US unveils new veto threat against WTO rulings

US President Donald Trump participates in a roundtable discussion about trade in Duluth, Minnesota, US June 20, 2018. (Reuters)
Updated 23 June 2018
0

US unveils new veto threat against WTO rulings

  • US tells WTO appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days
  • Trump, who has railed against the WTO judges in the past, threatens to levy a 20 percent import tax on European Union cars

GENEVA: The United States ramped up its challenge to the global trading system on Friday, telling the World Trade Organization that appeals rulings in trade disputes could be vetoed if they took longer than the allowed 90 days.
The statement by US Ambassador Dennis Shea threatened to erode a key element of trade enforcement at the 23-year-old WTO: binding dispute settlement, which is widely seen as a major bulwark against protectionism.
It came as US President Donald Trump, who has railed against the WTO judges in the past, threatened to levy a 20 percent import tax on European Union cars, the latest in an unprecedented campaign of threats and tariffs to punish US trading partners.
Shea told the WTO’s dispute settlement body that rulings by the WTO’s Appellate Body, effectively the supreme court of world trade, were invalid if they took too long. Rulings would no longer be governed by “reverse consensus,” whereby they are blocked only if all WTO members oppose them.
“The consequence of the Appellate Body choosing to breach (WTO dispute) rules and issue a report after the 90-day deadline would be that this report no longer qualifies as an Appellate Body report for purposes of the exceptional negative consensus adoption procedure,” Shea said, according to a copy of his remarks provided to Reuters.
An official who attended the meeting said other WTO members agreed that the Appellate Body should stick to the rules, but none supported Shea’s view that late rulings could be vetoed, and many expressed concern about his remarks.
Rulings are routinely late because, the WTO says, disputes are abundant and complex. Things have slowed further because Trump is blocking new judicial appointments, increasing the remaining judges’ already bulging workload.
At Friday’s meeting the United States maintained its opposition to the appointment of judges, effectively signalling a veto of one judge hoping for reappointment to the seven-seat bench in September.
Without him, the Appellate Body will only have three judges, the minimum required for every dispute, putting the system at severe risk of breakdown if any of the three judges cannot work on a case for legal or other reasons.
“Left unaddressed, these challenges can cripple, paralyze, or even extinguish the system,” chief judge Ujal Singh Bhatia said.
Sixty-six WTO member states are backing a petition that asks the United States to allow appointments to go ahead. On Friday, US ally Japan endorsed the petition for the first time, meaning that all the major users of the dispute system were united in opposition to Trump.


Danske Bank money laundering ‘giga scandal’ spreads to Britain

Updated 10 min 50 sec ago
0

Danske Bank money laundering ‘giga scandal’ spreads to Britain

  • By 2013, the number of UK-registered customers in the branch’s non-resident portfolio had topped 1,000
  • Danske Bank Chairman Ole Andersen said that the lender had made an assessment of whether it violated any US laws
LONDON/COPENHAGEN: Danske Bank’s money laundering scandal spread on Friday as Britain’s National Crime Agency (NCA) said it is investigating the use of UK-registered companies.
“This is a giga scandal,” European Union Competition Commissioner Margrethe Vestager said, joining a growing chorus of calls for a clampdown on the billions of euros which are alleged to have been “washed” through European banks.
An NCA spokeswoman said the British agency was working with partners across government to restrict the ability of criminals to use UK-registered companies in money laundering.
British and Russian entities dominate a list of accounts used to make €200 billion ($236 billion) in payments through Danske Bank’s branch in Estonia between 2007 and 2015, many of which the bank said this week are suspicious.
By 2013, the number of UK-registered customers in the branch’s non-resident portfolio had topped 1,000, Danske Bank’s investigation revealed, ahead of clients from Russia, the British Virgin Islands and Finland.
As the scope of the alleged money laundering through Danske Bank has widened, investor concerns over the potential penalties it could face have increased, with particular focus on what action if any US authorities might take against the bank.
So far, the US has not said whether it is investigating, although Danske Bank Chairman Ole Andersen said that the lender had made an assessment of whether it violated any US laws. He has declined to share the bank’s conclusion of this.
“We need to do more to prevent money laundering from happening,” Vestager told reporters in Copenhagen following the resignation on Wednesday of Danske Bank CEO Thomas Borgen after an investigation commissioned by the bank exposed past control and compliance failings.
Borgen, 54, was in charge of Danske Bank’s international operations including Estonia between 2009 and 2012.
He said on Wednesday that he had been “personally cleared from a legal point of view” while Danske said its board had not breached their legal obligations.
The European Commission last week recommended banking supervision changes, including bolstering national authorities, but stopped short of setting up a new financial crime agency called for by the European Central Bank.
In a sign of the growing pressure on Danske Bank, which already faces criminal inquiries in Denmark and Estonia, the chief executive of CARE Danmark said on Twitter that the Danish charity had decided to end its relationship with the lender.
International aid charity Oxfam also called on Danish municipalities to cut ties with the bank, saying it has not been able to re-establish the trust of Danish citizens.
The mayor of Aalborg, Denmark’s third largest municipality, said he would discuss its partnership with Danske Bank at the next municipality committee meeting, but noted that there were only two banks in Denmark would be able to handle a municipality its size.
“Danske Bank has been involved in money laundering which is deeply reprehensible and outrageous but Nordea has been involved in tax havens, so the entire bank sector needs to clean up for us to have a trusting collaboration with the banks,” Thomas Kastrup-Larsen said.
Danske Bank’s tiny Estonian branch accounted for as much as 10 percent of group profit during the period when suspected money laundering was conducted via its operations there.