28 March 2010

Economic recovery takes firm hold worldwide

Further evidence of the recovery taking hold in many major economies around the world comes courtesy of the latest KPMG Global Business Outlook survey, released today. For the third consecutive edition, the survey shows healthy optimism around key measures such as business activity, revenues and profits. The survey, compiled by research firm Markit on behalf of KPMG International, works on a net balance basis, with the percentage of respondents feeling more pessimistic about their company’s outlook in 12 months’ time deducted from the percentage feeling more optimistic about the future.

The net balance for global business activity in manufacturing stands at +50.9 (up from +42.9) while the equivalent figure in the services sector stands at +44 (down slightly from +46.5 last time but still strongly optimistic). This suggests a firm majority believe their businesses will be getting busier in the coming 12 months.

The outlook for improved business revenues is similarly healthy with a net balance of +42.5 in manufacturing (up from +37.4) and +37.9 in services (flattening out a touch from +40.7 last time). Optimism around profits is also holding up robustly at +35.3 in manufacturing (up from +32.1) and at +35.5 in services (from +36.2 last time).

Digging deeper into most of the key indicators, the percentage of respondents who predict no change in the coming year – and who thus have no impact on the net balance* – tends to stand around 20-25 percent in manufacturing and around 30 percent in services. Of those who have a firm view one way or the other, optimists now tend to outnumber the pessimists by as much as four or five to one.

Commenting on the results, Alan Buckle, Global Head of Advisory at KPMG, said: “What we are seeing here is evidence of a properly robust recovery across numerous key markets which is set to run through until at least spring 2011. Admittedly, we are coming at this from a pretty low base in terms of the nadir which the survey numbers hit in late 2008. However, the extent to which the optimists now outweigh the pessimists is not something which can be easily dismissed. The results from the BRIC countries do tend to put the others – with the exception of the US – somewhat in the shade but even if you took out the BRIC numbers, you would still be looking at some respectably healthy confidence levels elsewhere.

So far, so good then. With only a few exceptions, the recession ended last year and the survey points to continued growth over the next twelve months. However, there are still concerns. In particular, over the course of the year, we need to see the recovery feed into employment and to kick-start investment spending - where intentions currently lag somewhat - before we can really sleep soundly.

Looking at business activity expectations in manufacturing, the BRIC countries now boast a net balance of +63.4, with Brazil leading the way at a staggering +84.2. Only the US (at +65.7) comes near to matching the BRIC numbers. The European average is +43.4, with the UK the stand-out performer at +57.9. In the services sector, BRIC optimism runs at +58.3 and is matched by the US at +60.3 with Europe further back at +39.5. This time around, France leads the way for Europe, returning a net balance of +52.4.

The upward trend in optimism is now evident across the past three Outlook surveys. Confidence around business activity in the services sector hit an all-time low in October 2008 at -2.9 in Europe (indicating that the pessimists were in the majority) and +33.8 in BRIC. As for manufacturing, that dropped as low as -10.2 in Europe and +3.6 in BRIC in January 2009.** What these record low figures do demonstrate however is how the BRIC countries were never as badly affected as their European counterparts and were able to start their recovery from a stronger base.

One area in which global confidence does remain somewhat muted is regarding the prospects for further employment. This is one indicator on which the neutrals – who neither expect to increase or reduce headcount – hold sway, accounting for 53 percent and 60 percent of manufacturing and services respondents respectively. Amongst those who do feel likely to act one way or the other, net balances of just +17.1 (services) and +14.6 (manufacturing) are indicative of how businesses appear to be waiting for the recovery to solidify further before getting back on the recruitment trail.

Alan Buckle concluded: “Looking across the results, I feel that there is a three-tiered recovery in play here. In the top tier are the BRIC countries – full of confidence and worried only by inflation or issues from outside of their own borders which they have no control over. In the second tier are the more cautious optimists, including the US and the stronger European countries. The US may be some way out in front in terms of actual net balances but my feeling is that they share a fear with the Europeans over how sustainable the recovery is and what might happen when stimulus packages expire or are withdrawn. In the third tier are countries like Greece whose business confidence is lacking for obvious reasons. Countries in this tier exhibit survey results which lag the others by some way, serving as a salutary lesson to the others that nothing can be taken for granted at this most delicate stage of recovery.

Global Business Outlook survey - March 2010


* Respondents answering ‘no change’ or ‘don’t know’ are removed from the net balance equation, which only takes into account those giving a definite answer one way or the other.

** Until November 2009, the services and manufacturing surveys ran alternately at quarterly intervals. They were combined in November 2009, at the same time that Japan and the US were added to the survey.

26 March 2010

National Assembly Votes Open University of Mauritius Bill

The Open University of Mauritius Bill which was voted in the National Assembly on March 23 aims at giving the opportunity to a greater number of students or adults to get access to University and higher education and contribute to the setting up of the Mauritian knowledge hub.

In his statement on the Second Reading, the Minister of Education, Culture and Human Resources, Dr. Vasant Bunwaree, underscored the need to expand the supply of tertiary education which currently has a Gross Tertiary Enrolment Rate of about 45% and bring it to 72% by 2015. He said the Open University of Mauritius Bill is a landmark decision which will take our country to new and unprecedented heights of growth and prosperity.

The launching of this Open University of Mauritius with such a modern and up to date managerial framework testifies the real expansion of access to all key aspects of training by fully tapping the potential of our only resource - our human resource - and indicates the commitment of the present Government to the Knowledge Hub objective” said Dr. Bunwaree.

The Minister recalled that as a result of the limited seats in the public universities and the escalation in the costs of studying abroad, it becomes the responsibility of the State to ensure that the possibilities of studying beyond compulsory schooling are there at both an affordable cost and through flexible strategies.

The Bill is fully aligned with international trends in Open and Distance learning worldwide, which include a lean and matrix organisational structure for optimum utilisation of resources and cost-effectiveness, provision for the effective participation and collaboration of other tertiary education institutions. The Open University will comprise both the Language Institute and the Confucius Institute which will work flexibly and complementarily to promote languages in Business and in IT, in diplomacy and translation, and promote language exchanges with China in areas where Mauritius has a huge potential yet to be fully tapped.

The Open University will take up the assets of the Mauritius College of the Air and will be building up on the existing expertise of that institution in multimedia learning and distance Education to boost up open learning to new levels.

25 March 2010

Mauritius consolidates international connectivity via the LION Cable

The Lower Indian Ocean Network (LION) Submarine Optical Fibre Cable System was officially inaugurated yesterday by the Prime Minister, Dr Navinchandra Ramgoolam, GCSK, FRCP, at the Cable Landing Station located at the Mauritius Telecom Terre Rouge Exchange, in the presence of the Chairman of the Board of Directors of Mauritius Telecom, Mr Appalsamy Thomas, and the Deputy Chief Executive, Mr Jean-François Thomas.

The LION Project is a joint initiative of Mauritius Telecom, France Télécom and Orange Madagascar. It is the second submarine cable landing in Mauritius, the first one being the South Africa Far East (SAFE) located at Baie Jacotet. The LION project provides Mauritius with a second gateway and aims at eliminating the ‘single point of failure’ of having only one landing station, thereby enhancing the security, resiliency and reliability of international connectivity for Mauritius. It also provides additional capacity to connect to the world.

In his inaugural speech, the Prime Minister welcomed yet another step to consolidate and expand connectivity with the rest of the world and reinforce our position in the field of data collection and recovery base. He expressed his commitment to the ambition of breaching the digital divide and reach parity with the best global ICT players in the world.

Dr Ramgoolam recalled the development and emergence of ICT as one of the pillars of economy and listed the initiatives and efforts undertaken by the government in its vision to transform Mauritius into a cyberisland where knowledge and technology play a crucial role in the economy. The Prime Minister also reiterated his commitment for an inclusive society where each and everyone have access to internet services and are able to use them. He added that by 2013 some 20 000 vulnerable families would be trained in that field.

For his part, Mr Appalsamy Thomas highlighted the substantial investments of Mauritius Telecom to increase the capacity, reliability and resilience of the international connectivity. Apart from SAFE and LION, Mauritius Telecom also has stakes in the Eastern Africa Submarine System (EASSy) with an investment of US$ 8 million as well as the Europe – India Gateway (EIG) submarine optical fibre cable projects with investments to the tune of US$ 5 million. The systems are scheduled to become operational during the second semester of 2010. Those investments will contribute to create additional capacity that will be used to meet the demands of the IT Enabled Services (ITES) for huge volume of international bandwidth. It is to be noted that the requirements of the ITES sector for international bandwidth have jumped from 50 Mega bits per second (Mbps) in 2005 to 220 Mbps in 2009 and is expected to reach more than 400 Mbps in 2012.

The first phase of the LION project, launched in January 2008, consists of some 1070 km of cables linking Mauritius, Madagascar and Reunion island. It has cost some € 37 million, of which Mauritius Telecom contributed € 8 million. It has a designed total bandwidth capacity of 1.28 trillion bits per second of which only bandwidth capacity of 20 Giga bits per second will be used for a start. The second phase of the project, which was initiated in February this year, will see the cable extended to Mombasa in Kenya with landings in Comoros Archipelago (Mayotte) and Seychelles. LION is already connected to SAFE and will be connected to other major cable systems such as EASSy and The East African Marine System (TEAMS). The second phase of LION is estimated to cost € 54 million.

24 March 2010

IMA Welcomes Improvement to Competitiveness of UK-Domiciled Funds

The Chancellor announced today in his Budget Report that HMRC will work with the industry to amend the fund-specific Schedule 19 Stamp Duty Reserve Tax regime. The tax affects only UK-authorised funds and is in addition to SDRT paid on funds' acquisitions of UK equities. In particular, it is currently paid by UK funds investing in other funds, even where those other funds are not invested in UK equities. It is this element of the tax that is to be removed, which will enable UK-domiciled funds to compete on a level playing field with offshore funds.

The Government has also announced that it intends to launch a working group to consult with industry on whether to establish a tax-transparent contractual fund vehicle and that it will continue to work with us to refine the new regime for funds invested in non-reporting offshore funds.

Commenting on these announcements, Julie Patterson, Director of Authorised Funds & Tax at the Investment Management Association, said:

"
We welcome this news. The amendment of Schedule 19 SDRT will remove a current unfairness. This, coupled with the introduction of tax-transparent contractual funds, will enable the UK to compete as a domicile for the new UCITS master-feeder structures and for hedge funds coming onshore. It follows on from improvements to the UK's fund tax regime that IMA has secured over the past few years, including certainty that funds will be treated as investing not trading, tax-efficient regimes for securities and property funds, and a workable regime for institutional funds. The more funds that chose to domicile here rather than offshore, the more business and employment taxes are received by the UK Exchequer. Today's announcements are therefore good news for the competitiveness of the UK funds industry and for the UK.

We also welcome the Government's commitment to further discussion on reforms of Schedule 19 SDRT. We shall continue to argue for its complete abolition, because it is an additional tax on ordinary UK savers.
"

Tax and the Crisis

Keen, M., Klemm, A. and Perry, V. (2010), Tax and the Crisis. Fiscal Studies, 31: 43–79.
doi: 10.1111/j.1475-5890.2010.00107.x

Abstract

Did taxation play any role in precipitating the financial crisis? Are there lessons to be drawn for future tax reform priorities? This paper reviews the main channels by which tax effects might have been felt and which may require forceful attention. These include in particular the large tax biases favouring debt finance and, in some countries, investment in housing. The complexities of national tax codes, and the international interaction between them, have, moreover, encouraged the use of complicated financial instruments and international tax planning, reducing transparency. Tax distortions did not cause the crisis – in the sense that there are no obvious tax changes likely to have triggered it – but they may well have contributed by leading to higher leverage and more complexity than would otherwise have been the case. Most of these distortions have long been a source of concern, but dealing with them may be more important than previously supposed.

Get PDF (405K)

19 March 2010

Mauritius : Forum to chart the way forward for textile and apparel sector

Some 110 operators and support service providers are participating in the ‘Textile Forum 2010 - State of the Sector and Horizon 2010’ held since March 18, at the Hilton Resort and Spa in Wolmar. The two-day Forum, which is an Enterprise Mauritius event, is expected to come up with a set of strategies that would define the way forward for, and uphold, the local textile industry over the next three years.

The Forum aims at providing a platform for sharing information on the evolution of the global apparel sector, fashion trends and changes in consumer behaviour. Participants, among whom are representatives from small and medium enterprises as well as large companies engaged in textile and clothing sectors together with representatives of the financial and banking sectors, have the opportunity to assess the present strength and weaknesses of the Mauritian textile industry and put forth their queries as regards potential strategic responses. Presentations by industry experts from the textile, logistics and financial sectors are scheduled during the two days.

At the launching of the Forum, the Minister of Industry, Science and Research, Mr D. Gokhool, highlighted the need to address factors such as logistics as well as social and environmental compliance to enable the country to gain a competitive edge and increase its market share. The minister also called on participants to examine the means to capture niche markets and to overcome the challenges posed by the emergence of new suppliers who are in direct competition to Mauritius.

For his part, the Chairman of Enterprise Mauritius, Mr A. Darga, listed the measures taken by Enterprise Mauritius to accompany the textile and clothing sector in Mauritius in face of the economic crisis: developing new markets such as Italy and Scandinavia, marketing trip support to enable exporters to showcase their products, and promoting medium size companies to higher level of exports through an integrated support programme, among others. Mr Darga urged participants to seize the opportunity provided by the Forum to inform policy makers on how best to support the industry so that by 2015, the textile and apparel sector remains an important pillar of the economy.

It is to be noted that the textile and apparel industry accounts for 4.9% of GDP, 8.9% of the active labour force, 41.5 % of total merchandise exports and 64.9% of EOE - Export Oriented Enterprises – exports.

18 March 2010

OECD - Tax transparency: Global Forum launches country-by-country reviews

The international fight against cross-border tax evasion has entered a new phase with the launch by countries participating in the Global Forum on Transparency and Exchange of Information of a peer review process covering a first group of 18 jurisdictions: Australia, Barbados, Bermuda, Botswana, Canada, Cayman Islands, Denmark, Germany, India, Ireland, Jamaica, Jersey, Mauritius, Monaco, Norway, Panama, Qatar, Trinidad & Tobago.

The reviews are a first step in a three-year process approved in February by the Global Forum in response to the call by G20 leaders at their Pittsburgh Summit in September 2009 for improved tax transparency and exchange of information. In addition to a complete schedule of forthcoming reviews, the Global Forum also published three other key documents:

- the Terms of Reference explaining the information exchange standard countries must meet;

- the Methodology for the conduct of the reviews;

- the Assessment criteria explaining how countries will be rated.

Welcoming this new step forward for the international tax compliance agenda, OECD Secretary-General Angel Gurría said: "The Global Forum has been quick to respond to the G20 call for a robust peer review mechanism aimed at ensuring rapid implementation of the OECD standard on information exchange. This is the most comprehensive peer review process in the world, and it is based on decades of experience at the OECD of conducting reviews of this kind in many other areas of policy making. I look forward to seeing the first results later this year".

The Global Forum brings together 91 countries and territories, including both OECD and non-OECD countries. At a meeting in Mexico in September 2009, participants agreed that all members as well as identified non members will undergo reviews on their implementation of the standard. These reviews will be carried out in two phases: assessment of the legislative and regulatory framework (phase 1) and assessment of the effective implementation in practice (phase 2).

The review reports will be published once they have been adopted by the Global Forum, whose next meeting will take place in Singapore at the end of September 2010.

Mike Rawstron, chair of the Global Forum, stated: “This is the most comprehensive, in-depth review on international tax co-operation ever. There has been a lot of progress over the past 18 months, but with these reviews we are putting international tax co-operation under a magnifying glass. The peer review process will identify jurisdictions that are not implementing the standards. These will be provided with guidance on the changes required and a deadline to report back on the improvements they have made”.

12 March 2010

London and New York lead world in latest Global Financial Centres report

London and New York are tied for first place in the latest Global Financial Centres (GFC) report, published today by the City of London Corporation.

The data was collected between July and December 2009, a period of considerable volatility as the global economic recovery got underway. London (-15 points in the ranking to 775 from 790) was one of four centres to see a decrease in its ratings (Shenzhen (-25), Guernsey (-6), and Dublin (-1)), despite an overall return of confidence. Meanwhile, New York (+1) held steady in the face of concerns over the regulatory environment.

Asian centres continued to make gains, with Hong Kong, Singapore, Tokyo, Shanghai and Beijing, in particular, all recording strong performances.

The study, the seventh of its kind produced by Z/Yen Group, also indicates that the gap between the top two and Hong Kong in third has narrowed. It now stands at 36 points, down from 45 in GFCI 6 and 81 in GFCI 5.

Stuart Fraser, Policy Chairman at the City of London Corporation, said:

'Although London and New York have always led the pack, this research is a wake-up call for decision-makers that our standing as a world-leading global financial centre should not be taken for granted. Damage has been done to the Square Mile's perceived competitiveness relative to New York but this is not irreversible provided the new incoming government – regardless of political persuasion – makes a clear, positive statement on their "direction of travel" with regard to tax and regulation. Not everything can be achieved at once but businesses need confidence that over the longer term the government of the day is supportive of the financial services industry as a wealth generator for the UK economy.

'We cannot afford to be complacent in the face of growing competition across the world, not just in the USA but also increasingly Asia. There is a danger that new regulation could accelerate this shift in the financial centre of gravity towards fast-developing markets by undermining the UK's competitiveness. Industry and government must work together to ensure that this does not happen.'

GFCI 6, published in September 2009, showed a general return of confidence among respondents - with all but three centres (Dublin, Glasgow and Gibraltar) recording stable or higher results than previous ratings.

The GFC report tracks the underlying competitiveness of financial centres. The rankings are compiled by the independent Z/Yen Group from surveys of finance professionals around the world and competitiveness indicators.

Download the GFC7 report
Download the GFC7 appendices

11 March 2010

ACCA Mauritius appoints new head

Madhavi Ramdin to take charge in leading African market

ACCA Mauritius has appointed Madhavi Ramdin as its new country head.

Prior to joining ACCA, Madhavi was business development manager at the National Computer Board, and has previously worked for the Board of Investment and the Regional Tourism Office in Malaysia. She brings with her valued international experience in strategy and business development that will serve ACCA well in one of its strongest African markets.

'I am delighted to form part of such a highly reputable organisation known for its dynamism and effectiveness,' said Madhavi. 'I look forward to strengthening further ties with partners, stakeholders and members for the benefit of the accountancy profession and the advancement of the public interest.'

Welcoming the appointment, Daisy Kopolo, ACCA head of corporate development - South Africa, said: 'I am confident Madhavi's high-level international experience will serve ACCA's strategic focus well and ensure that we bring value to our membership, the profession, strategic partners and the country as a whole.

'I believe her business development skills are precisely what ACCA in Mauritius needs at this time of its development to build upon the quality growth already achieved in that market.'

10 March 2010

The Bahamas expands its network for international exchange of tax information

The Bahamas has today signed agreements allowing for exchange of tax information with the seven Nordic economies (Denmark, the Faroe Islands, Finland, Greenland, Iceland, Norway and Sweden). The Bahamas had previously signed 11 such agreements – including agreements with important regional and economic partners Mexico, the United States and the United Kingdom.

Today’s signing brings their total to 18 agreements that meet the internationally agreed tax standard. For the purposes of the progress report on the implementation of the standards, jurisdictions having signed at least 12 agreements that meet the internationally agreed tax standard are considered to have substantially implemented that standard. Accordingly, the Bahamas now moves into the substantially implemented category, becoming the 22nd jurisdiction to do so since the progress report was first issued in April 2009.

The Bahamas is a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes and an active member of the Global Forum’s Peer Review Group, and it is participating in a peer review of its laws and practices in this area.

Jeffrey Owens, Director of the OECD’s Centre for Tax Policy and Administration, said, “Given the role that the Bahamas plays in the financial world, I am particularly pleased that they have made significant progress and they continue to expand their network of partners with whom they can exchange tax information.

The Shorex Wealth Management Forum Singapore 2010

DATES: Tuesday 13th & Wednesday 14th April 2010

OPENING HOURS: 8.30 - 18.30

VENUE: Suntec Singapore - Level 2 - Ballroom 2 & 3

For the second time, the world's leading Shorex wealth management forum is moving to Singapore to address the growing need of the Asian market for private banking, asset management and international tax planning solutions and services. The event is an exhibition and conference offering a unique platform where professionals can network to explore new services, products and ideas in wealth management.

Last year, the Shorex Wealth Management Forum attracted 30 exhibitors and sponsors and 1294 participants from Singapore, Hong Kong, India, Indonesia, Malaysia, Thailand, Vietnam, Korea, Taiwan, the Emirates and China. After 8 years of success in Geneva as the most credible European platform for professionals advising HNWIs, Shorex is holding for the second year its sister forum in Singapore, the undisputed centre of wealth management excellence in Asia. The event mainly focuses on professional advisors to HNWIs, institutional investors but also welcomes ultra net worth qualified investors invited by our private banking partners. The event is expected in 2010 to attract over 50 exhibitors and 1400 delegates.

OBJECTIVES

- Provide a comprehensive networking platform for professional advisors & investors
- Enhance distribution channels for financial institutions
- Deliver knowledge updates from leading industry figures
- Introduce a global range of financial services for the Asian fast growing financial services sector
- Establish distribution agreements between international providers and local banks and advisers
- Design new products specifically made for the Asian markets
- Establish joint-ventures with local partners

If you are with either:

- a private banker (board member, fund selector, portfolio manager, relationship manager)
- an independent asset manager
- a family office senior executive
- independent financial advisor
- institutional investors (CIOs and board members)
- lawyer or a chartered accountant

09 March 2010

Regulatory Arbitrage

University of Colorado Law School; NYU School of Law

March 4, 2010


Most of us share a vague intuition that the rich, sophisticated, well-advised, and politically connected somehow game the system to avoid regulatory burdens the rest of us comply with. The intuition is correct; this Article explains how it’s done.

Regulatory gamesmanship typically relies on a planning technique known as regulatory arbitrage, which occurs when parties take advantage of a gap between the economics of a deal and its regulatory treatment, restructuring the deal to reduce or avoid regulatory costs without unduly altering the underlying economics of the deal. This Article provides the first comprehensive theory of regulatory arbitrage, identifying the conditions under which arbitrage takes place and the various legal, business, professional, ethical, and political constraints on arbitrage. This theoretical framework reveals how regulatory arbitrage distorts regulatory competition, shifts the incidence of regulatory costs, and fosters a lack of transparency and accountability that undermines the rule of law.

Download the paper here

Mauritius and France sign agreements on Investment Protection and Sustainable Development

Mauritius and France signed three agreements covering investment protection and sustainable Development, in Port Louis yesterday afternoon. The Vice-Prime Minister, Minister of Finance and Economic Empowerment, Dr Rama Sithanen, signed on behalf of the Mauritian Government and the French Government was represented by the Secretary of State for External Trade, at the Ministry of Economy, Industry and Employment, Mrs Anne-Marie Idrac, who was on official visit in Mauritius on 8 March 2010.

The agreements are as follows:
  • an Investment Promotion and Protection Agreement(IPPA) between Mauritius and France;
  • two financing agreements for general budget support: one, with the Agence Française de Développement (AFD) for a loan amounting to Euro 125 million for the environment and energy sectors with the overall objective to contribute to the sustainable development of Mauritius, and the other, a grant of Euro three million from the European Union, for the Environment Aid Programme for Mauritius (EAPM), financed by the Global Climate Change Alliance (GCCA), which aims at supporting the most vulnerable countries with respect to their capacity to adapt to the effects of climate change.
The core principles under the IPPA are the granting of most-favoured-nation treatment to investors of the two contracting parties in addition to fair and equitable treatment in conformity with the provisions of international law. The IPPA will also establish a predictable investment framework and contribute to the engendering of a stable business environment which will benefit both countries in terms of job creation, increased domestic economy efficiencies and opportunities to attract new investment and technology in support of the competitiveness and economic growth.

As regards the two financing agreements by the AFD and EU, they will complement and reinforce the budget support programme by sharing similar global objectives of financing projects and initiatives in the context of climate change and sustainable development. Funds under the EC EAPM grant, designed to support sustainable development, climate change and adaptation measures in Mauritius, will be disbursed in two equal fixed tranches of Euro 1.4 million each in 2010 and 2011. The remaining Euro 200 000 will serve for the purpose of capacity building within the EAPM.

Another agreement was signed between the State Investment Corporation Ltd and the Compagnie Française d'Assurance pour le Commerce Extérieur (COFACE), to allow Mauritian investors to benefit from export credit insurance scheme.

08 March 2010

PwC : Six Sigma Training

Preparing for Six Sigma Green Belt

PricewaterhouseCoopers will be conducting a Six Sigma Green Belt level training in Mauritius on 23-26 March 2010.

Course Objective:

The objective of this training programme is to explain and appreciate the Six Sigma philosophy, understand its tools, and how they can be used as a business management philosophy leverage continuous improvement in an organisation.

Course Contents:

The What and Why of Six Sigma

The Six Sigma Framework
Define Phase – What is important?
Measure Phase – How are we doing?
Analyse Phase – What is wrong?
Improve Phase – What needs to be done?
Control Phase – How do we guarantee performance?
Action Planning and Feedback

The training session will include practical examples to provide participants with the opportunity to apply the principles discussed.

Who Should Attend?

Directors, Managers, Accountants and Team Leaders
Quality and Process Improvement Professionals
Professionals seeking to become Six Sigma Certified
Project Managers, key contributors and first line management (and above) having continuous improvement roles

The Coach: Salil Agrawal

Salil Agrawal is an Associate Director at PricewaterhouseCoopers India. He has over 26 years of diverse industry experience. He helps organisations to achieve higher productivity, faster service and lower costs through the reengineering of business processes, by adopting quality tools like Six Sigma, LEAN and Business Process Management.

Training Details:

Date: 23-26 March 2010 (4 full-day workshops)

Time: 8:30 am - 5:30 pm

Venue: La Canelle, Domaine Les Pailles

Cost: Rs 50,000 per participant (15% VAT is applicable)

(MQA Approved)

Closing date: Monday 15 March 2010


Registration:

You can register by calling Mrs Nasrah Jownally on Tel : 404 5078

IMF F&D: Perils of Ponzis

FINANCE & DEVELOPMENT, March 2010, Volume 47, Number 1
Hunter Monroe, Ana Carvajal, and Catherine Pattillo

Regulators need to stop Ponzi schemes before they gain momentum, especially in developing countries.

05 March 2010

Mauritius : New Criteria for issue of occupation permits and residence permits

Cabinet has taken note that the Vice-Prime Minister, Minister of Finance and Economic Empowerment would make regulations under the Investment Promotion Act to review the criteria for the issue of an occupation permit to investors, professionals and self-employed persons and a residence permit to retired non-citizens to reflect current conditions whilst remaining in line with Government’s objective to attract quality investment and talents and, at the same time, to deter abuse of the system by persons with no genuine intention to participate in the economic development of Mauritius. The new criteria would, inter alia, provide that -

(a) besides an annual turnover exceeding Rs 4m, the investor should make an initial investment of US$100,000 or its equivalent in freely convertible foreign currency;

(b) a professional should have a monthly salary exceeding Rs 75,000 to be able to register in Mauritius;

(c) a self-employed person should, besides an annual income of Rs 600,000, make an investment of US$35,000 or its equivalent in freely convertible foreign currency; and

(d) a retired non-citizen should make an initial transfer of at least US$40,000 or its equivalent in freely convertible foreign currency when first settling in Mauritius.

04 March 2010

The World Trust Survey

Charles Gothard, Partner, Speechly Bircham LLP, and Sanjvee Shah, Partner, Speechly Bircham LLP
608 pages | 246x171mm
978-0-19-955157-6 | Hardback

Price: £125.00
  • Comprehensive, easy to follow questionnaire format with an entry for each country
  • Offers concise and practical answers to frequently asked questions that arise in trust law and practice
  • Gives a useful overview of both off-shore and on-shore jurisdictions
  • Entries written by experienced practitioners in the relevant jurisdiction around the world
  • New coverage of Monaco, Israel, Australia, Ireland, and the USA
The use of international trusts continues to expand, and practitioners increasingly need to be aware of cross-border considerations. This title provides a concise and practical overview of the key aspects of law and practice in all the key jurisdictions offering trusts.

Private and commercial trusts are established under the law of an increasing number of jurisdictions, which are competing to attract trust business, and these laws are often dissimilar. As international trusts mature, established trust jurisdictions are changing their laws to comply with the legal demands and standards imposed by international agencies, as well as to meet the legitimate expectations of the institutional investor. The courts of international centres are also developing their own jurisprudence. In addition, jurisdictions new to trusts are introducing trusts in the vehicles which they offer investors, and legislation from these new trust centres is opening up new routes for international investment and tax mitigation.

This book provides a comprehensive treatment of the subject, covering all the key on-shore and off-shore jurisdictions that practitioners typically encounter. It offers a very practical overview of the subject using a questionnaire format for each country, avoiding academic material, and giving concise answers to the sorts of frequently asked questions that arise in trust law and practice. The questionnaire covers a full range of subjects such as the mechanics of trusts, issues such as anti-money laundering laws and conflicts of laws, shams, protectors, and forced heirship as well as the different types of trusts used in a jurisdiction.

Formerly an annual special issue in the journal Trusts & Trustees, this title has been improved and extended with a reworked questionnaire, new countries and contributors, and new editors, Charles Gothard and Sanjvee Shah.

Readership: This book will appeal to solicitors and barristers advising on trusts where an international element is involved. It will also be useful for trust advisers and trust managers at banks and trust companies working with off-shore trusts.

Table of Contents:

1: Introduction
2: John O Dyrud: Anguilla
3: Anthony D'Aniello: Antigua and Barbuda
4: John Stumbles, John King, Heidi Machin: Australia
5: Earl Cash: Bahamas
6: Mary Mahabir: Barbados
7: Alec Anderson, Stephanie Bernard: Bermuda
8: Naresh Chand: British Virgin Islands
9: Timothy Youdan: Canada
10: Tony Pursall, Justin Appleyard: Cayman Islands
11: Hao Wang, Yi Zhou: China
12: Ronnie Summers: Cook Islands
13: Elias Neocleous, Philippos Aristotelous: Cyprus
14: Edward Reed: England and Wales
15: Peter Montegriffo, Raquel Moss: Gibraltar
16: St John Robilliard: Guernsey
17: Mark Lea: Hong Kong
18: Hanisha Amesur, Bijal Ajinka: India
19: Paraic Madigan, Jennifer Tuite: Ireland
20: John Rimmer: Isle of Man
21: Alon Kaplan, Lyat Eyal, Yigal Harkavy: Israel
22: Paolo Giacommetti, Giovanni Cristofaro: Italy
23: Alan Dart: Jersey
24: Bernhard Lorenz, Martin Attlmayr: Liechtenstein
25: Anthony Cremona: Malta
26: Muhammad Uteem: Mauritius
27: Donald Manasse: Monaco
28: Geoffrey Cone: New Zealand
29: Ramses Owens: Panama
30: Simon Mitchell: Seychelles
31: Leon Kwong Wing: Singapore
32: Jennifer Booth: South Africa
33: Najhdla Dilsuk, Nicholas John: St. Lucia
34: Edgar Paltzer, Patrick Schmutz: Switzerland
35: Dina Kapur Sanna, Natalia Murphy: United States: New York

03 March 2010

Federal Reserve announces proposed rules to protect credit card users from certain practices

The Federal Reserve Board on Wednesday proposed a rule amending Regulation Z (Truth in Lending) to protect credit card users from unreasonable late payment and other penalty fees and to require credit card issuers to reconsider increases in interest rates.

"This proposal addresses two key costs of using a credit card--fees and interest rates," said Federal Reserve Governor Elizabeth A. Duke. "The rule would prevent credit card issuers from charging large penalty fees for small missteps by consumers and would require issuers to reevaluate rate increases imposed since the beginning of last year."

Among other things, the proposed rule would:

Prohibit credit card issuers from charging penalty fees (including late payment fees and fees for exceeding the credit limit) that exceed the dollar amount associated with the consumer's violation of the account terms. For example, card issuers would no longer be permitted to charge a $39 fee when a consumer is late making a $20 minimum payment. Instead, the fee could not exceed $20.

Ban inactivity fees, such as fees based on the consumer's failure to use the account to make new purchases.

Prevent issuers from charging multiple penalty fees based on a single late payment or other violation of the account terms.

Require credit card issuers to inform consumers of the reasons for increases in rates.

Require issuers that have increased rates since January 1, 2009 to evaluate whether the reasons for the increase have changed and, if appropriate, to reduce the rate.

The proposed rule represents the third stage of the Federal Reserve's implementation of the Credit Card Accountability Responsibility and Disclosure Act of 2009 (Credit Card Act), which was enacted in May 2009. The provisions of the Credit Card Act addressed in this proposal will go into effect on August 22, 2010. In July 2009, the Board issued a rule implementing the provisions of the Credit Card Act that went into effect on August 20, 2009. In January 2010, the Board issued a rule to implement the provisions of the Credit Card Act that went into effect on February 22, 2010.

02 March 2010

JFSC : 2009 TCB On-site Examination Feedback

Indo-Mauritian partnership to implement the Work from home BPO scheme

The Work from Home (WFH) Business Process Outsourcing (BPO) model will be deployed in Mauritius as from April 2010. The project, as announced in the 2010 Budget, aims at creating opportunities for full time or part time employment, particularly for women who want to work from home while attending to other responsibilities as well as for persons with physical disabilities.

The Board of Investment (BOI) Mauritius and Quatrro BPO Solutions, one of India’s pioneers in the IT-BPO industry, signed a Memorandum of Understanding (MoU) on February 11, 2010 to that effect. The MoU paves the way for the implementation of the project, which will utilize innovative work processes for the people of Mauritius and enhances Quatrro’s capability of end-to-end processing of high volume transactions using an onshore-offshore model. The project is deemed as a major stepping-stone for Mauritius to ride the next wave in the ICT/BPO industry and will allow the island to showcase world-class service at a price-point projected to be over 50% lower than current processing costs in the United States.

The signing ceremony was held during the NASSCOM Leadership Summit that was held in Mumbai in February where Quatrro and BOI mentioned that they would also be pursuing opportunities to service customers and companies from French speaking countries. The signing parties will work together on providing ongoing support, enhancing domain expertise and business development, to these initiatives. Following this launch, the BOI proposes to take advantage of Quatrro’s expanded processing expertise and cost savings to showcase the service efficiencies from Mauritius for customer across the globe.

01 March 2010

IIFM and ISDA Launch Tahawwut (Hedging) Master Agreement

The International Islamic Financial Market (IIFM) and the International Swaps and Derivatives Association, Inc. (ISDA) today launched the ISDA/IIFM Tahawwut (Hedging) Master Agreement.

The development is a breakthrough in Islamic finance and risk management, and marks the introduction of the first globally standardized documentation for privately negotiated Islamic hedging products. The ISDA/IIFM Tahawwut (Hedging) Master Agreement is the first financial industry framework document that is applicable across all jurisdictions where Islamic finance is practiced. The launch of the Tahawwut Master Agreement was officially announced at a launch event in Bahrain hosted by IIFM and ISDA under the patronage of H. E. Rasheed Mohammed Al Maraj, Governor, Central Bank of Bahrain.

IIFM and ISDA jointly developed the Tahawwut documentation under the guidance and approval of the IIFM Shari’ah Advisory Panel for this project and in consultation with market participants. The published document consists of the Tahawwut Master Agreement and an Explanatory Memorandum, both of which are part of the official Shari’ah Pronouncement.

Given the growing nature of the Islamic finance industry, the institutions operating on Shari’ah principles can no longer afford to leave their positions un-hedged,” said Khalid Hamad, Chairman of IIFM and Executive Director of Banking Supervision at Central Bank of Bahrain. “Hence, some key hedging products are now becoming common across jurisdictions to mitigate risk. The ISDA/IIFM Tahawwut Master Agreement gives the industry access to a truly global framework document which is neutral in terms of treatment to both the transacting parties and at the same time strictly conforms to Shari’ah principles. IIFM is honored to have achieved this milestone in collaboration with ISDA and I am confident that such joint efforts will continue in the future.

Demand for customized, privately negotiated hedging tools that conform to the principles of Islamic finance has increased in momentum,” said Eraj Shirvani, Chairman of ISDA and Managing Director, Head of Fixed Income for the EMEA Region, Credit Suisse. “The Tahawwut Master Agreement provides the critical framework for the growth and evolution of Shari’ah-compliant hedging instruments.

The ISDA/IIFM Tahawwut Master Agreement provides the structure under which institutions can transact Islamic hedging transactions such as profit-rate and currency swaps, which are estimated to represent most of today’s Islamic hedging transactions.

It is designed to be used between two principal counterparties as a master agreement. Parties understand that no interest shall be pay­able or receivable and no settlement based on valuation or without tangible assets is allowed. Moreover, the counterparties to the Tahawwut Master Agreement make representations as to the fact that they enter into Shari’ah-compliant transactions only.

It is a completely new framework document though the structure of the document is similar to the conventional ISDA Master Agreement. However, the key mechanisms and provisioning such as early termination events, closeout and netting are developed based on the Islamic Shari’ah principles.

Standardization is a key element in the progress of Islamic finance though it is not a simple process as evident from the efforts put in to the development of this master agreement,” said Ijlal Ahmed Alvi, Chief Executive Officer, IIFM. “A record number of drafts - 24 drafts – were developed during the industry consultation and Shari’ah guidance process before ultimately reaching the final version, which is comprehensive as well as practical in terms of usage with no compromise to Shari’ah principles. It was indeed a pleasure to work with such an experienced and dedicated execution team and the efforts were supplemented by exemplary understanding and cooperation shown by ISDA, our joint partner. We express our heartfelt thanks to the Central Bank of Bahrain for their continuous support and to all who were involved in completing this important project.

ISDA is pleased to have partnered with the IIFM as part of its own on-going efforts to promote prudent risk management and to support the efficient development of privately negotiated hedging products,” said Robert Pickel, Executive Vice Chairman, ISDA. ”The Tahawwut Master Agreement represents a major milestone in the development of risk management in Islamic finance.

IIFM has taken a lead in preparing Shari'ah complaint Master Agreements for specific areas of Islamic finance, which a number of financial institutions globally have recognized and adopted in order to avoid misunderstanding, uncertainty, and confusion; and also to seek clarity and sound business activities. The adoption of these Master Agreements will pave the way not only for Shari'ah compliance but also product innovation” said Dr Ahmad Rufai, IIFM Shari'ah Head. “The IIFM Shari'ah Advisory Panel have considered the Tahawwut Master Agreement to be a necessary step forward for promoting global standardization for Islamic financial product standards, because the absence of a global Shari'ah compliant standardized agreement may lead to negative effect in the industry. On this occasion, the IIFM Shari'ah Department would like to thank the IIFM Shari'ah Advisory Panel for their indispensable and greatly appreciated support. We don't know where the TMA development would be without their invaluable help and patience in reviewing many of the drafts. Maybe it would not have seen the light.

In addition to developing documentation for Islamic transactions, ISDA in coordination with IIFM is in contact with various regulators in a number of Islamic jurisdictions, such as the Gulf Cooperation Council (GCC) region, namely UAE, Bahrain and Qatar, plus Pakistan to improve the local legal framework for hedging products and close-out netting provisioning.

The ISDA/IIFM Tahawwut Master Agreement will be available at IIFM’s website www.iifm.net or at ISDA’s website www.isda.org

About IIFM

IIFM is the global standard setting body for the Islamic Capital & Money Market segment of the IFSI. Its primary focus lies in the standardization of Islamic products, documentation and related processes. IIFM was founded with the collective efforts of Central Bank of Bahrain, Central Bank of Indonesia, Central Bank of Sudan, Labuan Offshore Financial Services Authority (Malaysia), Ministry of Finance (Brunei Darussalam) and Islamic Development Bank (Saudi Arabia). Besides the founding members, IIFM is supported by its permanent members namely State Bank of Pakistan and Dubai International Financial Centre (UAE). IIFM is further supported by a number of regional and international financial institutions as well as other market participants as its members. Information about IIFM is available at www.iifm.net

About ISDA

ISDA, which represents participants in the privately negotiated derivatives industry, is among the world’s largest global financial trade associations as measured by number of member firms. ISDA was chartered in 1985, and today has over 810 member institutions from 57 countries on six continents. These members include most of the world’s major institutions that deal in privately negotiated derivatives, as well as many of the businesses, governmental entities and other end users that rely on over-the-counter derivatives to manage efficiently the financial market risks inherent in their core economic activities. Information about ISDA and its activities is available on the Association's web site: www.isda.org

KEY COMMENTARY:

Below is some key commentary from IIFM Shari’ah Scholars and IIFM Board Members on the ISDA/IIFM Tahawwut Master Agreement:

Shari’ah Scholars:

Shaikh Nizam Yaquby: “IIFM and ISDA have done a great service to the Islamic Financial Institutions by this document. This is the second standard document issued by IIFM and it is the right example to follow in future documentations. The amount of time, efforts, and resources put to achieve this standard document will only be appreciated by those who understand the difficult and complex discussions and research phases that this document was subjected to. Congratulations IIFM and ISDA and keep up the good job!

Shaikh Esam Mohammed Al Shaikh Ishaq: “This ISDA/IIFM Tahawwut Master Agreement has been the end result of a long and difficult process, in which meetings between scholars, practitioners and others took place for a period of over three years. The process was arduous, involving tight-rope walking, navigation on many Shari’ah issues and concerns, while keeping in mind the interests of the industry simultaneously. I pray Allah blesses this document with proper understanding and implementation by all involved. This document is definitely an addition of great value to Islamic Finance & Banking.

Shaikh Dr Mohammed Daud Bakar: “Risk management or hedging which is compliant to Shari’ah principles is a must in Islamic finance industry. Standard documentation on this aspect by IIFM and ISDA is not only timely but also evidence that standardization is always possible in this young and promising industry. This ground breaking achievement will be the start of many more institutional achievements.

Shaikh Dr Mohammed Burhan Arbouna: “This Islamic hedging document is a milestone for the Islamic banking and finance industry. The birth of this document shows the flexibility of Islamic legal principles to attend to the need of societies as they conduct daily commercial activities according to the tenets of Islam. The document has passed through an extensive scholarly discussion and scrutiny for the past few years, the reason being to ensure that the mechanisms employed in the hedging industry are fully agreed upon by the majority of the IIFM Shari’ah Advisory Panel. We wish that this document will shape the road for other developments in the Islamic banking and finance industry.

IIFM Board Members:

Dato’ Azizan Abdul Rahman, Director General, Labuan Offshore Financial Services Authority (LOFSA): “The global financial crisis has underscored the importance of sound risk management, primarily related to hedging transactions. The Tahawwut Master Agreement provides the needed consistency and predictability to ensure deep and liquid international Islamic financial markets. Such standardization initiative undertaken by IIFM and ISDA is a testament to the greater convergence in Shari’ah interpretations of universal recognition and acceptance. Labuan FSA will continue to support and provide impetus towards such endeavors.

Farhan Al Bastaki, Executive Director, Islamic Finance, DIFC Authority: “DIFC is very happy to have been associated with the development of the Tahawwut Master Agreement. We are keen to promote and support initiatives that drive standardization in the Islamic finance industry. As DIFC evolves further into a global hub for institutional finance and a gateway for capital and investment in emerging markets, Islamic finance is one of the key sectors we are focusing on. The Tahawwut Master Agreement will help in boosting the growth of the Islamic financial services industry and the development of the Islamic capital & money markets across the world.

Afaq Khan, Chief Executive Officer, Standard Chartered Saadiq: “This is a great accomplishment as this will allow Islamic banks to offer end-to-end solutions to their customers and it will allow better treasury risk management tools for Islamic financial institutions to competitively manage the market risks. Standard Chartered Saadiq is proud to have been part of the development of this market standard and will continue to play a positive and proactive role in industry development initiatives.

Naveed Khan, Managing Director, ABC Islamic Bank: “It is encouraging that the IIFM and ISDA are launching this ground breaking initiative, which will not only provide the market with an essential tool for hedging but will also remove the current disadvantage experienced by Shari’ah-compliant customers versus their conventional competitors. That they can do it in a way that carries the blessings of a regulatory authority which is interested in enhancing industry benchmarks and standards is also really remarkable. ABC Islamic Bank is proud to have been associated with the IIFM as a part of this initiative.

Lilian Le Falher, Executive Manager, Treasury & Financial Institutions, Kuwait Finance House: “Hedging products are becoming mainstream products for Islamic financial institutions. Too often, transactions in our industry face delays in their execution due to the lack of standardization. The ISDA/IIFM Tahawwut Master Agreement will provide practitioners with an appropriate and globally recognized legal framework for hedging transactions.

Accessing Growth Markets - The Role of Global Business Centres : The Mauritius Conference

Date: 30 March 2010
Venue: Waldorf Hilton, London, UK

Investment in the new growth markets of Asia and Africa can be challenging. But the opportunities are worth it, or at least, we think so. Part of the problem is knowing how to structure the investment or the vehicle through which that investment will flow.

We have come together with one of the highest-quality international jurisdictions to create an innovative event to enable you to understand how your business can use global financial centres legally and efficiently to structure and manage investment in new growth markets.

Co-Hosted by Euromoney Conferences and the Board of Investment of Mauritius this new event will analyse and discuss the future for international business centres in the global economy. We will discuss the market opportunity presented by capital flows between emerging markets and how global business centres stand in relation to increasing pressure from developed nations.

Opened by Robert Parker, one of the best-known commentators on emerging markets, the conference will also be the only dedicated event in London to provide a platform for discussion of how to take advantage of growth market investment opportunities with some of the keenest minds in the City such as Richard Fairgrieve from Blackfriars AM and Liam Halligan from Prosperity CM.

Key speakers already confirmed include:
  • Saxon Brettell, Head of Research, City of London Corporation
  • Slim Feriani, Chief Executive Officer, Advance Emerging Capital Limited
  • Rainer Koehler, Senior Economist and Desk Officer for Mauritius, African Department, International Monetary Fund
  • Shyam Kumar, Director, Chief Executive Officer and Global Head Distribution and Institutional Business, Kotak Mahindra (UK) Limited
  • Vanessa Rossi, Senior Research Fellow, Chatham House
  • Devalingum Gopalla, Associate, Conyers Dill & Pearman
This conference is by invitation only. Please click here to apply for a complimentary invitation (Euromoney will decide eligibility based on your application) or to confirm your place if you are a VIP guest of the Mauritius Board of Investment or Conyers Dill & Pearman.

2010 International Narcotics Control Strategy Report

The 2010 International Narcotics Control Strategy Report (INCSR) is an annual report by the Department of State to Congress prepared in accordance with the Foreign Assistance Act. It describes the efforts of key countries to attack all aspects of the international drug trade in Calendar Year 2009. Volume I covers drug and chemical control activities. Volume II covers money laundering and financial crimes.

Sovereign Wealth Funds Regain Appetite for Foreign Investments in 2009 as Assets Fall 3% to $3.8 trillion

• SWFs’ investments increase from $10bn in first half of 2009 to $50bn in second half
• Financial services sector accounts for less than a fifth of investments in 2009, down on 45% since start of decade
• Assets under management of SWFs fall 3% in 2009 to $3.8 trillion

Sovereign wealth funds (SWFs) gradually regained their appetite for foreign investments in 2009 having cut-back on cross-border spending for much of 2008 according to International Financial Services London (IFSL), the independent organisation promoting UK financial services worldwide.

IFSL’s report Sovereign Wealth Funds 2010 shows that the $10bn invested by SWFs in the first half of 2009 was the slowest start to a year since 2005. Activity picked up in the second half, and much of the $50bn invested during this period was in foreign markets, primarily Europe and North America. The financial services sector accounted for less than a fifth of investments in 2009, down on its 45% share seen since the start of the decade. Instead, a larger proportion of funds was allocated to industry, commodities, real estate and other non-financial sectors. The China Investment Corporation was particularly active during the year with $15bn invested internationally.

Assets under management of sovereign wealth funds fell by 3% in 2009 to $3.8 trillion according to IFSL. The underlying value of SWFs’ portfolios probably increased by 15% in 2009 if negative positions on equity market investments at the end of the previous year are taken into account. There was an additional $6.5 trillion held in other sovereign investment vehicles, such as pension reserve funds, development funds and state-owned corporations’ funds and $6.1 trillion in other official foreign exchange reserves. IFSL projections are for SWFs’ assets to increase to $5.5 trillion by the end of 2012.

Countries with SWFs funded by commodities’ exports, primarily oil and gas exports, totalled $2.5 trillion at the end of 2009. Non-commodity SWFs totalled $1.3 trillion and are projected to increase their 34% share of assets in 2009 to 38% by 2012. Non-commodity SWFs are typically funded by transfer of assets from official foreign exchange reserves, and in some cases from government budget surpluses and privatisation revenue. Asian countries account for the bulk of such funds.

Marko Maslakovic, Senior Economist at IFSL said: “London is an important centre for SWFs both as a clearing house for transactions and a location from which some funds are managed. A number of funds from Kuwait, Brunei, Singapore and United Arab Emirates have already set up representative offices in London. The UK’s open and competitive market for international investment puts London in pole position to capture a growing share of this market over the coming years.

Click here to view PDF of Sovereign Wealth Funds 2010 report