UAE, Bahrain to act over Europe tax haven claims

EU finance ministers included the UAE and Bahrain on a new blacklist of 17 jurisdictions deemed tax havens. (Reuters)
Updated 08 December 2017
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UAE, Bahrain to act over Europe tax haven claims

DUBAI: The UAE and Bahrain expect to be removed from the EU’s tax-haven blacklist after taking steps to block tax avoidance by companies, the governments of the two countries said on Thursday.
Two days ago, EU finance ministers included the UAE and Bahrain on a new blacklist of 17 jurisdictions deemed to be tax havens. Inclusion on the list could affect billions of dollars of capital flows through both countries, which are Middle Eastern banking centers.
Countries on the blacklist may no longer be used by EU institutions for international financial operations, and transactions involving them could be subject to closer scrutiny.
On Thursday, both the UAE and Bahrain said they did not deserve to be on the list because they had already taken many steps to exchange financial information with other countries. But they pledged to do more to satisfy the EU.
“We have committed to a reform process which will be finalized by October 2018, and we are absolutely confident this will ensure the UAE is swiftly removed from the list,” the UAE said. It said its only outstanding issue with the EU was implementing the BEPS Minimum Standard. BEPS is a set of policies to tackle tax avoidance strategies that allow multinational companies to shift profits artificially to low or no-tax locations.
The UAE has committed to finalizing implementation of BEPS by October 2018 and ratifying it by March 2019, a schedule which would give the country’s federal structure enough time to ratify the measure across all seven emirates, the government said.
“We stand by this realistic timeline,” it said, adding that it was confident of being recognized as an internationally compliant tax jurisdiction at the EU’s next review.
Bahrain said its national assembly had begun the process of approving agreements that would allow it to collect information from its financial institutions and automatically exchange it every year with other countries.
The government also said it would commit to becoming a member of the Inclusive Framework on BEPS, a group of more than 100 countries and jurisdictions that cooperate to implement BEPS policies.
“Bahrain will initiate dialogue with the EU on this matter, to ensure understanding and recognition of the Kingdom’s efforts to ensure financial transparency, international cooperation and a robust regulatory environment,” it said.


IMF warns G20 economic leaders that tariffs hurting global economy

Updated 22 July 2018
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IMF warns G20 economic leaders that tariffs hurting global economy

BUENOS AIRES: The International Monetary Fund (IMF) warned world economic leaders on Saturday that a recent wave of trade tariffs would significantly harm global growth, a day after US President Donald Trump threatened a major escalation in a dispute with China.
IMF Managing Director Christine Lagarde said she would present the G20 finance ministers and central bank governors meeting in Buenos Aires with a report detailing the impacts of the restrictions already announced on global trade.
“It certainly indicates the impact that it could have on GDP (gross domestic product), which in the worst case scenario under current measures...is in the range of 0.5 pct of GDP on a global basis,” Lagarde said at a joint news conference with Argentine Treasury Minister Nicolas Dujovne.
Her warning came shortly after the top US economic official, Treasury Minister Steven Mnuchin, told reporters in the Argentine capital there was no “macroeconomic” effect yet on the world’s largest economy.
Long-simmering trade tensions have burst into the open in recent months, with the United States and China — the world’s No. 2 economy — slapping tariffs on $34 billion worth of each other’s goods so far.
The weekend meeting in Buenos Aires comes amid a dramatic escalation in rhetoric on both sides. Trump on Friday threatened tariffs on all $500 billion of Chinese exports to the United States.
US Treasury Secretary Steven Mnuchin will try to rally G7 allies over the weekend to join it in more aggressive action against China, but they may be reluctant to cooperate because of US tariffs on steel and aluminum imports from the European Union and Canada, which prompted retaliatory measures. .
The last G20 finance meeting in Buenos Aires in late March ended with no firm agreement by ministers on trade policy except for a commitment to “further dialogue.”
German Finance Minister Olaf Scholz said he would use the meeting to advocate for a rules-based trading system, but that expectations were low.
“I don’t expect tangible progress to be made at this meeting,” Scholz told reporters on the plane to Buenos Aires.
Mnuchin told reporters on Saturday that he has not seen a macroeconomic impact from the US tariffs on steel, aluminum and Chinese goods, along with retaliation from trading partners.
But he said there have been microeconomic effects on individual businesses, he said, adding that the administration was closely monitoring these and looking at ways to help US farmers hurt by retaliatory tariffs.
The US dollar fell the most in three weeks on Friday against a basket of six major currencies after Trump complained again about the greenback’s strength and about Federal Reserve interest rate rises, halting a rally that had driven the dollar to its highest level in a year.