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EU’s Barnier Rejects U.K. Plans for Banking After Brexit

The European Union’s chief Brexit negotiator rejected the U.K.’s latest proposals for financial firms to do business with the 27-nation bloc after Brexit, accusing Britain of trying to keep as many of the benefits of the single market as it can.

Michel Barnier dismissed Britain’s desires, which he said would let firms keep operating from the City of London, with employees flying in and out of the EU for short business trips. The proposals could even “create a significant risk” of avoiding regulation altogether.

“There is no way member states or the European Parliament would accept this!” Barnier said on Tuesday in the speech to the Eurofi financial conference. The U.K. “would like to make it easy to continue to run EU businesses from London, with minimal operations and staff on the continent.”

The U.K. and EU have made next to no progress in negotiations over their future relationship — which includes an accord on financial services — despite talking since March. A fresh round of discussions started on Monday, with both sides vowing to move forward in an attempt to get a deal before October, two months before Britain’s final parting with the bloc.

Barnier warned the industry to prepare for Jan. 1, saying there will be “big changes” when U.K. financial firms lose their passports to offer their services across the EU.

Market Access

Wall Street banks and the finance industry have pressed hard for the ability to continue using their London hubs for investment banking and trading business with European clients. As the year-end draws closer, banks are re-activating plans to move staff and business if the two sides can’t reach a new market access arrangement.

Meantime, the so-called equivalence process through which the EU can open access to London firms has run into trouble, Barnier said. Under the EU’s equivalence rules, foreign firms can be given access to the bloc only if officials in Brussels think the rules are tough enough in the companies’ home state.

“I know that many hope our equivalence decisions will provide continuity,” Barnier said. “Many believe that ‘responsible politicians’ on both side of the Channel should make this happen — but things have to change. The U.K. and the EU will be two separate markets, two jurisdictions. And the EU must ensure that important risks to our financial stability are managed within the framework of our single market”.

While the two sides committed to make progress in their equivalence assessments by this month, Barnier said the U.K. has answered only 4 of 28 EU questionnaires on regulations. “These assessments are particularly challenging,” Barnier said.

Britain has consistently argued that the regulations start at the same place in both jurisdictions, which should make the equivalence process simpler. “The U.K. has been able to complete our own assessments on time and we are now ready to reach comprehensive findings of equivalence as soon as the EU is able to clarify its own position,” a U.K. Treasury spokesperson said.

Source: https://www.bloomberg.com/news/articles/2020-06-30/eu-finance-negotiator-rejects-u-k-plans-for-post-brexit-banking

ECB Steps Up Crisis Aid as Lagarde Warns Governments to Act

The European Central Bank intensified its response to the coronavirus crisis by cutting the cost of funding for banks, while urging politicians to provide more fiscal support.

Hours after data showed the worst three-month contraction in a quarter-century of statistics, President Christine Lagarde warned that the euro-area economy could shrink as much as 12% this year.

“Continued and ambitious efforts are needed, notably through joint and coordinated policy action, to guard against downside risks and underpin the recovery,” she said in a virtual press conference on Thursday. “An ambitious and coordinated fiscal stance is critical, in view of the sharp contraction.”

She spoke after policy makers reduced the cost of their emergency loan program for banks, and unveiled a further facility to inject liquidity into the outbreak-stricken economy.

The ECB said the lowest interest rate on a program that gives banks incentives to lend to companies and households will fall to 50 basis points below the deposit rate, currently at -0.5%. Interest on the new, non-targeted facility will be 0.25% below the main refinancing rate that presently is zero.

Officials kept their pandemic purchase program at 750 billion euros ($815 billion), which together with earlier programs, means it will buy more than 1 trillion euros of debt through the end of this year.

Most economists predict the ECB will bump that up later this year. Lagarde said the central bank is “fully prepared” to increase or extend the program if needed.

Bond investors largely signaled satisfaction with the move, with Italian yields falling after initially briefly jumping.

“For today, it’s enough,” said Carsten Brzeski, an economist at ING in Frankfurt. “So much has been announced in the past six weeks.”

Lockdowns to curb the spread of the coronavirus have sent unemployment soaring across the region and burdened the currency area’s economies with massive costs.

Figures earlier Thursday showed European output shrank the most on record during the first quarter, a period only partially blighted by coronavirus lockdowns. Countries such as Italy, Spain and France, with limited room to spend their way out of the crisis, saw contractions of around 5%.

With more pain to come, demands by the euro area’s most vulnerable nations for a joint fiscal response will only grow louder. So far, most government action has been at the national level.

Squabbling Leaders

Leaders have asked the European Commission to come up with a broader proposal by May 6, though its unclear how to resolve disagreements on whether aid should take the form of grants or loans. Likewise, Germany and the Netherlands have led opposition to joint debt over fears they’ll end up with much of the bill.

The squabbling has unnerved investors, who fret that heavily indebted nations such as Italy will be tipped into a deeper crisis. The country’s credit rating was unexpectedly cut by Fitch this week.

The response contrasts with other major economies where fiscal support has been stronger. Federal Reserve Chairman Jerome Powell warned on Wednesday, after maintaining his institution’s own emergency settings, that this is “not the time” to worry about the U.S. debt burden.

Michael Pyle, global chief investment strategist at BlackRock, finds the contrast telling. He says the ECB’s move on Thursday only amount to “incremental steps in the right direction.”

“When we compare what we’re seeing out of the Fed and U.S. policy makers more broadly, the scale in response is much different,” he told Bloomberg Television. “We’re going to need to see quite a bit more, looking ahead.”

The ECB already eased the terms of its bank-lending program at its March policy meeting. It also recently loosened standards on the collateral it’ll accept for refinancing.

Source: https://www.bloomberg.com/news/articles/2020-04-30/ecb-intensifies-crisis-response-with-new-loans-after-gdp-crash

Wall Street slumps, government bonds hammered as stimulus high fades

Wall Street resumed a steep slide on Wednesday while bond markets rushed to price in the sheer scale of government support programs and handouts announced over the past 24 hours, all aimed at softening the economic shock of coronavirus.

Dire trading conditions continued to make two-way trading difficult and exaggerated the moves as investors piled into cash with the selloff in government bonds in particular drawing European Central Bank support for the Italian debt market.

U.S. dollar funding stresses remain evident, even if slightly easier since the U.S. Federal Reserve’s latest support for commercial paper and securities repurchase markets Tuesday.

Even the usual safe-haven assets, such as gold, got caught in the rout as battered investors looked to unwind their damaged positions while oil prices tanked to a 18-year low below $30.

“Another remarkable day in what is clearly fin-de-regime,” Rabobank’s global strategist Michael Every wrote in a note.

“Things have already irrevocably changed and whipsaw market action reflects that this is the case. The only issue is how much further they change from here, and hence where markets settle.”

Wall Street’s main indexes slumped at the open as growing signs of coronavirus damage to corporate America saw Tuesday’s sugar high over sweeping official moves to protect the economy fade fast.

The Dow Jones Industrial Average fell 1,048.69 points or nearly 5% at the open to 20,188.69, while the S&P 500 opened lower by 92.69 points, or 3.7% at 2,436.50. The Nasdaq Composite dropped 432.47 points or nearly 6%.

The declines follow sharp tumbles in Europe where equity indexes in London, Frankfurt and Paris plunged around 5% and Milan slipping around 2%. MSCI’s global stocks index dropped nearly 4% .

In Asia, the MSCI’s broadest index of Asia-Pacific shares outside Japan dropped 4% to lows last seen in summer 2016, led by a 6.4% fall in Australia. Japan’s Nikkei dipped 1.7%.

Bond markets joined the selling as liquidity vanished from European fixed income.

Italy’s debt found itself at the center of the sell-off with borrowing costs soaring, on track for their biggest daily jump since the 2011 euro zone debt crisis. The rout quickly spread to Spanish, Portuguese and Greek yields. Safe-haven German 10-year debt yields jumped to two month highs at -0.2%. [GVD/EUR]

In Europe, speculation grew around the issuance of joint euro zone “coronavirus” bonds or a European guarantee fund to help member states finance urgent health and economic policies.

“The liquidity situation is horrendous. What we see if liquidity is completely drying up when one-way selling starts and no one wants to take the other side,” Salman Ahmed, investment strategist at Lombard Odier.

“In the pre-crisis era, banks would step in and buffer the shock. Now there are no banks, only mutual funds which are having a run on their funds — it’s all impatient money.”

Big price swings have saddled market participants with losses, making them reluctant to get back into the market and thereby reducing trading volume.

Benchmark U.S. 10-year Treasury yield touched a three-week high of 1.2260 after the Federal Reserve eased some market jitters. U.S. 30-year bond yields climbed as high as 1.8440%.

“We are in the midst of the mayhem really, and I think there is still a risk that the increasing number of infections will keep markets on their toes,” said Hans Peterson global head of asset allocation at SEB investment management.

“It is hard to know how deep the recession will be, and as long as we have that situation it is hard to lift sentiment.”

Source: https://www.reuters.com/article/us-global-markets/wall-street-slumps-government-bonds-hammered-as-stimulus-high-fades-idUSKBN21504C

Passport applicants may need to spend more on property in Malta

A new cash-for-passports scheme is likely to be launched later this year and applicants may be forced to spend more on the property they must buy or rent. Parliamentary secretary for citizenship and communities Alex Muscat outlined the government’s plans for the controversial Individual Investor Programme in an interview with The Sunday Times of Malta.

Launched in 2014, the IIP had been capped at 1,800 main applicants. According to Mr Muscat, more than 70 per cent of this allocation has been reached. “At this rate, the programme will have been exhausted within months,” he said, pointing out that Prime Minister Robert Abela had already committed himself to retaining it.The Chamber of Commerce, he noted, recently pronounced itself for the programme to be extended or a new one to be rolled out. “Given that the scheme has raised over €1.3 billion in revenue, how long can the country afford to wait for the second programme to start?” he questioned. “Personally, I am in favour of launching it straight away to avoid having a gap in revenue. We are looking at a scenario in which the new programme will be rolled out later this year.”But is a €350,000 property or an expenditure on annual rent of €16,000 – the minimum requirements for IIP applicants – such a big deal nowadays?

Mr Muscat conceded that these thresholds might have made sense when the programme was drafted in 2013 but, in the context of the property boom, which has seen prices soar, there was a case for an upward revision.

As for the reason why most successful applicants were opting to rent rather than buy, he said it was probably due to the fact that it did not require as much red tape and was a more expedient process.It was pointed out that his urgency over starting a new programme seemed to contradict the finance minister’s repeated assurances that the budget was not dependent on IIP revenue. There was no such contradiction, he said. “Without the programme, public finances would still be very strong and Malta’s economy is not dependent on the sale of passports. But it would be presumptuous to say the country should refuse this additional stream of revenue.”

In the last financial year, the IIP accounted for over €270 million in revenue and this, he said, was contributing to various infrastructural projects in areas like roads and education. Only 30 per cent of the revenue was going towards the annual budget while the remaining 70 per cent was put into the National Development and Social Fund, which had reached nearly €600 million. However, the government’s decision to finance a €50 million social housing programme from this fund has prompted criticism that government’s expenditure is dependent on the IIP.

Again, Mr Muscat insisted this was not the case.“Social housing is not dependent on the sale of passports but is being aided by it,” he said. “The IIP means that certain capital expenditures can be made sooner rather than later.” One of the most controversial aspects of the individual investor programme has always been the residency clause, whereby applicants need to show some sort of genuine link with Malta in order to allay concerns of having ulterior motives for buying a passport.

Main applicants are meant to be in Malta physically for the entirety of 12 months before taking the Oath of Allegiance, and questions are frequently raised on how this provision is being enforced.

Asked if controls would be tightened, Mr Muscat insisted Malta was one of the few countries that “enforced” the residency aspect. “Applicants are required to submit boarding passes as proof of having entered or left Malta.”

Further enforcement was “tricky” in the wake of the fact that European laws did not impose restrictions on free movement. “Having no such impediment imposed on us as a member state, we cannot introduce such restrictions either,” he said. Other changes in the pipeline to “strengthen” the programme are a legal obligation to have a register of accredited agents and clearer provisions on how to suspend or revoke a licenced operator. “We are also looking at further due diligence obligations on agents, and even to have certain checks and balances in place for a fixed period of time on successful applicants,” he said. “Should an agent became aware of certain issues, why should they not be obliged to flag the matter?” He pointed out that the authorities had started proceedings to revoke citizenship for three successful IIP applicants. “This action was taken on the strength of information which emerged later.”

Last October, Opposition MP Karol Aquilina had denounced what he had described as “fake due diligence”. He listed five names of foreigners who, shortly after obtaining a Maltese passport, made headlines for the wrong reasons.Yet, Mr Muscat said the bottom line was that Malta’s “rigid” due diligence regime meant that it had the lowest acceptance level in Europe at around 76 per cent of applicants, in contrast to the UK at 91 per cent, Latvia 98 per cent and Hungary at 99 per cent. “There were cases in which applicants who were rejected for Maltese citizenship on the strength of our due diligence regime were accepted in other member states.” And there were no applicants who were accepted under the IIP after having been rejected elsewhere.

Noting that neither the Venice Commission nor MoneyVal had expressed themselves against the IIP, he said Malta was the only country which had an independent regulator as watchdog. Asked why the government was publishing the names of successful IIP applicants only together with thousands of others who acquired Maltese citizenship through other means, Mr Muscat insisted that only Malta and Austria ‘published’ the names.

“There are data protection issues as one would be making distinctions between IIP applicants, naturalisations and those who got married,” he said. “I don’t agree we should make such a distinction.”

Source: https://timesofmalta.com/articles/view/passport-applicants-may-need-to-spend-more-on-property.771167

 

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Brexit: EU leaders sign UK withdrawal deal

The heads of the European Commission and Council – Ursula von der Leyen and Charles Michel – have signed the Withdrawal Agreement, ahead of the UK’s exit from the EU on 31 January.

The Queen approved it on Thursday, and next Wednesday the European Parliament is expected to vote for it too.

The UK has agreed to abide by EU rules during a transition period until the end of the year. By 2021 the UK aims to have agreed a deal on future ties.

Brexit ends 46 years in the EU club.

After the document was signed in Brussels it was taken to Downing Street by EU and UK officials, for signing by UK Prime Minister Boris Johnson, due later on Friday. The agreement will then travel back to Brussels, and a copy of it will remain in London.

Next week’s European Parliament vote is seen as all but a formality, after it was backed by the parliament’s constitutional affairs committee on Thursday.

Mrs von der Leyen and other senior EU figures are sceptical about the UK government’s plan to negotiate a comprehensive deal on future relations before the end of 2020. They believe the timetable for that is too tight.

But Prime Minister Boris Johnson is upbeat, insisting the UK can now move forward after years of wrangling over Brexit.

Charles Michel, the former Belgian Prime Minister who chairs EU summits, said in a tweet “things will inevitably change but our friendship will remain.

“We start a new chapter as partners and allies.”

The EU Commission official who spent more than three years negotiating Brexit – Michel Barnier – stood behind the two EU leaders at the low-key signing ceremony.

Earlier Mr Johnson said “at times it felt like we would never cross the Brexit finish line, but we’ve done it.

“Now we can put the rancour and division of the past three years behind us and focus on delivering a bright, exciting future – with better hospitals and schools, safer streets and opportunity spread to every corner of our country.”

MPs overruled an attempt by the House of Lords to secure additional rights, including for unaccompanied child refugees, in the Withdrawal Agreement.

Source: https://www.bbc.com/news/world-europe-51234625

The Estonian Government approved and submitted to the Riigikogu for discussion the draft amendments to the law on combating money laundering and terrorism.

The Estonian Government creates the legal basis for developing a bank account register based on the existing electronic arrest system and provides the anti-money laundering bureau with access to it, the Estonian government press service said on Thursday, December 19.

The circle of persons obliged to apply measures to combat money laundering will also expand, and a legal mechanism will be created to improve the quality of data on real beneficiaries. The changes are important for increasing the transparency of the Estonian business environment, the press service of the government said.

The bill also creates the basis for compiling a list of persons related to the interests of the state, for whom increased requirements to combat money laundering will begin to apply. Such persons include, for example, ministers, members of the Riigikogu, heads of various constitutional institutions and state institutions, as well as members of the board of parties.

In addition, the bill strengthens the protection of persons reporting violations and broadens the circle of people who should consider the requirements for combating money laundering in their activities.

According to the press service of the Estonian Government, this draft amendment is an important step in implementing the requirements of the European Union Anti-Money Laundering Directive.

It is worth noting that the Estonian authorities very peculiarly understand the term “money laundering”. Sputnik Estonia editorial staff received letters from the Estonian Police and Border Guard Board containing threats of criminal prosecution. These letters emphasize that justice may also apply to those who, having any information about legal entities or individuals related to Sputnik, do not report this to the Money Laundering Bureau.

At the end of October 2019, Estonian branches of international banking groups froze wage transfers, tax payments and rental payments for the Sputnik Estonia office. The justification was the inclusion in 2014 of Brussels by the director general of the Russia Today MIA Dmitry Kiselyov in the EU sanctions lists for his position on events in Ukraine. At the same time, Kiselyov is not the owner of MIA “Russia Today”. The news agency belongs to the Russian state, is not listed in any sanctions list, and no measures are applied to its employees in any EU country.

Source: https://ee.sputniknews.ru/estonian_news/20191219/18800940/Direktivy-ES-vynuzhdayut-Estoniya-usilivaet-borbu-s-otmyvaniem-deneg.html

ECB revokes licence of one of Austria’s best-known banks

The former Bank Meinl has been dogged by allegations over money laundering.

European regulators moved to shut one of Austria’s best-known financial institutions on Friday, bringing to a close almost a century in banking for the Meinl dynasty. Austria’s financial regulator, the FMA, said that the European Central Bank had decided to terminate a banking licence for Anglo-Austrian Bank, which until a hasty rebranding in June had been Bank Meinl. The decision will take effect immediately, the FMA said, amid ongoing concerns over compliance failures and allegations of money laundering that have dogged the bank in recent months. Bank Meinl is as Viennese as the city’s famous Kaffeehäuser: the Meinl family made their fortune as the great importers of coffee under the Habsburgs, and Meinl blends are still brewed and served on the distinctive silver trays of Vienna’s urban salons. Meinl am Graben, opened in 1950, is Vienna’s best-known luxury food store — a multi-story emporium of tea, coffees, biscuits and chocolates a stone’s throw from St Stephen’s cathedral in the medieval city centre. In a statement posted on its website, the bank said it had already decided to withdraw from the banking business. “Today’s decision by the ECB will not change anything,” the statement read. “Objectively speaking there is no reason to withdraw the licence,” it continued, adding that the bank had almost “completely solved” past problems and that its capital base was solid. “Legal steps are being evaluated,” it said. Anglo Austrian has the option to appeal against the ECB decision.

The bank, owned by Julius Meinl V — an outspoken dealmaker known simply as “the fifth” within the family’s sprawling network of interests — has been run separately from the retail businesses which bear the family’s name since 1998. Originally set up to meet the financial needs of employees in the Meinl food empire in 1923, the bank was an early target of the Nazis after their takeover of Austria in 1938. The Meinls were given sanctuary in Britain, and became a valuable intelligence asset for the British government, through their still strong connections in the European business world. The Meinl’s rapidly rebuilt their business empire after the war. Since Julius Meinl V’s ascension to head the bank in 1983, its fortunes rose swiftly — and fell with equal drama. At its peak, in a boom which Mr Meinl spearheaded in the early 2000s, the bank and its subsidiaries generated hundreds of millions in revenues, with interests and investment projects in operation across central and eastern Europe. The past three years, however, have been more troubled.

Since 2016, Ukrainian authorities and their counterparts in Austria have been investigating the bank for its alleged role in helping to launder tens of millions of euros on behalf of individuals and entities connected with former Ukrainian president Viktor Yanukovich. In an earlier statement, the bank said claims against it were “absurd” and that it was the victim of a politically motivated “media campaign” against it. The bank also became embroiled in Brasil’s giant Odebrecht corruption scandal. In 2017, leaked documents revealed Meinl’s Antigua subsidiary was used by men at the centre of the Odebrecht scheme to process millions in illicit transactions. Meinl said it has “no managerial control or operational insight” of the transactions because it had sold a 51 per cent stake in the entity which bore its name in 2010. This year, Austrian regulators fined Meinl Bank €500,000 for “breaches of due diligence requirements for the prevention of money laundering and terrorist financing.”

A separate action sought to remove influential members of the bank’s board. While it is unclear how Bank Meinl will be able to continue to operate in financial services given the ECB’s decision, Mr Meinl and his bank have proved tenacious in the face of damaging crises in the past. The collapse of a €5bn property fund run by the bank in 2009 led to the arrest of Mr Meinl on suspicion of fraud. He made headlines shortly after by paying a world-record bail bond of €100m — higher even than that set for Bernie Madoff — although he was forced to relinquish his passport. Mr Meinl holds British citizenship, as do others in the family, after the family settled in Britain. The family owns an 800-acre estate near Upton Scudamore in Wiltshire. Mr Meinl told the UK’s Daily Telegraph newspaper at the time of his arrest he was probably “the most hated man in Austria”. The bail was later refunded to Mr Meinl and the allegations against him were dropped. Austrian authorities brought a second case against the financier in 2014, in relation to a €212m dividend the bank paid out to him and other shareholders. Mr Meinl had fraudulently taken the money, they said. The charges were shortly thrown out by a Vienna court.

Source: https://www.ft.com/content/b3ace8be-07c8-11ea-9afa-d9e2401fa7ca

EU’s Tusk taking Brexit request seriously, decision in days

The European Council president said on Tuesday that London’s request for an extension of its deadline for divorce from the EU should be taken seriously, and the bloc’s other members would never take a decision that forces Britain out with no deal.

Donald Tusk told the European Parliament that he was discussing Prime Minister Boris Johnson’s request for a Brexit delay beyond Oct. 31 with the leaders of the other 27 member states and would make a decision “in the coming days”. “I have no doubt that we should treat the British request for an extension in all seriousness,” he told lawmakers in the Strasbourg assembly of the European Union parliament. “A no-deal Brexit will never be our decision,” Tusk said, to a round of applause.

Johnson faces two pivotal Brexit votes in parliament on Tuesday that will decide if he can deliver on his pledge to lead Britain out of the EU in just nine days’ time.

As the clock ticks down to the latest Oct. 31 deadline for the United Kingdom’s departure, Brexit is hanging in the balance as a divided parliament debates when, how and even whether it should happen.

After he was forced by opponents into the humiliation of asking the EU for a delay that he had promised he would never ask for, Johnson is battling to ram legislation through the House of Commons that will enact his last-minute Brexit deal.

‘BREXIT A WASTE OF TIME AND ENERGY’

The European Parliament must also approve the Brexit deal struck by Britain at an EU summit last week, but European Commission President Jean-Claude Juncker told the Strasbourg assembly it could only do so once it has been approved by the British parliament.

“We need now to watch events in Westminster very closely. But it is not possible, not imaginable that this Parliament would ratify the agreement before Westminster will have ratified the agreement – first London, then Brussels and Strasbourg,” he said. Juncker said Brexit had been a waste of time, and it irked him that he could not have spent more of his five-year mandate on making the bloc serve its citizens better.

“In truth, it has pained me to spend so much of this mandate dealing with Brexit, when I have thought of nothing less than how this Union could do better for its citizens – a waste of time and a waste of energy,” he said. However, he said the new agreement creates the legal certainty for an orderly withdrawal of Britain from the EU.

“I will always regret the United Kingdom’s decision to leave the Union. But at least we can look ourselves in the eye and say that we have done all in our power to make sure that this departure is orderly,” he said.

In a debate that followed in Strasbourg, British members of the European Parliament bickered with each other over Brexit.One of them, Brexit Party leader Nigel Farage, criticised Johnson for trying to avoid an extension because it would damage his Conservative party in the polls and instead was trying to “bounce us into this new treaty” by Oct. 31.

“It’s the same story every time: it is about the Tory Party, not about the country. What we need to do is to build a Leave alliance of those across the spectrum to fight and win the next general election: the only way we can leave this place is with a clean-break Brexit,” Farage said.

Brexit, flags of the United Kingdom and the European Union on asphalt road with legs

Source: https://www.reuters.com/article/uk-britain-eu-juncker/eus-tusk-taking-brexit-request-seriously-decision-in-days-idUSKBN1X10N3

Russian Finance Ministry Vows To Cut Non-Residents’ Income Tax In Bid To Lure Investments

The Russian Finance Ministry proposed to reduce the personal income tax rate for non-residents to 13 percent from the current 30 percent, at the same time reducing the minimum period of stay in Russia to maintain tax residence to 90 days down from the current 183 days, according to a draft budget, tax and customs tariff policy for 2020-2022 submitted to the parliament’s lower house

The Russian Finance Ministry proposed to reduce the personal income tax rate for non-residents to 13 percent from the current 30 percent, at the same time reducing the minimum period of stay in Russia to maintain tax residence to 90 days down from the current 183 days, according to a draft budget, tax and customs tariff policy for 2020-2022 submitted to the parliament’s lower house.”It is planned to reduce the actual stay of individuals in Russia to acquire the Russian tax resident status to 90 Calendar days from 183 days over 12 consecutive months and to equalize the personal income tax rate for residents and non-residents of Russia at 13 percent,” the document says.

The document’s authors mention this proposal among measures aimed at stimulating investment in Russia.

The proposed changes imply that Russian citizens who spent 90 days a year in the country and have real estate, economic and personal contacts in Russia, will pay taxes.

Earlier, First Deputy Prime Minister and Minister of Finance Anton Siluanov noted that many Russian businessmen intentionally spend less than 183 days a year in the country, thus avoiding the obligation to report on their foreign assets to the Federal Tax Service and may not pay income tax.

Source: https://www.urdupoint.com/en/business/russian-finance-ministry-vows-to-cut-non-resi-725911.html

China, U.S. kick off new round of tariffs in trade war

The United States began imposing 15% tariffs on a variety of Chinese goods on Sunday – including footwear, smart watches and flat-panel televisions – as China began imposing new duties on U.S. crude, the latest escalation in a bruising trade war. U.S. President Donald Trump said the sides would still meet for talks later this month.Trump, writing on Twitter, said his goal was to reduce U.S. reliance on China and he again urged American companies to find alternate suppliers outside China.

A new round of tariffs took effect from 0401 GMT (12:01 a.m. EDT), with Beijing’s levy of 5% on U.S. crude marking the first time the fuel had been targeted since the world’s two largest economies started their trade war more than a year ago.The Trump administration on Sunday began collecting 15% tariffs on more than $125 billion in Chinese imports, including smart speakers, Bluetooth headphones and clothing.

A variety of studies suggest the tariffs will cost U.S. households up to $1,000 a year and the latest round will hit a significant number of U.S. consumer goods.In retaliation, China started to impose additional tariffs on some of the U.S. goods on a $75 billion target list. Beijing did not specify the value of the goods that face higher tariffs from Sunday.The extra tariffs of 5% and 10% were levied on 1,717 items of a total of 5,078 products originating from the United States. Beijing will start collecting additional tariffs on the rest from Dec. 15.

AFL-CIO President Richard Trumka told “Fox News Sunday” that Trump was right to confront China, but “unfortunately, he’s done it the wrong way. To take on China, there has to be a multilateral approach. One country can’t take on China to try to dry up its overcapacity because they just send it through to you in other ways.”

CHINA REACTS

Chinese state media struck a defiant note. “The United States should learn how to behave like a responsible global power and stop acting as a ‘school bully,’” the official Xinhua news agency said.“As the world’s only superpower, it needs to shoulder its due responsibility, and join other countries in making this world a better and more prosperous place. Only then can America become great again.” Tariffs could not impede China’s development, said the official People’s Daily of the ruling Communist Party.

“China’s booming economy has made China a fertile ground for investment that foreign companies cannot ignore,” it said, in a commentary under the name ‘Zhong Sheng,’ or ‘Voice of China,’ which is often used to state its view on foreign policy issues. Last month, Trump said he was increasing existing and planned tariffs by 5% on about $550 billion worth of Chinese imports after Beijing announced its own retaliatory tariffs on U.S. goods. Tariffs of 15% on cellphones, laptop computers, toys and clothing are to take effect on Dec. 15.

The U.S. Trade Representative’s Office said on Thursday it would collect public comments through Sept. 20 on a planned tariff increase to 30% on a $250 billion list of goods already hit with a 25% tariff set for Oct. 1.Trade teams from China and the United States continue to talk and will meet in September.

For two years, the Trump administration has sought to pressure China to make sweeping changes to its policies on intellectual property protection, forced transfers of technology to Chinese firms, industrial subsidies and market accessTrump has also linked the trade talks and the protests in Hong Kong, saying he believes the negotiations with the United States had led Beijing to be more restrained in its response to the demonstrations in Hong Kong.

Source: https://www.reuters.com/article/us-usa-trade-china/china-u-s-kick-off-new-round-of-tariffs-in-trade-war-idUSKCN1VM0V9?il=0

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