G7 finance ministers look to rein in tech giants at French meeting

There are concerns the growing powers of big tech companies, such as Facebook, are increasingly encroaching on areas belonging to governments, like issuing currency. (AP)
Updated 17 July 2019
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G7 finance ministers look to rein in tech giants at French meeting

  • Concerns that the growing powers of big tech companies are increasingly encroaching on areas belonging to governments
  • ‘These digital giants are turning into private states — states over which citizens have no control and where democracy has no place’

CHANTILLY, France: G7 finance ministers will have the growing powers of big digital firms in their sights when they meet on Wednesday outside Paris despite divisions about how best to tax them.
France wants to use its presidency of the two-day meeting in the picturesque chateau town of Chantilly north of Paris to get broad support for ensuring minimum corporate taxation.
G7 governments are concerned that decades-old international tax rules have been pushed to the limit by the emergence of Facebook and Apple, which book profits in low-tax countries regardless of the source of the underlying income.
The issue has become more vexed than ever in recent days as Paris defied US President Donald Trump last week by passing a tax on big digital firms’ revenues in France despite a threat from him to launch a probe that could lead to trade tariffs.
“France is a sovereign nation and will continue of course to decide as a sovereign nation on all taxation issues,” French Finance Minister Bruno Le Maire said at a conference at the French central bank on the eve of the G7 meeting.
“So, let’s work during the G7 ... on that key question of digital taxation because this is for us the best way to fix this issue,” Le Maire added.
Their bilateral dispute aside, France and the United States are in favor of rules ensuring minimum taxation as part of an effort among 139 countries to overhaul international tax rules.
Although a G7 agreement would set the tone for the broader push, an agreement among all of the G7 ministers on a minimum rate or range of rates is likely to prove elusive as Britain and Canada have reservations, a French Finance Ministry source said on Friday.
Common ground should be found more easily among ministers and central bankers present at the meeting on the issue of digital currencies and coins.
Facebook’s recent announcement of plans to launch a digital coin has met with a chorus from regulators, central bankers and governments insisting it must respect anti-money-laundering rules and ensure the security of transactions and user data.
But there are also deeper concerns that the growing powers of big tech companies increasingly encroach on areas belonging to governments, like issuing currency.
“These digital giants are turning into private states – states over which citizens have no control and where democracy has no place,” Le Maire said.
“We cannot let companies, which are serving private interests, gather all the attributes of sovereign states. We must act,” he added.
Off the official agenda, ministers are also due to consult on possible successors to replace Christine Lagarde at the head of the International Monetary Fund.
US Secretary of the Treasury Steven Mnuchin and some European ministers are due to meet with Bank of England Governor Mark Carney, who has been mooted as a possible candidate for the IMF job.


Lebanon’s Jammal Trust Bank forced to close by US sanctions

Updated 19 September 2019

Lebanon’s Jammal Trust Bank forced to close by US sanctions

  • Jammal Trust Bank is accused of helping to fund the Hezbollah movement in Lebanon
  • The bank has 25 branches in Lebanon and representative offices in Nigeria, the Ivory Coast and Britain

BEIRUT: Lebanon’s Jammal Trust Bank has been forced to wind itself down after being hit last month by US sanctions for allegedly helping to fund the Iran-backed Hezbollah movement, the bank said on Thursday.
The central bank said the value of the bank’s assets, and its share of the national deposit guarantee body, were “in principle enough to pay all deposits and commitments.”
Jammal Trust Bank denied the US allegations in August after the bank and its subsidiaries were hit with sanctions, accused of helping to fund the Hezbollah movement in Lebanon.
“Despite its sound financial situation ... and its full compliance with banking regulations, the (bank) was forced to take the decision to liquidate itself in full coordination with the central bank,” Jammal Trust said in a statement.
The bank has 25 branches in Lebanon and representative offices in Nigeria, the Ivory Coast and Britain, its website says.
It is a relatively small lender, with net assets of 1,600 billion Lebanese pounds ($1 billion) at the end of 2017, according to the annual report on the latest year for which data is available.
Washington has sought to choke off Hezbollah’s funding worldwide, with sanctions among a slew of steps against Tehran since US President Donald Trump withdrew last year from a 2015 international nuclear deal with Iran.