Day: March 7, 2018

European Union states are set to remove Bahrain, the Marshall Islands and Saint Lucia from a list of tax havens next week, leaving only six jurisdictions on it, an EU document shows.

The planned removals from the EU list drew criticism from an anti-corruption watchdog on Tuesday. The decision is also likely to bring more disapproval from lawmakers and activists who had strongly criticized a first delisting in January that cut the number of jurisdictions named to nine from 17.

The latest decision was taken by the EU Code of Conduct Group, which includes tax experts from the 28 member states, according to an EU document seen by Reuters.

EU finance ministers are expected to endorse the proposal at their regular monthly meeting in Brussels on March 13.

The jurisdictions that remain on the blacklist are American Samoa, Guam, Namibia, Palau, Samoa and Trinidad and Tobago.

Bahrain, the Marshall Islands and Saint Lucia are to be delisted after they made “specific commitments” to adapt their tax rules and practices to EU standards, the document says.

Those commitments are not public.

“This ever-decreasing list of tax havens will soon be so short it will be able to fit on a Post-it. It’s time for the EU to publish how it chooses which countries go on the list and why,” said Elena Gaita, of Transparency International EU, an anti-corruption watchdog.

Panama

In the last cut, EU governments decided to remove Barbados, Grenada, South Korea, Macau, Mongolia, Tunisia, the United Arab Emirates and Panama.

Panama’s delisting caused particular outcry. The EU process to set up a tax-haven blacklist was triggered by publication of the Panama Papers, documents that showed how wealthy individuals and multinational corporations use offshore schemes to reduce their tax bills.

Ministers said January’s delisting signaled that the process was working as countries around the world were agreeing to adopt EU standards on tax transparency.

All delisted countries have been moved to a “gray list,” which includes dozens of jurisdictions that are not in line with EU standards against tax avoidance but have committed to change their rules and practices.

These countries can be moved back to the blacklist if they fail to respect their undertakings.

Blacklist

Blacklisted jurisdictions could face reputational damage and stricter controls on their financial transactions with the EU, although no sanctions have been agreed by member states yet.

The blacklist was set up to discourage the use of shell structures abroad, which in many cases are legal but may hide illicit activities.

It took nearly a year for EU experts to screen an initial 92 jurisdictions around the world before identifying 17 in December that could favor tax avoidance.

EU countries were not screened. They were deemed to be already in line with EU standards against tax avoidance, although anti-corruption activists and lawmakers have repeatedly asked for some EU members such as Malta and Luxembourg to be blacklisted.
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Mexico is looking into ways to deepen energy cooperation with Jamaica, Foreign Minister Luis Videgaray said on Tuesday on a Caribbean trip to promote U.S.-backed efforts to erode Venezuela’s diplomatic influence.

Videgaray said he was hoping to get more Mexican firms to come to Jamaica as suppliers of oil and as potential investors in developing Jamaican oil resources.

Last month, U.S. Secretary of State Rex Tillerson announced that Mexico, Canada and the United States were looking at how to mitigate the effect sanctions on OPEC-member Venezuela would have in the Caribbean.

Videgaray, who visited St. Lucia before Jamaica, said deeper Mexican-Jamaican energy ties could serve as a model elsewhere in the island region.

“Whatever we do in Jamaica can be a learning experience for what we do with other Caribbean countries,” he said, without directly mentioning efforts to weaken Venezuela’s support among countries grateful for past oil largesse.

While Jamaica no longer imports Venezuelan crude, it was a founding member of the South American nation’s Petrocaribe program that provided cheap loans for oil to Caribbean nations.

The legacy of the program has helped Venezuela win votes in the Organization of American States to defeat motions against President Nicolas Maduro, whose socialist government has overseen an economic crisis in Venezuela.

Mexico’s oil output has fallen sharply and the energy ministry has said it would be difficult for the country to replace Petrocaribe. 

“We are a market-based economy and any kind of cooperation that we do, and any business that we foster, is according to market principles,” said Videgaray, standing next to his Jamaican counterpart Kamina Johnson Smith.

He added Mexico would be signing a memorandum of understanding to provide technical support to Jamaica’s oil refinery, Petrojam, which is jointly owned by a unit of Venezuelan national oil company PDVSA.

Jamaica already buys spot cargos of crude from Mexico, a major oil supplier to the United States.

Mexico has been gradually opening up its oil sector following a constitutional reform in 2013 that ended decades of monopoly control by national oil company Pemex. Its ability to maximize crude processing has been hobbled, however, by little new investment, accidents and natural disasters.
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East Timor and Australia signed a treaty at the United Nations in New York on Tuesday to resolve a long-running dispute over their maritime border and struck a deal on how to share revenue from the giant offshore Greater Sunrise gas field.

Under the agreement, East Timor will receive a bigger share of the revenue than Australia depending on the development concept – 70 percent of the revenue if the gas is piped to the tiny country or 80 percent if the gas is piped to Australia for processing.

The agreement establishes a maritime boundary in the Timor Sea for the first time. Australia had sought a boundary aligned with its continental shelf, but East Timor argued the border should lie half way between it and Australia – placing much of the Greater Sunrise field under its control.

“With this treaty we open a new chapter in relations between Australia and Timor-Leste,” said Australian Foreign Minister Julie Bishop, who signed the treaty alongside East Timor’s Deputy Minister of the Prime Minister for the Delimitation of Borders Hermenegildo Augusto Cabral Pereira.

“Australia has an enduring interest in a stable and prosperous Timor-Leste. As good friends and close neighbors we want Timor-Leste to achieve its economic potential,” she said.

Pereira acknowledged: “These negotiations have been tough.”

The protracted dispute had led the owners of Greater Sunrise – Woodside Petroleum, ConocoPhillips, Royal Dutch Shell and Japan’s Osaka Gas – to shelve the project.

The Greater Sunrise field is estimated to hold 5.1 trillion cubic feet of gas and 226 million barrels of condensates, which analysts have previously estimated could be worth $40 billion.

However, development could be at least a decade away, with Woodside looking at the latter half of the next decade.

Ending years of opposition, Australia agreed in 2017 to accept Dili’s formal notice to terminate an agreement to split petroleum revenue equally from Greater Sunrise and set a 50-year timetable for negotiating a permanent sea boundary.

Dili had taken the long-running maritime border dispute to the Permanent Court of Arbitration, an intergovernmental organization based at The Hague, which ordered compulsory arbitration between the two parties.

East Timor had been pushing hard for the building of an onshore processing plant to boost its economy.
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Interior Secretary Ryan Zinke says his agency should be a partner with oil and gas companies that seek to drill on public land and that long regulatory reviews with an uncertain outcome are “un-American.”

Speaking Tuesday to a major energy-industry conference, Zinke described the Trump administration’s efforts to increase offshore drilling, reduce regulations, and streamline inspections of oil and gas operators.

“Interior should not be in the business of being an adversary. We should be in the business of being a partner,” Zinke said to a receptive audience that included leaders of energy companies and oil-producing countries.

Shorten permit process

Zinke said the government should shorten the permitting process for energy infrastructure — it shouldn’t take longer than two years.

“If you ask an investor to continuously put money on a project that is uncertain because the permit process has too much uncertainty, ambiguity, (it) is quite frankly un-American,” he said.

The Interior Department manages 500,000 million acres — one-fifth of the U.S. land mass — as well as the lease of offshore areas for oil drilling. One-fifth of U.S. oil production takes place on land or water that the Interior Department leases to private energy companies.

Environmentalists accuse Zinke and the administration of undercutting environmental rules to help oil, gas and coal companies. 

Alex Taurel, a legislative official with the League of Conservation Voters, said Tuesday that Zinke “thinks our public lands are nothing more than an ATM for his industry friends. If anything is un-American, it’s this administration’s persistent attacks on America’s public lands.”

In January, the Trump administration proposed to open up nearly all coastal areas to oil drilling, although Florida was dropped after the Republican governor and lawmakers objected, citing risk to the state’s tourism business.

States have leverage

As he has before, Zinke defended the plan, which faces fierce opposition from governors and lawmakers along the entire West Coast and much of the East Coast.

Zinke said he would listen to local objections, and he noted that states have leverage if they oppose drilling in federal water off their coastlines — they would have to approve pipelines and terminals to handle the oil.

“You can’t bring energy ashore unless you go through state water,” he said.

Zinke said the United States won’t exhaust its resource of fossil fuels in our lifetime, but that cleaner-burning natural gas will take on a bigger role.

Trump ‘a delightful boss’

The Trump administration, he said, is “pro-energy across the board,” and he tried to dismiss an environmental disadvantage to burning fuels that emit carbon linked to climate change. All fuels, he said, have consequences.

When solar facilities are built on public land, people can’t hunt or pursue other recreation there, he said, and wind turbines “probably chop up as many as 750,000 birds a year.”

Zinke acknowledged, however, that “certainly oil and gas and coal have a consequence on carbon.”

Zinke began his comments with a shout-out to his boss, President Donald Trump, calling him “a delightful boss,” before explaining Trump’s goal of encouraging U.S. “energy dominance.” He has frequently criticized former President Barack Obama.

U.S. oil production surged during Obama’s tenure and has kept growing, recently surpassing 10 million barrels a day, thanks to increasing output from shale formations in Texas, North Dakota and elsewhere.
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