India: Government clarification on issues regarding M/S Agusta Westland International Limited (AWIL)

In the matter pertaining to acquisition of Agusta Westland helicopters, the undisputed central issue that stands out is corruption, especially bribery. Any other line of assumption, approach and effort, as is being attempted in some quarters, is misleading, tries to hide the wrong-doers and is driven by instincts of self preservation. 

Ever since the new government was given the responsibility to serve the people, it has acted with speed, drive and purpose to empower the country's masses. It continues to relentlessly pursue fearless and transparent governance. One of the core goals of our governance has been to unearth and uproot corruption, and punish the corrupt. 

It is indeed tragic that a small section of the Indian polity has attempted, unsuccessfully, to divert and diffuse the public discourse on this matter. They question the speed of the government processes, especially the investigation. But, they do not ask how the corrupt influenced the process of acquisition in the first place and bled the nation. They do not admit corruption; they instead boldly proclaim, "catch us if you can". 

The present government has taken effective action to bring out the truth and will leave no stone unturned in pursuing all means to bring to justice the corrupt and the wrong-doers in this case. 

The investigative agencies remain determined to bring to justice the key perpetrators of this misdeed, both inside and outside the country. 

The government has acted proactively and with alacrity against Agusta Westland International and Finmeccanica. It is the present government which through its order dated 3 July 2014, put on hold all procurement/acquisition cases in the pipeline of six companies figuring in the FIR registered by the CBI, namely: M/S Agusta Westland International Ltd., UK, M/S Finmeccanica, Italy, and its group companies, including subsidiaries and affiliates, M/S IDS, Tunisia, M/S Infotech Design System (IDS), Mauritius, M/S IDS Infotech Ltd, Mohali and M/S Aeromatrix Info Solution Pvt Ltd, Chandigarh. 

In doing so, we did not let the preparedness of our defence forces suffer. At the same time, we also ensured that no new capital procurement was made thereafter from these companies in the tenure of the present Government. 

The factually misinformed have also made a mention regarding clearance of a joint venture involving Agusta Westland by the Foreign Investment Promotion Board. This proposal was approved on 2nd September 2011 based on an application by Indian Rotorcraft Ltd a joint venture of Tata Sons with Agusta Westland NV, Netherlands. This was later changed to Agusta Westland S.p.A Italy due to reorganization within the group. On 7th February 2012, an industrial licence for the manufacture of helicopters was granted by the Department of Industrial Policy and Promotion to Indian Rotorcraft Ltd. However, the validity of licence has since expired. 

In their drive to divert the public attention from their own corruption, some have said that the Modi government permitted Augusta Westland to bid for 100 Naval Utility Helicopters in April, 2015. The fact is that a techno-commercial Request for Proposal (RFP) for Naval Utility Helicopters was issued to eight vendors on 4 August 2012. In response to the RFP, M/S Eurocopters, France and M/S Agusta Westland S.p.A Italy submitted their techno-commercial proposals on 4 March 2013. RFP of the procurement case was retracted by the Government on 13 October 2014. 

The Indian Navy has hosted on the website a Request for Information for more than 100 Naval Utility Helicopter in October 2014. No Request for Proposal has been issued, therefore the question of permitting Agusta Westland to bid for the Naval Utility Helicopter in April 2015 does not arise. The government is exploring whether their manufacturing can be pursued under "Make in India". 

On the core issue of corruption, the timeline of actions taken by the CBI and Enforcement Directorate clearly shows due rigour and diligence with which these agencies have pursued all aspects of their investigations, including the arrest and extradition of three foreign nationals namely Mr. Carlo Gerosa, Mr. Guido Haschke Ralph and Christian Michel James. 

CBI has so far investigated over 100 witnesses. In September and November 2014, couple of accused have been arrested and their property attached. A criminal complaint was also filed. Letter of Requests were sent out by ED and CBI to Mauritius (July 2013), Tunisia and Italy (December 2013), British Virgin Islands, Singapore and U.K. (September 2014), UAE and Switzerland (December 2014). The agencies are continuing to pursue responses to the LRs from the countries concerned. 

Further, an open ended non bailable arrest warrant was issued by CBI against Mr. Christian James Michel on 24 September 2015. Red Corner notices were issued in December 2015 and January 2016 through Interpol under Prevention of Money Laundering Act and Prevention of Corruption Act on charges of conspiracy and abuse of official position in giving favours to M/s AWIL. 

Extradition request has also been made for Christian Michel James. A request for provision arrest for the purpose of extradition was made to the U.K. authorities on 4 January 2016 by CBI. Enforcement Directorate, another autonomous agency to handle private money laundering and Foreign Exchange irregularities, has also separately sent a Red Corner seeking arrest and a request for his extradition from the U.K. on 29 February 2016. 

By asking why did Prime Minister and BJP government not take any action on the alleged offer dated 08.11.2015 made by James Christian Michael to be questioned by CBI and ED including on Indian soil, some have even tried to side with a wanted criminal. 

It is well known that any understanding/agreement with an accused outside the frame of law is a criminal act in itself. James Christian Michael is a criminal wanted by the Indian law enforcement agencies. We are pursuing all legal means to arrest him and have him extradited to India. Mr. Michel should submit himself to the Indian legal system rather than make elliptical references to offers that are suspect in intent and reality. We are determined that the law must take its course against Mr. Michel and his associates in this matter. 

Those who cannot see Prime Minister succeed even hint at him cutting a deal. Nothing could be farther from the truth. Prime Minister Modi did not cut any deal of any sort. His only goal and priority is the development of comprehensive national power, and empowerment of our masses. 

A few have even sought to link one of the accused with Shri Ajit Doval, present NSA, as also Shri Nripendra Mishra, Principal Secretary to the Prime Minister. This is a totally baseless assertion, devoid of reason and logic, and indicative of malicious intent. In reality, there is no such connection. 

Individuals in some quarters have even gone to the extent of ascribing intent to the technicalities of the CAG audit of the state governments of Rajasthan and Chattisgarh. They ask as to whey did Modi government not take any action against Chhattisgarh Chief Minister, Dr. Raman Singh despite an indictment of Chhattisgarh government by CAG in purchase of Agusta Westland Helicopter, which led to loss to public exchequer (according to CAG) of Rs.65 lakh? 

But, the government has been proactive in seeking response from the State governments also. As per the State Government of Chattisgarh, the Public Accounts Committe of the Chattisgarh Vidhan Sabha took cognizance of the CAG report regarding the acquisition that was done in 2007, and took the evidence of State Government officials. After analyzing the evidence of officials and the report of the State Government, the PAC closed the matter. 

Similarly, as per the State Government of Rajasthan, the alleged loss to public exchequer according to CAG was not on account of any irregularity in the procurement process, but due to the expenditure incurred on account of lack of planning and basic infrastructure prior to procurement, such as pilot training and maintenance. In this case too, the acquisition was done in 2005. 

The Government appeals to the countrymen to recognize the nature and depth of corruption in Agusta Westland case. The investigative agencies will stay their course in unveiling the corrupt and holding them accountable to our public. 

Four Seasons Announces Global Culinary Journey Developed with Noma

Four Seasons Hotels and Resorts, the world’s leading luxury hospitality company, today announced Culinary Discoveries, a first-of-its-kind journey developed in partnership with one of the world’s best restaurants, Copenhagen-based Noma, and its acclaimed head chef René Redzepi.

Beginning in May 2017, the three-week Culinary Discoveries itinerary will take travellers on an extraordinary journey to explore the people and places of many of the world’s most exciting culinary destinations. Tracing food influences and cultures across Asia and Europe, from the vibrant history and traditions of Chiang Mai, Copenhagen and Florence to the cosmopolitan energy of Tokyo, Seoul and Paris, guests will discover or reconnect with the cities and cultures that continue to shape the tastes and flavours of the world.

More than just a journey of the senses, Culinary Discoveries will explore each destination through a variety of angles, from visiting some of the world’s best restaurants and private kitchens to joining local chefs and producers as they travel to markets and farms to taste the best of what is in season. Guests will also visit each location’s historical and cultural landmarks, many of which have influenced cuisine well beyond their borders – all while enjoying Four Seasons legendary service and staying exclusively at Four Seasons hotels and resorts.

Along the way, guests will also participate in a series of hosted talks and conversations about the past, present and future of food and its intersection with creativity, innovation and community.

“We have always enjoyed the opportunity to travel and explore, and to learn about the ingredients and cultures that have helped shape what people eat and how they cook,” said Noma head chef René Redzepi. “From our team’s travels across Scandinavia to relocating our restaurant to Tokyo and Sydney, our international journeys have helped expand our minds and our tastes, and influenced the creativity of the Noma kitchen. We look forward to working with Four Seasons to help develop their first-ever Culinary Discoveries journey, and to create an experience that is truly memorable.”

“This new itinerary is the perfect example of why the Four Seasons Private Jet was launched, and furthers our innovative approach in planning exceptional travel journeys that create unforgettable memories,” said Elizabeth Pizzinato, Senior Vice President, Marketing and Communications, Four Seasons Hotels and Resorts. “Private Jet itineraries open doors to some of the world’s most exclusive experiences and extraordinary destinations. Through this collaboration and partnership with Noma we will explore new synergies and create a journey for our guests unlike any other.”

Destinations highlights on this all-new itinerary include:

Culinary Discoveries (May 27 – June 14, 2017)

Seoul – Tokyo – Hong Kong – Chiang Mai – Mumbai – Florence – Lisbon – Copenhagen – Paris

Culinary Discoveries opens in Seoul, where guests will begin their culinary expedition with a private dinner at Chef Jong Kuk Lee’s home to experience his renowned farm-to-table cuisine before visiting the Jin-Kwan temple to learn the spiritual Buddhist preparation of ancient temple food. In Tokyo, Private Jet passengers will explore one of the world’s most heralded culinary destinations, joining world-renowned Chef Namae Shinobu for a day of foraging outside the city, followed by a private dinner at his Michelin-starred restaurant L'Effervescence.

From there, guests will venture on to Hong Kong, where they will enjoy transcendent street food, tours of local markets and cooking classes with Michelin-starred chefs. In Chiang Mai, guests will select from a curated mix of experiences, exploring traditional Thai markets, embarking on an elephant trek through the verdant jungle, and enjoying a private dinner with Garima Arora, a native of India and former Noma chef now based in Thailand. Culinary Discoveries will then continue on to Mumbai, where guests will savour the distinctive flavours of the city, enjoying the aromatic curries and colourful spices of Mumbai’s delectable street-food.

From India, guests will travel to Florence where they will meet with pioneering wine makers in their medieval estates and explore the Chianti countryside. The Four Seasons Private Jet will then continue to Lisbon where guests will enjoy gala dinners, Michelin star dining, and an insider’s tour of the historic Mercado da Ribeira before jetting on to Copenhagen, home to Noma. There, guests will join the Noma team in foraging for local ingredients to be used at their private dinner at Noma that evening. Culinary Discoveries will continue on to Paris, culminating with a farewell dinner at the famed Michelin-starred Le Cinq at Four Seasons Hotel George V, Paris.

FSC Mauritius: Termination of the Licence of The HongKong and Shanghai Banking Corporation Limited

Pursuant to Section 28(9) of the Financial Services Act 2007, the public is hereby notified that the licence of The HongKong and Shanghai Banking Corporation Limited as Distributor of Financial Products will be terminated with effect from 30 April 2016.

Artificial Intelligence seen as opportunity and threat by financial services sector

• Majority believe AI and other fintech will make financial markets more competitive by 2018
• But more than three-quarters say regulators are unable to keep pace with changing technology
• Sixty percent say more regulation of AI and machine learning is needed to offset risks
• Almost half think their own companies don't understand the material risks inherent in AI

Global law firm Baker & McKenzie has paired with Euromoney Thought Leadership to reveal what is driving the global financial services industry towards a rapid embrace of Artificial Intelligence and Machine Learning, and the implications both for the industry and financial markets as a whole.

Ghosts in the machine: Artificial intelligence, risks and regulation in financial markets shows an industry rapidly seeing the potential benefits of AI, while being increasingly concerned about risk and the ability of regulators to keep pace.

The survey asked 424 senior executives from financial institutions and fintech companies around the world as well as leading experts in the field for their view on how AI will affect the financial sector, what risks and benefits AI will bring to the sector, what the associated regulatory and legal challenges will be and many more questions. Surprisingly similar views emerged from across the globe, with only a few notable variations, such as AI investment seen as lagging slightly in Asia Pacific compared to other regions and Latin American participants seeing AI as a regulatory tool to combat money laundering first rather than market misconduct, the top choice elsewhere.

Key findings

The results provide some insights into the likely  future of the financial sector. The most dramatic changes brought about by AI and machine learning within three years are expected to be in the areas of provision of credit, asset management, trading and hedge funds. 

On the positive side, AI is expected to improve financial institutions' risk management, through more in-depth assessment of risk in portfolios and more incisive, comprehensive and informed credit-risk assessment.  Machine learning is also predicted to make financial markets more competitive by as soon as 2018.

On the flipside, the use of AI in the financial sector brings about significant uncertainties and risks, such as the risk of malfunctioning algorithms, humans' misuse of technology and concerns surrounding the security, privacy and quality of data.  

Regulatory inadequacy and the rise of the machines

Survey respondents expressed great unease about the future regulatory response to AI. Over three-quarters are not confident that regulators have the adequate knowledge and skills to stay abreast of new financial technologies and understand the potential implications of AI for financial markets.

Arun Srivastava, head of Financial Services Regulation at Baker & McKenzie says, “Financial institutions have been fined billions of dollars because of illegality and compliances breaches  by traders. A logical response by banks is to automate as much decision-making as possible, hence the number of banks enthusiastically embracing AI and automation. But while conduct risk may be reduced, the unknown risks inherent in aspects of AI have not been eliminated."

Survey participants suspect that regulators are only just beginning to understand the potential implications of AI for financial markets and companies. For now, much of their attention is still focused on fighting the last war, identifying compliance breaches by humans directly abusing technology.  Their attention is only now beginning to turn to the integrity of algorithms, and any rule-writing on machine learning in the next few years will focus here.

The most popular solution revealed by the survey is more collaboration between fintech companies and regulators, with the second most popular choice coordinated, cross-border cooperation between regulators.

Financial sector calls for yet more regulation 

Experts interviewed acknowledge the degree of risk surrounding the use of AI. The survey backs up these concerns, with the risk of malfunctioning algorithms and concerns surrounding the security, privacy and quality of data leading 60% of respondents to call for new laws and regulations. 

Remarkably, only 16% believe financial institutions are already overregulated. A surprising finding perhaps for an industry that has seen relentless waves of new laws and regulation since the global financial crisis.

Almost half of those surveyed are doubtful that that even their own organisations fully understand the legal risks associated with new financial technologies.  Such risks include, for example, corporate liability as well as data protection and privacy risk. 

Adrian Lawrence, Partner at Baker & McKenzie expects access to data to play a central role in the scope and impact of AI systems, noting that "Data, and the various rules and processes which both enable and regulate access to and use of that data, stand at the heart of disruptive fintech businesses.  Even the most advanced and intelligent algorithms and models are useless without efficient, secure and legal access to detailed, accurate and up-to-date data sets."

Human error versus machine error

Just like humans - programmes, computers and machines have the capacity to be stupid. The danger is that they can act at a far greater scale and speed. The importance of maintaining human oversight, comprehension and control of emerging AI systems exposes the contradiction at the core of the technology. When confronted with inherently risky tasks – such as making investment decisions and bets on unknown future events – over-reliance on AI can magnify systemic risks. Yet the same technology can improve the depth and quality of financial institutions’ due diligence of companies. Through their powerful data-crunching capabilities, such applications can also help identify fraud, money-laundering, bribery and other corrupt practices that more conventional methods would struggle to uncover. 

With these examples in mind, the survey respondents appear hopeful that machine learning will help them to minimise risks, in some cases. Nearly six in ten (58%) believe it will “greatly enhance” their risk-assessment processes. Machine learning techniques can, for example, be used to alert fund managers about emerging weaknesses in invested companies . Astrid Raetze, Partner at Baker & McKenzie also expects consumer credit risk assessment to be enhanced through more thorough risk profiling of customers suggesting that, “AI should also reduce risk in some areas if deployed properly. Market misconduct and anti-money laundering (AML)/Know Your Customer (KYC) processes are areas where regulators could harness AI to improve regulatory oversight and scrutiny.”

With great power comes….?

Jeremy Pitts, Global Head of Baker & McKenzie's Financial Institutions Group, concludes: 

"Many survey respondents are cautiously optimistic about AI’s future role in financial markets. This optimism derives from the recognition that it will transform entire market segments, product lines and greatly increase aspects of risk assessment capability. Concerns on the other hand highlight the potential dark side of AI and the need for banks and other financial institutions to feel they can rely on the rule of law and effective regulation to protect them and their customers by creating a safe environment for innovation to flourish. Applying the truism that business hates uncertainty, the survey results show there is much work to be done."

Ghosts in the machine: Artificial intelligence, risks and regulation in financial markets

A global survey of 424 senior executives from financial institutions and fintech companies, and interviews with leading experts in the field, reveal tension as artificial intelligence (AI) is pioneered across financial markets.

Solving the Beneficial Ownership Conundrum: Central Registries and Licenced Intermediaries

Professor Jason Sharman’s discussion paper on the effectiveness of central registries and regulated corporate service providers in combatting financial crime has just been published.

Rajiv Servansingh: The Great Panama Hypocrisy

The greatest features of the immediate post World War II world economic history had been the great “decolonization” movement and the “swinging 60s” which marked the beginning of almost thirty years of constant economic growth in the most developed countries. This was then followed by the frenzied globalization of the world economy driven by developments in communication and travel technologies and the neo-liberal credo of free market ideology.

Excerpts:

“Offshore financial centres have an important role to play in the present and future global economic paradigm. Small islands and developing countries which use their resources to position themselves as providers of legitimate and transparent (subject to international norms) services to a community of increasingly demanding but willing clients should be left to carry out their business without undue pressure...” 

“The OECD club of rich nations would do well to look into their own backyard before raising a hue and cry and accusing all “offshore financial centres” of being the den of crooks. The underlying Euro-centred sense of high moral grounds and resulting preconceptions and suspicion towards these entities (read the OXFAM papers) deserves to be censured without reserve. As The Guardian wrote recently even while commenting on the Mossack Fonseca affair, ‘Using offshore structures is entirely legal. There are many legitimate reasons for doing so...’”

Mauritius Times 

Offshore in central London: the curious case of 29 Harley Street

On a central London street renowned for high-class healthcare sits a property that houses 2,159 companies. Why has this prestigious address been used so many times as a centre for elaborate international fraud?

Hotel Flowers of Paradise Entrecôte Wagyu à volonté

Mauritius Revenue Authority: Draft CRS Guidance Notes

Implementation of CRS Guidance Notes

IFC Review - The Panama Papers: Determining the Future of Financial Services

Mark Brantley, Deputy Premier of Nevis, and Professor Gilbert NMO Morris consider the fallout from the Panama Papers and examine the role they will play in determining the future of financial services.

IFC Review - The Case for Offshore

In the wake of the media frenzy over the illegal leak of private information in Panama, Richard Hay dispels the myths perpetrated by detractors and the media regarding the offshore financial industry.

IFC Review - Panama Leaks: Through the Offshore Looking Glass

Anthony Travers considers the impact of the Panama leaks on offshore financial centres and attacks the hypocrisy of onshore centres in their rush to demonise offshore centres.

IFC Review - Panama Leaks: Exposing Private Information Serves an Ideological Agenda

Daniel Mitchell and Brian Garst examine how in the midst of the controversy over the Panama Leaks the legality of how the private information was obtained and is being used has been overlooked.

FSC Mauritius launches the operation of the Online Data Capture System (ODCS)

Communiqué

Circular Letter CL180416 - Filing Of Audited Financial Statements or Annual Report through the Online Data Capture System

Submission Form

Nicholas Shaxson: Five myths about tax havens

News broke this month of an unprecedented data leak: Some 11.5 million documents containing detailed, confidential information about more than 200,000 offshore companies involved with Mossack Fonseca, a Panamanian law firm, had fallen into the hands of the International Consortium of Investigative Journalists via an anonymous informant. Collectively known as the Panama Papers , the files revealed just how widespread the abuse of offshore tax havens is among the world’s elite politicians and business people. Still, myths persist about the supposed benefits of offshore tax havens, both for the countries that stash wealth there and for the havens themselves. Here are a few:

FSC Mauritius issues Public Notice - NinetyEast

US Department of State Country Report on Human Rights Practices for 2015: Mauritius

Mauritius is a multiparty democracy governed by a prime minister, a council of ministers, and a national assembly. International and local observers judged elections in December 2014 to be generally free and fair. Civilian authorities maintained effective control over the security forces.

The most important reported human rights problems were security force abuse of suspects and detainees, and violence and discrimination against women.

Other reported human rights problems included arbitrary arrests, corruption, abuse and sexual exploitation of children, human trafficking, discrimination and abuse based on sexual orientation or gender identity, discrimination against persons with HIV/AIDS, restrictions on labor rights, antiunion discrimination, and child labor.

The government took steps to prosecute and punish officials who committed abuses, whether in the security services or elsewhere in the government; but enforcement was inconsistent, and sometimes politically motivated, resulting in the appearance of impunity. 

Mauritius 2015 Human Rights Report

After the Panama papers: Who next?

The travails of Mossack Fonseca, the Panamanian law firm from which a trove of documents about offshore firms it had helped create was recently leaked, intensified on April 12th, when prosecutors raided its head office. But as the firm defends itself, campaigners for financial transparency are already looking for other Mossacks and other Panamas.

Unlocking Mossack Fonseca: The key’s in Sin City

With numerous governments already announcing probes into the “Panama papers” and others preparing to do so, Mossack Fonseca, the law firm from which the hoard of documents about offshore companies was leaked, will be receiving lots of inquiries in the coming months. Until now, getting information on clients of law firms in Panama has been about as common as ice-skating on the Canal. But sleuths may soon find it a lot easier, thanks to a court ruling in, of all places, Las Vegas.

Harvard Business Review: Revolutionizing Customer Service

Getting customer interactions right has never been more important, especially since social media has given unhappy customers a louder voice. Many companies want to raise their level of service, but the question is, How?

About the Research: “Engineering a Service Revolution: How to Establish a Strong Service Culture Fast,” by Jochen Wirtz and Ron Kaufman (working paper)

In defence of ‘tax havens’: offshore banking is not the same as dodgy dealing

Offshore investors are not just the uber rich highlighted by the Panama Papers. Many are hardworking people looking for better returns and more flexibility

Why Iceland Swapping Out Its Prime Minister Won't Change Anything

Sigmundur David Gunnlaugsson has resigned in the wake of the Panama Papers scandal, but does it matter?

CaféBabel - Lanceurs d'alerte : Rudolf Elmer, l'Inside Man (1/2)

David contre Goliath 2.0. C'est peu ou prou l'histoire d'un ancien banquier suisse, Rudolf Elmer, qui poursuit un combat acharné contre le secret bancaire, l'évasion fiscale, la justice zurichoise et «les médias complices». À quelque jours du «leak du siècle» et des Panama Papers, cette histoire aux allures de thriller était diffusée à Bruxelles, sur grand-écran, grâce au réalisateur David Leloup, qui a suivi la vie mouvementée d'Elmer pendant 7 ans. Le titre du documentaire? A Leak in Paradise : l'homme qui voulait détruire le secret bancaire.

Accenture: The ethics and conduct risk challenge for US banks

UK banks have been pushed to define bank conduct and to develop new approaches to conduct risk and regulation. Regulators have expanded their focus from narrow corporate governance issues to an emphasis on making sure customers are treated fairly. As US banks undertake a similar journey, they can be guided by the experience of their UK counterparts.

In this effort, an emphasis on customer-centricity and cultural change can help avoid legal and regulatory risk while creating value for customers and shareholders. US banks can learn from what UK banks have done, both to make regulatory and compliance-related activities more effective and more efficient and to help establish a stronger competitive position.

John Perkins: Confessions Of A Panama Papers Hit Man

As an Economic Hit Man (EHM) in the 1970s I spent a great deal of time in Panama. I hate to admit it, but I helped forge the system that has now been exposed in the Panama Papers. It is a system of legalized crimes. How else can we describe it?

Above all, the Panama Papers should encourage each and every one of us to understand that we have a responsibility to ourselves and future generations to reverse this terribly destructive course we’ve permitted our leaders to take. The New Confessions of an Economic Hit Man provides strategies and lists that every individual can employ to transform the Death Economy into a Life Economy. The short version is that we can all use social media to force corporations to transform the Death Economy into a Life Economy.

Engineering a Service Revolution: How to Establish a Strong Service Culture Fast

Traditional approaches to service improvement often don’t work. They are fragmented, incremental, and based on faulty assumptions about the true nature of service. Companies try these approaches again and again, and while they may enjoy temporary surges of improvement, people run out of steam and the improvement dies. Instead, many companies would benefit from a more dramatic service revolution that quickly rebuilds their culture around the vision of taking action to create new or greater value for others. 

Working Paper #20160304-1

An article based on this research titled “Revolutionizing Customer Service” published in Harvard Business Review, April 2016

Gokulsing Chambers: Legal Risk Management Training Program

Legal Risk Management Training Program in association with Virtuose a leading training institute in Mauritius specialising in high level workshops, conferences and networking events.

This MQA approved program aims to educate businesses of all types to manage their legal risks. 

UK: Companies to be liable for employees who facilitate tax cheating

The UK will bring forward plans to introduce a criminal offence for corporations who fail to stop their staff facilitating tax evasion, the Prime Minister will announce today in a statement to the Commons, ahead of next month’s summit to tackle corruption in all its forms.

For the first time, companies will be held criminally liable if they fail to stop their employees from facilitating tax evasion. At the March 2015 Budget the Chancellor said the government would be delivering on its pledge to introduce the measure in this Parliament. Today the Prime Minister is confirming that the offence will be introduced in legislation this year.

The move is part of the government’s efforts to clamp down on corruption in all walks of life. The government has already confirmed plans to create a cross-agency taskforce to investigate all evidence of illegality that has emerged from the so-called ‘Panama Papers’.

Prime Minister David Cameron said:

This government has done more than any other to take action against corruption in all its forms, but we will go further. 

That is why we will legislate this year to hold companies who fail to stop their employees facilitating tax evasion criminally liable.

On 12 May, the Prime Minister will host the London Anti-Corruption Summit aimed at stepping up global action to expose, punish and drive out corruption in all walks of life.

The summit will seek to galvanise a global response to tackle corruption. As well as agreeing a package of actions to tackle corruption across the board, it will deal with issues including corporate secrecy, government transparency, the enforcement of international anti-corruption laws, and the strengthening of international institutions.

It will be the first summit of its kind, bringing together world leaders, business and civil society to agree a package of practical steps to:

• expose corruption so there is nowhere to hide;
• punish the perpetrators and support those affected by corruption;
• drive out the culture of corruption wherever it exists

The new criminal offence will build on the government’s existing record in tackling tax evasion, and corruption more broadly. Since 2010, the government has:

• led the way on tackling tax evasion and tax avoidance, bringing in more than £2 billion from offshore tax evaders;
• been the first member of the G20 to establish a public central registry of company beneficial ownership information which will go live in June 2016, and pushed its G7 and G20 partners to do the same;
• introduced some of the world’s strictest legislation on bribery through the Bribery Act 2010, making it a criminal offence for a company to fail to prevent a bribe being paid,
• co-chaired a UN panel that put tackling corruption at the heart of the new UN Development Goals and transformed the way the international community fights poverty

Oxfam: Majority of World Bank’s private investments go to companies that have a presence in tax havens

Fifty-one of the 68 companies that were lent money by the World Bank’s private lending arm in 2015 to finance investments in sub-Saharan Africa use tax havens, Oxfam revealed today.

Oxfam’s analysis focused on International Finance Corporations (IFC) investments in Sub-Saharan Africa.  It shows that together these 51 companies, whose use of tax havens has no apparent link with their core business, received 84 percent of IFC investments in that region in 2015. It also reveals that the IFC has more than doubled its investments in companies that use tax havens in just 5 years - from $1.20 billion in 2010 to $ 2.87 billion in 2015. 

The findings come ahead of the IMF-World Bank Spring meetings in Washington DC on 13-15 April and in the wake of the Panama Papers scandal which revealed how powerful individuals and companies are using tax havens to hide wealth and dodge taxes.

In Oxfam’s study, the most popular haven for IFC’s corporate clients was Mauritius; 40% of IFC’s clients investing in Sub-Saharan Africa have links there. Mauritius is known to facilitate “round-tripping”. This is where a company shifts money offshore before returning it disguised as foreign direct investment, which attracts tax breaks and other financial incentives.

Sub-Saharan Africa is the poorest region in the world. It desperately needs corporate tax revenues to invest in public services and infrastructure. The region lacks money to provide enough skilled birth attendants, clean water or mosquito nets, for example, resulting in high rates of child mortality; one child in 12 dies before their fifth birthday.

”It doesn’t make sense for the World Bank Group to spend money encouraging companies to invest in “development”  while turning a blind eye to the fact that these companies could be cheating poor countries out of tax revenues that are needed to fight poverty and inequality,” said Oxfam’s tax policy advisor, Susana Ruiz.  

“The World Bank Group should not risk funding companies that are dodging taxes in Sub-Saharan Africa and across the globe. It must put safeguards in place to ensure that its clients can prove they are paying their fair share of tax.”

The IFC invested more than $86 billion of public money in developing countries between 2010 and 2015; 18.6% of it spent in Sub-Saharan Africa. The IFC has a significant focus on financial markets, infrastructure, agribusiness and forestry, among other sectors.     

While the IFC arguably leads the private sector with its disclosure, environmental and social standards, the public still has no access to information about where over half of the institution’s financing ends up, because it is done through opaque financial intermediaries. It also continues to face major challenges in measuring its overall development impact, and ensuring that the projects it funds do not harm local communities. This latest Oxfam research shows that the organisation has a long way to go in ensuring that its clients are responsible tax payers, too.

Oxfam is calling for the IFC to develop new standards to ensure it only invests in companies that have responsible corporate tax practices. For example companies should be transparent about their economic activities so it’s clear if they are paying their fair share of tax where they do business. 

The World Bank and IMF must work with all governments to further reform the international tax system and help to stop tax dodging by wealthy individuals and corporations. This should include action to end the era of tax havens.

Oxfam: The IFC and Tax Havens

Inequality is rising around the world. Fighting inequality must be an integrated priority for everyone in development, to promote and achieve sustainable development.

Oxfam analysis reveals that 51 of the 68 companies that were lent money by the World Bank’s private lending arm in 2015 to finance investments in sub-Saharan Africa use tax havens. Together these companies, whose use of tax havens has no apparent link to their core business, received 84 percent of the International Finance Corporation’s investments in the region last year.

As the World Bank and IMF prepare for their Spring Meeting in Washington 13–15 April, and in the wake of the Panama Papers scandal which reveals how powerful individuals and companies are using tax havens to hide wealth and dodge taxes, Oxfam is calling on the World Bank Group to put safeguards in place to ensure that its clients can prove they are paying their fair share of tax.

UK launches cross-government taskforce on the ‘Panama Papers’

The Prime Minister, David Cameron, has announced a new taskforce to deal with the so-called Panama Papers.

The taskforce will be jointly led by HMRC and the National Crime Agency and draws on investigators, compliance specialists and analysts from HMRC, the National Crime Agency, the Serious Fraud Office and the Financial Conduct Authority.

The Prime Minister has committed to provide resources to ensure that the files are fully investigated, once shared with HMRC, including initial new funding of up to £10 million to support the taskforce’s work.

Between them, these agencies have some of the most sophisticated technology, experts and resources to tackle money laundering and tax evasion anywhere in the world.

The taskforce will report its progress to the Chancellor and Home Secretary later this year.

Prime Minister David Cameron said:

The UK has been at the forefront of international action to tackle the global scourge of aggressive tax avoidance and evasion, and international corruption more broadly. 

There is clearly further to go and this taskforce will bring together the best of British expertise to deal with any wrongdoing relating to the Panama Papers. 

This world-class operation will report to the Chancellor and the Home Secretary on their strategy for taking action later this year, when we will update Parliament.

Financial Secretary to the Treasury David Gauke said:

Everyone should pay their fair share of tax, just as the honest majority already does.

No government has done more to make sure we crack down on tax evasion and aggressive avoidance, both here in the UK and internationally.

But as the Panama papers show, tax evasion is part of a wider set of international criminality activity together with money laundering, illicit finance and evading sanctions.

The new taskforce announced today will further tighten the screw on those who think they can get away with dodging tax that’s due in this country. It will also further enhance our ability to tackle financial crimes across the board, leaving no stone unturned.

Our message is clear: there are no safe havens.

HMRC experts, who have tracked down £2 billion from offshore tax dodgers since 2010, are already investigating 700 current leads they have with a link to Panama.

This new taskforce will make sure the full arsenal of UK financial compliance is deployed, combining their skills to maximum effect.

The Chancellor is working with other major countries to speed up progress towards sharing beneficial ownership information, so that enforcement agencies can share information on who really owns companies. This would allow for more effective investigation of financial wrongdoing.

The UK will publish its own register of company beneficial ownership from June 2016, making it clear who the real owners of companies are, the first major country to have such a list in place and the information it contains will be free for anyone to access.

These latest actions build on strong action the government has taken since 2010 to revolutionise tax transparency and tackle tax avoidance and evasion.

In this Parliament alone the government will legislate for over 25 measures to make sure people do not get out of taxes due, together raising £16 billion by 2021.

OPÉRATION « PANAMA PAPERS » : 30 Mauriciens et 97 sociétés clients de Mossack Fonseca

L'opération Panama Papers, nom de code utilisé dans l'édition de lundi dernier du quotidien français Le Monde, avec la fuite de plus de 11,5 millions de documents confidentiels du cabinet d'avocats d'affaires Mossack Fonseca, du Panama, a atteint les rivages de Maurice. 

The Economist: The Panama papers - A torrential leak

There is much in the 2.6 terabytes of data that is yet to be noticed or revealed. The ICIJ has been drip-feeding stories daily after publishing the initial batch. More revelations were expected after The Economist went to press. And there is plenty more beyond Mossack that might be leaked: the firm has only 5-10% of the global market for shell companies. No wonder that, as one adviser to the wealthy puts it, “We’re now telling clients they have to assume anything they do offshore will become public, and they’ll have to be able to justify it when it does.

The Economist: Leak of the century - The lesson of the Panama papers

Three years ago a watchdog published a series of reports on tax havens based on leaks of confidential documents. Some nervous clients of Mossack Fonseca, a law firm in Panama that specialises in setting up offshore companies, asked if their secrets were safe. The law firm told them not to fret; its data centre was “state of the art” and its encryption algorithm was “world class”. Whoops. This week the same watchdog, the International Consortium of Investigative Journalists (ICIJ), published the first stories based on a trove of leaked data on Mossack Fonseca’s clients

Financial Times: Has the sun set on offshore tax shelters?

The revelations in the Panama Papers have shone a light into the world of offshore tax havens and world leaders have been under scrutiny for their links to these schemes. Does this mark the end of offshore tax shelters? Financial Times commentators discuss.

Dirty little secrets: Inside the ‘Wikileaks of the ultra-rich and ultra-powerful’

A new trove bigger than Wikileaks exposes the hidden underworld of drug dealers, sex traffickers, and tax cheats. Fusion takes you inside.

Anil Gujadhur: The Panama Papers

We cannot afford to be cavalier about driving away investors if we really want to consolidate Mauritius’ international financial business. It is ‘our job’ to build up trust about our jurisdiction, not that of our international competitors

Panama, which lies between North and South America, is famed for its canal which provides shipping links connecting the Pacific and the Atlantic Ocean. For those who know, it is also an important international offshore centre.

This week it was at the centre of global news following the leaking of some 11.5 million documents belonging to a Panama-based law firm, Mossack Fonseka, first to German newspaper, Süeddeutsche Zeitung, and then, through it, to a host of investigative journalists, including the BBC. The BBC aired on Monday this week the news that the leaked documents revealed how the rich and powerful hide their accumulated wealth in an offshore jurisdiction such as Panama.

Excerpts:

“One doesn’t have to condone malpractices wherever they emanate from. Malpractices are malpractices, no less. But it would be naïve to assume that thefts of all sorts started only when offshores were first set up on the European continent and in the US… Likewise, secrecy has not been invented by offshore business activity. Besides, financial institutions in places like Mauritius are not ‘secretive’; they are required to respect the ‘confidentiality’ of customers’ dealings with them in accordance with law which is applicable not only in Mauritius but in all decent banking systems all over the world…”

“Powerful countries such as Switzerland, the UK and Singapore get away from being blamed in as strong terms as less well-off countries like Mauritius in such cases. The powerful ones place themselves as more “respected” jurisdictions than the rest by virtue of the fact that they can deploy very sophisticated techniques to shelter themselves in a club apart of stricter jurisdictions as regards strict adherence to rules in the conduct of their international financial businesses. Lesser economies like Mauritius usually get targeted and tarnished in public…”

Mauritius Times 

Jean-Claude de l’Estrac ‘Le gouvernement est comme un Ponzi politique… ...qui annonce pour demain les dividendes prévus pour hier’

• ‘Le climat politique actuel ne contribue aucunement à créer les conditions d’une croissance forte’
• ‘Les incertitudes politiques freinent l’élan du secteur privé, le fonctionnement bicéphale Jugnauth-Jugnauth alimentent les contradictions. Le ballet de ministres à l’ICAC achève de détruire le crédit d’une équipe censée venue faire de la politique autrement’

Ayant voté pour l’alternance, les citoyens ordinaires s’attendaient à un changement radical dans le monde politique. Force est de constater que la déception est apparente sur tous les visages au point de ne plus remarquer ce qui fait honneur à la nation au niveau régional ou international. De plus en plus, chacun se tourne vers les innombrables maux qui rongent la société et se pose des questions sur l’avenir des jeunes. Dans quelle mesure y aura-t-il un renouveau sur les plans politique et socio-économique dans les mois à venir ? Jean Claude de l’Estrac nous en parle…

Extraits:

« Quoi qu’il arrive, je vois ce gouvernement tout à fait capable de tenir jusqu’à la fin de son mandat et résister à une opposition divisée et en panne de crédibilité. Mais son principal ennemi c’est lui-même, une implosion n’est pas à écarter. Une implosion : cela a lieu quand une organisation s’effondre en raison de ses problèmes internes. Nous y sommes presque. Pour après, je vois une recomposition des alliances, mais peut-être ai-je trop vu… »

« Le premier «miracle» c’était le plein emploi dans un pays qui possédait une main d’œuvre abondante et pas chère, disposée à travailler en usine pour quatre sous. Aujourd’hui, il n’y a pas de main d’œuvre disponible, quand il y en a, elle ne veut pas travailler, et elle est chère en plus. Si vous faites une croissance forte dans ces conditions, alors là, ce sera effectivement miraculeux !… »

Mauritius Times

The Rich Bastard's Guide to Choosing Which Tax Haven Is Right For You

Like us, you probably read the Panama Papers with a growing sense of disbelief.

WTF? How did all these wealthy bastards get away with paying no tax while we're still coughing up extra cash on every purchase. What's the trick?

Well take heart. If the big boys can do it, you can too, little guy. It's actually much easier than you think to muscle in on some of that sweet no tax action.

How? Start by reading our handy consumer guide to which tax haven is best for you.

Bank of Mauritius: Guideline on Credit Impairment Measurement and Income Recognition

Consistent with the requirements of International Accounting Standards and International Financial Reporting Standards, this Guideline sets out the conceptual framework for credit impairment measurement and income recognition as it applies to financial institutions in Mauritius.

The Guideline outlines prudential processes to identify weaknesses in credits granted, outlining benchmarks for identifying and providing for anticipated credit losses in a timely fashion.

The objective of this Guideline is to bring about a balance between the application of international accounting norms and prudential norms respecting credit impairment measurement and income recognition with a view to ensuring that financial institutions have adequate processes for determining allowance for credit losses, in a timely manner, and the carrying amounts of credit portfolio recoverable values.

The Guideline is not intended to deal with each and every provision of the current accounting standard pertaining to impairment and uncollectibility of financial assets, that is IAS 39 “Financial Instruments: Recognition and Measurement” or any subsequent International Financial Reporting Standard, in replacement of IAS 39. Financial institutions are advised to refer directly to the Standard for complete treatment of the subject. However, financial institutions are henceforth required to take on board the prudential norm on credit classification and credit impairment measurement in the preparation of their financial statements as described under section 8.

World Bank: Mauritius, Mozambique, and Seychelles Partner to Boost Trade and Regional Integration

The World Bank Board of Executive Directors approved today a total of US$29.9 million for Mauritius, Mozambique and Seychelles to support their efforts to collaborate and create regional reforms that will improve the trading environment within Africa. Today’s funding comprises a US$10 million International Development Association (IDA) credit to Mozambique  and two International Bank for Reconstruction and Development (IBRD) loans of US$14.9 million and US$5 million to Mauritius and Seychelles, respectively.

“The above countries recognize the perverse effects of barriers to trade, and they’ve agreed to collaborate in the implementation of reforms aimed at removing those barriers,” said Mark Lundell, World Bank Country Director for Mozambique, Mauritius and Seychelles. “This initiative is built on an increasing body of knowledge on the barriers that continue to restrict trade in goods and services in Africa and the economic benefits of deeper economic integration between African countries.”

The project will support the Accelerated Program for Economic Integration (APEI) that will help to improve the policy environment for trade in APEI countries. The program will focus on removing barriers to trade, promoting trade in services, and boosting resources to facilitate trade.  

“This innovative project supports the countries in jointly removing barriers to trade which impact heavily on poor people,” said Anabel Gonzalez, Senior Director for World Bank Group Trade and Competitiveness Global Practice. “The more rapid economic integration that this partnership between Mozambique, Mauritius, and Seychelles seeks to achieve will open up new regional markets, improve competitiveness and create jobs.”

Reducing non-tariff barriers that stifle regional markets in food products will increase incentives for production and increase food security in the region. Opening up regional trade in services in areas such as transport is expected to increase competition and drive down transport prices. Increased risk management at borders, and stronger coordination among border agencies will reduce dwell time, and hence costs at borders. Improved access to trade information through trade portals will reduce the scope for rent seeking and corruption related to trade which impinge particularly heavily on small traders, many of whom are women. Finally, reducing the costs to import inputs and export final goods will make companies more productive and competitive. It will increase market size for operators, allowing companies to benefit from economies of scale, and generate new opportunities for investment.

The APEI is an initiative of five countries and the financing approved today is part of a two-series to support the initiative. This first operation supports Mozambique, Mauritius and Seychelles while the second will go on to include Malawi and Zambia as well.  The initiative is expected to facilitate trade across the region and has the potential to facilitate the emergence of regional supply chains in the continent.

“This initiative supports African countries’ growing realization of the need to improve regional trade, which remains extremely fragmented in the continent,” reminded Ahmadou M. Ndiaye, World Bank Director for Regional Integration. “For example, completing border compliance procedures takes an exporter in the region 108 hours and $542 on average, compared with a global average of 64 hours and $389. This reminds us of the need to press ahead with trade reforms as supported by our own World Bank regional strategy for Africa.”