Category: Business

NAFTA trade negotiators convene in Washington next week for a limited round of talks unlikely to move the needle on major sticking points, but aimed at demonstrating some progress toward closing easier chapters.

Last month’s round of negotiations to update the North American Free Trade Agreement in Mexico City failed to resolve major differences, as Canada and Mexico pushed back on what they saw as unreasonable U.S. demands on automotive content rules, dispute settlement and a five-year sunset clause.

U.S. Trade Representative Robert Lighthizer said that the United States wanted to see “meaningful progress” before year’s end.

The “intersessional” meetings in a Washington hotel come with lower expectations and without trade ministers from the three countries, who are due to attend a World Trade Organization meeting in Buenos Aires.

Some lobbyists and trade experts said that chapters with the best chances of showing progress were among those that Canada and Mexico had agreed to create or update in the Trans-Pacific Partnership trade deal: digital trade, food safety, state-owned enterprises and telecommunications.

NAFTA negotiators have not closed any chapters since completing talks on competition policy and small-medium enterprises in late September. Talks have since been dominated by U.S. demands, such as for half of all North American automotive content to be produced in the United States.

Less rhetoric, more substance

“The intersessional could be a chance to turn the temperature down,” said Max Baucus, a former U.S. senator who chairs Farmers for Free Trade, a coalition of U.S. farm sector groups. “This should be a round for the worker bees, with less rhetoric and more concrete negotiations.”

A senior Canadian government source said no progress would be made on the most contentious issues at the Washington talks.

Separately, Canada’s chief negotiator, Steve Verheul, said the U.S. “extreme proposals” were proving very hard to deal with.

“We will not accept U.S. proposals that would fundamentally weaken the benefits of NAFTA for Canada and undermine the competitiveness of the North American market in relation to the rest of the world,” Verheul told Canadian lawmakers this week.

The Washington meetings follow stepped-up lobbying efforts by NAFTA backers in the United States to warn against the dangers of withdrawing from the nearly 24-year-old trade pact.

Top Detroit auto executives met with Vice President Mike Pence, and pro-trade Republican senators met with President Donald Trump.

Moises Kalach, the head of Mexico’s CCE business lobby and a government consultant, said that the United States would need to back off from some of its “extreme” positions for compromises to be made.

“We’re ready to dance. The question is whether the American government is willing to do so,” Kalach told Reuters.
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Bangladesh’s central bank has asked the Federal Reserve Bank of New York to join a lawsuit it plans to file against a Philippines bank for its role in one of the world’s biggest cyber-heists, several sources said.

The Fed has yet to respond formally, but there is no indication it would join the suit.

Unidentified hackers stole $81 million from Bangladesh Bank’s account at the New York Fed in February last year, using fraudulent orders on the SWIFT payments system. The money was sent to accounts at Manila-based Rizal Commercial Banking Corp and then disappeared into the casino industry in the Philippines.

Nearly two years later, there is no word on who was responsible, and Bangladesh Bank has been able to retrieve only about $15 million, mostly from a Manila junket operator.

​Legal action discussed

Officials from Bangladesh Bank and the New York Fed spoke about legal action against RCBC in a conference call last month that was also attended by two representatives from SWIFT, according to three sources in Dhaka who had direct knowledge of the conversations.

It was agreed that Bangladesh Bank would send a proposal on the suit to the New York Fed, they said.

“The aim is to file a case by March-April in New York,” said one of the sources. “Work is on. Bangladesh Bank is likely to send something to the Fed soon.”

The source said the idea was it would be a civil suit to recover the money, and that Bangladesh hoped the Fed and SWIFT would be joint petitioners.

Subhankar Saha, a spokesman for Bangladesh Bank, said he had no knowledge of any plans to sue RCBC but that “efforts are on to recover the entire stolen money.”

The New York Fed and SWIFT declined comment.

A source familiar with the New York Fed’s thinking confirmed that Bangladesh Bank’s external counsel raised the idea of filing a suit against RCBC in the call.

The New York Fed officials agreed to review any proposal Bangladesh Bank wrote up, but they did not formally agree to a joint effort, and have not since worked on it nor heard from Bangladesh Bank, the source said.

​Rogue employees

RCBC has blamed rogue employees, and Philippine prosecutors have filed money-laundering charges against a former RCBC bank manager and four people who owned the bank accounts where the funds were sent, but are not identifiable because the accounts were in fake names. They are the only people to be formally cited in association with the crime.

Bangladeshi officials have cited internal RCBC documents, also seen by Reuters, to assert that the Filipino bank ignored suspicions raised by some RCBC officials when the money was first remitted to the accounts on Feb. 5, 2016, and then delayed acting on requests from RCBC’s head office to freeze the funds on Feb. 9.

RCBC did not respond to requests for comment. But it has said in the past that it would not pay any compensation and that Bangladesh Bank bore responsibility for the theft since it was negligent.

RCBC was fined a record 1 billion Philippine pesos ($20 million) by the country’s central bank last year for its failure to prevent the movement of the stolen money through it.

Separately, a Bangladesh court has sent letters rogatory to the United States seeking the findings of the Federal Bureau of Investigation (FBI) into the case, said the main police investigator in Dhaka. Letters rogatory are documents used to obtain judicial assistance from foreign courts.

“We have questions for the Federal Reserve Bank, we want to collect the FBI report, what their findings are,” Molla Nazrul Islam, a special superintendent of police in Bangladesh, told Reuters this week.

An FBI spokeswoman said the agency could not comment on ongoing cases.

A hacking group called Lazarus that is believed to have connections to North Korea has been linked to the Bangladesh cyberheist, and some U.S. officials said earlier this year that prosecutors were building a case against Pyongyang. But no case has yet been filed.
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A federal judge in Michigan has sentenced a former high-level Volkswagen manager to seven years in prison for his part in the scheme to cheat emissions tests and defraud consumers.

Oliver Schmidt has also been fined $400,000. He pleaded guilty in August to charges that included defrauding the United States and violating the Clean Air Act.

“This sentence reflects how seriously we take environmental crime,” Acting U.S. Attorney Daniel Lemisch said Wednesday. “Protecting national resources is a priority of this office. Corporations and individuals acting on behalf of corporations will be brought to justice for harming our environment.”

Schmidt was the general manager of Volkswagen’s U.S. Environment and Engineering office. He admitted knowing about and agreeing with engineers to carry out a scheme to install a device on certain VW diesel vehicles that would switch on for emissions tests, but switch off during normal driving.

Customers bought the cars believing they were environmentally friendly when in fact the cars were polluting as much as 30 times higher than U.S. standards.

Federal courts have ordered Volkswagen to spend more than $1 billion to buy back or repair the affected cars.
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China’s Ofo launched its dockless bicycles in Paris on Wednesday, becoming the fourth bike-sharing plan operator in a city set to banish all combustion-engine cars by 2030.

Ofo France general manager Laurent Kennel told Reuters the firm, one of two bike-sharing giants in China, had put just over 100 of its bright yellow bicycles on Paris roads on Wednesday and plans to ramp that up to 1,000 bikes by year-end.

Ofo comes hot on the wheels of Hong Kong-owned Gobee.bike, which launched in October and whose bright green bikes, estimated at a few thousand, can be seen on every Paris street.

A third Asian player, Singapore-owned oBike, has a few hundred bikes on Paris streets, and will also compete with the city’s long-established Velib plan.

Unlike the dockless Asian bikes, the Velib bikes must be parked in fixed docking stations of which there are some 1,800 in Paris, but which are often full in popular parts of the city.

“We want to be leader in free-floating bikes in Paris and France,” Kennel said.

He added that to cover Paris well, the firm plans to put several thousand bikes on the road, although there are no immediate plans to match Velib’s 24,000 bicycles.

Like Velib, the Ofo bikes have three gears – unlike the gearless Gobee and oBike bikes – but will be slightly more expensive at 0.50 euros ($0.6) per 20 minutes, compared to 0.50 euros for 30 minutes for the other two Asian operators.

Ofo’s bikes will be free for the first 40 minutes until the end of the year. Velib is free the first half hour for users with a subscription.

Kennel said Ofo operate more than 10 million bikes in 200 cities worldwide, the vast majority in China, and a few thousand in Europe, including in Milan, Madrid, Vienna, Prague, London and Cambridge.

Ofo, which has raised more than $1 billion from Chinese venture capitalists, including Alibaba Group Holding Ltd., will cooperate with Paris city authorities, which have said they want to regulate the dockless bike plans to prevent chaos on Paris sidewalks.

The dockless bikes can be found and unlocked with a mobile phone app, and after use they can be left anywhere. So far there have been no pile-ups as have been seen on Chinese roads.

The new Asian bike share operators’ entry into the Paris market is well timed, as longtime Velib operator JCDecaux is replaced by the Smoovengo consortium, which won a 600-700 million euro ($700-$825 million) contract to run the Paris city bike-sharing system from 2018 to 2032.

Dozens of Velib docking stations have been out of order for weeks as Velib’s old docking stations are replaced with Smoovengo’s new stations.

The Paris city government is building more bike lanes as it tries to reduce automobile traffic in a bid to cut pollution.

($1 = 0.8486 euros)
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Vulnerable communities uprooted by climate change are being left out of a voluntary pact to deal with migration, campaigners said, after the United States pulled out of the global deal.

Although people within low-lying states are being forced to relocate because of worsening storms and rising seas, they will not be recognized in U.N. migration pact talks next year, putting lives at risk, campaigners said.

“Many of the situations we find ourselves in, here in the Pacific, are not caused by us. We continue to ask, ‘Where is the justice?’ Those of us who are least responsible, continue to bear the brunt,” said Emele Duituturaga, head of the Pacific Islands Association of Non-Governmental Organizations (PIANGO).

Hoping for acceptance

“We hope that there will be an openness and an acceptance that climate-induced migration is one that the world community has to be responsible for,” she said on the sidelines of a conference co-hosted by PIANGO in Fiji’s capital, Suva.

With a record 21.3 million refugees globally, the 193-member U.N. General Assembly adopted a political declaration in September 2016 in which it also agreed to spend two years negotiating a pact on safe, orderly and regular migration.

U.S. President Donald Trump this week withdrew from negotiations because the global approach to the issue was “simply not compatible with U.S. sovereignty.”

U.N. Secretary-General Antonio Guterres regretted the U.S. decision, his spokesman said, but expressed hope the United States might re-engage in the talks ahead of the start of formal negotiations in February.

Unique heritage

Climate displacement is already a reality for Telstar Jimmy, a student from the Bank Islands in northern Vanuatu.

Her family has relocated several times because of worsening cyclones and flooding, as rising seas slowly wash away ancestral homelands and burial sites.

“The foundations of our unique heritage were taken,” she told the Thomson Reuters Foundation.

“Relocation just meant safety and continuing to exist. But now the question is: Safe and existing for how much longer?”

Worldwide, sea levels have risen 26 centimeters (10 inches) since the late 19th century, driven up by melting ice and a natural expansion of water in the oceans as they warm, U.N. data show. Seas could rise by up to a meter by 2100.

‘It’s only going to get worse’

“With climate-induced displacement, we know that there are already people, communities and countries at risk,” said Danny Sriskandarajah, head of the rights group CIVICUS, co-hosting the Fiji conference. “It’s only going to get worse [and] we need to come up with ways to manage those flows.”

PIANGO and CIVICUS are among campaign groups drafting a declaration that calls on the United Nations to recognize climate change as a key driver of migration.

The 1951 Refugee Convention recognizes that people fleeing persecution, war and conflict have the right to protection, but not those forced out by climate change.

Trump also plans to pull out of the 2015 Paris climate accord, which seeks to end the fossil fuel era this century with a radical shift to cleaner energies to curb heat waves, downpours, floods and rising sea levels.

The deal aims to hold the global temperature rise to “well below” 2 degrees Celsius above pre-industrial levels and try to limit the rise even further, to 1.5 degrees Celsius.

The U.S. is the only country that is not part of the climate pact after Syria and Nicaragua joined this year.

“I’m a bit nervous because other countries may also pull out with the U.S., and that’s going to be a bigger issue for us, especially at a time when we’re trying to battle climate change,” said Vanuatu local Jimmy. “Whatever each country does will impact the lives of other people around the whole globe.”
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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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