bin Salman’s appointment as Crown Prince by his ailing father, the kingdom’s 81-year-old current monarch. The round-up, which saw palaces surrounded in the dead of night and the grounding of private jets at Jeddah’s airport to prevent those targeted from …

The Supreme Court has rejected Samsung’s appeal of court rulings that it impermissibly copied features of Apple’s iPhone. The justices on Monday left in place rulings in favor of Apple involving its patents for smartphone features that include auto-correct and a slide that unlocks the device. In 2014, a jury awarded Apple $120 million in damages for Samsung’s infringement of the patents. The case is part of a series of disputes between the technology rivals that began in 2011. Last year, the high court ruled in favor of Samsung in a legal fight over the similar appearances of the two companies’ smartphones. …

The Pakistani province of Baluchistan has been well known for its coal production since British colonial times. Today, most of the thousands of people who work in the mines are contract laborers. According to many, condition in the mines are not safe. VOA’s Murtaza Zehri takes us for an inside look at one mine near Quetta. …

While President Donald Trump continues an Asia trip with high geo-strategic stakes, Republicans in Washington are promoting an ambitious tax reform bill that could bring enormous fiscal, and political, consequences. VOA’s Michael Bowman reports, a tax cut is Trump’s last hope for a major legislative victory in his first year in office, something Republicans desperately need and something Democrats are determined to deny them. …

The Republican tax bill unveiled last week in the U.S. Congress could disrupt the global supply chains of large, multinational companies by slapping a 20-percent tax on cross-border transactions they routinely make between related business units. European multinationals, some of which currently pay little U.S. tax on U.S. profits thanks to tax treaties and diversion of U.S. earnings to their home countries or other low-tax jurisdictions, could be especially hard hit if the proposed tax becomes law, according to some tax experts. Others said the proposal could run afoul of international tax treaties, the World Trade Organization and other global standards that forbid the double taxation of profits if the new tax did not account for income taxes paid in other countries. The proposed tax, tucked deep in the 429-page bill backed by President Donald Trump, caught corporate tax strategists by surprise and sent them scrambling to understand its dynamics and goals, as well as whether Congress is likely ever to vote on it. Reuters contacted seven multinational companies and four industry groups. None would comment directly on the proposal, with most saying they were still studying the entire tax package. The proposal is part of a broad tax reform bill unveiled by House of Representatives Republicans on Thursday, which promises to lower overall tax burdens and simplify the tax code. Whether the proposed reforms ever become law is uncertain, with weeks and possibly months of debate and intense lobbying still ahead. The House package overall has drawn criticism for …

Wireless carriers Sprint and T-Mobile called off a potential merger, saying the companies couldn’t come to an agreement that would benefit customers and shareholders. The two companies have been dancing around a possible merger for years, and were again in the news in recent weeks with talks of the two companies coming together after all. But in a joint statement Saturday, Sprint and T-Mobile said they are calling off merger negotiations for the foreseeable future. “The prospect of combining with Sprint has been compelling for a variety of reasons, including the potential to create significant benefits for consumers and value for shareholders. However, we have been clear all along that a deal with anyone will have to result in superior long-term value for T-Mobile’s shareholders compared to our outstanding stand-alone performance and track record,” said John Legere, president and CEO of T-Mobile US, in a prepared statement. T-Mobile and Sprint are the U.S.’ third- and fourth-largest wireless carriers, respectively, but they are significantly smaller than AT&T and Verizon, who effectively have a duopoly over U.S. wireless service. The two companies have said they hoped to find a way of merging to make the wireless market more competitive. Sprint and its owner, the Japanese conglomerate SoftBank, have long been looking for a deal as the company has struggled to compete on its own. But Washington regulators have frowned on a possible merger. D.C. spiked AT&T’s offer to buy T-Mobile in 2011 and signaled in 2014 they would have been against Sprint …

U.S. President Donald Trump urged Saudi Arabia Saturday to list its state-owned oil company on the New York Stock Exchange when the company goes public in what is expected to be the largest-ever initial public offering in which shares of a company are sold to investors. “Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!,” Trump tweeted from Hawaii, his first stop ahead of a 13-day trip to Asia. Saudi officials have reportedly said the government intends to list 5 percent of  the company’s shares on local and global stock exchanges in 2018 but have yet to select an overseas venue. Saudi officials have estimated the IPO will be worth about $100 billion. The NYSE has had discussions with the Saudis about the upcoming IPO as has the London Stock Exchange. Exchanges in Hong Kong, Singapore, Tokyo, Toronto and the U.S. are also soliciting portions of the public offering. New York-based NASDAQ, which provides technology to Saudi Arabia’s exchange, has been leveraging that relationship in an attempt to win the listing. Trump has developed a close relationship with Saudi Arabia. During his visit there last summer, he signed a $110 billion defense agreement with Saudi King Salman. At a $2 trillion valuation Saudi officials have projected for Aramco, selling five-percent of the company’s shares would reap $100 billion. The public offering of shares of Aramco, the world’s largest oil producer, is part of Saudi government plans to …

The recent flurry of social and economic reform coming out of Saudi Arabia has left some Saudis ecstatic, others more circumspect, and a few conservatives bewildered or even angry. Saudi Crown Prince Mohammed Bin Salman told a crowd of investors at a conference in late October that he was merely attempting to “return Saudi Arabia to the moderate Islam that once prevailed” before the Iranian Revolution in 1979. He stressed that 70 percent of Saudis are younger than 30 and vowed “not to spend another 30 years of our lives living under extremist ideas.” The young crown prince also proposed an ambitious plan for a new economic zone on the Red Sea near Jordan and Egypt. In April, he put forward an economic road map for the kingdom, called Vision 2030. Part of the plan calls for privatizing 5 percent of the country’s flagship petroleum company Aramco, in addition to attracting foreign investment capital. ​Too much change too fast Clarence Rodriguez, who spent 12 years as a French foreign correspondent in Riyadh and recently wrote a book called Saudi Arabia 3.0 on the aspirations of Saudi women and young people, tells VOA that she believes Saudi Arabia “is in crisis, due to the drop in the price of petroleum,” and that it has found itself under pressure to “diversify its economy, which necessitates societal reform involving women and young people, as well.” Rodriguez points out that the late King Abdallah, who died in 2014, started the reform movement by allowing Saudi …

For Yu Kaiguang, harsh new United Nations sanctions on North Korea are a disaster. The trader in the Chinese border city of Dandong has seen business all but dry up, and he spends his days scrambling to obtain payment from the suddenly broke North Korean state companies to whom he sold on credit. “They have no money to pay us in cash, and the worst is that because of sanctions they can’t settle the bill with goods such as coal, as they did in the past,” said Yu, reached by telephone at the offices of his Dandong Gaoli Trading Company. Yu said he’s owed about $1 million in all for deliveries of toothpaste, instant noodles and other household items. He’s trying to avoid laying off staff by continuing to export foodstuffs such as pine nuts and red beans. “If they become unemployed, it would be bad for both the state and society.” ​Common problem for traders Yu’s plight appears increasingly commonplace across Dandong, where the bulk of the cross-border trade is handled. Interviews with four trading companies and recent media reports indicate Chinese companies are hurting in a city where North Korean trucks used to rumble across the Yalu River bridge several times a week delivering metal scrap and returning with everything from televisions to toilet bowls. The owner of another firm, Dandong Baoquan Commerce and Trade Co., which used to import iron ore and coal and export basic consumer goods, said he was owed around $200,000 by his North …

A solid rebound for the job market in October as the U.S. economy added 261,000 jobs. Job gains were strong across the board, and the unemployment rate fell to 4.1 percent, its lowest level in 17 years. But, as Mil Arcega reports, American workers are not seeing any real growth in their wages. …

Venezuelan President Nicolas Maduro has announced that the country and state oil company PDVSA will restructure its burgeoning foreign debt, even as he vowed to make a payment of more than $1 billion that came due on Thursday. The announcement did not put Venezuela or PDVSA into default, but suggests that Maduro’s cash-strapped government may be preparing to do so as heavy debt payments aggravate the country’s crippling economic crisis. Why is Venezuela so heavily indebted? Even though the OPEC nation was flush with cash during a decade-long oil boom, Venezuela’s ruling Socialist Party borrowed heavily during the era of late president Hugo Chavez to finance generous social programs that made him popular. The country also dismantled mechanisms meant to ensure Venezuela saved money when oil prices were high, leaving it without sufficient hard currency reserves to import basic goods such as food and medicine after prices crashed in 2014. Hunger and preventable diseases are as a result taking a growing toll on the population of 30 million. Why can’t Venezuela refinance its debt? The most common refinancing mechanisms are effectively blocked by U.S. sanctions levied this year, in response to accusations that Maduro was undermining democracy, which prevent U.S. banks from acquiring newly issued Venezuelan debt. Venezuela and PDVSA cannot carry out “swap” transactions in which they exchange maturing bonds for ones that come due further down the road because financial institutions with U.S. headquarters would not be able to acquire the new debt. Investors also say bondholders would …

California Gov. Jerry Brown and lawmakers asked the U.S. government Friday for $7.4 billion to help rebuild after a cluster of fires tore through the heart of wine country, killing more than 40 people and leaving thousands without housing.   In a letter to the White House, Brown joined California’s U.S. senators and 39 members of its congressional delegation to urge President Donald Trump and Congress to quickly adopt a disaster-related appropriations measure to support the state’s recovery.   Brown said the funding would go toward cleanup and programs to support housing, transportation, agriculture, environmental protection and other services for those affected by the fires. A series of blazes that started in Northern California the night of Oct. 8 killed at least 43 people and destroyed about 8,900 homes and other buildings. At the peak, thousands of firefighters battled 21 blazes that burned simultaneously. Officials have not yet assessed all the damage and effects of the fires, but the governor’s office and the affected counties determined that $7.4 billion in federal funding is needed to help California recover, the letter says.   The wildfires significantly damaged farmland, rangeland and watersheds, and more than a third of the funding requested, $3.1 billion, would go toward helping agricultural industries bounce back, including affected wineries, California officials said.   “The full economic impact to the agricultural, tourism, hospitality, and wine industries is still not known,” the letter says. “Nine California wineries were destroyed and 21 were damaged in the nation’s most prominent winemaking …