new approach

G-20 Pushes for Measures to End Tax Evasion

April 19, 2013 by NewsMaker Leave a Comment

The Group of 20 countries called Friday for a coordinated effort to stop international tax evasion, urging governments to systematically share bank data.

Finance ministers and central bankers of the G-20, meeting in Washington, said in a communiqué that automatic exchange of tax-relevant bank information should be adopted as the global standard.

The officials, who were meeting in Washington, also noted the problems of economic weakness and high unemployment in many countries, and called for more action “to make growth strong, sustainable and balanced.” They acknowledged Japan’s recent decision to sharply increase the supply of money to end deflation, but did not criticize the move for driving down the value of the yen, saying only that they would “refrain from competitive devaluation and will not target our exchange rates for competitive purposes.”

The automatic exchange of tax data, an approach the United States has pushed for, would represent a major change from the current procedures, in which countries are expected to provide such information only on request — as when tax officials seek to track payments across national borders during an audit.

Under automatic exchange, governments would routinely transfer all foreign taxpayers’ data to their home governments, making it far more difficult to hide assets from the taxman.

The impetus for the new approach is a U.S. law, the Foreign Account Tax Compliance Act, or Fatca, requiring Americans with overseas accounts and non-U.S. financial firms to meet tough financial disclosure requirements. Because Fatca, in practice, conflicts with privacy laws in many countries, Washington has been working out bilateral deals in which overseas financial institutions share that data first with their own governments for transmission to the U.S. Internal Revenue Service.

European governments, initially skeptical about the idea, have become more enthusiastic amid public outrage over the secret offshore finance records recently unearthed by the International Consortium of Investigative Journalists. In France, President François Hollande’s government has championed the more aggressive hunt for tax dodgers since his government was rocked by the disclosure that the recently ousted budget minister, Jérôme Cahuzac, was squirreling money away in a Swiss account.

“Fatca has been a game changer,” Pascal Saint-Amans, director of the Center for Tax Policy at the Organization for Economic Cooperation and Development, said Friday.

Mr. Saint-Amans noted that in the past week Luxembourg, long one of Europe’s most opaque financial centers, had agreed to begin automatically sharing data in the face of pressure from its E.U. partners and the United States.

The challenge, Mr. Saint-Amans said, is to make sure the right information technology is in place to allow for secure account data transfer on a global scale. That is something the O.E.C.D. is now working on, he said.

The G-20 issued its statement Friday after the O.E.C.D. earlier in the day issued a progress report that showed Switzerland — which is not a G-20 member — was still struggling to get off a so-called “blacklist” of nations cited for a lack of cooperation on tax data.

An additional 13 jurisdictions that are not in the G-20 — including Guatemala, Lebanon, Liberia and Panama — have not made the necessary legal and regulatory changes to be removed from the blacklist, according to the report, compiled by the O.E.C.D’s Global Forum on Transparency and Exchange of Information for Tax Purposes.

The other blacklisted nations are Botswana, Brunei, Dominica, Marshall Islands, Nauru, Niue, Trinidad and Tobago, United Arab Emirates and Vanuatu.

The Global Forum is now moving toward the adoption of a rating system, under which it will grade nations’ compliance with transparency agreements, and expects to roll that system out in November.

The United States’ push for access to overseas account data began after UBS, the biggest Swiss bank, was found several years ago to have been encouraging Americans to hide assets abroad. UBS in 2009 paid $780 million and turned over details about thousands of client accounts to end prosecution.

While Switzerland has met most of the requirements for being removed from the O.E.C.D. blacklist, its status, the report noted, “is still subject to conditions.” Swiss officials are currently trying to negotiate their way out of an international assault on their banking secrecy, led by the United States, Germany and France. Recent media reports have said a deal to open American clients’ Swiss banking data to the I.R.S. may be near.

Mario Tuor, a spokesman in Bern for the Federal Finance Ministry, said Friday that the Swiss government was working to meet the conditions for being removed from the list, and he said that it was unfair to lump Switzerland with truly uncooperative nations. Mr. Tuor said he could not comment about the ongoing negotiations with Washington.

In Washington, Dena W. Iverson, a Justice Department spokeswoman, declined to comment.

Switzerland has been locked in a dispute with the United States over its banking secrecy since 2009, when UBS, the giant Zurich-based bank, entered into a deferred prosecution agreement with the U.S. Justice Department, agreeing to pay $780 million and hand over data on thousands of clients to avoid criminal charges that it sought to defraud the Internal Revenue Service.

Since that time, the Swiss have taken a number of steps to accommodate American demands, including agreeing to more information sharing, but banks have shown dogged determination to maintain the privacy law, which makes it a crime to divulge some client information. Washington continues to apply pressure. Last year, U.S. prosecutors indicted Wegelin Company, Switzerland’s oldest bank, effectively putting it out of business.

In the latest salvo, two Swiss men — including Stefan Buck, a member of the executive board of the Zurich lender Bank Frey, and Edgar Paltzer, a partner at a Swiss law firm — were indicted this week by New York prosecutors on conspiracy charges.

Article source: http://www.nytimes.com/2013/04/20/business/global/g-20-pushes-for-measures-to-end-tax-evasion.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: new approach, tax compliance, tax officials

News Analysis: Cyprus Bailout Shows Strictness but Signs of Disarray

March 26, 2013 by NewsMaker Leave a Comment

First, there will be no more bailouts without bail-ins, meaning investors and even some depositors in banks that get in trouble may have to pay at least part of the price of rescuing them. European leaders recognize that their voters will no longer tolerate having to pay to save other countries’ irresponsible banks and their clients.

Second, there is a strong message that if the euro zone is going to work, with a banking union that has credibility, there will be no more “casino economies,” little islands like Cyprus with banking sectors many times larger than their gross domestic product, that do not follow the rules and make everyone else vulnerable.

The package for Cyprus marks a victory, of sorts, for Germany and other hard-liners inside the euro zone that are determined to signal that banks and countries will be rescued only when they do penance for their past mismanagement, as determined by their rescuers. Supporters say this will preserve public support for the euro and encourage greater prudence down the road.

Critics, however, say the Cyprus bailout was so haphazardly handled that it underscored the chaotic nature of European decision making more than it sent an unmistakable message about a new approach to bailouts.

Many economists also say euro zone countries may have done themselves further harm by threatening to confiscate part of the savings of depositors in Cypriot banks. If large investors and even ordinary savers worry about a seizure of their assets whenever a bank gets in trouble, the private sector may grow more reluctant to steer funds toward troubled financial institutions, putting more pressure on the European Central Bank to pump in rescue funds.

Some researchers have also forecast that the Cyprus crisis will contribute to financial fears around Europe, which could end up costing Europeans far more in lost growth than they gain in savings from reducing the cost of bailing out Cypriot banks.

On Monday, after Reuters quoted Jeroen Dijsselbloem, the new head of the Eurogroup of finance ministers, as saying the Cyprus bailout could be a new template for resolving regional banking problems, stock markets in Europe and around the world dropped and the value of the euro dipped as well, giving up early gains. That appeared to reflect investor pessimism that requiring savers to bail out troubled banks would prove a good model for euro zone rescues.

The Cyprus crisis elicited a strong and uncompromising response partly for geostrategic reasons, specifically because the role of Russian money, laundered and otherwise, is becoming a major consideration. European Union officials, for example, speak privately of their deep suspicion that European position papers about negotiations with Russia were regularly leaked to Moscow from Cyprus, and European countries that are NATO members are unhappy with the laxity with which Cyprus deals with Russian spying and the way it holds up European cooperation with the alliance over Turkey.

Germany and other countries of northern Europe, either former Soviet colonies like the Baltic nations or sometimes anxious neighbors, like Finland, were not going to try to sell to their voters the idea of bailing out Russian oligarchs — and Russian officials with secret bank accounts.

Toomas Hendrik Ilves, the president of Estonia, said he and his European colleagues were shocked to hear Cypriot officials say, “Brussels is far away, and Russia is a good friend.”

Cyprus also lost sympathy by trying to protect depositors with more than 100,000 euros from too high a contribution — considered an effort to protect Russian money, for the most part — while proposing to tax depositors with accounts under that figure, which are supposed to be insured. “It meant only that they were in bed with the Russians,” said Mr. Ilves, who is blunter than most officials. “And German voters, let alone Estonians, were not going to accept bailing out Russian oligarchs.”

Politically, he said, “you can talk about solidarity with the poor Greeks, and that’s hard enough, but solidarity with thugs and money launderers is a different matter.”

However tiny, Cyprus also appeared to call into question, once again, the sustainability of the euro as a common currency for so many disparate economies.

Steven Erlanger reported from Paris, and James Kanter from Brussels.

Article source: http://www.nytimes.com/2013/03/26/world/europe/cyprus-bailout-shows-strictness-but-signs-of-disarray.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: depositors, european leaders, new approach

Murky Opening on Wall Street

December 10, 2012 by NewsMaker Leave a Comment

Opinion »

New Approach to Immigration

Many factions call for comprehensive immigration reform, but they may not mean the same thing. Room for Debate asks: What should we look for in a solution?

Article source: http://www.nytimes.com/2012/12/11/business/daily-stock-market-activity.html?partner=rss&emc=rss

Filed Under: Economy News Tagged With: factions, new approach, wall street

Advertising: SnackWell’s Nudges Up the Portion Pack

April 21, 2011 by NewsMaker Leave a Comment

In 1995, sales reached about $490 million, and the brand topped both the cookie and cracker categories — but then SnackWell’s got an object lesson in how the cookie crumbles. Competing brands, which had dabbled mostly in sugar-free products to attract dieters, introduced their own successful fat-reduced temptations, and SnackWell’s sales plummeted.

Revenue for SnackWell’s was $32.3 million in the 52 weeks that ended March 20, a drop of 8.6 percent from the previous year, according to SymphonyIRI Group, whose totals do not include Wal-Mart. Advertising for the brand, which totaled an estimated $60 million in 1998, ceased after 2005 as parent company Kraft aggressively marketed its 2004 introduction of another craze for dieters: the 100-calorie pack.

Now, in what Kraft marketers are calling a reintroduction of SnackWell’s, the brand has new products, and a new advertising campaign aimed at weight-conscious women.

The first print ad in the campaign features a closely cropped photograph of a pair of stiletto-heeled black leather boots with the new slogan for the brand, “Be bad. Snack well.” The ad, by McGarryBowen, New York, a unit of Dentsu, introduces Fudge Drizzled Caramel Popcorn, and a new approach for the brand: portion control.

“Deliciously indulgent, perfectly portioned,” says the new ad, which is scheduled to begin appearing Friday in magazines, including People, Cosmopolitan and Glamour. “At 130 calories, they let you be bad, and still be good.”

SnackWell’s will continue to sell in two older varieties, Devil’s Food Cookie Cakes and Crème Sandwich Cookies, in standard packaging. But in a new twist on premeasured portions, the brand is nibbling past the common 100-calorie limit. Another popcorn snack with white chocolate is also packaged in 130-calorie portions and two other varieties, Fudge Crème Brownie Bites and Rich Vanilla Crème Brownie Bites, contain 150 calories in a portion.

“There is a group of women out there who struggle with temptation and want responsible alternatives that allow them to really enjoy sweets, but with an off switch because they have a difficult time stopping,” said Steve Siegal, a senior brand manager for SnackWell’s, who added that sometimes the cutoff should exceed 100 calories.

“When it comes to portion control, consumers really want satiating products, and at the end of the day they don’t want to feel deprived,” Mr. Siegal said. “They will have a few more calories if it satisfies their sweet craving.”

Women are far more interested in snacks and drinks sold in portion-controlled packages, with 19 percent of women saying they buy such products, compared with 8 percent of men, according Mintel, a market research firm. But prepackaged portions are often too small, in the opinion of 25 percent of men and 20 percent of women.

Brian Wansink, who wrote “Mindless Eating: Why We Eat More Than We Think,” said in a telephone interview that in his research, when experiment subjects were presented with 100-calorie packs, about 70 percent were satisfied with just one, while the remainder helped themselves to seconds or thirds.

In another experiment by Dr. Wansink, who directs the Cornell University Food and Brand Lab, participants who had eaten at around noon were gathered for snacks of either chocolate or cheese and crackers between 3 p.m. and 5 p.m. With no inkling that their intake was being monitored, “most people stopped between the 170- to 190-calorie mark,” said Dr. Wansink. Applying that to SnackWell’s 130- to 150-calorie portions, “that might present a happy medium” because it is midway between 100 calories and what seems to be a natural point of satiation, he said.

But SnackWell’s two popcorn snacks that combine sweet and salty flavors could undermine “sensory-specific satiety,” the term for the feeling of having had enough of a certain flavor, he said.

“Sensory-specific satiety causes you to get bored if you just eat potato chips, but if you take a break from potato chips and then eat chocolate, you want more potato chips again,” said Dr. Wansink.

Sweet-and-salty snacks “are very tasty, but I could see this combination of flavors triggering a gigantic craving for more than just 130 calories of it,” he said.

Four varieties that had been sold under the Nabisco 100 Calorie Packs label — Petites Fudge, Petites Mint Fudge, Fudge Drizzled Chocolate Chip Cookies and Fudge Drizzled Double Chocolate Chip Cookies — will now instead be sold under the SnackWell’s label (still in 100-calorie portions.) All of the new SnackWell’s products have a suggested retail price of $3.19 for a box of five servings.

The brand declined to reveal what it will spend on the new campaign, except that it’s “a significant investment in the millions of dollars,” Mr. Siegal said.

As for why Kraft elected to introduce the products and approach under a brand it had not advertised in five years, rather than a new one, Mr. Siegel said that 85 percent of consumers still report being familiar with SnackWell’s.

“A lot of snacking companies would die to have 85 percent brand recognition for a brand that has stood for better-for-you indulgent snacking,” Mr. Siegal said. “It’s been a long time since the brand was out there in a big way, but this really is all about a new attitude and edge for the brand.”

Article source: http://feeds.nytimes.com/click.phdo?i=fe12914d5ce7d4f0f75c323aabeb90c4

Filed Under: Business News Tagged With: new approach, portion pack, wal mart