World figures deny wrongdoing as ‘Panama Papers’ turn spotlight on tax

Updated 05 April 2016
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World figures deny wrongdoing as ‘Panama Papers’ turn spotlight on tax

LONDON/PANAMA CITY: Governments across the world began investigating possible financial wrongdoing by the rich and powerful on Monday following a leak of documents from a Panamanian law firm, which allegedly showed how clients avoided tax or laundered money.

The documents detailed schemes involving an array of figures from friends of Russian President Vladimir Putin to relatives of the prime ministers of Britain, Iceland and Pakistan and as well as the president of Ukraine, journalists who received them said.
While the “Panama Papers” detail complex financial arrangements benefitting the world’s elite, they do not necessarily mean the schemes were all illegal.
The Kremlin said the documents contained “nothing concrete and nothing new” while a spokesman for British Prime Minister David Cameron said his late father’s reported links to an offshore company were a “private matter.”
Iceland’s Prime Minister Sigmundur Gunnlaugsson could not immediately be reached for comment on the naming of his wife in connection with a secretive company in an offshore haven, which brought opposition calls for him to resign.
Ukrainian President Petro Poroshenko has not commented on his reported offshore links.
Opponents said Poroshenko should be impeached for allegedly transfering his confectionary business to an offshore company in 2014, amid fierce fighting between Ukraine and pro-Russian separatists. A senior official from the General Prosecutor’s office said there was no evidence he had committed a crime.
Australia, New Zealand, India, France and Austria were among countries, which said they had begun investigating the allegations, based on more than 11.5 million documents from law firm Mossack Fonseca, located in the tax haven of Panama. Banks as well as individual clients came under the spotlight.
The documents were leaked to the International Consortium of Investigative Journalists (ICIJ) and more than 100 other news organizations. Mossack Fonseca has denied any wrongdoing.
The material covers a period over almost 40 years, from 1977 until last December, and allegedly show that some companies domiciled in tax havens were being used for suspected money laundering, arms and drug deals, and tax evasion.
Britain’s Guardian newspaper said the documents showed a network of secret offshore deals and loans worth $2 billion led to close friends of Putin, including concert cellist Sergie Rolddugin. Reuters could not confirm those details.
Putin’s spokesman dismissed the reports, saying they aimed to discredit him ahead of upcoming elections.
“This Putinophobia abroad has reached such a point that it is in fact taboo to say something good about Russia, or about any actions by Russia or any Russian achievements. But it’s a must to say bad things, a lot of bad things, and when there’s nothing to say, it must be concocted. This is evident to us.”
The publications contained “nothing concrete and nothing new” about Putin, Kremlin spokesman Dmitry Peskov said.
The British government asked for a copy of the leaked data, which could be embarrassing for Prime Minister Cameron, who has spoken out against tax evasion and tax avoidance.
His late father, Ian Cameron, is mentioned in the files, alongside some members of his Conservative Party in the upper house of parliament, former Conservative lawmakers and party donors, British media said.
Jennie Granger, director general of enforcement and compliance at HM Revenue and Customs, said the government had a great deal of information from a wide range of sources.
“We will closely examine this data and will act on it swiftly and appropriately,” she said.Cameron’s spokeswoman declined to comment on whether the leader’s family had money invested in offshore funds set up by his father, saying it was a “private matter.”
Tax authorities in Australia and New Zealand said they were probing local clients of Mossack Fonseca.
The head of Mossack Fonseca, Ramon Fonseca, has denied any wrongdoing but said his firm had suffered a successful but “limited” hack on its database. He described the hack and leak as “an international campaign against privacy.”
Fonseca, who was up until March a senior government official in Panama, said that the firm, which specializes in setting up offshore companies, has formed more than 240,000 such companies, the “vast majority” used for “legitimate purposes.”


Russia’s Dagestan bans niqab over ‘threats’ after attacks

Updated 3 sec ago
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Russia’s Dagestan bans niqab over ‘threats’ after attacks

This veil is “temporarily prohibited until the elimination of existing threats,” said Dagestan’s highest religious body
Few details have surfaced about the identities and motivations of the attackers in Dagestan

MOSCOW: Russia’s southern Dagestan region on Wednesday issued a temporary ban against wearing the niqab in the Muslim-majority republic, citing security reasons after a recent attack against churches and synagogues.
This veil — which hides the entirety of a woman’s face with the exception of the eyes — is “temporarily prohibited until the elimination of existing threats,” said Dagestan’s highest religious body.
Last month, gunmen simultaneously attacked two churches, two synagogues and a police checkpoint in two cities in Dagestan, killing 22 people.
The attacks came just three months after Daesh fighters killed more than 140 in an assault on a Moscow concert hall, the deadliest terror attack in Russia for almost two decades.
Few details have surfaced about the identities and motivations of the attackers in Dagestan.
The incidents had echoes of the kind of insurgent violence that struck the North Caucasus during the 1990s and 2000s, however, the Kremlin has dismissed fears of a renewed wave of violent unrest.
In the 1990s, Moscow fought two wars for control of the neighboring Chechnya region, with President Vladimir Putin touted his success in quashing the insurgency at the start of his presidency.
Militants from Dagestan are known to have traveled to join Daesh in Syria.

Polish man charged in Denmark over assault on prime minister Frederiksen

Updated 41 min 1 sec ago
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Polish man charged in Denmark over assault on prime minister Frederiksen

  • The prime minister suffered minor whiplash but was otherwise unharmed
  • Henrik Karl Nielsen, a lawyer for the suspect said the suspect had no recollection of the episode

COPENHAGEN: A Polish man was charged on Wednesday with assaulting Danish Prime Minister Mette Frederiksen last month, his lawyer said.
A 39-year-old man walked up to Frederiksen in a downtown Copenhagen square on June 7 and punched her on her right upper arm. The prime minister suffered minor whiplash but was otherwise unharmed.
Henrik Karl Nielsen, a lawyer for the suspect, who has not been named, told The Associated Press in an email that he will not plead guilty. He said the suspect had no recollection of the episode.
Frederiksen was rushed to a hospital for a check-up soon after, and she canceled her work program for the following days, including her appearance at events connected to the European Parliament elections.
The man was charged with assault against a civil servant or a person carrying out a public duty, Nielsen said. If found guilty, the man faces fines or up to eight years in jail. A trial has been set for Aug. 6 and 7 in Copenhagen.
Danish media has said that the man was probably under the influence of drugs and intoxicated at the time of the late afternoon incident.


What the UK general election might mean for the Middle East 

Britain’s Prime Minister Rishi Sunak, soaked in rain, stands at a lecturn as he delivers a speech.
Updated 52 min 35 sec ago
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What the UK general election might mean for the Middle East 

  • Perceived inaction on Gaza has hung over the election contest between Rishi Sunak and Sir Keir Starmer
  • If the polls prove correct and Labour sweeps to power, analysts predict a far closer UK-Gulf relationship

LONDON: It was clear from the moment that British Prime Minister Rishi Sunak stood outside 10 Downing Street on May 22 and announced that he was calling a snap general election that the next six weeks would not go well for his ruling Conservative party.

For many, the raincloud that burst over Sunak’s head as he spoke seemed to sum up the past 14 years, which, riven by factional infighting, saw no fewer than four leaders in the eight years since Theresa May succeeded David Cameron in 2016.

Adding to the comedy of the moment was the soundtrack to the announcement, courtesy of a protester at the gates of Downing Street, whose sound system was blasting out the ’90s pop hit “Things Can Only Get Better” — the theme tune of Labour’s 1997 election victory.

Britain’s Prime Minister Rishi Sunak delivers a speech at a Conservative Party campaign event at the National Army Museum in London. (File/AP)

Headline writers were spoiled for choice. Contenders included “Drown and out,” “Drowning Street” and — probably the winner — “Things can only get wetter.” That last one was also prescient. 

In theory, under the rules governing general elections, Sunak need not have gone to the country until December. The reality, however, was that both Sunak and his party were already trailing badly in the polls and the consensus at Conservative HQ was that things could only get worse.

As if to prove the point, in one early Conservative campaign video, the British Union Flag was flown upside down. A series of mishaps and scandals followed, with some Conservative MPs found to have been betting against themselves and the party.

Former British PM Boris Johnson gestures as he endorses British Prime Minister Rishi Sunak at a campaign event in London, Britain, July 2, 2024. (Reuters)

Judging by the steady slide in support for the government, the electorate has neither forgotten nor forgiven the chaos of the Boris Johnson years, typified by the illegal drinks parties held in Downing Street while the rest of the nation was locked down during COVID-19 restrictions.

Nor has the electorate forgotten the failure to deliver on the great promises of Brexit, the shock to the UK economy delivered by the 44-day premiership of Liz Truss, and the inability of the government to control the UK’s borders — which was, after all, the chief reason for leaving the EU.

On the day the election was announced, a seven-day average of polls showed Labour had twice as much support as the Conservatives — 45 percent to 23 percent.

Labour Party leader Keir Starmer and Britain’s Prime Minister and Conservative Party leader Rishi Sunak attend a live TV debate, hosted by the BBC. (File/AFP)

Compounding the government’s woes was the rise of Reform UK, the populist right-wing party making gains thanks largely to the failure of Sunak’s pledge to reduce immigration and “stop the boats” carrying illegal migrants across the English Channel.

On 11 percent, Reform had overtaken the Lib Dems, Britain’s traditional third-placed party, and the vast majority of the votes it seemed certain to hoover up would be those of disenchanted Conservative voters.

By the eve of today’s election, a poll of 18 polls carried out in the seven days to July 2 showed Labour’s lead had eased only very slightly, to 40 percent against the Conservatives’ 21 percent, with Reform up to 16 percent.

Reform UK leader Nigel Farage scratches his head as he delivers a speech during the “Rally for Reform” at the National Exhibition Centre in Birmingham. (File/AFP)

A “mega-poll” carried out by The Economist predicts Labour will win 465 of the 632 seats in England, Scotland and Wales, which would give the party its biggest majority since the Second World War.

The Conservative party, which won 365 seats in 2019, is on course to implode, returning for the new Parliament on July 9 with just 76 MPs, the smallest number in its history.

After the polls close tonight at 10pm, there is a very good chance that Sunak may even lose his own seat, the constituency of Richmond and Northallerton, which the Conservatives have held for 114 years.

Either way, the Conservative party will be thrust into further turmoil as the battle begins to select the party’s next leader who, as many commentators are predicting, can look forward to at least a decade in opposition.

The return of Labour, a completely regenerated party after 14 years in the wilderness, is likely to be good news for Britain’s relationships in the Middle East, as Arab News columnist Muddassar Ahmed predicted this week.

Distracted by one domestic or internal crisis after another, the Conservatives have not only neglected their friends and allies in the region but, in an attempt to stem the loss of its supporters to Reform UK, have also pandered to racial and religious prejudices.

“The horrific scenes unfolding in Gaza, for example, have rocked Muslims worldwide while pitting different faith communities against one another,” Ahmed wrote.

A Palestinian boy who suffers from malnutrition receives care at the Kamal Adwan hospital in Beit Lahia in the northern Gaza Strip on July 2, 2024. (AFP)

“But instead of working to rebuild the relationships between British Muslims, Jews and Christians, the Conservative government has branded efforts to support Palestinians as little more than insurgent ‘hate marches’ — using the horrific conflict to wedge communities that ought to be allied.”

On the other hand, Labour appears determined to reinvigorate the country’s relationship with a region once central to the UK’s interests.

January this year saw the launch of the Labour Middle East Council (LMEC), founded with “the fundamental goal of cultivating understanding and fostering enduring relationships between UK parliamentarians and the Middle East and North Africa.”

Chaired by Sir William Patey, a former head of the Middle East Department at the Foreign and Commonwealth Office and an ambassador to Afghanistan, Saudi Arabia, Iraq and Sudan, and with an advisory board featuring two other former British ambassadors to the region, the LMEC will be a strong voice whispering in the ear of a Labour government that will be very open to what it has to say.

Britain’s Labour Party leader Keir Starmer speaks on stage at the launch of the party’s manifesto in Manchester, England, Thursday, June 13, 2024. (AP)

Writing in The House magazine, Sir William predicted “a paradigm shift in British foreign policy is imminent.”

He added: “As a nation with deep-rooted historical connections to the Middle East, the UK has a unique role to play in fostering a stable and prosperous region.”

The role of the LMEC would be “to harness these connections for a positive future. We will work collaboratively to address pressing global issues, from climate change to technological advancement, ensuring that our approach is always one of respect, partnership, and shared progress.”

David Lammy, Labour’s shadow foreign secretary, has already made several visits to the region since Oct. 7. In April he expressed “serious concerns about a breach in international humanitarian law” over Israel’s military offensive in Gaza.

Britain’s main opposition Labour Party Shadow Foreign Secretary David Lammy addresses delegates at the annual Labour Party conference in Liverpool. (File/AFP)

It was, he added, “important to reaffirm that a life lost is a life lost whether that is a Muslim or a Jew.” In May, Lammy called for the UK to pause arms sales to Israel.

In opposition, Labour has hesitated to call for a ceasefire in Gaza, but this has been a product of its own internal and domestic tensions. Starmer has brought the party back on track after years of accusations by UK Jewish activist groups that under his predecessor Jeremy Corbyn it was fundamentally antisemitic.

Whether the charges were true, or whether the party’s staunch support of the Palestinian cause was misrepresented as antisemitism, was a moot point. Starmer knew that, in the run-up to a general election, this was hard-won ground that he could not afford to lose.

Nevertheless, even as he has alienated some Muslim communities in the UK for his failure to call for a ceasefire, he has spoken out repeatedly against the horrors that have unfolded in Gaza.

A protester looks on in Parliament Square, central London, on June 8, 2024 at the end of the “National March for Gaza”. (File/AFP) 

Crucially, he has consistently backed the two-state solution, and the creation of “a viable Palestinian state where the Palestinian people and their children enjoy the freedoms and opportunities that we all take for granted.”

In broader terms, Lammy has also made clear that Labour intends to re-engage with the Middle East through a new policy of what he called “progressive realism.”

Less than a week before Sunak called his surprise general election, Lammy spoke of the need for the UK to mend relations with the Gulf states, which he saw as “hugely important for security in the Middle East” and “important in relation to our economic growth missions.”

Because of missteps by the Conservative government, he added, relations between the UAE and the UK, for example, were at “an all-time low. That is not acceptable and not in the UK’s national interests (and) we will seek to repair that.”

In an article he wrote for Foreign Affairs magazine, Lammy went further.

China, he said, was not the world’s only rising power, and “a broadening group of states — including Brazil, India, Saudi Arabia, and the UAE — have claimed seats at the table. They and others have the power to shape their regional environments, and they ignore the EU, the UK, and the US ever more frequently.”

Lammy expressed regret for “the chaotic Western military interventions during the first decades of this century,” in Afghanistan, Iraq and Libya, which had proved to be a “recipe for disorder.”

As shadow foreign secretary, he has traveled extensively across the MENA region, to countries including Bahrain, Egypt, Israel, Jordan, Qatar, Saudi Arabia, Turkiye, the UAE, and the Occupied Palestinian Territories.

All, he wrote, “will be vital partners for the UK in this decade, not least as the country seeks to reconstruct Gaza and — as soon as possible — realize a two-state solution.”

For many regional observers, Labour is starting with a clean sheet, but has much to prove.

“It is an acknowledged fact among scholars that foreign policies don’t radically change after elections,” Arshin Adib-Moghaddam, professor in global thought and comparative philosophies at the School of Oriental and African Studies in London, told Arab News.

“Therefore, I don’t expect major shifts once Labour forms the government in the UK.

“That said, the composition of the Labour party and its ‘backbench’ politics are likely to shift the language and probably even the code of conduct, in particular with reference to the question of Palestine. For a Labour leader it may be that much more difficult to be agnostic about the horrific human rights situation in Gaza.”

Displaced Palestinians flee after the Israeli army issued a new evacuation order for parts of Khan Yunis and Rafah on July 2, 2024. (AFP)

For political analysts advising international clients, however, the implications of a Labour victory extend beyond the situation in Gaza.

“In an attempt to secure political longevity, the party will renegotiate key policy priorities in the Middle East,” said Kasturi Mishra, a political consultant at Hardcastle, a global advisory firm that has been closely following the foreign policy implications of the UK election for its clients in business and international politics.

“This could include calling for a ceasefire in Gaza, ending arms sales to Israel, reviving trade and diplomacy with the Gulf states and increasing the UK’s defense spending in the region,” Mishra told Arab News.

“This renegotiation is important at a time when the UK finds itself increasingly uncertain of its global position.

Saudi Foreign Minister Prince Faisal bin Farhan meets with Shadow Foreign Secretary of the British Labor Party David Lammy on the sidelines of the Manama Dialogue 2023 held in Bahrain. (SPA)

“The Middle East has significant geopolitical and security implications for the West. Labour policy-makers recognize this and are likely to deepen British engagement with the region to reshape its soft power and influence.”

Mishra highlighted Lammy’s multiple trips to the region as a foretaste of a Labour’s intention to strengthen ties with the Gulf states, “which have been neglected in post-Brexit Britain. 

“Given the influential role of Saudi Arabia, the UAE and Qatar in regional security and the potential to collaborate with them on climate mitigation and other international issues, it is clear that he will seek to forge partnerships.

“His doctrine of progressive realism combines a values-based world order with pragmatism. It is expected that he will favor personalized diplomacy, more akin to that of the UAE, India and France.”


Banksy-funded migrant rescue ship blocked by Italian authorities

Updated 03 July 2024
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Banksy-funded migrant rescue ship blocked by Italian authorities

  • The Louise Michel ship had been told to take 37 people rescued at sea to Pozzallo in Sicily
  • “Our rescue ship MV Louise Michel has been detained for 20 days in the port of Lampedusa,” the Louise Michel charity wrote on X

ROME: A rescue ship funded by British street artist Banksy has been grounded at port for 20 days for ignoring migrant disembarkation orders from Italian authorities, the charity running the vessel said on Wednesday.
The Louise Michel ship had been told to take 37 people rescued at sea to Pozzallo in Sicily, but instead took them to the island of Lampedusa, saying the sea was too rough to reach its prescribed destination.
“Our rescue ship MV Louise Michel has been detained for 20 days in the port of Lampedusa,” the Louise Michel charity wrote on X.

“We were informed that the ship is now detained for not following the order to disembark in Sicily,” it added.
Italy’s right-wing government has faced criticism for restricting the activities of charity rescue ships, including orders to take migrants to distant ports, increasing their fuel costs and taking them away from search and rescue areas.
Banksy, who keeps his identity secret, is known for his social and political activism. The charity and the 30-meter-long rescue vessel he is sponsoring are named after Louise Michel, a 19th century French feminist anarchist.


Russian missiles and drones strike eastern Ukraine's Dnipro in a daylight attack that kills 5

Updated 03 July 2024
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Russian missiles and drones strike eastern Ukraine's Dnipro in a daylight attack that kills 5

  • Blasts blew out some windows of a shopping mall, raining shards onto the street, photos published by local officials showed
  • A video posted on social media by President Volodymyr Zelensky showed a missile with a fiery trail streaking over buildings

KYIV: A Russian missile and drone attack on the eastern Ukrainian city of Dnipro on Wednesday killed five civilians and injured 47 others, including a 14-year-old girl, authorities said.
Blasts blew out some windows of a shopping mall, raining shards onto the street, photos published by local officials showed. Mayor Borys Filatov said the daytime attack also shattered windows in two schools and three kindergartens. Debris struck the intensive care unit of a children’s hospital, and a fire broke out in another hospital.
A video posted on social media by President Volodymyr Zelensky showed a missile with a fiery trail streaking over buildings in Ukraine's fourth-largest city, and debris flying into the air from its impact.
The war, now in its third year since Russia invaded its neighbor, has killed more than 10,000 civilians and wounded around 20,000 others, the United Nations says.
In the Kharkiv region in the northeast, Russian shelling struck a village council building, killing one person and injuring two others, regional head Oleh Suniehubov said.
Elsewhere in the region, a Russian glide bomb struck a residential building in the village of Ruska Lozova, injuring at least two people. Others could be trapped under rubble, Syniehubov said.
Also Wednesday, Ukraine received $2.2 billion from the International Monetary Fund under an ongoing credit facility, Prime Minister Denys Shmyhal announced.
The credit program foresees the disbursement of $16 billion, but Ukraine must pass IMF reviews of its progress on key economic and fiscal benchmarks before each part is released.
The latest funds will be used for welfare payments and the salaries of doctors and teachers, among other things, Shmyhal said.