Constance celebrates New Zealand wines in Mauritius this September

Constance Belle Mare Plage and Constance Le Prince Maurice will be welcoming some of the finest winemakers from New Zealand for a week-long celebration of wine from the region.

Head Sommelier Jerome Faure will organise a range of wine dinners from the 15-21 September to introduce guests to New Zealand wines and giving them the opportunity to meet and talk with the winemakers.

Wine tastings will also be held for all the sommeliers of each resort as part of ongoing training to ensure that Constance sommeliers are at the head of their field.

New Zealand winemakers visiting Belle Mare Plage and Le Prince Maruice will include:

• Felton Road – a biodynamic wine producer using wild yeast, no fining or filteration has created wines of a unique character and an impressive reputation.
• Millton Vineyards and Winery – Situated on the East coast of North Island in the winegrowing region of Gisborne the family have introduced French traditions picked up working in the famous wine regions of France.
• Ata Rengi – A small New Zealand winery at the southern end of North Island, Ata Rengi has become famous for producing a renowned Pinot Noir.
• Escarpment – Stretching along the banks of the Huangarua River, Escarpment’s vineyards produce wine with a complexity and structure that have made them a leader in the market.
• Pegasus Bay – The second largest winery in Canterbury, Pegasus Bay is rated as the top winery of the region.

Guests will be able to enjoy a number of events across both resorts to introduce them to these fascinating New World wines:

Sunday 15 September

Belle Mare Plage – A management cocktail party featuring the wines

Monday 16 September

Belle Mare Plage – A special dinner featuring Escarpment wines at La Spiaggia

Tuesday 17 September

Belle Mare Plage – A special dinner featuring Pegasus wines at Indigo

Wednesday 18 September

Belle Mare Plage – A special dinner featuring Ata Rangi wines at Deer Hunter

Thursday 19 September

Le Prince Maurice – A management cocktail party featuring New Zealand wines including Felton Road 2010 Pinot Noir Bannockburn, 2012 Millton La Cote Pinot Noir and Ata Rangi Petrie Sauv Blanc.

A special dinner at l’Archipel featuring Millton wines including 2011 Opour Chardonnay, 2011 Riverpoint Viognier, 2010 Clos St Anne, 2010 Clos Samuel Viognier SBS.

Friday 20 September

Le Prince Maurice – A special dinner featuring Felton Road wines at Le Barachois including 2012 Riesling Bannockburn, 2011 Chardonnay Bannockburn, 2009 Pinot Noir Block 3, 2008 Riesling Block 1.

Saturday 21 September

Belle Mare Plage – A gala dinner featuring all the wineries.

Tax Havens and the Production of Offshore FDI : An Empirical Analysis

While most research on FDI focuses on the ‘real’ economy, at least 30% of global FDI stock is intermediated through tax havens. Using 2010 IMF data on FDI stocks, this paper sheds new light on geographical, historical, and political determinants of offshore FDI. Despite its intangibility, offshore FDI is as sensitive to physical distance as real FDI. Offshore FDI links are particularly strong between colonial powers and their current and former colonies. The OECD, while officially leading an agenda against tax evasion, internalizes significant offshore FDI within its membership. Indeed, offshore FDI is pervasive, affecting wealthy economies as much as developing countries.

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IFC Economic Report (Summer 2013) Offshore Voice – Kenneth Krys

The IFC Economic Report speaks to Kenneth Krys about the effects that the global financial crisis has had on the asset recovery industry within IFCs.

  

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Standard & Poor's: Report Says Rising Regulatory Pressure On Offshore Economic Models Threatens Small European Sovereigns' Creditworthiness

Increasing regulatory scrutiny of offshore economic models is making the future for small European sovereigns (Gibraltar, Jersey, Guernsey, Isle of Man, Andorra, Monaco, San Marino, and Liechtenstein) uncertain, according to a report by Standard & Poor's Ratings Services.

Titled "Rising Regulatory Pressure Heightens Risks To Small European Sovereigns' Creditworthiness," the report points out that the exceptional wealth of these small sovereigns is in part due to their heavy dependence on the high value-added financial services sector. The sector varies in size across the small sovereigns--from 14% of GDP in San Marino to 42% in Jersey. Dependence on this sector served the small sovereigns well prior to the global financial crisis of 2007-2009, and in some cases throughout it, with Gibraltar and the Isle of Man posting consistently positive rates of economic growth. However, dependence on financial services has since left small European sovereigns exposed to regulatory headwinds.

"An important appeal of several of these small sovereigns is their benign tax regime and/or client anonymity," said Standard & Poor's credit analyst Benjamin Young. "However, European and North American regulatory authorities are pressing for increased banking transparency and tighter rules on tax evasion and avoidance.

"It's unclear to us how far regulators will go to curtail the activities of offshore business centers, and to what extent any regulatory changes will affect the small European sovereigns. Although the regulators' focus falls periodically on offshore financial centers, the latest push, partly in response to the financial crisis, appears to us to be more sustained and focused."

We therefore believe that the creditworthiness of small European sovereigns increasingly depends on the extent to which they rely on tax or regulatory arbitrage or bank secrecy and their value to their larger "hosts." Hosts are larger countries with which small sovereigns frequently have historical ties and which often assume responsibility for small sovereigns' foreign affairs, defense, and monetary arrangements.

The regulation currently being discussed could cause some small sovereigns to lose parts of their financial services business to overseas competitors, forcing them to undertake a major reorientation of their economies. Other countries could find that the financial services they provide to their "host" countries' onshore financial sector - such as short-term lending facilities - are too important to be compromised.

This has positive and negative repercussions. On the positive side, some small European sovereigns are likely to become more adept at reinventing themselves to suit the evolving global environment. On the other hand, these sovereigns are on the receiving end of regulatory shocks.

Aside from regulatory risks, the prolonged recession in the European Economic and Monetary Union (eurozone) has weakened a number of small European sovereigns' trade centers, while most have seen their public finances deteriorate. In some cases, this has led governments to introduce unprecedented consumption and personal income taxes.

Therefore one of the key challenges we see for these small European sovereigns is to adapt to circumstances over which their control appears to be diminishing.

The report examines both rated and unrated sovereigns. Besides the rated Isle of Man and the Principalities of Liechtenstein and Andorra, we consider comparable unrated jurisdictions - Gibraltar (a British Overseas Territory), the Channel Islands of Jersey and Guernsey (British Crown Dependencies), the Principality of Monaco, and the Republic of San Marino.

Mauritius - Tunisia: Discussions on Preferential Trade Agreement Launched

A meeting between Mauritius and Tunisia to initiate discussions on a Bilateral Preferential Trade Agreement (PTA) between the two countries, opened this morning in Port Louis.

The Tunisian delegation is led by Mrs Saida Hachicha, Director of Trade and Industry, Ministry of Trade and Handicraft of Tunisia.  The Mauritian side, led by Mr N. Boodhoo, Deputy Director, International Trade Division, Ministry of Foreign Affairs, Regional Integration and International Trade, comprises representatives from stakeholder ministries, the State Law Office, and the private sector including the Mauritius Chamber of Commerce and Industry and MEXA.

Discussions on the PTA are based on a text proposed by Mauritius and to which the Tunisian side has already expressed broad agreement.  The two-day meeting is also addressing issues related to rules of origin and market access which will be annexed to the PTA.  Participants are being called upon to identify issues that need to be negotiated at technical level.  Presentations on the Mauritian and Tunisian respective economies are also scheduled.

It is expected that the PTA will provide a gateway for Mauritius to penetrate the Mediterranean market and this will help diversify the export market of Mauritius in line with government strategy.

Developing a partnership to maximise the benefit of the EU market

In his opening address, Mr Assad Bhuglah, Director International Trade Division, Ministry of Foreign Affairs, Regional Integration and International Trade stated that the launching of discussions on the PTA demonstrates the political will of the Mauritian and Tunisian governments to enter in a structured dialogue and agree on the framework that would help facilitate bilateral trade.

Both Mauritius and Tunisia have opened their economies through liberalisation measures, observed Mr Bhuglah.  ‘The EU constitutes the major market for the two countries.  The possibility therefore of developing a partnership to maximise the benefit existing in the EU market is real especially by developing a bilateral supply chain in garments and other products.  This will be in addition to the market opportunities which the PTA will provide, he added.

For her part, Mrs Hachicha expressed her conviction that the present meeting and the discussions on the PTA will enhance bilateral commercial exchanges and their development. ‘We expect a lot from the PTA under discussion with Mauritius which will certainly enhance the conditions of commercial exchanges between the two countries and the competitiveness of products exchanged’, she said.

It is recalled that Tunisia has concluded an Association Agreement with the European Union in 2008 allowing duty free access to Tunisian industrial products.  Given that Mauritius has concluded an Interim Economic Partnership Agreement with the European Commission, the PTA would provide a platform to explore the possibility of developing synergies to tap the European Market, especially, through the cumulation of rules of origin.

Trade Statistics

According to trade statistics, in 2012, Mauritius exports to Tunisia amounted to Rs 6.7 million comprising canned tuna, denim fabric of cotton, fertilizers, machinery parts and woven fabrics.

Imports for the same year amounted to 88 million rupees including electrical appliances, footwear, textiles products, sweet biscuits, fruits such as watermelons and dates.

Australia: ASIC releases report on emerging market issuers

Following the high profile collapse of some emerging market issuers overseas ASIC has undertaken a review of these types of entities here in Australia. Our review has not identified at this time any areas of systemic concern, however ASIC does consider that there are some specific challenges that retail investors should be aware of before making the decision to invest in an emerging market issuer.

Today ASIC has published Report 368 Emerging market issuers (REP 368) about our review of emerging market issuers.

REP 368’s key points:

• ASIC identified challenges emerging market issuers may be more likely to encounter than entities operating wholly in Australia.
• ASIC is urging emerging market issuers and their advisers to focus on their corporate governance and the disclosure they provide to Australian investors regarding these challenges.
• Investors should consider the risks before investing in an emerging market issuer.
• Investors need to know that they may not have the same protections when investing in an emerging market issuer that is listed in Australia but incorporated abroad.

As described in REP 368, ASIC found that there are a number of challenges faced by entities that are operating in, or have significant exposure to, emerging markets. Common challenges include implementing good corporate governance and management systems, operating through complex ownership or contractual arrangements, risks associated with relying on one or two key individuals located outside Australia, and the difficulty in accessing or verifying reliable information about an entity’s operation and performance.

The report recommends emerging market issuers respond to these challenges by implementing effective internal controls and risk management systems. It is important that entities focus on making appropriate disclosure to investors consistent with an exchange’s listing rules and ASIC’s regulatory guidance.

‘ASIC is shining a light on emerging market issuers and their governance and disclosure, because we want to lift the sector’s transparency. And that is because we want investors to be confident and informed when putting their money in these companies,’ ASIC Commissioner John Price said.

Further investor guidance on emerging market issuers is available on ASIC’s MoneySmart.

ASIC will continue to monitor emerging market issuers in the coming year by including a number of these entities in its financial reporting surveillance programs and through reviewing selected disclosure documents lodged with it.

Download REP 368

Bank of Mauritius: Guideline on Complaints Handling Procedures

1. Introduction

One of the objects of the Bank is to ensure the stability and soundness of the financial system of Mauritius. In order to help achieve that objective, an amendment has been brought by The Economic and Financial Measures (Miscellaneous Provisions) Act 2012, whereby a new Section 96A has been added to the Banking Act 2004, laying down specific provisions in relation to the protection of customers of financial institutions

This guideline sets out the minimum criteria to be observed by financial institutions for the handling of complaints from their customers.

2. Authority

This guideline is issued under the authority of Section 50 of the Bank of Mauritius Act 2004 and Sections 96 A and 100 of the Banking Act 2004.

3. Scope of Application

This guideline applies to financial institutions licensed by the Bank of Mauritius under the Banking Act 2004 with the exception of paragraphs 6, 7, 8, 10, 14, 15, 16, 17, 18, 27, 28 which shall not apply to cash dealers.

4. Effective Date

This guideline shall come into effect on 01 November 2013.

5. Interpretation

In this guideline:-

“Bank” means the Bank of Mauritius established under section 3 of the Bank of Mauritius Act.

“Complaint” means any act or omission of an institution made within a period of 7 years as from the date thereof, which causes a customer to be aggrieved.

“Complaints Officer’ means an officer appointed under Section 96A of the Banking Act 2004 for banks and non bank deposit taking institutions.

“Financial institution” has the same meaning as in the Banking Act 2004.

SECTION 1 - PROCEDURES

6. Financial institutions should have in place appropriate and effective internal procedures for handling customer complaints. In formulating these procedures, financial institutions should take into account the provisions of Section 96 A of the Banking Act 2004.

7. The internal complaint handling procedures should be in writing and their scope should include at least of the following:

(i) receiving complaints;

(ii) responding to complaints;

(iii) the appropriate investigation of complaints;

(iv) the availability of redress and compensation, in appropriate circumstances.

8. Financial institutions should put in place appropriate management controls and take reasonable steps to ensure that they handle complaints fairly, consistently and promptly.

SECTION 2 - ACCESSIBILITY

9. Financial institutions should ensure that their customers know where and how to make complaints.

10. Financial institutions should publish relevant provisions of their internal complaint handling procedures, in the form of a leaflet as well as on their websites with a view to bringing actual notice thereof to their customers. Notice may also be given by e-mail where this is available. Financial institutions should ensure that their complaint handling procedures are provided to new customers at the time of the establishment of the business relationship with them.

11. Financial institutions should allow customers to make complaints by any reasonable means for example by letter, facsimile, e-mail, phone or in person.

SECTION 3 –EMPOWERMENT

12. Complaint Officers should have the authority to settle complaints including offering redress where appropriate or should be able to have ready access to those who have the necessary authority.

13. Complaints, in appropriate cases, should be escalated to senior management if not resolved by staff below.

SECTION 4 - RESOURCES AND STAFF TRAINING

14. Financial institutions should make available the resources needed to ensure the efficiency and effectiveness of a complaint management system. Resources comprise staff, appropriate training and technology.

15. Financial institutions should take reasonable steps to ensure that all relevant employees are aware of their internal complaint handling procedures and that they act in accordance therewith.

SECTION 5 - MONITORING AND AUDIT

16. Effective procedures to monitor complaints should be set up with regular reports to senior management for review. Information provided to management should include at least the following:-

• Statistics on the volume and type of complaints received;
• How well the internal complaint management system meets prescribed performance standards;
• The level of customer satisfaction;
• Whether recurrent problems are being identified and corrected.

17. A regular assurance exercise should be conducted by competent and independent staff. The assurance exercise should aim at examining whether the complaint handling procedures fulfil the stated aims of the policy and that the procedures are operating effectively.

18. The results of the assurance exercise should be used to improve the complaint handling procedures, operating processes, products and services as appropriate.

SECTION 6 - TIME LIMITS FOR DEALING WITH COMPLAINTS

19. Where a complaint can be resolved on the spot, this has to be favoured. In the case that the complaint has not been resolved on the spot and is not in writing, customers should be advised to submit their complaints in writing.

20. Financial institutions should, except where the complaint has been resolved, send a written acknowledgement of a complaint within three working days of its receipt, giving the name, job title and contact details of the person handling the complaint.

21. A written reply should be sent to the complainant within 3 months as from the date the complaint is received by the financial institution.

22. Complainants should be informed in the internal complaints procedures that in case they are not satisfied with the reply provided to them, or they do not receive a reply from the financial institution concerned within 3 months as from the date of their complaint, they may refer their complaint to the First Deputy Governor Bank of Mauritius, specifying the nature of their complaint, the redress sought for and the reasons for their dissatisfaction duly accompanied by the following documents:

(i) a copy of the complaint made to the financial institution;

(ii) a copy of the reply made by the financial institution; and

(iii) any other document or information which may be of relevance to the complaint.

SECTION 7 – RECORD KEEPING

23. Financial institutions should record and retain details of complaints for at least a period of 7 years as from the date of their receipt.

24. The details to be recorded should include, where applicable:

• the complainant's name;
• the substance of the complaint;
• any correspondence between the institution concerned and the complainant,including the manner in which the complaint was resolved and details of any redress offered by the financial institution concerned; and
• Whether any alleged problems, if substantiated, were rectified and the manner in which this was done.

25. The records should be kept in a convenient and accessible form to facilitate examination by the Bank during regular on-site or ad hoc examinations.

SECTION 8 – NOTIFICATION TO THE BANK

26. Financial institutions should provide the Bank, on a quarterly basis, with information on complaints as per format annexed.

27. To enhance communication with the Bank in relation to complaint handling, financial institutions should provide the Bank within one week as from the issue of this guideline, with details of the complaints officer appointed in terms of Section 96A of the Banking Act 2004.

28. Financial institutions should notify the Bank as soon as reasonably practicable of any subsequent change with regard to the complaints officer.

Bank of Mauritius

15 August 2013

Mauritius - Employment Relations Tribunal: New Employment Promotion and Protection Division Operational

A new Employment Promotion and Protection Division (EPPD) is operational since yesterday at the Employment Relations Tribunal (ERT). This division will deal will all cases of reduction of workforce, whether on a short term or permanently or the closing down of an enterprise, referred by the Ministry of Labour, Industrial Relations and Employment.

The official launching of the EPPD was held yesterday at Newton Tower, in Port Louis by the Minister of Agro-Industry and Food Security, Attorney General, Mr Satya Veyash Faugoo in the presence of the Minister of Labour, Industrial Relations and Employment, Mr Shakeel Mohamed and the Minister of Business, Enterprise and Cooperatives, Mr Jangbahadoorsing Seetaram.

The setting up of this new division has been enunciated in the Employment Rights Act proclaimed in 2008. It will be presided by the President or the Vice-President of the ERT together with two members well versed in the field of employment and finance respectively.

Speaking at the launching ceremony, the Attorney General, Mr Satya Veyash Faugoo commended the task which is being undertaken at the ERT, which according to him, is a clear indication of the strong commitment of the Government to ensure that decent work prevails at the workplace in addition to protecting the rights of workers.

The Minister of Labour, Industrial Relations and Employment, Mr Shakeel Mohamed for his part, made an appeal to the employers to respect the terms and conditions of employment as defined under the two labour laws that is the Employment Rights Act and the Employment Relations Act.

The President of the ERT, Mr Rashid Hossen, called upon the lawyers to assist the ERT in meeting its deadlines. He added that the time limit for the Tribunal to give its verdict is only 30 days with an extra 30 days in exceptional cases to consider whether the employers’ decision is justified. According to him, this is itself a challenge for the ERT taking into account the Constitutional and other legal rights of disputants.

For the purposes of this new division, the law defines the word “employer” to be one of not less than 20 workers. The rationale behind the setting up of the EPPD at the ERT is to ensure that an independent, impartial body with the required expertise in employment relations matters is dealing with such important issues which may have a bearing on numerous workers.

The ERT has since 2012 implemented an e-tribunal electronic case management system through which the parties can exchange pleadings by e-mail. It can also post online its awards and statements of case and of defense or other documents presented before the Tribunal.

ERT has as main functions to settle industrial disputes in the civil service, the private sector and parastatal bodies and local government services in addition to hearing appeals related to decisions of the Conciliation and Mediation Commission. ERT also contributes to the promotion of harmonious industrial relations and is expected to enquire into the dispute and make an order/award/ruling within 90 days of the date of lodging.

Mauritius: PM Inclusive Financial System, a Critical factor for Economic Democratisation

An inclusive financial system is critical to our economic democratisation process and emphasis should be laid on financial inclusion which G20 leaders outlined as one of the main pillars of the global development agenda.

The Prime Minister, Dr Navinchandra Ramgoolam, made this statement this morning at the opening of a symposium on the theme Financial Inclusion in Africa: The Challenges of Financial Innovations for Monetary Policy and the Stability of Financial System organised in the context of the 37th Annual Meeting of the Association of African Central Banks (AACB) which is being held from 19 to 23 August at the Maritim Hotel, Balaclava.

In his address Dr Ramgoolam recalled that Africa is not renowned for high savings generally. However, given the volatility of capital seeds it is critical that we develop an efficient and stable banking and financial system that helps allocate these funds as effectively as possible. This will contribute towards a higher GDP growth and long lasting investment opportunities for the benefit of the African population.

The Prime Minister further underlined that as income level rises across Africa, it is crucial to ensure that the financial system of Central Banks remains competitive and efficient while adding that the role of central banks goes much deeper than just contributing to promote robust growth across the continent.

Hence, he strongly recommends the continued focus on producing a competitive financial system that serves the needs of the continent and that can help produce the sustained economic growth that Africa increasingly approaches.

He also listed out the challenges that Africa is facing, with the possibility of a slowdown in many emerging economies and sharp swings in exchange rates especially fixed exchange rate in the wake of the recent volatility in global financial markets in many emerging economies. According to the Prime Minister the advanced economies have provided substantial liquidity to the global capital markets and have helped to support asset prices. But as conditions improved in the developing economies investors will look for the prosperous markets in Africa which may lead to a rise in exchange rates and asset prices, he said.

Dr Ramgoolam, further observed that Africa can address those challenges with its greatest assets that is its young people. Every country in the African Union should be equipped with an educated workforce as human capital remains critical for the economic development in Africa.  In a bid to eradicate poverty and ensure that the fruits of growth are rightly shared it is essential to match growth with social policy, he added.

The opening ceremony was also marked by the launching of the first polymer banknotes namely the Rs500, Rs50 and Rs25 denomination.  The banknotes bear an iridescent feature “Swing” printed and registered on a transparent window to create a complex security feature, and the Domino feature for the visually impaired.

The Association of African Central Banks (AACB) presently consists of 40 member countries' central banks.  The idea of an AACB was first introduced on 25 May 1963, at the Summit Conference of African Heads of State and Government held in Addis Ababa, Ethiopia.

Mauritius e-Registry Phase 1 Project to become Operational in 2014

A one-day workshop on the Mauritius e-Registry Project (MeRP) at the Registrar-General Department (RGD) was held on August 17 at the InterContinental Resort, Balaclava, for the staff of the department. The first phase of the project will be implemented in January 2014.

The objective of the workshop is to apprise the staff of the different aspects of the project and the benefits to be derived thereafter. Some 150 officers participated in the workshop aimed   to familiarising themselves on the new eservices to be provided under the MeRP.

The project which will help transform the RGD from a Service to an e-Service organisation, will harness the latest technologies and solutions that can provide integrated workflows and options for businesses, professionals and members of the public to conduct online transactions with the RGD. It will cater for online and offline submission, taxation, payment, registration and delivery of documents.

The MeRP is being jointly funded by the Government of Mauritius and the Investment Climate Facility for Africa to the tune of around Rs 170 m. It will be implemented in two phases stretched over a span of two years, hence enabling the RGD to have an integrated system for its customers.

The first phase pertains to the modernisation of RGD through the implementation of the e-Registry software system whereby most of the automated tasks and services will be provided through sophisticated software tools. The System will comprise the following features: Integrated cashier and registration module; Integrated search engine for registered document (movable); Taxation module; Reporting engine; User and security administration module; and Digitisation of Land Archive (immovable).

The second phase which will focus on transforming the services to electronic mode will come into operation by mid-2014. The key objective is to provide the RGD and stakeholders an electronic dashboard through which they can perform the following tasks: e-Submission of documents; e-Payment of fees; e-Registration; e-Search; and e-Delivery of registered documents.

A similar workshop was held earlier this year for the different stakeholders of the RDG to sensitise them on the implementation of the project following  which the following developments have been noted: an inception report has been submitted on the project by the Joint Venture Norway Registry Development and SAS Software Solutions Ltd.;  the contractor for an e-Registry system under the MeRP; a prototype of the system has been presented on August 14 by the representatives of the Joint Venture. The Department is presently carrying out an evaluation exercise for the setting up of a world class customer service area.

The RGD, which operates under the aegis of the Ministry of Finance and Economic Development, is the central agency for maintaining a repository of all documents that are registered which include immovable (land, mortgage) and movable property (share, vehicle) transactions and any other documents. It also has the responsibility of collecting revenue in terms of taxes associated with registration activities.

The Department has so far embarked on various reforms for a better service delivery towards its customers. Among them, the setting up of an electronic search room with 58 stations to facilitate search on land transactions; the paper-based Name Index Register, the Repertories have been digitized and integrated into the RGD Electronic System; and the paper-based Register of Deposits (Registre de Presentation) has been converted into an Electronic Register and linked to the Electronic Search Room. Registered deeds are delivered within 24 hours.

As at date, more than 95% of paper-based deeds archived in the Land Registry of the RGD have been scanned and kept in the Digital Cadastral Database of LAVIMS project which is expected to be completed by October this year.

IIFL Global Launches Strategic India Fund On Mauritius Open Architecture Platform

IIFL Global (IIFL) is pleased to announce the launch of a new fund, the Strategic India Fund (SIF) on its Mauritius Open Architecture platform, fully regulated by the Financial Securities Commission and designed to give investors access to best-in-class Indian strategies. 

The Strategic India Fund is a collaboration between IIFL Global, Generation Systematic Solutions Ltd and HDFC Asset Management Company Ltd (HDFC AMC). SIF is a systematic multi-asset fund which aims to outperform the CNX Nifty Equity Index over a long period of time at lower volatility. The key driver of superior risk-adjusted returns is a strategic asset allocation process whereby the fund will be allocated 100% to either equities, debt or cash at any point in time. The weekly signals are generated by a proprietary trend-following model built and designed by Generation.  IIFL Mauritius, a part of the IIFL Global Group, is the Investment Manager and HDFC AMC is the investment advisor to the Fund.

Generation has already seeded the Strategic India fund which launched on 1st August 2013.  

Roger Mortimer, Director – Generation Systematic Solutions Ltd, said: 

“The back testing of the fund since 2003 delivered 808% returns in comparison to 177% by the Nifty Index and at significantly lower volatility. The fund has been running with live recommendations since early 2013 and we are very excited to be launching this product in collaboration with IIFL and HDFC AMC. Given HDFC AMC’s long-term focus and risk management discipline, the quant overlay can be put in place with significant confidence”. 

Swati Jain, Director – IIFL Wealth (UK) Ltd, said:

“India is currently going through a volatile phase and we see immense opportunity for SIF to deliver significant alpha by toggling between asset classes. The fund has already generated high level of interest reinforcing the appetite for innovative products in the market”.  

Generation Systematic Solutions Ltd is a subsidiary of Arrow Capital Management (Toronto) and an affiliate of Generation Asset Management. Founded in early 2010, Generation Systematic Solutions is engaged in the research and development of systematic multi-asset strategies. The R&D process is undertaken in collaboration with Arrow Capital Management which also provides the DRP back-up for the model. Founded in 1999, Arrow’s expertise in active portfolio management and manager selection is evident in its strong, diverse platform, which provides clients with access to a global selection of outstanding alternative investment funds. One of the most experienced alternative investment fund companies in Canada and with an extensive network of global resources, Arrow has successfully navigated its clients through all types of market conditions. Arrow is a founding member of AIMA Canada (Alternative Investment Management Association) and is a substantial co-investor in its own funds. 

IIFL Global is a part of the India Infoline Group, one of the largest financial conglomerates in India offering a full service platform for Institutional, Corporate, Private Wealth and Retail Clients. The group’s global footprint covers fully regulated offices in New York, London, Geneva, Dubai, Mauritius, Colombo, Singapore and Hong Kong.  IIFL Global deals with large global institutions including pension funds, private banks, discretionary asset managers and family offices across Europe, U.S and Asia. They manage / advise over $3.7 billion across several asset classes worldwide as on 30th June 2013. 

HDFC Asset Management Company Limited is a 60:40 JV between Housing Development Finance Corporation Limited and Standard Life Investments Limited. It is a top-tier investment manager with deep local knowledge and long-term track record of investing in the Indian markets. HDFC AMC acts as Investment Manager to HDFC Mutual Fund which is the largest mutual fund in India with average assets under management of US$ 17.68 billion as at quarter ending June 30, 2013. HDFC AMC also provides portfolio management / advisory services. 

Canada: Government Invites Comments on Possible Measures to Prevent Treaty Shopping

As announced in Economic Action Plan 2013, the Government is inviting comments with respect to possible measures to prevent a type of abuse of Canada’s income tax treaties commonly referred to as “treaty shopping.” Treaty shopping generally arises when a non-resident who is not entitled to the benefits of a tax treaty with Canada seeks to obtain tax treaty benefits by using an entity resident in a country with which Canada has concluded a tax treaty to earn, through that entity, income in Canada.

When treaty shopping occurs, tax treaties concluded between Canada and its treaty partners provide indirect and unintended tax benefits to residents of third countries. While Canada is prepared to reduce the level of Canadian tax imposed on residents of trading partners by concluding bilateral tax treaties, it is not prepared to extend these tax treaty benefits to third-country residents who indirectly access these benefits by treaty shopping. Adopting measures that prevent treaty shopping, as some other countries have done, would protect the integrity of Canada’s tax treaties. Canada has comprehensive tax treaties in place with 90 countries—one of the largest networks of bilateral tax treaties in the world.

The Government is committed to enhancing the integrity of the tax system to ensure that everyone pays their fair share of taxes. Such actions help keep taxes low for Canadian families and businesses, thereby improving incentives to work, save and invest in Canada. The purpose of this consultation is to seek the views of stakeholders on possible approaches to developing a workable solution to treaty shopping. Comments received in the course of the consultation will help the Government determine what measures could be implemented to address treaty shopping while preserving a competitive business tax system.

Treaty Shopping – The Problem and Possible Solutions

Canada: Consultation Paper on Treaty Shopping – The Problem and Possible Solutions

As indicated in Economic Action Plan 2013, the Government continues to actively negotiate and conclude tax treaties to reduce barriers to international trade and investment, combat tax evasion and avoidance, strengthen Canada’s bilateral economic relationships, and create enhanced opportunities for Canadian businesses abroad. Tax treaties generally promote these economic objectives by establishing rules for the prevention of double taxation and reducing rates of withholding taxes imposed on cross-border payments. Canada now has more than 90 tax treaties in force, and more under negotiation, and is committed to maintaining an extensive and effective tax treaty network.

At the same time, insofar as another purpose of tax treaties is to prevent tax avoidance and evasion, it is important that safeguards exist to ensure that taxpayers cannot make improper use of Canada’s tax treaties. Treaty shopping arises when, for example, a person who is not entitled to the benefits of a tax treaty with Canada uses an entity in a country with which Canada has concluded a tax treaty and, to obtain Canadian tax benefits, earns or realizes income sourced in Canada indirectly through that entity. As described in sections 1 and 5 below, treaty shopping defeats the purposes of Canada’s bilateral tax treaties and poses risks to the Canadian tax base.

Distinguishing between acceptable uses of a tax treaty and treaty shopping can be difficult given the complexity of international transactions and the increasing sophistication of international tax planning. Nevertheless, there is both direct and circumstantial evidence that treaty shopping exists and that the unintended consequences of treaty shopping are significant. Many other countries are better positioned to address treaty shopping, either as a result of favourable judicial decisions or having taken more decisive steps to address treaty shopping in their domestic laws or tax treaties.

The intention of this consultation process is to examine a range of possible approaches to address the practice of treaty shopping into Canada. The purpose of this paper is to serve as the basis for a discussion aimed at reaching a workable solution to the problem of treaty shopping. In finding a solution to treaty shopping, the main goals are to ensure that Canada remains an attractive destination for foreign investors and that all of the purposes of Canada’s tax treaties are achieved.

The first section of this paper defines treaty shopping. The second section sets out Canada’s position on treaty shopping and the third section discusses recent judicial experience. The fourth section describes the evidence of treaty shopping and the fifth section explains unintended consequences of treaty shopping. The sixth section canvasses the possible approaches to preventing treaty shopping. The seventh section explores approaches for striking a balance between general and specific rules. The eighth section concludes with a description of the consultative process. Finally, the ninth section summarizes questions and issues on which the Government invites stakeholders’ comments.

Treaty Shopping – The Problem and Possible Solutions


Introduction

1. Treaty Shopping – The Hallmarks
2. Canada’s Position on Treaty Shopping
3. Canada’s Judicial Experience
4. Evidence of Treaty Shopping
5. Unintended Consequences of Treaty Shopping
6. Possible Approaches to Preventing Treaty Shopping
6.1 Overview and tax policy objectives
6.2 Domestic tax rules or treaty-based rules
6.3 General or specific anti-treaty shopping rules
6.4 The use of general or specific approaches – considerations in the Canadian context
7. Striking a Balance Between General and Specific Rules
7.1 Considerations regarding effectiveness and certainty
7.2 Dealing with the difficult cases
7.3 The interaction between domestic law and treaty-based approaches
8. Consultative Process
9. Summary of the Questions
ANNEX
1 - OECD Position on Improper Use of Tax Treaties
2 – UN Model Commentary Concerning Specific and General Legislative Anti-abuse Rules in Domestic Law
3 – Other Countries’ Experience Dealing With Treaty shopping

Career of shell-company creator points to banks as culprits

bne's tracking of a "meister creator" of shell companies suggests that recent moves by G8 countries to stop corporate anonymity will be insufficient, unless there are equivalent measures taken against the murky banks like those in Latvia and Cyprus whose clients require such vehicles.

US senators Carl Levin and Chuck Grassley introduced the “Incorporation Transparency and Law Enforcement Assistance Act” in the US Senate on August 3, which is intended to close down the US as a jurisdiction used by unscrupulous businessmen, often of Eastern European origin, to set up shell companies. "Our states don't require anyone to name the owners of the corporations being formed under their laws, practically inviting people to misuse our corporations," Levin said, introducing the bill. 

Career of shell-company creator points to banks as culprits

Offshore Investment (July/August 2013): Keeping your clients as friends - not enemies

Representing high-net-worth clients on asset protection, wealth preservation, and other related issues is an intellectually challenging multi-disciplinary practice that should be stimulating and rewarding.  However, a professional must always deal with clients on an arms-length basis in order to ensure that proper advice is given and that ultimately the relationship between the professional and the high-net-worth client remains a solid, well balanced and non-adversarial relationship.  Richard Cahan reveals important lessons in keeping your clients as friends - not enemies.

Trade Facilitation - Mauritius Trade Portal operational

Mauritius Trade Easy, a state-of-the-art trade portal aiming at providing maximum information to the business community and to the public at large relating to import and export procedures in Mauritius, was launched this morning at Le Labourdonnais Waterfront Hotel, in Port Louis.

The comprehensive trade portal also has as objective to provide information on opportunities that exist on the regional and international markets under the different Agreements signed by Mauritius.  It will be of help primarily to SMEs and those who want to embark on the import and export markets and also be a valuable source of information on additional market opportunities to the already established businesses in Mauritius.  The portal, supported by the Ministry of Foreign Affairs, Regional Integration and International Trade, can be accessed at www.mauritiustrade.mu

The Portal comprises several components, namely: import and export procedures, trading with Mauritius, market intelligence, Mauritius Trade Agreements, Intellectual Property Policy, as well as useful links.  Users can also access market data relating to Mauritius which include market reports, business alerts, and import-export flows.  Mauritius’ economic outline and trade profile is available under the component Trading with Mauritius.

In his address at the launching ceremony, the Minister of Foreign Affairs, Regional Integration and International Trade, Dr Arvin Boolell, observed that the Mauritius Trade Portal is a first of its kind not only in Mauritius but also in the region with the prime aim to facilitate import and export.  He highlighted the importance of international trade for Mauritius which he qualified as ‘the lifeblood of our economy’.

According to the Minister, Mauritius has been engaged in a process of reciprocal market opening at the regional and bilateral levels to create favourable market access conditions for our exporters so that they can develop a competitive edge over their competitors.  Government is committed to further improving the trading environment and is actively engaged in opening up opportunities in emerging markets particularly in Asia as well as diversifying Mauritius’ market base within Africa to further expand the circle of opportunities, added Dr Boolell.

For his part the Minister of Information and Communication Technology, Mr Tassarajen Pillay Chedumbrum, pointed out that the Mauritius Trade Portal is a means to portray what Mauritius has to offer in terms of trade facilitation and will also put to the forefront the know-how of SMEs.  He also highlighted the importance of ICT in modernising the country and its increasing contribution to the growth of the Mauritian economy.

Mauritius: New Herb Garden BBQ Experience at Shanti Maurice

Shanti Maurice in Mauritius has introduced a new luxury private dining experience in the heart of its vegetable and herb garden. The Herb Garden BBQ includes a special degustation menu, tailored wine flight and service by a personal butler and chefs. Guests as well as non-residents of the luxury resort can enjoy the five-course gourmet menu, which will be available year-round from August 2013.

After a Champagne welcome, diners are served canapés in the garden lounge while a team of chefs select and prepare the fresh ingredients. These are transformed into a private gourmet meal to be enjoyed in the resort’s ‘garden kitchen’, with each of the five courses paired with a suitable wine.

Created by the hotel’s Executive Chef Willibald Reinbacher, the special menu changes seasonally but showcases the local cuisines and ingredients of Mauritius. This new offering has been introduced following the success of Shanti Maurice’s 15 Mile Menu, which features produce caught, farmed, bred or raised from within 15 miles of the hotel.  Available for either lunch or dinner, the new BBQ menu can also be tailor made to suit guests’ preferences.

Sample highlights on the Herb Garden BBQ menu include; Yellow Fin Tuna with Garden Herbs, Lobster and Lime achar Churascaria (grilled and shaved corn) and Ombrine in Banana Leaf. Diners may also be treated to succulent tenderloin Wagyu Beef, barbequed and finished with foie gras sourced from the neighbouring village.  Dessert options might include a charcoal fruit fondue - a blend of barbequed fruits with lollipops of Baked Alaska, truffle marshmallow and spiced brownie.

The Herb Garden BBQ is available to pre-order for between two and six diners. The minimum charge is MUR 30,000 MUR per dinner, which is MUR 5,000pp based on six dining, or MUR 15,000pp for two. Price includes all food and drinks as indicated. 

University of Minnesota research reveals luxury products' role in relationships

Purchasing designer handbags and shoes is a means for women to express their style, boost self-esteem, or even signal status. New University of Minnesota research suggests some women also seek these luxury items to prevent other women from stealing their man.

Through a series of five experiments featuring 649 women of varying ages and relationship statuses, Carlson School of Management Associate Professor Vladas Griskevicius and PhD student Yajin Wang discovered how women’s luxury products often function as a signaling system directed at other women who pose a threat to their romantic relationships.

"It might seem irrational that each year Americans spend over $250 billion on women’s luxury products with an average woman acquiring three new handbags a year, but conspicuous consumption is actually smart for women who want to protect their relationship," says Griskevicius, coauthor of The Rational Animal: How Evolution Made Us Smarter Than We Think. "When a woman is flaunting designer products, it says to other women ‘back off my man.’"

Griskevicius and Wang first investigated what other women infer about a woman’s relationship partner based on the luxuriousness of her possessions. "We found that a woman who is wearing luxury items and designer brands is perceived to have a more devoted partner and as a result other women are less likely to flirt with him," says Wang. "Regardless of who actually purchased the items, other women inferred that the man had something to do with it and is thus more devoted to her."

In another study, Griskevicius and Wang made participants feel jealous by having them imagine that another woman was flirting with their man. Shortly afterward, the women completed a seemingly unrelated task in which they drew a luxury brand logo on a handbag. The result? When women felt jealous, they drew designer logos that were twice the size of those in the other conditions.

"The feeling that a relationship is being threatened by another woman automatically triggers women to want to flash Gucci, Chanel, and Fendi to other women," explains Wang. "A designer handbag or a pair of expensive shoes seems to work like a shield, where wielding a Fendi handbag successfully fends off romantic rivals."

Another of Griskevicius and Wang’s studies revealed that when romantic relationships were threatened, women not only desired more expensive handbags, cars, cell phones, and shoes, they also spent 32 percent more of their own money for a chance to win an actual luxury spending spree.

This research highlights that luxury products serve an important function in relationships, but that men and women use conspicuous consumption for a different purpose. Past research by Griskevicius has found that men often seek expensive products to show off to the opposite sex in order to attract them as mates. The current studies reveal that women often seek expensive products to show off to the same sex in order to protect their turf.

"The fact that most women’s luxury products are aimed to impress other women helps explain why men have a hard time figuring out if a woman’s handbag costs $50 or $5,000," adds Griskevicius. "Women’s designer products are geared to show off to other women not men."

A surprising finding in the paper was that feelings of jealousy triggered a desire for luxury products not just for women in committed relationships but also for single women. "Many single women obviously want designer products, but instead of these products saying back off my current man, the single woman is saying back off my future man," adds Wang. "Conspicuous consumption for women has a lot to do with subtle status within the female group."

Download Conspicuous Consumption, Relationships, and Rivals: Women’s Luxury Products as Signals to Other Women

First probable person to person transmission of new bird flu virus in China

The first report of probable person to person transmission of the new avian influenza A (H7N9) virus in Eastern China is published today.

The findings provide the strongest evidence yet of H7N9 transmission between humans, but the authors stress that its ability to transmit itself is “limited and non-sustainable.”

Avian influenza A (H7N9) virus was recently identified in Eastern China. As of 30 June 2013, 133 cases have been reported, resulting in 43 deaths.

Most cases appear to have visited live poultry markets or had close contact with live poultry 7-10 days before illness onset. Currently no definite evidence indicates sustained human-to-human transmission of the H7N9 virus.

The study reports a family cluster of two patients (father and daughter) with H7N9 virus infection in Eastern China in March 2013.

The first (index) patient – a 60 year old man – regularly visited a live poultry market and became ill five to six days after his last exposure to poultry. He was admitted to hospital on 11 March.

When his symptoms became worse, he was transferred to the hospital’s intensive care unit (ICU) on 15 March. He was transferred to another ICU on March 18 and died of multi-organ failure on 4 May.

The second patient, his healthy 32 year old daughter, had no known exposure to live poultry before becoming sick. However, she provided direct and unprotected bedside care for her father in the hospital before his admission to intensive care.

She developed symptoms six days after her last contact with her father and was admitted to hospital on 24 March. She was transferred to the ICU on 28 March and died of multi-organ failure on 24 April.

Two almost genetically identical virus strains were isolated from each patient, suggesting transmission from father to daughter.

Forty-three close contacts of both cases were interviewed by public health officials and tested for influenza virus. Of these, one (a son in law who helped care for the father) had mild illness, but all contacts tested negative for H7N9 infection.

Environmental samples from poultry cages, water at two local poultry markets, and swans from the residential area, were also tested. One strain was isolated but was genetically different to the two strains isolated from the patients.

The researchers acknowledge some study limitations, but say that the most likely explanation for this family cluster of two cases with H7N9 infection is that the virus “transmitted directly from the index patient to his daughter.” But they stress that “the virus has not gained the ability to transmit itself sustained from person to person efficiently.”

They believe that the most likely source of infection for the index case was the live poultry market, and conclude: “To our best knowledge, this is the first report of probable transmissibility of the novel virus person to person with detailed epidemiological, clinical, and virological data. Our findings reinforce that the novel virus possesses the potential for pandemic spread.”

So does this imply that H7N9 has come one step closer towards adapting fully to humans, ask James Rudge and Richard Coker from the London School of Hygiene and Tropical Medicine, based in Bangkok, in an accompanying editorial?

Probably not, they say. Limited transmission between humans “is not surprising, and does not necessarily indicate that the virus is on course to develop sustained transmission among humans.”

Nevertheless, they point to several traits of H7N9 are of particular concern, and conclude that, while this study might not suggest that H7N9 is any closer to delivering the next pandemic, “it does provide a timely reminder of the need to remain extremely vigilant: the threat posed by H7N9 has by no means passed.”

The authors also summarise their findings in a video abstract. Dr Zhou says that the reason for carrying out this study was because there was “no definite evidence to show that the novel virus can transmit person-to-person”, plus she and her co-authors wanted to find out whether the novel avian influenza virus possesses the capability to transmit person-to-person. She concludes that “the infection of the daughter is likely to have resulted from her father during unprotected exposure” and suggest that the virus possesses the ability to transmit person-to-person in this cluster. She does add however that the infection was “limited and non-sustainable as there is no outbreak following the two cases”.

Mauritius: FSC Holds Training on Effective Oversight of Capital Markets

The Financial Services Commission (FSC) in collaboration with the United States Securities and Exchange Commission (US SEC) is hosting from 5 to 8 August 2013 a training programme on Effective oversight of Capital Markets. The aim is to familiarise participants with the latest developments in the Capital Market regulatory oversight.

Both local and foreign participants from financial regulators of African and neighbouring countries namely Angola, Botswana, India, Kenya, Malawi, Namibia, Nigeria, Maldives, Seychelles, Singapore, Sri Lanka, Swaziland and Tanzania, are attending the training. It is being conducted by experts from the US SEC and is in line with the FSC’s strategy of enhancing cooperation to combat malpractices and develop higher standards to reinforce its supervisory approaches.

The training programme is serving as a platform for the participants to exchange the best practices in the development and regulation of securities markets presented through a series of discussions and case studies. The resource persons from US SEC will also share practical solutions to common market problems and abuses including how to address financial frauds such as Ponzi schemes. Discussions will also focus on investigation and prosecution cases.

Speaking at the opening ceremony on August 5, the Chief Executive of the FSC, Ms Clairette Ah-Hen, highlighted the importance of the training programme for the FSC to further enhance cooperation with its regulatory counterpart. According to her, the FSC is today an important contributor to the Mauritian economy, not only in terms of GDP and employment, but also for its linkages to other sectors in terms of investment facilitation.

According to Ms Ah-Hen for a sustainable growth and development of the economy, funds must be effectively mobilised and allocated in the most effective and efficient manner. She also commented on the emerging role of the capital markets sector and the increasing importance for an effective capital markets regulator to understand the market comprehensively, identify trends in the markets, re-construct market movements and spot malpractices.

On this score she also referred to the Ponzi schemes involving ill-intent investors seeking fraudulent ways to benefit from the growth in financial services. Ms Ah-Hen pointed out that following the recent Ponzi cases in Mauritius, the regulatory authority needs to step up investment regulation and fraud detection measures.

A strong legal enforcement framework is necessary but not sufficient to ensure adequate handling of Ponzi schemes and protection of investors, she said. Regulators should keep the public informed about how to protect themselves and the actions that are being taken to prevent particular schemes, she added.

So far, the FSC has already embarked on a consumer protection and awareness campaign to keep the consumers informed of financial products and services available on the market. The FSC has also adopted a prevention model against Ponzi schemes and changes have also been brought to its Risk-Based Supervision framework to consolidate the anti-money laundering policies as well as instil a compliance culture amongst service providers.