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Chancellor Angela Merkel condemns burning of Israeli symbols in Berlin

December 12, 2017

Chancellor Angela Merkel has condemned the burning of Israeli symbols during protests against the US decision on Jerusalem. Germany’s interior, foreign and justice ministers also expressed criticism.

German Chancellor Angela Merkel on Monday denounced the burning of Israeli flags to protest against the United States’ decision last Wednesday to recognize Jerusalem as Israel’s capital.

“We oppose all forms of anti-Semitism and xenophobia,” she said following a meeting of senior members of her Christian Democratic Union (CDU) party in Berlin. She added that “the state has to use all available legal measures” to combat these actions.

Read more: Jerusalem: Three things to know

On Sunday, some 2,500 demonstrators marched through Berlin’s Neukölln district and burned flags with the Star of David, the Berliner Zeitung reported, to demonstrate against the controversial decision by US President Donald Trump.

 Image may contain: 5 people

Fresh wave of unrest in the Middle East

Eleven people were detained and cited for offenses, including illegally covering the face, police said.

On Friday, around 1,200 anti-Israel and anti-American protesters gathered at the Brandenburg Gate in Berlin, near the US Embassy,

The Berliner Zeitung reported the 12 people are being investigated for disturbing the peace and violating laws prohibiting the desecration of the flags of foreign states. Police said 10 people were detained.

Flag burning ‘unacceptable’

Germany’s interior minister has also criticized the burning of Israeli national symbols in Berlin.

“We don’t accept it when Jews or the state of Israel are disgraced in this way,” Thomas de Maziere told the Monday edition of mass daily Bild. Germany is “bound in a special way to the state of Israel and people of Jewish belief,” he said.

He added that freedom of speech and protest is respected, but those rights must be carried out peacefully.

People waving Palestinian and Turkish flags gather in front of the Brandenburg Gate to protest against U.S. President Donald Trump's announcement to recognize Jerusalem (Getty Images/S. Gallup)At least 20 people were detained during protests over the weekend

Read more: Opinion: Jerusalem’s declaration of pretendence

German Foreign Minister Sigmar Gabriel told Bild that despite understandable criticism of the US decision, “there is no right and also no justification to burn Israeli flags, incite hatred against Jews or question the right of Israel to exist.”

Whoever does such things, Gabriel said, “is not just opposing Israel but also the constitutional order of Germany.”

Justice Minister Heiko Maas also said there was no place for any sort of anti-Semitism.

amp, cw/cmk (AFP, dpa, kna, Reuters)

http://www.dw.com/en/chancellor-angela-merkel-condemns-burning-of-israeli-symbols-in-berlin/a-41736113

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Qatar arms deal slammed amid concerns over human rights, regional rift

December 12, 2017

A member of staff works in the cockpit of an aircraft on the Eurofighter Typhoon production line at BAE systems Warton plant near Preston, northern England September 7, 2012. (Reuters)

LONDON: A major UK-based anti-arms-trade group has criticized the sale of 24 Typhoon fighter jets to Qatar, telling Arab News that Britain must “make sure weapons are not being sold to human-rights-abusing regimes.”

The outcry follows the announcement on Sunday that British company BAE Systems has agreed a $6.7 billion deal with the Gulf nation of Qatar to supply two dozen Eurofighter Typhoon aircraft.

According to Reuters, the jets are due to be delivered from late 2022, with the deal strongly supported by the British government as it secures around 5,000 manufacturing jobs in England.

Reacting to the news, the Campaign Against Arms Trade (CAAT) spokesperson Andrew Smith told Arab News: “The Qatari regime has an appalling human rights record. There is a tense political situation in the region, and these arms sales will not make it any safer. They are characteristic of the huge levels of political and military support that the UK government is prepared to offer to human rights abusers and dictatorships.”

The CAAT is of course committed to halting the sale of all arms, with Smith explaining, “We do not support arms sales to anyone, but the immediate priority has to be to make sure weapons are not being sold to human rights abusing regimes, or into war zones. The overwhelming majority of UK arms are sold to dictatorships and human rights abusers.”

The latest sale of 24 Typhoon jets to the Qatar Emiri Air Force takes the total number sold worldwide to 623, which includes 28 to Kuwait, 72 to Saudi Arabia, 143 being used by Germany, and 160 in use by the UK. Qatar is the ninth country to buy the Eurofighter Typhoon warplane.

In a statement on the Qatari deal, BAE Systems Chief Executive Charles Woodburn said: “We are delighted to begin a new chapter in the development of a long-term relationship with the State of Qatar and the Qatar Armed Forces, and we look forward to working alongside our customer as they continue to develop their military capability.”

The move follows a string of arms deals signed between Qatar and French entities last week, including 12 Rafale fighter jets.

Harvard scholar and Iranian affairs expert Majid Rafizadeh criticized that move.

“France should be cognizant of the fact that such a deal would only ratchet up radicalism, violence and militarization of conflicts in the region,” he told Arab News.

“Qatar is funding, arming, and training extremist groups and militias across the region. As Qatar and its ally the Iranian regime are top states sponsor of terrorism, France deal and its rapprochement with Qatar will only empower and embolden terrorist groups in the region. In addition, weapons and military equipments sold to Qatar can easily fall in the hands of terrorist groups.”

Yemen’s Houthis kill 20, arrest dozens in latest crackdown

December 12, 2017

A Yemeni fighter loyal to the Saudi-backed Yemeni president flashes his Kalashnikov assault rifle as he walks on a road leading to the town of Khokha which was retaken from Shiite-Huthi rebels, about 120 kilometres south of the Huthi rebel-held Red Sea port of Hodeida, on December 10, 2017. (AFP)

CAIRO: Yemen’s official news agency SABA said the Houthi militias have killed at least 20 people and detained dozens across the country’s north since assassinating former President Ali Abdullah Saleh.

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The Houthis appear to be escalating their crackdown on any possible sign of rebellion among their one-time allies from Saleh’s party, the General People’s Congress. They are also shutting down the Internet and tightening an already existing media blackout.
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According to SABA, now under control of the internationally-recognized government, the Houthis also blew up 20 houses in the northern province of Hajja and replaced the province’s governor who was a onetime Saleh associate.
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The agency reported on Monday that the Houthis also arrested 49 people in Mahwet, another northern province in Yemen.
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Houthi violence continued despite a call by UN Secretary-General Antonio Guterres for a renewed push to end the war.
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As the Fed Deliberates, Amazon Is Making Its Job More Difficult

December 12, 2017

Comparison shoppers keep a lid on inflation, complicating deliberations on interest rates

Holiday shoppers with smartphones can retrieve instant price comparisons that make bargain hunting easier—and the Federal Reserve’s job tougher.

Web-driven comparison shopping complicates Fed decisions on how much and how fast to raise interest rates. Consumer knowledge is keeping a lid on prices that retailers can charge on a wealth of goods, a small but growing factor holding down inflation in the U.S., Japan and other advanced economies

The Fed is likely to announce Wednesday the raising of its benchmark short-term rate by a quarter percentage point, to a still-low range of 1.25% to 1.50%. Officials also will release their latest projections for the likely path of rates in the years ahead, which will influence mortgages, credit cards and other consumer loans, business borrowing and global financial markets.

Fed officials, along with central bankers in Europe and Japan, want inflation to rise to an annual rate of around 2%, considered a healthy level for spending, business investment and higher wages. With the U.S. economy expanding and showing very low unemployment, an interest-rate increase would help forestall asset bubbles or other financial dangers.

Most Fed policy makers agree they should keep gradually raising short-term rates in the months ahead to prevent the buoyant U.S. economy from overheating. But some are hesitant because inflation remains puzzlingly weak, running below 2% for most of this year. Moving too quickly could stall growth.

Persistently weak inflation has stumped Fed Chairwoman Janet Yellen and her colleagues. Some Fed officials have argued for holding rates low a bit longer to give inflation a nudge. Most, though, want to raise them.

Economists attribute feeble inflation across developed economies to several causes, including aging populations, slow productivity growth and globalization, which have reined in the ability of companies to raise prices and wages. With consumer spending accounting for more than two-thirds of the U.S. economy, the explosion in e-commerce has been added the list.

Stacy Peterson, 34 years old, of North Little Rock, Ark. said she started her holiday shopping in October, researching and comparing prices online. On Thanksgiving Day, she sprang for a trampoline she had been eyeing. It was marked down online at Academy Sports + Outdoors to $129.99 from $179.99.

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The mother of two plans to check the holiday sales at her local stores, she said, but mostly will look online and buy from “whoever has it cheapest.”

In a nod to the growing practice, Ms. Yellen said in September that increased competition created by online retailers “may have reduced price margins and restrained the ability of firms to raise prices in response to rising demand.” She said in October that online shopping “could be helping to hold down inflation in a persistent way in many countries.” The Bank of Japan in has attributed part of the price declines at supermarkets to online shopping.

Kayla Weaver Blake of Lufkin, Texas, frequently researches prices online. On a trip to buy diapers at a Toys “R” Us Inc. store, she pulled out her phone and noticed a carton of 128 Pampers Swaddlers was $34 on Amazon.com Inc., or roughly 20% cheaper than in the store. The mother of three showed the screenshot to the cashier. Paired with a $10-off coupon, Toys “R” Us sold the diapers to her for a net price of $24.

“I do that with everything,” said Ms. Blake, 29, who price checks such items as laundry detergent and toilet paper. “If it’s full price, I’m not going to buy it.”

The same applies for holiday shopping. Ms. Blake saw a PJ Masks toy set for $89 in Wal-Mart Stores Inc. It was $59 on Amazon. Every retailer, she said, is “competing with every other business out there.”

The growth of e-commerce is well understood, tracking the smartphone’s ubiquity and a global supply chain that delivers consumer goods quickly and cheaply. Its impact on inflation—the so-called Amazon effect—is still being explored by economists.

Research by Goldman Sachs found that online price competition may be subtracting as much as a tenth of a percentage point from core inflation, which strips out volatile energy and food prices, and quarter of a percentage point from core-goods inflation, as measured by the personal-consumption expenditures index. It may not sound like much but with annual core inflation at just 1.4% in October, it is significant.

Alberto Cavallo,  an economist at the Massachusetts Institute of Technology’s Sloan School of Management, said the expanding ability of consumers to comparison shop has constrained retailers’ ability to charge different prices online and in stores, according to data compiled in MIT’s Billion Prices Project.

Retail’s share of e-commerce is growing, another consideration for Fed policy makers. Online shopping accounted for 9.1% of U.S. retail spending in the third quarter, according to the Census Bureau, up from 3.6% in the same quarter of 2008. It comprises most retail growth: More than half the sales of books, music, videos and DVDs are done online, according to retail data analysis firm Boomerang Commerce Inc. Sales of sporting goods and consumer electronics are getting close to that level.

A worker wheels a cart of yellow totes carrying merchandise at an Amazon fulfillment center in Chattanooga, Tenn. Photo: Doug Strickland/Associated Press

Consumer prices for many of those goods fell in the year to October: Books were down 2.7%; sporting goods fell 1.9%; televisions dropped 10.3%; toys declined 8%, the Labor Department said. The consumer-price index for commodities, excluding food and energy, dropped 1% over that time. It has shown deflation, compared with a year earlier, nearly every month since early 2013, though that partly reflects a drop in import prices from the strengthening dollar over that time.

By contrast, the annual rate of inflation for services hasn’t dipped below 2% in six years, largely driven by the rising costs of rent, health care and education.

With more sales conducted online, retail pricing now mirrors gas stations, where prices are clearly marked and competitors quickly match their rivals, said Tracy Issel, Microsoft Corp.’s general manager of world-wide retail and consumer goods. “It’s a race to the bottom.”

The competition helps drive innovation and productivity, according to economists, while giving consumers more for their money. And some believe it will have a growing influence over central bank policy.

“If the Amazon effect is big, or more broadly if structural forces pushing down on inflation are big, then at the margin that means an easier monetary policy” going forward, said Goldman Sachs economist Jan Hatzius.

Central bankers should rethink their inflation targets, given the continued downward pressure on inflation from globalization and technological change, said Claudio Borio, chief economist at the Bank for International Settlements, a Switzerland-based consortium of central banks in a recent speech.

Amazon captures more than 40 cents of every dollar spent online, according to a panel of 5 million U.S. shoppers tracked by Slice Intelligence. The internet giant chooses which categories it leads and matches on pricing by electronically checking thousands of websites a day, according to former employees.

When Pradnya Haldipur of Silver Spring, Md., first got pregnant, “I started doing as much comparison shopping as my brain could tolerate,” she said.

Ms. Haldipur, 43, typically checks Target.com and Amazon.com, and sometimes Google’s shopping search engine, before clicking buy. She does so for such basic goods as toilet paper, as well as toys she buys for her two children.

“If I can avoid going into a physical store, I will do so,” she said. “The majority of my holiday shopping, that’s been done on Amazon.”

Some economists are skeptical of the Amazon effect. European Central Bank President  Mario Draghi said his economists “do not see much evidence to suggest that e-commerce is depressing inflation in the euro area today—at least to extent that we can measure it.”

Accurately measuring the impact of the Amazon effect is indeed one problem. Few statistical agencies collect extensive online price data. In the consumer-price index, the survey sample of where people shop rotates only every two to four years. The CPI doesn’t capture the money saved when a consumer switches from a brick-and-mortar store to an online retailer, said Steve Reed, an economist at the Bureau of Labor Statistics.

That factor, known as outlet bias, is another reason economists could be underestimating the impact of online shopping and overstating inflation.

An earlier example was known as the “Wal-Mart effect,” coined in the 1990s to describe the company’s disruption of the retail sector. A 2005 study found Wal-Mart’s entry into a new market offered lower prices, and prompted competing supermarkets to respond by either lowering prices or not raising them.

The shift toward outlets like supercenters and big-box discounters between 2002 and 2007 lowered the average prices of most categories of food by about 1.5% from 2002 to 2007, according to a BLS study.

With the Wal-Mart effect, however, it was one dominant retailer that pushed prices lower through its large-scale purchasing power and supply-chain management. Today, smartphones and online price transparency mean “it’s the consumer that now has extraordinary buying power,” said Rick Rieder, chief investment officer of Global Fixed Income for BlackRock Inc.

Write to Harriet Torry at harriet.torry@wsj.com and Laura Stevens at laura.stevens@wsj.com

https://www.wsj.com/articles/u-s-shoppers-wield-smartphones-to-keep-a-lid-on-consumer-prices-1513036486

South Korea’s Moon, China’s Xi to talk North Korea, trade in Beijing summit

December 12, 2017

By Christine KimBen Blanchard

Asian markets struggle to extend gains, awaiting clues on Fed interest rates

December 12, 2017

AFP

© AFP | Traders are turning their focus to the Federal Reserve’s latest policy meeting this week hoping for clues about its interest rate timetable

HONG KONG (AFP) – Asian markets struggled to build on their recent rally as investors cashed in while also looking ahead to key central bank meetings that could provide an idea about monetary policy in the new year.Wall Street provided yet another record-breaking lead as the selling that hit equities at the start of the month abates, while energy firms were supported by stronger oil prices.

The week kicked off on a high following forecast-busting jobs data from the US on Friday, which reinforced the view that the world’s top economy is in rude health.

However, dealers were unable to build on the gains Tuesday, with analysts also pointing to thinning volumes towards the end of the year.

By the break in Tokyo the Nikkei was flat, while Hong Kong and Sydney were also barely moved.

Shanghai slipped 0.3 percent, Seoul was down 0.4 percent and Singapore was off 0.2 percent.

“It’s been a few good days on Asia’s stock markets as last week’s swoon gave way to renewed confidence,” said Greg McKenna, chief market strategist at AxiTrader.

He added that “save for the recent weakness Asian stock markets have generally performed reasonably well over the past few months”.

McKenna attributed the recent losses to profit-taking and lingering concerns about China’s economy “rather than anything chronic or outright negative”.

– ‘Significant outage’ –

Focus is now on the last policy meetings of central banks in the US, Britain and the eurozone this week.

While the Federal Reserve is expected to lift interest rates again, the key will be comments from bank boss Janet Yellen, which will be scanned for clues about its timetable for future increases.

Bitcoin futures for January ended at $18,850.00 as the cryptocurrency launched in a major exchange Sunday, well above its $15,000 initial price on the Cboe.

The Cboe launch marked the first opportunity for professional traders to invest in the digital unit on a traditional platform and is expected to be followed in a week by a rival listing on the Chicago Mercantile Exchange.

The spot price for Bitcoin quoted by Bloomberg News — which is lower than the Cboe — was up just 0.3 percent at $16,16.760.

On crude markets both main contracts built on Monday’s surge that came on news that a pipeline in the North Sea has been shut down for a few weeks after it was found to be leaking.

“This is a significant outage at this pipeline supplies nearly 40 percent of the North Sea’s Crude which represents around 550,000 barrels per day,” said Shane Chanel, equities and derivatives adviser at ASR Wealth Advisers.

The closure provided some much-needed support to the commodity as traders grow concerned that a Russia-OPEC output cap could be reviewed next year.

– Key figures around 0300 GMT –

Tokyo – Nikkei 225: FLAT at 22,944.21 (break)

Hong Kong – Hang Seng: FLAT at 28,954.77

Shanghai – Composite: DOWN 0.3 percent at 3,312.24

Euro/dollar: UP at $1.1777 from $1.1769 at 2100 GMT

Pound/dollar: UP at $1.3343 from $1.3340

Dollar/yen: DOWN at 113.48 yen from 113.56 yen

Oil – West Texas Intermediate: UP 28 cents at $58.27 per barrel

Oil – Brent North Sea: UP 51 cents at $65.20 per barrel

New York – DOW: UP 0.2 percent at 24,386.03 (close)

London – FTSE 100: UP 0.8 percent at 7,453.48 (close)

Israeli minister calls Arab MPs ‘war criminals’

December 11, 2017

AFP

© POOL/AFP/File | Israeli Defence Minister Avigdor Lieberman has long advocated land-swaps in a future peace deal that would see some Arab areas of Israel handed over to the Palestinians in exchange for Israeli retention of some West Bank Jewish settlements

JERUSALEM (AFP) – Israel’s defence minister on Monday called Arab MPs “war criminals” a day after he urged a boycott of Israeli Arabs living near the scene of clashes over the US president’s Jerusalem declaration.Avigdor Lieberman was speaking in a televised parliamentary debate on a motion of no confidence in the right-wing government filed by the mainly Arab Joint List alliance.

Presenting the motion, Joint List lawmaker Hanin Zoabi said Prime Minister Benjamin Netanyahu “should be tried at the International Criminal Court in The Hague, because he is a war criminal.”

“Occupation is always belligerent, violent, illegitimate and a basis for war crimes,” she added, referring to Israel’s 50-year occupation of the Palestinian territories.

“All the Joint List are war criminals, every one of you,” Lieberman responded.

The alliance has 12 Arab members and one Jew.

“You exploit the weaknesses and advantages of a democratic state to destroy us from within, we have no illusions,” he told them.

“You are here by mistake and the time will come when you will not be here.”

Arab Israelis are descendants of Palestinians who remained on their land following the creation of Israel in 1948. Today they account for some 17.5 percent of the population.

Lieberman has long advocated land-swaps in a future peace deal that would see some Arab areas of Israel handed over to the Palestinians in exchange for Israeli retention of some West Bank Jewish settlements.

He has also proposed conditioning the Arabs’ continued Israeli citizenship on them taking oaths of loyalty to the Jewish state.

Dozens of Arab Israelis on Saturday night blocked the Wadi Ara intersection in northern Israel, police said, throwing stones at vehicles and burning tyres in protest at Donald Trump’s declaration of Jerusalem as Israel’s capital.

The windows of a bus were smashed and its driver was slightly injured. Police arrested two minors and a man from Arara, an Arab town in the Wadi Ara area.

Speaking to Israeli army radio the next day, Lieberman proposed collective punitive sanctions.

“Those who demonstrate in Israel holding Hezbollah, Hamas and PLO flags are not part of the state of Israel,” Lieberman said.

“I therefore call on Israeli citizens to impose an economic boycott on Wadi Ara — don’t shop there, don’t eat in the restaurants and don’t buy services from them.”

Jewish Israelis must simply “give them the feeling they’re not wanted here,” he said, noting instances in which Arabs from the area carried out attacks against Israelis or supported militant activities.

Clashes and protests erupted in the Palestinian territories after Trump’s declaration last Wednesday, but there has been relatively little unrest within Israel itself.

 

European Finance Chiefs Hit Out at U.S. Tax Plans

December 11, 2017

Letter to US. treasury secretary warns reforms could violate double taxation treaties

BERLIN—Europe’s five largest economies on Monday warned the U.S. its planned corporate tax reform could violate the country’s double-taxation treaties and breach world trade rules.

In a letter sent to Treasury Secretary Steven Mnuchin, and seen by The Wall Street Journal, the countries’ finance ministers said that while tax legislation was an essential pillar of a state’s sovereignty, countries should respect international rules.

“It is important that the U.S. government’s rights over domestic tax policy be exercised in a way that adheres with international obligations to which it has signed-up,” the ministers wrote in the letter. Some provisions of the Senate and House bills, they added, “could contravene the U.S.’s double taxation treaties and may risk having a major distortive impact on international trade.”

Their letter comes after the Senate earlier this month passed a tax overhaul plan that would include about $1.4 trillion in tax cuts, a cut in the corporate rate to 20% from 35%, reshape international business tax rules and temporarily lower individual taxes.

Europeans have repeatedly clashed with the U.S. over trade issues since President Donald Trump took office nearly one year ago on an “America First” platform. While Mr. Trump has pledged to reverse abuses of free trade by what he paints as unscrupulous partners, allies have warned against what they see as protectionist tendencies.

The ministers’ letter, sent on Monday, echoes concerns among European businesses that various aspects of the planned U.S. tax-reform bills might be designed to offer American companies an edge. The U.S. is the European Union’s single most important trade and investment partner.

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Beijing Sets Plan to Counter U.S. Tax Overhaul

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Last week, the BDI Federation of German Industry, Germany’s most influential business lobby, warned some provisions of the bills ostensibly aimed at curbing corporate tax avoidance had “clearly a protectionist character.”

“Companies in Germany and Europe face massive damage,” Joachim Lang, BDI managing director, warned last Monday.

The ministers took specific issue with provisions in both the House and Senate versions of the tax bill, including proposed excise-tax payments to foreign-affiliated firms in the House version. They also cited a “base erosion” provision in the Senate version that would add tax to cross-border financial transactions.

U.S. companies are holding more than $2.6 trillion in profits across the globe and they haven’t paid U.S. taxes on it. Why is so much money offshore, and how could the tax code be changed to bring it back? WSJ’s tax reporter Richard Rubin dives in. Photo: Heather Seidel/The Wall Street Journal

Those provisions could impact a host of foreign manufacturers that sell their wares in the U.S., like Japanese auto makers or European pharmaceuticals companies.

“The excise-tax and base-erosion-tax provisions appear to have the greatest impact on certain sectors, particularly those with heavy sales in the U.S. but relying on integrated supply chains,” said Albert Liguori, a tax expert at tax advisory firm Alvarez & Marsal Taxand LLC.

Mr. Liguori said software makers like SAP SE, based in Germany, could also get hit. An SAP spokesman declined to comment on potential impact of the U.S. tax plans. The company’s finance chief, Luka Mucic, last month said in an interview that he wanted to avoid speculation. “There are too many moving parts,” he said.

Even without those provisions, the reform would leave U.S. businesses facing lower domestic-tax rates than some of their European peers, putting governments under pressure to reciprocate.

Business is particularly concerned in Germany, where prospects for corporate tax cuts dropped after the collapse of coalition talks involving Chancellor Angela Merkel and the pro-business Free Democratic Party last month.

For years, European governments and the U.S. have sought to combat beggar-thy-neighbor corporate tax policies, agreeing on a series of multilateral initiatives against tax-base erosion and practices by companies to shift their profits to low-tax jurisdiction—initiatives which the signatories of Monday’s letter now fear could be in danger.

In their letter, Germany’s Peter Altmaier, France’s Bruno Le Maire, Italy’s Pier Carlo Padoan, Spain’s Cristóbal Montoro and Philip Hammond of the U.K. contended that several provisions included in the two U.S. tax bills and aimed at combating an array of corporate tax-avoidance practices were protectionist in nature.

A provision of the House bill for a 20% excise tax on payments to foreign-affiliated companies, the Europeans warned, would discriminate against non-U.S. businesses operating in the country, contravene World Trade Organization rules and breach double-taxation agreements.

Likewise, the proposed “base erosion and anti-abuse tax provision” contained in the Senate bill could harm international banking and insurance businesses because it would treat cross-border financial transactions between a company and a subsidiary as nondeductible, subjecting it to a 10% tax, the ministers warned.

The finance chiefs also said a proposed preferential regime for some types of foreign incomes, another provision of the Senate bill, could be seen as an export subsidy banned under international trade rules.

In their letter, they called on the U.S. to see the benefits of continued close international-tax cooperation.

“We explicitly welcome U.S. action in the fight against base erosion and profit shifting. However, we have strong concerns if this is done via measures that are not targeted on abusive arrangements as this would impact on genuine business activities,” they said.

“This may lead to distortions in the international tax consensus as well as the trade and investment environment,” they added.

Write to Andrea Thomas at andrea.thomas@wsj.com

ATM cyber heists hit Pakistan banks

December 11, 2017

This photo shows that HBL ATM software license is not genuine. (AN photo)

ISLAMABAD: An ATM scam affecting hundreds of debit card users in Pakistan has led to several arrests by the country’s Federal Investigation Agency (FIA), which apprehended another four suspects on Sunday.

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FIA official Abdul Ghaffar Mirani told Arab News that investigators have unearthed a scam of about $105,000 and expected the number to rise after digital forensic experts searched confiscated equipment and cloned debit cards used by the scammers.
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Mirani withheld the exact number of people arrested but said that mostly Chinese nationals had been taken into custody. “Our team is probing further as more complaints are pouring in and data is being compiled from other cities,” he said.
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The cyber heist is being dealt with by the FIA’s National Response Center for Cyber Crime (NR3C), the country’s only technology-based crime division, which was set up 10 years ago and assists other law enforcement agencies in Pakistan.
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On Friday, FIA Director Shakeel Durrani said at a press briefing that the investigation had revealed the involvement of Canadian, Nigerian and Italian hackers, as well as an Indian scammer identified as Sorev.
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The information was divulged by Saqibullah, a Rawalpindi resident running a racketeering business, who as their front man sold stolen financial information to the hackers. He is also involved in identity theft, credit debit card cloning and extortion. His arrest has expanded into a FIA investigation searching for his collaborators.
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Durrani said, “The prime suspect (Saqibullah) would take photos of ATM machines to match suitable skimming machines that were ordered from other countries.”
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The cash withdrawals from the hacked accounts were in China, Canada, Italy, Nigeria, Indonesia, Malaysia, US, but were not limited to those countries, he said.
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Revelations of the ATM-skimming scam were revealed last week by the country’s largest financial institution, Habib Bank Limited (HBL), which confirmed more than $105,000 had been stolen from 559 hacked HBL customers, mostly in the cities of Karachi and Lahore.
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Image result for Habib Bank Limited, photos, signage
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“We have more than 10 million customers, which means that the size of the amount missing is not very significant for the HBL, while the number of customers affected is also low, said HBL’s corporate and marketing executive Naveed Asghar, who was reported in a local English daily. “It is a fraud and we must check it and find the culprits … it happens in all the countries that use ATMs,” he said.
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Banks using outdated technology fitted with aging security protocols attracted a “organized foreign group” to hack the ATM booths, suggests the FIA, which is approaching the State Bank of Pakistan, the country’s banking regulator, to introduce biometric policy and enforce it across the banking spectrum.
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An HBL official in Islamabad told Arab News: “The practice of skimming is not new,” but the bank’s new biometric security measures, currently being introduced in its ATMs, “will prevent and curb future hacks.” Though HBL seems to be the main target, Standard Chartered Bank, Faysal Bank Limited, Bank Al Habib Limited and other banks have also fallen victim to cybercrime, he said.
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“Officially the bank hasn’t sent out warning notifications to customers of this continuing fraud but we are compensating the affected account holders. An internal memo has been circulated for each bank branch to check and monitor the ATMs,” the banking officer said.
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US Treasury says Senate tax plan would boost revenue $1.8 tn

December 11, 2017

AFP

© GETTY/AFP | US Treasury Secretary Steven Mnuchin said the Senate version of the Republican’s massive tax overhaul plan will boost economic growth to 2.9 percent over 10 years, which will generate enough additional revenue to offset the tax cuts

WASHINGTON (AFP) – The US Senate version of the tax overhaul plan would pay for itself over 10 years, boosting growth and generating $1.8 trillion in additional revenues, the Treasury Department said Monday.The Republican plan is expected to generate GDP growth of about 2.9 percent over the next decade, 0.7 percentage points higher than the current forecast, which will bring in more revenue to the government’s coffers and offset the deficit increase caused by lower taxes, according to a Treasury analysis.

Republicans in the House and Senate are working to come up with a final unified version of the reform that President Donald Trump can sign before the end of the year. Both versions call for slashing taxes for corporations and business partnerships while eliminating many deductions for individuals.

“The Administration has been focused on tax reform and broader economic policies to stimulate growth, which will generate significant long-term revenue for the government,? US Treasury Secretary Steven T. Mnuchin said in a statement.

Many economists doubt large tax cuts can pay for themselves, especially in an economy with not much more room to grow. Other estimates have forecast significantly smaller increases in economic growth as a result of the tax overhaul.

The non-partisan Joint Committee on Taxation estimates the Senate plan could add as much as a $1 trillion to the deficit by 2027.

But according to the Treasury’s analysis, the increased revenues from higher growth should exceed those lost to tax cuts by about $300 billion.

“These increased receipts are primarily collected in the last five years,” the Treasury said in a statement.

“We acknowledge that some economists predict different growth rates,” it added.