Archives for August 2016

Negotiations between the two enterprises have been held since May 2016 and the deal was signed on August 30 in Beijing.

“On August 30, Antonov [Company] and Aerospace Industry Corporation of China (AICC) signed an agreement on cooperation on the AN-225 project,” Antonov’s press service said in a statement, UNIAN news agency reported. The company added that cooperation between the two companies include the projected construction of the second aircraft of its kind in Ukraine and its handover to China at the first stage of the project, as well as the creation of an aircraft production line under a Ukrainian license in China at the second stage.

Ukrainian troops blast flaws in new ‘Molot’ mortars, manufacturer blames lack of training

Representatives of Antonov Company told UNIAN that each stage of the project will be implemented under a separate contract. The two companies did not reveal any further details about the agreement and said nothing about the project deadlines or the planned numbers of the AN-225 aircraft set to be built in China.

Earlier, China’s CCTV Channel said on its Facebook page that Antonov Company sold all manufacturing rights and technological documents for the super-heavy air freighter AN-225 Mriya to the China Aerospace company. It added that the first AN-225 could be produced in China as early as in 2019.

Antonov’s press service dismissed these reports as untrue.

In May, Antonov’s deputy head said that Ukraine had been considering launching joint manufacturing production with China and was planning to invite Chinese investors to the project. On Wednesday, Antonov refused to make any comments on the deal and said that it will publish additional information about the negotiations with the Chinese company later, after its delegation returns from Beijing.

AN-225 is currently the biggest aircraft in the world, with a takeoff mass amounting to 640 tons and a working load of 250 tons. It was developed in the former Soviet Union in the 1980s and was initially designed as a carrier for the Soviet Buran (Snowstorm) space shuttle.

The only existing AN-225 aircraft took its first flight in 1988 and is now operated by Antonov Airlines, which is a part of the Antonov Company.

Article source: https://www.rt.com/business/357815-ukraine-china-aircraft-production/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Canada facing massive mortgage crisis

Trudeau is currently on his first official visit to Beijing.

“China and Canada have multi-vector cooperation in trade and the economy. The parties have agreed to prepare a feasibility study for the establishment of a free trade zone between China and Canada as soon as possible,” the premier said at a news conference with Trudeau.

China is Canada’s second-largest trading partner after the US.

The two countries should send a signal to the global community to defend the liberalization of international trade and promote simpler implementation of investments, according to the Chinese premier.

The previous government of Canada had considered the issue, but did nothing concrete.

The Canadian delegation to China will work closely with Chinese leaders to bolster our shared prosperity and grow the Canadian middle class.

— CanadianPM (@CanadianPM) 29 августа 2016 г.

“When you negotiate with the Chinese, despite the tea and buns, they are much more dragon than panda,” former Canadian diplomat in Hong Kong Colin Robertson told CBC.

According a poll conducted earlier this month, 46 percent of Canadians support a deal with China, which is ten percent more than two years ago.

However, the poll also revealed that fewer Canadians believe the human rights situation in China is improving. More than half said they would prefer Canada to hold back from economic opportunities in Asian countries because of human rights concerns.

READ MORE: Canada’s wheat crop up, but heavy rains mean lower quality

Beijing is seeking to attract $100 billion from Canada into the Asian Infrastructure Investment Bank (AIIB). The bank was established to support the development of Chinese infrastructure. The AIIB provides countries which invest with possible access to projects funded by the bank.

Article source: https://www.rt.com/business/357740-china-canada-free-trade-zone/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

SWIFT admits international bank transfer system was hacked

In a private letter to customers, SWIFT said there had been new cyber-theft attempts since June, some of them successful.

“Customers’ environments have been compromised, and subsequent attempts (were) made to send fraudulent payment instructions,” Reuters quoted a copy of SWIFT’s letter. “The threat is persistent, adaptive and sophisticated – and it is here to stay.”

SWIFT said some banks attacked had lost money. It didn’t say how much money was taken or how many of the attempted hacks succeeded. The company did not identify specific banks, but said they all shared one thing in common – weaknesses in local security that attackers used to compromise local networks and send fraudulent messages requesting money transfers.

In June, SWIFT warned banks of a number of cyber-attacks on its system and asked them to update their software. It released a security update for the software 11,000 financial institutions use to access its network.

Vietnamese bank reports another hacker attack on SWIFT money transfer system

It was the first time the global network had acknowledged there were cyber-attacks on its system, as well as the hacking of the central bank of Bangladesh. In that attack, cyber-thieves stole $81 million from the bank’s account at the US Federal Reserve.

READ MORE: Bangladesh may sue NY Fed over $100mn cyber heist

Shane Shook, an independent security consultant who advises central banks told Reuters that SWIFT is trying to coerce members into prioritizing cyber-security by threatening to share confidential information about security lapses that banks want to keep private.

“That type of information sharing is something that no bank likes to see happen without their direct approval and involvement, because it can affect market confidence,” Shook said.

Among other cases of fraudulent transfer requests are the theft of more than $12 million from Ecuador’s Banco del Austro and a failed attempt to steal money from Vietnam’s Tien Phong Bank.

SWIFT’s messaging services are used in more than 200 countries. The network processed 25.6 billion financial transfers in 2014.

Article source: https://www.rt.com/business/357735-swift-cyber-thefts-security/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Apple ordered to repay record €13bn to cover unpaid EU tax

“This decision is awful. Slamming a company with a giant tax bill — years after the fact — sends exactly the wrong message to job creators on both sides of the Atlantic. It’s also in direct violation of many European countries’ treaty obligations. This is precisely the kind of unpredictable and heavy-handed taxation that kills jobs and opportunity,” said Speaker of the US House of Representatives Paul Ryan.

“This is a cheap money grab by the European Commission, targeting US businesses and the US tax base. By forcing their member states to retroactively impose taxes on US companies, the EU is unfairly undermining our ability to compete economically in Europe while grabbing tax revenues that should go toward investment here in the United States,” said Senator Chuck Schumer, who is expected to be the next Democratic leader.

Both senators have called for US tax reforms forcing giant companies like Apple to pay more taxes in America.

Schumer’s party colleague Carl Levin has criticized US tax authorities for letting Apple funnel tax payments into Europe.

“The IRS [US Internal Revenue Service] has failed to stake a claim for US taxes on those revenues. So Europe attempts to fill the vacuum. Shame on Apple for dodging US taxes. Shame on the IRS for failing to challenge Apple’s tax avoidance,” he said. Levin chaired hearings into Apple’s taxes three years ago.

There is also a possibility that US taxpayers could end up covering Apple’s back taxes in Ireland.

“It’s extremely possible the US taxpayer will have to pay this bill. For every dollar in tax Apple has to repay in Ireland, they may get to reduce their US tax bill by $1,” said Stuart Gibson, a former government tax official, now editor of Tax Notes International.

EU Competition Commissioner Margrethe Vestager said it was the Senator Levin-headed hearings three years ago that inspired the watchdog to start the investigation into Apple.

“The Commission listened and decided to look deeper into the matter,” Vestager said in June.

On Tuesday, the EU announced its decision after a three-year investigation into Apple’s tax deal with the Irish authorities. The probe showed that for every €1 million in profits, the US company paid just €500 in tax. A few years later, Apple was paying just €50 per million.

Both Apple and Ireland said they will appeal the decision.

Article source: https://www.rt.com/business/357731-apple-tax-fine-us-reaction/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

UK cuts interest rates for first time in seven years, extends QE

The numbers turned out to be worse than analysts expected, confirming fears over the short-term economic effects of the UK’s decision to quit the European Union.

The data shows 60,912 new mortgages were approved in the first full month after the Brexit-vote, a 3,000 decline from the month earlier and the lowest total since January 2015.

READ MORE: London rents see first decline in 6 years

Experts expect mortgage approvals to continue falling further in the near future due to the uncertainty over the vote that has already affected new buyer enquiries.

“With Brexit uncertainty having driven new buyer inquiries lower, we suspect mortgage approvals have further to fall over the rest of the year,” said Scott Bowman, an economist at Capital Economics as quoted by the FT.

The slowdown in mortgage approvals shows real estate prices will probably slide three percent by the end of the current year with a further drop of five percent in 2017.

READ MORE: UK consumers keep spending despite Brexit uncertainty

UK industrial production shows fastest growth in 17 years

“Housing market activity is likely to be limited over the coming months and prices will weaken as heightened uncertainty following the UK’s vote to leave the EU weighs down on consumer confidence and willingness to engage in major transactions, and also hampers economic activity,” said Howard Archer, chief UK and European economist at IHS Global Insight as quoted by The International Business Times.

READ MORE: Weak pound sends UK inflation rate near 2-yr high

The report shows that non-mortgage borrowing by consumers was also weaker in July than it has been in recent months. Consumer credit was up by £1.2 billion against an average of £1.6 billion over the previous six months. Meanwhile, credit card lending increased by £0.5 billion to a record £65.5 billion.

“We remain concerned that while most households will be able to handle this extra borrowing, a minority of households could find themselves exposed to financial difficulty,” said Joanna Elson, chief executive of the Money Advice Trust as quoted by the BBC.

Article source: https://www.rt.com/business/357659-uk-mortgage-approvals-drop/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Amsterdam wants to take London’s crown as global financial hub

“If the UK leaves the European Union, and it will, since it’s the decision of the British people, we [Poland – Ed.] will be in a very good position as we can provide access to the single EU market on the same conditions (as in Britain),” Morawiecki told local broadcaster TVN24. He added Poland will be the largest non-eurozone economy among the EU countries once Britain leaves.

The country has already attracted a number of financial institutions such as UBS, Credit Suisse, Bank of NY Mellon and HSBC.

READ MORE: Global banks could leave UK in case of ‘Brexit’ – SP

According to Morawiecki who’s going to London this week to meet with senior executives at some of the biggest banks in the City, Poland wants to lure more banks, especially in areas such as risk management and IT services.

“It will be certainly a difficult task but we want to show how attractive Warsaw and Poland are,” he said.

He told the Financial Times “many banks have approached us,” adding there is clearly an increased interest in leaving London.

He also said talks had begun with financial institutions in London about moving middle-office and back-office operations to Poland.

Since Britain’s vote to leave the European Union, cities such as Paris, Amsterdam, and Frankfurt, have expressed their willingness to become a new center of international finance.

Last month, Amsterdam’s Deputy Mayor Kajsa Ollongren said a number of Asian companies operating in the finance sector and located in London approached them, saying they want to move to the Dutch capital to provide services for mainland Europe.

France has promised to “roll out the red carpet” for City bankers in an effort to woo them from London to Paris.

Article source: https://www.rt.com/business/357654-poland-eu-attractiveness-brexit/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Iran ready for crude output freeze talks

Only 736 million barrels of crude oil have been discovered this year through July, the report says. The volume has dropped 90 percent compared to 1960.

Analysts expect a further decline by the end of the year with concerns over the drillers’ ability to meet potential growing demand.

“There will definitely be a strong impact on oil and gas supply, and especially oil,” said Nils-Henrik Bjurstroem, a senior project manager at Norway’s consultant Rystad Energy as quoted by Bloomberg.

Spending on oil exploration globally has been cut to $40 billion this year against nearly $100 billion in 2014, with it projected to remain at a similar level through 2018, according to Andrew Latham, Wood Mackenzie’s vice president for global exploration.

As a result of the cutback, only 209 wells have been drilled this month compared to 680 in 2015 and 1,167 in 2014, the consultancy says.

The exploration slowdown will definitely drag down production, and will inevitably have a “significant potential to push oil prices up,” according to Bjurstroem.

The report by Wood Mackenzie does not take into account the US shale production bloom that could partly make up for the losses from the global production decline.

In the meantime, the global demand for crude is expected to grow from 94.8 million barrels a day this year to over 105 million barrels in 2026, according to the US Energy Information Administration.

READ MORE: Oil output freeze self-destructive for OPEC – Goldman

Shale production is expected to almost double from 4.5 million barrels per day last year to 8.5 million by the mid-2020s, according to Wood Mackenzie.

Crude prices have fallen from $115 per barrel in 2014 to $27 per barrel this January. Since then, prices have rebounded to the current $45-$50.

Article source: https://www.rt.com/business/357636-oil-discoveries-low-shortfall-prices/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

France urges Jose Manuel Barroso to walk away from Goldman job

The petition was organized by a small group of EU officials, and accuses Barroso of “irresponsible” and “morally reprehensible behavior.” They plan to present the petition to the current leaders of the EU institutions at the end of September.

Barroso was Portugal’s prime minister from 2002 to 2004, and later served as President of the European Commission from 2004 to 2014, and took up the position of chairman and senior adviser to the international arm of Goldman Sachs in July.

He is criticized for joining the Wall Street bank that helped spark the 2008 financial crisis. Goldman has also been blamed for assisting Greece in hiding its financial situation in order to enter the eurozone in 2000.

Separately, a staff union with 2,000 members has written to the current European Commission President, Jean-Claude Juncker. They criticize the appointment, saying it “can only provide further ammunition for populist and extremist Europhobe propaganda”.

EU officials describe the Goldman job as “a disastrous symbol” for the EU and “a gift horse for Europhobes.”

President of the Union for Unity Georges Vlandas told the Guardian that when the political future of the EU is in question, senior officials had a responsibility to set an example of ethical behavior.

French politician and the president of the Front National Marine Le Pen has described Barroso’s move as “not surprising”, because “the EU serves big finance, not the people.”

The “scandalous” move showed the EU’s conflict of interest rules needed to be tightened, according to France’s Europe Minister Harlem Desir.

In July, the French government called on Barroso not to take a job with Goldman Sachs, with some EU politicians demanding he be sanctioned for accepting the new position. They said Barroso’s pension from the Commission should be cut when he reaches the age of 65.

Article source: https://www.rt.com/business/357627-barroso-eu-goldman-job-critic/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

“Member States cannot give tax benefits to selected companies – this is illegal under EU state aid rules. The Commission’s investigation concluded that Ireland granted illegal tax benefits to Apple, which enabled it to pay substantially less tax than other businesses over many years. In fact, this selective treatment allowed Apple to pay an effective corporate tax rate of one percent on its European profits in 2003 down to 0.005 percent in 2014,” said EU Competition Commissioner Margrethe Vestager EU in a press release before her speech.

Washington threatens Brussels over plan to demand billions in unpaid taxes from Apple

Apple was attributing its profits to a “head office” in Cork that had no employees, premises or any economic activity, and paid almost no tax, said Vestager.

The 130-page ruling on Apple’s Irish operations was published on Tuesday following a three-year investigation.

“I disagree profoundly with the commission’s decision,” said Irish Finance Minister Michael Noonan, adding that the country’s tax system leans on the law “without exception.”

According to a FT source familiar with the matter, Apple would have to restate its accounts as a result of the ruling. The US company allegedly paid tax at a rate of one percent, well below Ireland’s then official 12.5 percent corporate tax.

The investigation was accompanied by strong warnings from Washington not to fine American companies. The US Department of Justice accused the European Commission of becoming a “supranational tax authority” overriding the tax codes of its member countries. The Obama administration warned the EU that the investigation could “create an unfortunate international tax policy precedent.”

The European Commission accused Ireland in 2014 of dodging international tax rules by allowing Apple to funnel tens of billions of dollars of European profits into the country in return for maintaining jobs. Apple has rejected the decision and said it will appeal.

“The European Commission has launched an effort to rewrite Apple’s history in Europe, ignore Ireland’s tax laws and upend the international tax system in the process. The Commission’s case is not about how much Apple pays in taxes, it’s about which government collects the money. It will have a profound and harmful effect on investment and job creation in Europe,” a statement from Apple said.

The multibillion dollar penalty for Apple will be much bigger than fines on other US companies such as Starbucks and Fiat Chrysler. The European watchdog had previously ordered the Netherlands and Luxembourg to recover €30 million in unpaid taxes from the coffee company and car maker.

The biggest penalty to date involved EDF, the French energy group, which was ordered to repay €1.4 billion.

Article source: https://www.rt.com/business/357613-apple-tax-avoidance-eu/?utm_source=rss&utm_medium=rss&utm_campaign=RSS

Rich tourists stay away from France in wake of terror attacks

“Travelers create a situation when they decide to visit alternative destinations,” said Olivier Jager from Forward Keys talking on the BBC. “Operators and airlines decide to use their aircraft for other routes that allow them to fill their planes,” he added.

The research shows Turkey is having the hardest time attracting visitors. Bookings were down 15 percent between August 2015 and July 2016 compared a year earlier due to a series of terror attacks and July’s failed coup.

According to Forward Keys, bookings for the last four months of this year are expected to be down 52 percent compared with the same period in 2015.

Terrorist attacks are also taking their toll on the world’s top tourist destination France, the company said. It forecasts bookings will fall by nearly 20 percent from September to December. It added the number of terror attacks in the country, which started with the Charlie Hebdo shooting, led to a decreasing trend in international arrivals there. The Paris shootings have worsened the situation.

France has suffered an accumulated year-on-year decrease in tourism of 5.4 percent between August 2015 and July 2016, says Forward Keys. Paris has suffered the worst decline, down 7.5 percent over the same period.

The research suggests Spain, Portugal and Italy are the favored substitute destinations in southern Europe. The data showed that during the first seven months of this year, the available flight seats to Spain from the UK increased by almost twenty percent compared with the same period a year earlier. Travel to Portugal increased by 12 percent.

Data from Forward Keys suggests popular Tunisia, which has also been hit by a series of terror attacks, is starting to recover. International arrivals for the coming quarter are up by 13 percent compared with the equivalent period last year. The country saw an almost 40 percent drop between August 2014 and July 2015.

According to the Tunisian Tourist Board there has been an increase in the number of visitors from Algeria and Russia.

The number of Russian tourists visiting Tunisia has more than doubled, at 131,434 between July 2014 and July 2016. Tourism from Algeria has tripled from 65,000 visitors in 2014 to 194,370 over the same period.

Article source: https://www.rt.com/business/357536-bookings-fall-terror-countries/?utm_source=rss&utm_medium=rss&utm_campaign=RSS