NEWS,12.06.2013

Swiss upper chamber approves US tax deal

The Swiss upper house of parliament backed on Wednesday a bill that would let Swiss banks hand over information to the US authorities to help settle a dispute on tax evasion.
After US action over tax evasion led to the closure of the country's oldest private bank earlier this year, and with formal investigations under way into some of its biggest institutions, the Swiss government urgently wants a compromise to end threats of criminal charges that have hurt a vital national industry.
The bill, which is set to go to the lower chamber next week, would allow banks to sidestep secrecy laws to strike settlements with US prosecutors, expected to include heavy fines which might amount to $10bn for the whole industry.
Though opposition to the draft law has been vocal from left to right as lawmakers chafe at what some call US blackmail, 24 lawmakers voted in favour of the bill and only 15 opposed. The draft law is likely to face tougher debate in the lower house.
The country's biggest bank UBS was forced in 2009 to pay a fine of $780m and deliver the names of more than 4 000 clients to avoid indictment, giving the US authorities information that allowed them to then pursue other Swiss banks.

Iraq to get $6trn from new energy plan

Iraq on Wednesday unveiled an ambitious energy strategy that aims to see it raise $6 trillion from oil and gas sales by 2030 and massively increase local power generation, a major domestic complaint.
The plan, dubbed the Integrated National Energy Strategy, would see Iraq invest some $620bn in the sector over nearly two decades, in a bid to substantially increase living standards and employment levels in a country badly hit by decades of conflict and sanctions.
"The strategic goals of the plan are to meet local energy needs, maximise government revenues, encourage economic diversification and improve the standard of living and create jobs," said Thamir Ghadhban, a former oil minister and the head of Prime Minister Nuri al-Maliki's advisory committee.
In all, Iraq aims to increase oil production to 4.5 million barrels per day by 2014, and about double that by 2020 in its "medium" scenario, with all domestic energy requirements met by 2022.
The country projects it will raise about $6trn in revenues by 2030, about 85% of which will come from oil exports.
It also aims to diversify its oil-dependent economy and add 10 million new jobs, with planners arguing that by 2020, non-energy sectors of the economy will grow faster than oil and gas.
Iraq has sought in recent years to dramatically increase its oil production in order to fund reconstruction of its battered economy and dilapidated infrastructure.
But while output has increased, unemployment remains high and Iraqis frequently complain about a lack of improvement in daily living standards.
Tempers run particularly high during the country's boiling summer, when most residents receive only a few hours of government-supplied power per day.

Electricity market shake-up looms in UK

Britain's energy watchdog on Wednesday proposed changes to prise open the grip of big suppliers on the wholesale electricity market and increase choice for consumers.
The objective was to create "a more level playing field", over concerns about the pricing power of eight companies.
The driving idea behind the change is to increase competition and improve opportunities for small suppliers.
Ofgem said that under its proposals the big six suppliers British Gas Centrica, EDF Energy, EON, RWE Npower, Scottish Power and SSE will have to post the prices at which they buy and sell wholesale electricity on power trading platforms up to two years in advance.
The changes were aimed also at putting pressure on Britain's two biggest independent power generators Drax Power and GDF Suez Energy UK while the eight indentified companies must together trade fairly with small suppliers or face financial penalties.
"Ofgem's proposals would mean that the big six and the two largest independent power generators cannot refuse any reasonable requests by small suppliers to buy electricity," the regulator said in a statement.
"They must also ensure that they sell power to small suppliers at a fair price and negotiate fairly with them at all times."
Andrew Wright, senior partner for markets at Ofgem, said the regulator wanted also "to improve consumer confidence and choice by putting strong pressure on prices through increased competition in the energy market.
"Ofgem's proposals will break the stranglehold of the big six in the retail market and create a more level playing field for independent suppliers, who will get a fair deal when they want to buy and sell power up to two years ahead," he added in the statement.
Wright said greater price transparency would also assist investors seeking to build new generation plants and help secure supplies for consumers, "who are also set to benefit from a simpler, clearer and fairer energy market".
Edward Davey, Secretary of State for Energy and Climate Change called on companies "to work with Ofgem to implement these proposals as swiftly as possible", adding that the government stood ready "to take necessary measures to improve energy market liquidity should Ofgem's proposals be delayed or frustrated".

Broader bank data swap in tax dodge fight

The European Commission proposed to expand the kind of customer information that banks must surrender to authorities around the European Union, as political momentum grows to clamp down on tax dodging.
Algirdas Semeta, the EU official in charge of tax policy, outlined proposals on Wednesday for banks to disclose account balances, dividends and capital gains, to catch sophisticated schemes not covered by the simpler EU rules now in place.
But the Commission's suggestion will likely face opposition from Luxembourg, which does not want to be forced to lift its veil of banking secrecy higher than that of neighbouring Switzerland, its chief rival as a financial centre.
"Member states will be better equipped to assess and collect the taxes they are due," Semeta said. "It will be another powerful weapon in our arsenal to lead a strong attack against tax evasion."
Banking secrecy is high on the political agenda ahead of German elections later this year and following the resignation of a French budget minister over a secret Swiss account.
Luxembourg has signed up to exchanging information about the bank accounts of EU citizens from 2015, but its officials have been rowing back in private on the type of data they are willing to hand over.
Luxembourg does not want to agree to a revised version of the EU savings tax regime that would extend beyond simple interest payments on saving accounts, which are little used to hide income, to include foundations and trusts.
The tiny but wealthy state has an important banking sector and a lot to lose, particularly if customers were lured away by a Swiss financial sector subject to laxer rules.
Switzerland is the world's biggest home for offshore assets, totalling $2 trillion and four times the size of those held in Luxembourg.
Luxembourg is awaiting the outcome of talks between Brussels and Switzerland on a similar agreement to swap information. Semeta will kick-start those talks next week on a trip to meet Swiss Finance Minister Eveline Widmer-Schlumpf.