YCLOAK

Chinese exports to Cuba have plunged this year in the latest sign of a worsening in the Communist-run island’s financial situation, which began in 2015 with the economic crisis in its top trading partner Venezuela.

Chinese exports to Cuba slumped 29.8 percent to $1 billion from January through October compared with the same period last year, according to Chinese customs.

Chinese exports peaked at a record $1.9 billion in 2015, nearly 60 percent above the annual average of the previous decade. They slipped slightly last year to $1.8 billion.

China sends a broad array of supplies to Cuba, from machinery and transportation equipment to raw materials, chemicals and food.

The Chinese commercial office in Havana said the decline was due to Cuba’s payment problems. China ranked as Cuba’s first trading partner in terms of goods in 2016, followed by Venezuela.

The economic crisis in Venezuela, lower revenue from commodity and related exports, the devastation wrought by Hurricane Irma and the Trump administration’s tightening of business and travel restrictions have left Cuba without cash to pay some suppliers and investment partners.

Western diplomats and businessmen estimate Cuban state-run banks, which must pay suppliers, have fallen behind by anywhere from $800 million to well over a billion dollars since 2015.

“China’s exports to Cuba are experiencing difficult times and the pressure continues for many businessmen due to the economic difficulties this Caribbean nation is going through,” Hong Xiao, economic and commercial counselor at the Chinese embassy, told Chinese business representatives attending a Havana trade fair last month, according to news agency Xinhua.

Cuba’s trade in goods last year was $12.6 billion, compared with $15 billion in 2015, more than 80 percent imports.

The cash crunch and lower oil supplies from Venezuela have forced the government to slash imports and reduce the use of fuel and electricity, helping tip its economy into recession in 2016 for the first time in nearly a quarter century.

The island’s economy relies on imports to fuel economic activity, so a drop in Chinese exports does not bode well.

“The fall in imports from China is a pattern more or less across the board and in part reflects the government’s efforts to balance revenues and pay debt,” said former Cuban central bank economist Pavel Vidal, now a professor at Universidad Javeriana Cali in Colombia.

“That means less consumer goods and supplies for the productive sector, which effects growth,” said Vidal, who expects little if any growth this year despite increased government spending and foreign investment.

The government had hoped for a 2 percent increase in the gross domestic product after last year’s contraction of 0.9 percent.
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Luxury goods companies may ban sales of their products on online platforms like Amazon to preserve their aura of exclusivity, the European Union’s top court said Wednesday. 

The European Court of Justice ruled in favor of the German branch of luxury cosmetics group Coty, whose brands include Calvin Klein and Marc Jacobs, which sought to keep its products from selling on non-authorized digital sale platforms. 

​The court said Coty’s effort to limit distributors “is appropriate to preserve the luxury image of those goods,” adding that it “does not appear to go beyond what is necessary.” Coty wanted to ban an authorized distributor from selling its products on Amazon.de in a case pending at a Frankfurt court, which requested a ruling from EU judges.

The Computer and Communications Industry Association said the ruling was “bad news for consumers who will face fewer choices and also less competition when they want to shop online.”

Germany’s antitrust agency said it was examining the EU court ruling, but expected it to have only a limited effect on its own decisions.

The court in Luxembourg “apparently made a great effort to limit its statements to the realm of real prestige products, where the luxurious aura is a significant part of the product itself,” said Andreas Mundt, the head of the Federal Cartel Office.

Manufacturers of goods that aren’t luxury brands “still have no carte blanche to sweepingly limit their distributors’ use of sales platforms, according to our assessment,” Mundt added.
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A war on food waste in France, where supermarkets are banned from throwing away unsold food and restaurants must provide doggy bags when asked, has helped it secure the top spot in a ranking of countries by their food sustainability.

Japan, Germany, Spain and Sweden rounded out the top five in an index published the Economist Intelligence Unit (EIU), which graded 34 nations based on food waste, environment-friendly agriculture and quality nutrition.

It is “unethical and immoral” to waste resources when hundreds of millions go hungry across the world, Vytenis Andriukaitis, EU Commissioner for Health and Food Safety, said at the launch of the Food Sustainability Index 2017 on Tuesday.

“We are all responsible, every person and every country,” he said in the Italian city of Milan, according to a statement.

One third of all food produced worldwide, 1.3 billion tons per year, is wasted, according to the U.N.’s Food and Agriculture Organization.

Food releases planet-warming gases as it decomposes in landfills. The food the world wastes accounts for more greenhouse gas emissions than any country except for China and the United States.

“What is really important is the vision and importance of [food sustainability] in these governments’ agendas and policies,” Irene Mia, global editorial director at the EIU, told Reuters. “It’s something that is moving up in governments’ agendas across the world.”

Global hunger levels rose last year for the first time in more than a decade, with 815 million people, more than one in 10 on the planet, going hungry.

France was the first country to introduce specific food waste legislation and loses only 1.8 percent of its total food production each year. It plans to cut this in half by 2025.

“France has taken some important and welcome steps forward including forcing supermarkets to stop throwing away perfectly edible food,” said Meadhbh Bolger, a campaigner at Friends of the Earth Europe. “This needs to be matched at the European level with a EU-wide binding food waste reduction target.”

High-income countries performed better in the index, but the United States lagged in 21st place, dragged down by poor management of soil and fertilizer in agriculture, and excess consumption of meat, sugar and saturated fats, the study said.

The United Arab Emirates, despite having the highest income per head of the 34 countries, was ranked last, reflecting high food waste of almost 1,000 kilos per person per year, rising obesity and an agriculture sector dependent on depleting water resources, it said.
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Venezuela’s plan to create an oil-backed cryptocurrency faces the same credibility problems that dog the ruling Socialist Party in financial markets and is unlikely to fare any better than the struggling OPEC member itself, investors and technical experts say.

President Nicolas Maduro on Sunday floated a plan to create the “petro” that would be backed by the world’s largest crude reserves, amid a crippling economic crisis worsened by U.S. sanctions that limit Venezuela’s capacity to borrow money.

Cryptocurrencies rely on confidence in clear rules and equal treatment of all involved, three experts said, adding that Venezuela is widely seen as flouting basic property rights and mismanaging its existing bolivar currency.

Without such confidence, the “petro” would neither help Venezuela raise funds nor help it avoid sanctions levied by the government of U.S. President Donald Trump.

“If any government is willing to set up a fair set of rules for a cryptocurrency, it would be a great thing,” said Sean Walsh of Redwood City Ventures, a bitcoin and blockchain-focused investment firm.

“But if an administration has a history of unfair treatment of the population, then tacking on a buzzword like ‘cryptocurrency’ isn’t going to change that behavior.”

The Information Ministry did not respond to requests for comment. In further comments on Tuesday, Maduro said Venezuela’s new virtual currency would be backed by oil from the heavy-crude Orinoco Belt, plus gold and diamonds.

Bitcoin, the world’s most popular cryptocurrency, has soared in recent weeks to nearly $12,000 in what detractors call evidence of a bubble but supporters insist is the start of a new monetary system not dependent on central banks.

Venezuela’s inflation is expected to top 1,000 percent this year, driven by unchecked expansion of the money supply and a currency control system that critics say provides favorable treatment to well-connected officials and businessmen at the expense of everyday citizens.

‘Do We Trust Venezuela?’

Under the 15-year-old foreign exchange regime, state agencies receive dollars to import food and medicine at a rate of 10 bolivars while private citizens now pay more than 108,000 per greenback on the black market. The black market rate has depreciated more than 99 percent under Maduro.

Basic food and medical items are increasingly out of reach for most citizens, fueling malnutrition and preventable diseases. Maduro says the country is victim of an “economic war” led by political adversaries with the support of Washington.

Maduro has not outlined the rules that would govern the proposed currency, including what rights its holders would have over Venezuela’s oil reserves.

“The fact that the bolivar’s value has plummeted shows that people have very little faith in Venezuela,” said Yazan Barghuthi of Jibrel Network, a blockchain development firm.

“A tokenized asset will still have the same problem: Do we trust the institution that is backing this to fulfill the promises that this token represents?”

U.S. sanctions, in response to accusations of human rights violations and undermining of democracy, have effectively blocked the country from issuing new debt and have made global banks increasingly wary of working with Venezuela.

But Venezuela is unlikely to find foreign companies willing to accept payment for food or medicine in newly minted petros and has little chance of convincing creditors to accept them in lieu of dollars when making payments on its distressed bonds, the experts said.

“Given that there is no stable judicial system in Venezuela, no one will trust anything that the government claims is backed by assets of any kind,” wrote Marshall Swatt, founder of bitcoin exchange Coinsetter, in an email. “Even if the technology were proper and prevented government meddling (impossible to imagine), it is dead on arrival.”
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The White House on Tuesday strongly denied that the special prosecutor looking into alleged Russian interference in last year’s election has asked a German bank for records relating to accounts held by Donald Trump and his family members.

“We’ve confirmed this with the bank and other sources” that it is not true, White House Press Secretary Sarah Huckabee Sanders told reporters during the daily briefing. “I think this is another example of the media going too far, too fast and we don’t see it going in that direction.”

A member of the president’s legal team, Jay Sekulow, issued a statement that “no subpoena has been issued or received.”

Deutsche Bank

However, Deutsche Bank appears to be acknowledging there has been a related request, saying it “takes its legal obligations seriously and remains committed to cooperating with authorized investigations into this matter.”

The bank received a subpoena from special counsel Robert Mueller several weeks ago to provide information on certain transactions and key documents have already been handed over, according to the German financial newspaper Handelsblatt.

Similar details also were reported Tuesday by the Bloomberg and Reuters news agencies, as well as the Wall Street Journal.

According to the Financial Times newspaper Deutsche Bank has begun sending information about its dealings with Trump to U.S investigators.

A person with direct knowledge of the German bank’s actions told the newspaper this began several weeks ago.

“Deutsche could not hand over client information without a subpoena,” said a second person with direct knowledge of the subpoena, according to the newspaper. “It’s helpful to be ordered to do so.”

The subpoenas concern “people or entities affiliated with President Donald Trump, according to a person briefed on the matter,” the Wall Street Journal reported in an update to its story.

“I would think it’s something more than a fishing expedition,” says Edwin Truman, a former U.S. Treasury Department assistant secretary for international affairs.

“At a minimum, they know there’s some fish in this pond and they want to know whether they’re nice fish or bad fish,” Truman, a nonresident fellow of the Peterson Institute for International Affairs, tells VOA.

If the reports are true, “this is a significant development in that it makes clear that Mueller is now investigating President Trump’s finances, something that the president has always said would be a red line for him,” says William Pomeranz of the Wilson Center, who teaches Russian law at Georgetown University.

“The substance of any potential charges remains unclear, but Deutsche Bank already has paid significant penalties in a Russian money laundering case, and I am sure that it does not welcome further investigations into its Russia operations,” says Pomeranz, who as a lawyer advised clients on investment in Russia and anti-money laundering requirements.

Relationship with family

The bank has a longstanding relationship with the Trump family, previously loaning the Trump organization hundreds of millions of dollars for real estate ventures.

Trump had liabilities of at least $130 million to a unit of the German bank, according to a federal financial disclosure form released in June by the U.S. Office of Government Ethics.

“Special counsel Mueller’s subpoena of Deutsche Bank would be a very significant development,” says Congressman Adam Schiff, the top Democrat on the House intelligence committee. “If Russia laundered money through the Trump Organization, it would be far more compromising than any salacious video and could be used as leverage against Donald Trump and his associates and family.”

Congressional Democrats, in June, asked the bank to hand over records regarding Trump’s loans, but lawmakers say their request was rebuffed, with the financial institution citing client privacy concerns.  

 

A U.S. official with knowledge of Mueller’s probe, according to Reuters, said one reason for the subpoenas was to find out whether the bank may have sold some of Trump’s mortgage or other loans to Russian state development bank VEB or other Russian banks that now are under U.S. and European Union sanctions.

Deutsche Bank, in January, agreed to pay $630 million in fines for allegedly organizing $10 billion in sham trades that could have been used to launder money out of Russia.

Red line

Trump earlier this year, when asked if examining his and his family’s finances unrelated to the Russia probe would cross a red line, replied, “I would say yeah. I would say yes.”

 

Trump, unlike previous U.S. presidents dating back four decades, has refused to make public his U.S. tax returns that would show his year-to-year income. Trump, a billionaire, is the richest U.S. president ever, although some analysts have questioned whether Trump’s assets total $10 billion as he claims.

Before he became president last January, Trump, who still owns an array of companies, turned over the day-to-day operation of the Trump Organization to his adult sons, Donald Trump Jr. and Eric Trump, and a longtime executive at the firm.
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Uzbekistan and Afghanistan signed an agreement Tuesday to extend a railroad connecting the two countries in a move that may eventually give Uzbekistan a direct link to seaports.

Landlocked Uzbekistan’s access to marine shipping is very limited.

In 2011, the Uzbek state railway company, Ozbekiston Temir Yollari, built a short link between Hairatan, a town on the Uzbek-Afghan border, and Mazar-i-Sharif, a major city in northern Afghanistan.

Tashkent has since expressed interest in extending that line to Herat, another Afghan city in the northwest, and a gateway to Iran. 

Another link, already under construction, will connect Herat to Iran, which may eventually enable Uzbekistan to send cargoes to and from its Persian Gulf ports.

Uzbek President Shavkat Mirziyoyev’s office said in a statement that he and visiting Afghan President Ashraf Ghani had signed an agreement on the construction of the Mazar-i-Sharif-Herat railroad. It provided no details, such as cost and funding.

The original, short link was almost fully financed by the Asian Development Bank, which has also financed studies for the expansion project.

Mirziyoyev and Ghani also signed 20 other deals, including an agreement on the construction of a new electric power line and deals for supplies of Uzbek agricultural products, medicines and other goods to Afghanistan.
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The European Union named and shamed 17 states that it accuses of being tax havens Tuesday, and put another 47 countries on notice that they risk being blacklisted, too, unless they start tackling tax evasion.

The blacklist was agreed on after 10 months of investigations and diplomatic wrangling, but transparency activists say it doesn’t go far enough.

After a meeting in Brussels, EU finance ministers announced the blacklist.

The list doesn’t include any European countries, but does name several Caribbean islands, including former British colonies Barbados, Grenada, and Trinidad and Tobago — a reflection, analysts say, of Britain’s reduced political clout in the European Union.

Completing the list are American Samoa, Bahrain, Guam, South Korea, Macau, Marshall Islands, Mongolia, Namibia, Palau, Panama, Saint Lucia, Samoa, Tunisia and the United Arab Emirates.

Countries on the list could lose access to EU funds and face further as-yet-undetermined sanctions from the economic bloc.

“To be on a blacklist is, in itself, bad enough and, of course, there will be consequences for these countries,” said Luxembourg’s finance minister, Pierre Gramegna.

Immediate consequences will be felt by multinationals that do business with any of the blacklisted jurisdictions, as they will face additional and burdensome financial disclosure requirements.

The EU move, part of a broader effort to tackle tax evasion, comes less than a month after the publication of the so-called Paradise Papers, an investigation by nearly 100 media outlets into a leak of 13.4 million files from two offshore service providers.

British officials drew comfort from the exclusion of the Cayman Islands and Bermuda from the list; but their omission prompted an outcry from transparency activists, who dubbed the exercise a “whitewash.”  Other transparency campaigners, including Oxfam, argue the blacklist should have included well-established EU tax havens: Ireland, Luxembourg, the Netherlands and Malta, as well as Switzerland.

Another 47 jurisdictions were included Tuesday in a “grey list.” Among those are other British-tied jurisdictions, the Isle of Man and Jersey. The finance ministers deemed them as not currently compliant with EU standards, but all have formally committed to changing their tax rules.

Critics of list

The Tax Justice Network, an advocacy group that campaigns against tax avoidance and corruption, said the European Union had flunked the tax haven test, arguing it had missed an opportunity.

“The list appears to be a politically-led list, that includes only the economically weak and politically unconnected,” it said. The blacklist is hard to take seriously, it added, saying, “EU members like the Netherlands, Ireland and Luxembourg are the greatest procurers of global profit-shifting, but are excluded.”

Pierre Moscovici, the European commissioner for economic and financial affairs, dismissed the complaints, describing Tuesday’s naming and shaming as a vital “first step.”

“This list represents substantial progress. Its very existence is an important step forward,” he said, adding, “It is the first EU list; it remains an insufficient response to the scale of tax evasion worldwide.”

Toomas Toniste, Estonia’s finance minister, agreed that the list was an important step.

“This initiative is already proving its value, as numerous countries have worked to meet the deadline for making commitments on the basis of our criteria,” he said.

Pushing for change

In the past few weeks, countries at risk of inclusion have been scrambling to promise reforms. To remain off the list, countries had to promise to implement “fair tax rules,” which Brussels defines as not offering preferential treatment for companies enabling them to move profits to avoid taxes elsewhere. They also had to pledge to meet international transparency standards of the Organization for Economic Co-operation and Development, or OECD.

Hours before the list was announced, officials from Panama, Samoa, Guam and the Marshall Islands said they thought they had done enough to escape being blacklisted. Several of the named Caribbean islands appealed for exclusion on the basis of the devastation they suffered this year from hurricanes. Several other hurricane-impacted Caribbean islands have been put on probation and their cases will be addressed in February.

Meanwhile, opposition lawmakers in Britain accused the British government of being weak on tax avoidance, criticizing London’s diplomatic efforts to persuade EU finance ministers to go easy on the Caribbean islands. Liberal Democrat leader Vince Cable accused Downing Street of helping the super-rich hide their cash.

Cable argued the British government had a long history of “dragging its heels” when it comes to tax havens, saying he witnessed a lack of action when he was in government.

“Some Caribbean islands in particular were operating to very poor standards, sometimes to the cost of the British government,” the former business secretary said.

British officials dismiss such accusations, saying London is at the forefront of tackling avoidance and ensuring tax transparency.
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The government of Brazil’s President Michel Temer is far from assembling the coalition needed to pass a landmark pension reform, but potential supporters of the measure are now more organized, a key legislator said on Monday.

“We’re still enormously far (from having the needed votes), but we have a party leader committed, a party president committed, one party that’s set to commit,” Brazil’s lower house speaker, Rodrigo Maia, told journalists after an event in Rio de Janeiro.

Pension reform is the cornerstone policy in President Temer’s efforts to bring Brazil’s deficit under control. But the measure is widely unpopular with Brazilians, who are accustomed to a relatively expansive welfare net.

In order to curry support from Congress, Temer and his allies watered down their original proposal in November, requiring fewer years of contributions by private sector workers to receive a pension.

According to several government sources, Temer’s allies have grown more optimistic in the last week about the reform’s chances.

However, speed is essential for the bill’s passage. A congressional recess begins on Dec. 22, and lawmaking thereafter will be hampered by politics, as lawmakers ramp up their campaigns for 2018 elections.
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