Day: December 5, 2017

The White House on Tuesday strongly denied that the special prosecutor looking into alleged Russian interference in last year’s election has asked a German bank for records relating to accounts held by Donald Trump and his family members.

“We’ve confirmed this with the bank and other sources” that it is not true, White House Press Secretary Sarah Huckabee Sanders told reporters during the daily briefing. “I think this is another example of the media going too far, too fast and we don’t see it going in that direction.”

A member of the president’s legal team, Jay Sekulow, issued a statement that “no subpoena has been issued or received.”

Deutsche Bank

However, Deutsche Bank appears to be acknowledging there has been a related request, saying it “takes its legal obligations seriously and remains committed to cooperating with authorized investigations into this matter.”

The bank received a subpoena from special counsel Robert Mueller several weeks ago to provide information on certain transactions and key documents have already been handed over, according to the German financial newspaper Handelsblatt.

Similar details also were reported Tuesday by the Bloomberg and Reuters news agencies, as well as the Wall Street Journal.

According to the Financial Times newspaper Deutsche Bank has begun sending information about its dealings with Trump to U.S investigators.

A person with direct knowledge of the German bank’s actions told the newspaper this began several weeks ago.

“Deutsche could not hand over client information without a subpoena,” said a second person with direct knowledge of the subpoena, according to the newspaper. “It’s helpful to be ordered to do so.”

The subpoenas concern “people or entities affiliated with President Donald Trump, according to a person briefed on the matter,” the Wall Street Journal reported in an update to its story.

“I would think it’s something more than a fishing expedition,” says Edwin Truman, a former U.S. Treasury Department assistant secretary for international affairs.

“At a minimum, they know there’s some fish in this pond and they want to know whether they’re nice fish or bad fish,” Truman, a nonresident fellow of the Peterson Institute for International Affairs, tells VOA.

If the reports are true, “this is a significant development in that it makes clear that Mueller is now investigating President Trump’s finances, something that the president has always said would be a red line for him,” says William Pomeranz of the Wilson Center, who teaches Russian law at Georgetown University.

“The substance of any potential charges remains unclear, but Deutsche Bank already has paid significant penalties in a Russian money laundering case, and I am sure that it does not welcome further investigations into its Russia operations,” says Pomeranz, who as a lawyer advised clients on investment in Russia and anti-money laundering requirements.

Relationship with family

The bank has a longstanding relationship with the Trump family, previously loaning the Trump organization hundreds of millions of dollars for real estate ventures.

Trump had liabilities of at least $130 million to a unit of the German bank, according to a federal financial disclosure form released in June by the U.S. Office of Government Ethics.

“Special counsel Mueller’s subpoena of Deutsche Bank would be a very significant development,” says Congressman Adam Schiff, the top Democrat on the House intelligence committee. “If Russia laundered money through the Trump Organization, it would be far more compromising than any salacious video and could be used as leverage against Donald Trump and his associates and family.”

Congressional Democrats, in June, asked the bank to hand over records regarding Trump’s loans, but lawmakers say their request was rebuffed, with the financial institution citing client privacy concerns.  

A U.S. official with knowledge of Mueller’s probe, according to Reuters, said one reason for the subpoenas was to find out whether the bank may have sold some of Trump’s mortgage or other loans to Russian state development bank VEB or other Russian banks that now are under U.S. and European Union sanctions.

Deutsche Bank, in January, agreed to pay $630 million in fines for allegedly organizing $10 billion in sham trades that could have been used to launder money out of Russia.

Red line

Trump earlier this year, when asked if examining his and his family’s finances unrelated to the Russia probe would cross a red line, replied, “I would say yeah. I would say yes.”

Trump, unlike previous U.S. presidents dating back four decades, has refused to make public his U.S. tax returns that would show his year-to-year income. Trump, a billionaire, is the richest U.S. president ever, although some analysts have questioned whether Trump’s assets total $10 billion as he claims.

Before he became president last January, Trump, who still owns an array of companies, turned over the day-to-day operation of the Trump Organization to his adult sons, Donald Trump Jr. and Eric Trump, and a longtime executive at the firm.
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Uzbekistan and Afghanistan signed an agreement Tuesday to extend a railroad connecting the two countries in a move that may eventually give Uzbekistan a direct link to seaports.

Landlocked Uzbekistan’s access to marine shipping is very limited.

In 2011, the Uzbek state railway company, Ozbekiston Temir Yollari, built a short link between Hairatan, a town on the Uzbek-Afghan border, and Mazar-i-Sharif, a major city in northern Afghanistan.

Tashkent has since expressed interest in extending that line to Herat, another Afghan city in the northwest, and a gateway to Iran. 

Another link, already under construction, will connect Herat to Iran, which may eventually enable Uzbekistan to send cargoes to and from its Persian Gulf ports.

Uzbek President Shavkat Mirziyoyev’s office said in a statement that he and visiting Afghan President Ashraf Ghani had signed an agreement on the construction of the Mazar-i-Sharif-Herat railroad. It provided no details, such as cost and funding.

The original, short link was almost fully financed by the Asian Development Bank, which has also financed studies for the expansion project.

Mirziyoyev and Ghani also signed 20 other deals, including an agreement on the construction of a new electric power line and deals for supplies of Uzbek agricultural products, medicines and other goods to Afghanistan.
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The European Union named and shamed 17 states that it accuses of being tax havens Tuesday, and put another 47 countries on notice that they risk being blacklisted, too, unless they start tackling tax evasion.

The blacklist was agreed on after 10 months of investigations and diplomatic wrangling, but transparency activists say it doesn’t go far enough.

After a meeting in Brussels, EU finance ministers announced the blacklist.

The list doesn’t include any European countries, but does name several Caribbean islands, including former British colonies Barbados, Grenada, and Trinidad and Tobago — a reflection, analysts say, of Britain’s reduced political clout in the European Union.

Completing the list are American Samoa, Bahrain, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Tunisia and the United Arab Emirates.

Countries on the list could lose access to EU funds and face further as-yet-undetermined sanctions from the economic bloc.

“To be on a blacklist is, in itself, bad enough and, of course, there will be consequences for these countries,” said Luxembourg’s finance minister, Pierre Gramegna.

Immediate consequences will be felt by multinationals that do business with any of the blacklisted jurisdictions, as they will face additional and burdensome financial disclosure requirements.

The EU move, part of a broader effort to tackle tax evasion, comes less than a month after the publication of the so-called Paradise Papers, an investigation by nearly 100 media outlets into a leak of 13.4 million files from two offshore service providers.

British officials drew comfort from the exclusion of the Cayman Islands and Bermuda from the list; but their omission prompted an outcry from transparency activists, who dubbed the exercise a “whitewash.”  Other transparency campaigners, including Oxfam, argue the blacklist should have included well-established EU tax havens: Ireland, Luxembourg, the Netherlands and Malta, as well as Switzerland.

Another 47 jurisdictions were included Tuesday in a “grey list.” Among those are other British-tied jurisdictions, the Isle of Man and Jersey. The finance ministers deemed them as not currently compliant with EU standards, but all have formally committed to changing their tax rules.

Critics of list

The Tax Justice Network, an advocacy group that campaigns against tax avoidance and corruption, said the European Union had flunked the tax haven test, arguing it had missed an opportunity.

“The list appears to be a politically-led list, that includes only the economically weak and politically unconnected,” it said. The blacklist is hard to take seriously, it added, saying, “EU members like the Netherlands, Ireland and Luxembourg are the greatest procurers of global profit-shifting, but are excluded.”

Pierre Moscovici, the European commissioner for economic and financial affairs, dismissed the complaints, describing Tuesday’s naming and shaming as a vital “first step.”

“This list represents substantial progress. Its very existence is an important step forward,” he said, adding, “It is the first EU list; it remains an insufficient response to the scale of tax evasion worldwide.”

Toomas Toniste, Estonia’s finance minister, agreed that the list was an important step.

“This initiative is already proving its value, as numerous countries have worked to meet the deadline for making commitments on the basis of our criteria,” he said.

Pushing for change

In the past few weeks, countries at risk of inclusion have been scrambling to promise reforms. To remain off the list, countries had to promise to implement “fair tax rules,” which Brussels defines as not offering preferential treatment for companies enabling them to move profits to avoid taxes elsewhere. They also had to pledge to meet international transparency standards of the Organization for Economic Co-operation and Development, or OECD.

Hours before the list was announced, officials from Panama, Samoa, Guam and the Marshall Islands said they thought they had done enough to escape being blacklisted. Several of the named Caribbean islands appealed for exclusion on the basis of the devastation they suffered this year from hurricanes. Several other hurricane-impacted Caribbean islands have been put on probation and their cases will be addressed in February.

Meanwhile, opposition lawmakers in Britain accused the British government of being weak on tax avoidance, criticizing London’s diplomatic efforts to persuade EU finance ministers to go easy on the Caribbean islands. Liberal Democrat leader Vince Cable accused Downing Street of helping the super-rich hide their cash.

Cable argued the British government had a long history of “dragging its heels” when it comes to tax havens, saying he witnessed a lack of action when he was in government.

“Some Caribbean islands in particular were operating to very poor standards, sometimes to the cost of the British government,” the former business secretary said.

British officials dismiss such accusations, saying London is at the forefront of tackling avoidance and ensuring tax transparency.
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The government of Brazil’s President Michel Temer is far from assembling the coalition needed to pass a landmark pension reform, but potential supporters of the measure are now more organized, a key legislator said on Monday.

“We’re still enormously far (from having the needed votes), but we have a party leader committed, a party president committed, one party that’s set to commit,” Brazil’s lower house speaker, Rodrigo Maia, told journalists after an event in Rio de Janeiro.

Pension reform is the cornerstone policy in President Temer’s efforts to bring Brazil’s deficit under control. But the measure is widely unpopular with Brazilians, who are accustomed to a relatively expansive welfare net.

In order to curry support from Congress, Temer and his allies watered down their original proposal in November, requiring fewer years of contributions by private sector workers to receive a pension.

According to several government sources, Temer’s allies have grown more optimistic in the last week about the reform’s chances.

However, speed is essential for the bill’s passage. A congressional recess begins on Dec. 22, and lawmaking thereafter will be hampered by politics, as lawmakers ramp up their campaigns for 2018 elections.
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