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Documents reveal offshore deals with Apple, others

By Afp
Published: 16:35 EST, 5 November 2017 | Updated: 18:15 EST, 6 November 2017

Protesters in..

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By Afp

Published: 16:35 EST, 5 November 2017 | Updated: 18:15 EST, 6 November 2017

Protesters in France last week carried signs urging Apple to

Protesters in France last week carried signs urging Apple to "pay your taxes" in a reference to its dispute with EU authorities over back taxes

New revelations Monday from the "Paradise Papers" shed light on Apple's tax avoidance strategy which shifted profits from one fiscal haven to another as well as loopholes employed by Nike and Formula One champion Lewis Hamilton.

They are the latest disclosures from a trove of documents released by the US-based International Consortium of Investigative Journalists (ICIJ) concerning secretive offshore deals that have proved deeply embarrassing.

According to documents cited by the New York Times and BBC, the offshore legal services firm Appleby helped the iPhone maker shift tens of billions of dollars from Ireland to the Channel Islands when it appeared to face a tougher stand on taxes by Dublin.

The report said Apple transferred funds to the small island of Jersey, which typically does not tax corporate income and is largely exempt from European Union tax regulations.

Apple did not immediately respond to an AFP query on the report but told the New York Times it follows the law in each country where it operates.

At a 2013 congressional hearing, Apple chief Tim Cook denied the use of "gimmicks" to avoid taxes. The company is now facing an EU demand for some $14.5 billion in taxes based on a ruling that its tax structure in Ireland amounted to illegal state aid.

– Hamilton's jet –

Mercedes' British driver Lewis Hamilton could not be reached for comment on leaked documents on how he avoided taxes on a private jetMercedes' British driver Lewis Hamilton could not be reached for comment on leaked documents on how he avoided taxes on a private jet

Mercedes' British driver Lewis Hamilton could not be reached for comment on leaked documents on how he avoided taxes on a private jet

The BBC and Guardian newspaper reported Hamilton avoided paying taxes on his private jet using an elaborate scheme now under investigation by British tax authorities.

The leaked documents showed the driver received a £3.3 million ($4.4 million, EUR3.7 million) tax refund in 2013 after his luxury plane was imported into the Isle of Man — a low-tax British Crown Dependency.

Representatives for Hamilton could not be reached by AFP for comment.

A separate report appearing in France's Le Monde said Nike used a loophole in Dutch fiscal law to reduce its tax rate in Europe to just two percent compared with a 25 percent average for European companies.

The tax savings came from Nike's use of an offshore subsidiary which charged royalties to the company's European subsidiaries, the report said.

– Trump official's Russia ties –

Leaks show US Commerce Secretary Wilbur Ross has business ties to a shipping firm linked to Vladimir Putin's inner circleLeaks show US Commerce Secretary Wilbur Ross has business ties to a shipping firm linked to Vladimir Putin's inner circle

Leaks show US Commerce Secretary Wilbur Ross has business ties to a shipping firm linked to Vladimir Putin's inner circle

Separately, the documents showed the Russian connection of US Commerce Secretary Wilbur Ross through a complex web of offshore investments.

They revealed Ross's 31 percent stake in Navigator Holdings partnership with Russian energy giant Sibur, which is partially owned by Putin's son-in-law Kirill Shamalov and Gennady Timchenko, the Russian president's friend and business partner who is subject to US sanctions.

The cabinet member's ties to Russian entities raise questions over potential conflicts of interest, and whether they undermine Washington's sanctions on Moscow.

The US imposed sanctions on Russian entities and individuals over the annexation of Crimea and the crisis in Ukraine.

The billionaire investor told Bloomberg on Monday he was not intending to hold onto his stake: "I've been actually selling it anyway but that isn't because of this."

On Monday, Russian politicians played down the leaks, saying the deals mentioned were legal and not politically motivated.

In a statement reported by Russian news agencies, Sibur voiced its "amazement at the politically charged interpretation in some media of ordinary commercial activity."

Earlier reports highlighted offshore holdings of Britain's Queen Elizabeth II and a top fundraiser for Canada's prime minister.

The documents showed around £10 million ($13 million, 11 million euros) of the queen's private money was placed in funds held in the Cayman Islands and Bermuda, as first reported in Britain by the BBC and the Guardian newspaper.

Theresa May's spokesman said the British prime minister "wants people to pay the tax that they owe," while cautioning that holding offshore investments was not an automatic sign of wrongdoing.

"We have been clear that avoidance and evasion is never acceptable," he said, ahead of the British parliament discussing the Paradise Papers on Monday.

A spokeswoman for the Duchy of Lancaster, which provides the monarch with an income and handles her investments, said: "All of our investments are fully audited and legitimate."

The documents also suggest that Canadian Prime Minister Justin Trudeau's top fundraiser and senior advisor Stephen Bronfman, heir to the Seagram fortune, moved some $60 million (52 million euros) to offshore tax havens with ex-senator Leo Kolber.

The 13.4 million documents were first obtained by the German newspaper Suddeutsche Zeitung, and shared with the ICIJ and partner media outlets.

The findings were described as a "scandal" by European Economics Affairs Commissioner Pierre Moscovici.

"In light of these shocking revelations, I call on member states to rapidly adopt a European tax haven blacklist, as well as other dissuasive measures," he said in Brussels.

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Australia: Scott Morrison saga casts scrutiny on Queen’s representative

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In the past fortnight, Australia has been gripped by revelations that former Australian Prime Minister Scott Morrison secretly appointed himself to several additional ministries.

The move has been labelled a “power grab” by his successor as prime minister, and Mr Morrison has been scolded by many – even his own colleagues.

But the scandal has also dragged Australia’s governor-general into the fray – sparking one of the biggest controversies involving the Queen’s representative in Australia in 50 years.

So does Governor-General David Hurley have questions to answer, or is he just collateral damage?

‘Just paperwork’

Governors-general have fulfilled the practical duties as Australia’s head of state since the country’s 1901 federation.

Candidates for the role were initially chosen by the monarch but are now recommended by the Australian government.

The job is largely ceremonial – a governor-general in almost every circumstance must act on the advice of the government of the day. But conventions allow them the right to “encourage” and “warn” politicians.

Key duties include signing bills into law, issuing writs for elections, and swearing in ministers.

Mr Hurley has run into trouble on the latter. At Mr Morrison’s request, he swore the prime minister in as joint minister for health in March 2020, in case the existing minister became incapacitated by Covid.

Over the next 14 months, he also signed off Mr Morrison as an additional minister in the finance, treasury, home affairs and resources portfolios.

Mr Morrison already had ministerial powers, so Mr Hurley was basically just giving him authority over extra departments.

It’s a request the governor-general “would not have any kind of power to override or reject”, constitutional law professor Anne Twomey tells the BBC.

“This wasn’t even a meeting between the prime minister and the governor-general, it was just paperwork.”

But Mr Morrison’s appointments were not publicly announced, disclosed to the parliament, or even communicated to most of the ministers he was job-sharing with.

Australia’s solicitor-general found Mr Morrison’s actions were not illegal but had “fundamentally undermined” responsible government.

But the governor-general had done the right thing, the solicitor-general said in his advice this week.

It would have been “a clear breach” for him to refuse the prime minister, regardless of whether he knew the appointments would be kept secret, Stephen Donaghue said.

Critics push for investigation

Ultimately, Mr Hurley had to sign off on Mr Morrison’s requests, but critics say he could have counselled him against it and he could have publicised it himself.

But representatives for the governor-general say these types of appointments – giving ministers the right to administer other departments – are not unusual.

And it falls to the government of the day to decide if they should be announced to the public. They often opt not to.

Mr Hurley himself announcing the appointments would be unprecedented. He had “no reason to believe that appointments would not be communicated”, his spokesperson said.

Emeritus professor Jenny Hocking finds the suggestion Mr Hurley didn’t know the ministries had been kept secret “ridiculous”.

“The last of these bizarre, duplicated ministry appointments… were made more than a year after the first, so clearly by then the governor-general did know that they weren’t being made public,” she says.

“I don’t agree for a moment that the governor-general has a lot of things on his plate and might not have noticed.”

The historian says it’s one of the biggest controversies surrounding a governor-general since John Kerr caused a constitutional crisis by sacking Prime Minister Gough Whitlam in 1975.

Prof Hocking famously fought for transparency around that matter – waging a lengthy and costly legal battle that culminated in the release of Mr Kerr’s correspondence with the Queen.

And she says the same transparency is needed here.

The Australian public need to know whether Mr Hurley counselled the prime minister against the moves, and why he didn’t disclose them

The government has already announced an inquiry into Mr Morrison’s actions, but she wants it to look at the governor-general and his office too.

“If the inquiry is to find out what happened in order to fix what happened, it would be extremely problematic to leave out a key part of that equation.”

Former Prime Minister Malcolm Turnbull – Mr Morrison’s predecessor – has also voiced support for an inquiry.

“Something has gone seriously wrong at Government House,” he told the Australian Broadcasting Corporation.

“It is the passive compliance along the chain… that did undermine our constitution and our democracy… that troubles me the most. This is how tyranny gets under way.”

PM defends governor-general

Prof Twomey says the criticism of Mr Hurley is unfair – there’s was no “conspiracy” on his part to keep things secret.

“I don’t think it’s reasonable for anyone to expect that he could have guessed that the prime minister was keeping things secret from his own ministers, for example.

“Nobody really thought that was a possibility until about two weeks ago.”

Even if he had taken the unprecedented step to publicise the appointments or to reject Mr Morrison’s request, he’d have been criticised, she says.

“There’d be even more people saying ‘how outrageous!'” she says. “The role of governor-general is awkward because people are going to attack you either way.”

Prime Minister Anthony Albanese has also defended Mr Hurley, saying he was just doing his job.

“I have no intention of undertaking any criticism of [him].”

A role fit for purpose?

Prof Hocking says it’s a timely moment to look at the role of the governor-general more broadly.

She points out it’s possible the Queen may have been informed about Mr Morrison’s extra ministries when Australia’s parliament and people were not.

“It does raise questions about whether this is fit for purpose, as we have for decades been a fully independent nation, but we still have… ‘the relics of colonialism’ alive and well.”

Momentum for a fresh referendum on an Australian republic has been growing and advocates have seized on the controversy.

“The idea that the Queen and her representative can be relied upon to uphold our system of government has been debunked once and for all,” the Australian Republic Movement’s Sandy Biar says.

“It’s time we had an Australian head of state, chosen by Australians and accountable to them to safeguard and uphold Australia’s constitution.”

But Prof Twomey says republicans are “clutching at straws” – under their proposals, the head of state would also have been bound to follow the prime minister’s advice.

“It wouldn’t result in any changes that would have made one iota of difference.”

 

Read from: https://www.bbc.com/news/world-australia-62683210

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Australia election: PM Morrison’s security team in car crash in Tasmania

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A car carrying the Australian prime minister’s security team has crashed in Tasmania during an election campaign visit.

Four police officers were taken to hospital with “non-life threatening injuries” after the car and another vehicle collided, authorities said.

Prime Minister Scott Morrison was not in the car, but the accident prompted him to cancel the rest of his campaign events on Thursday.

The other driver involved was not hurt.

Tasmania Police said initial investigations suggested the second car had “collided with the rear of the police vehicle, while attempting to merge”. It caused the unmarked security vehicle to roll off the road.

The two Tasmania Police officers and two Australian Federal Police officers were conscious when taken to hospital for medical assessment, the prime minister’s office said.

“Family members of the officers have been contacted and are being kept informed of their condition,” a statement said.

“The PM is always extremely grateful for the protection provided by his security team and extends his best wishes for their recovery and to their families.”

Australians go to the polls on 21 May. Mr Morrison – prime minister since 2018 – is hoping to win his conservative coalition’s fourth term in office.

Polls suggest the opposition Labor Party, led by Anthony Albanese, is favoured to win. However, Mr Morrison defied similar polling to claim victory at the last election in 2019.

Mr Morrison’s Liberal-National coalition holds 76 seats in the House of Representatives – the minimum needed to retain power.

Political observers say the cost of living, climate change, trust in political leaders, and national security will be among key issues in the campaign.

In recent weeks, the prime minister has faced accusations of being a bully and once sabotaging a rival’s career by suggesting the man’s Lebanese heritage made him less electable. Mr Morrison has denied the allegations.

Mr Albanese stumbled into his own controversy this week when he failed to recall the nation’s unemployment or interest rates.

Read from: https://www.bbc.com/news/world-australia-61103987

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Sydney airport warns delays could last weeks on third day of travel chaos

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Long queues at Sydney airport’s domestic terminals have continued for a third day, with some passengers missing international connections, as the airport warns delays resulting from a surge in travellers and a shortfall in security staff could continue for weeks.

Chaotic scenes were reported in the departure halls as early as 4.30am on Saturday, with some frustrated travellers, many of whom heeded the pleas of airport chiefs to arrive at least two hours before their domestic flight was due to take off, claiming only one security line was operating.

While the queues that formed early on Saturday are understood to have cleared later in the morning, the airport apologised to affected travellers.

“Traffic numbers are picking up and the close contact rules are making it hard to fill shifts and staff the airport. We appreciate your patience,” Sydney airport said on its Twitter account.

A wave of families travelling as the term two school holidays begin this weekend, combined with close contact rules that are understood to be taking out about 20% of security shifts in any given day, are driving the problem.

Certis, the company that Sydney airport contracts for its security operations, is desperately trying to recruit personnel, while the airport has reallocated back office, IT and retail workers to the departure hall to comb queues so they can prioritise passengers at risk of missing their flight.

“We are working around the clock to resolve these issues and have teams in the terminals bringing passengers forward in order of priority,” a Sydney airport spokesperson said.

He added that the airport is “anticipating it will [be] busy right through the school holiday period and peak over the Easter and Anzac Day weekends, in some cases at 90% of pre-Covid passenger levels”.

“We’re deeply grateful to passengers for their ongoing patience and we’re sorry to everyone who has been inconvenienced,” the spokesperson said. “We would also like to thank passengers for getting to the airport early and treating staff and each other with kindness and respect.”

The Qantas chief executive Alan Joyce was forced to clarify comments he made on Friday that passengers were “not match fit” and that those forgetting to remove laptops and aerosols from their bags at the security check contributing to the delays.

“Just to be clear, I’m not ‘blaming’ passengers,” Joyce said. “Of course it’s not their fault,” he said.

Qantas shed thousands of staff during the pandemic, and outsourced ground crews in a decision that was challenged in court.

On Saturday, Qantas also apologised to a Melbourne family left stranded in Sydney, after domestic flight delays caused them to miss an international trip.

Javiera Martinez, her partner Daniel Capurro and their three children were supposed to be flying to Chile on Friday to visit relatives they had not seen in three years.

But after their 8am Qantas flight from Melbourne was delayed by half an hour, baggage handling and airport transfer delays in Sydney meant they couldn’t make their 11.30am LATAM Airlines flight to Santiago.

Martinez said the airline’s procedures at the airport were chaotic.

“We think Qantas didn’t behave appropriately. I got berated by the person at the counter – they never apologised, they never assumed any responsibility at all,” she said. “It was a rude conversation. We have been mistreated badly I would say.”

The PCR tests they need to travel have now expired and they will have to take them again as they wait for seats on the next flight to Santiago from Sunday.

The airline has apologised and paid for a night’s accommodation in Sydney.

“We sincerely apologise that the family missed their connecting flight on another airline due to delays moving through Sydney airport on Friday,” a Qantas spokesperson said.

The family is among many affected by hold ups amid the busiest travel period in two years, with Sydney, Melbourne and Brisbane airports warning passengers to arrive two hours before domestic flights.

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