U.S. President Donald Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto have signed the new U.S. Mexico Canada Agreement, a deal designed to replace the North American Free Trade Agreement. White House Correspondent Patsy Widakuswara reports.
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U.S. President Donald Trump, Canadian Prime Minister Justin Trudeau and Mexican President Enrique Peña Nieto have signed the new U.S. Mexico Canada Agreement, a deal designed to replace the North American Free Trade Agreement. White House Correspondent Patsy Widakuswara reports.
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During Andres Manuel Lopez Obrador’s successful campaign for the Mexican presidency, his advisers met representatives of dozens of investment funds to allay fears about the leftist’s plans, saying he prized economic stability and wanted to attract foreign capital.
Initially, it worked.
When Lopez Obrador won office by a landslide on July 1, the peso and the stock market rose, buoyed by his conciliatory tone.
The rally continued when Mexico and the United States reached a deal to rework the NAFTA trade pact in late August.
But the mood has since changed.
Lopez Obrador, who takes office Saturday, began saying in September that Mexico was “bankrupt.” When he canceled a new $13 billion Mexico City airport on Oct. 29 on the basis of a widely-derided referendum, investors took flight.
“[Lopez Obrador] behaved quite well from the election in early July until the referendum on the airport. That was really an indication of his true colors,” said Penny Foley, portfolio manager for emerging markets and international equities groups at TCW Group Inc, which manages $198 billion in total.
Foley said the referendum prompted TCW to cut its exposure to bonds issued by state oil firm Pemex, on the grounds that under a Lopez Obrador administration the company would be driven more by politics than by profit.
“We are now slightly underweight Mexico in the dollar fund and neutral in the local currency fund,” she added.
Lopez Obrador wants to attract investment from home and abroad to fuel economic growth and drive an ambitious infrastructure agenda, including a major rail project linking Cancun to Mexico’s southeast, plus a new oil refinery.
Yet decisions such as the airport cancellation have fed investors’ concerns he could push Mexico toward a more authoritarian, arbitrary and partisan form of government.
Mexico’s S&P/BVM IPC stock index has tumbled 17 percent since the market’s post-election peak on Aug. 28, while the peso has fallen around 8 percent against the dollar.
Bond yields on Mexican 10-year sovereign debt have jumped 121 basis points, a sign investors see it as a riskier bet.
By contrast, yields on Brazil’s 10-year debt have fallen over 20 basis points since the Oct. 28 presidential election victory of Jair Bolsonaro, a far-right politician who has appointed a group of pro-market economists to his team. Mexican corporate debt markets have taken note.
Airport operator GAP, which controls terminals in a dozen cities including Tijuana and Guadalajara, canceled a planned 6 billion peso debt issuance this week.
“We decided to wait for better conditions,” GAP chief financial officer Saul Villarreal told Reuters.
Some European businesses are also in wait-and-see mode, said Alberico Peyron, a board member and former head of the Italian chamber of commerce in Mexico.
There was “no panic so far,” but a few executives had put plans on hold until the picture became clearer, he said, adding: “There are more who are worried than are optimistic.”
‘Errors’ made
After 30 years of kicking against the establishment, the veteran Lopez Obrador, a 65-year-old former mayor of Mexico City, claimed the presidency with a promise to clean up government, cut poverty and tame Mexico’s drug cartels.
Aiming to almost double economic growth to around 4 percent, Lopez Obrador wants to revive Pemex, increase pensions and spur development in the poorer south to contain illegal immigration that has strained ties with U.S. President Donald Trump.
Lopez Obrador says rooting out corruption will free up billions of dollars, while he intends to save more with pay cuts for civil servants. However, critics say the cuts could affect the quality of officials in his new administration.
Johannes Hauser, managing director of the German chamber of commerce in Mexico, told Reuters the association’s annual survey of firms, currently underway, was upbeat on Mexico.
Still, initial results suggested companies were not quite as eager to invest or create new jobs as they were a year ago. And the airport cancellation had been a shock, he said.
During their campaign outreach, some of Lopez Obrador’s advisers sought to play down the airport’s importance to markets, while others suggested it was likely to be completed.
Without providing evidence, Lopez Obrador said the project — which has been under construction since 2015 — was tainted by corruption. But more than once, Lopez Obrador had raised the possibility of turning its completion into a private concession.
Incoming Finance Minister Carlos Urzua, whose team sat down with financial heavyweights such as Bank of America, BlackRock, Credit Suisse and Morgan Stanley, told Reuters in April that foreign investors were “not very worried” about the airport.
Now, the scrapping of the hub has raised the prospect of a messy legal dispute with investors that could cost billions of dollars — as well as cloud interest in new projects.
Some members of Lopez Obrador’s incoming government privately express deep misgivings about the decision to cancel the airport, which was based on a referendum organized by his own party in which barely 1 percent of the electorate voted.
They felt the poll, which critics lambasted as opaque and open to abuse, undermined the credibility he had built up over the years he spent campaigning against corruption and vote-rigging.
Lopez Obrador’s taste for rule by referendum, and changes to laws governing everything from banking to mining and pension funds that have been proposed by his National Regeneration Movement and the party’s allies in Congress, have further curdled sentiment.
“I’ve moved from being cautiously optimistic after the election, to being quite pessimistic now,” said Andres Rozental, a former deputy foreign minister of Mexico. “He’s not building on what he got. He’s destroying little by little what he got.”
Facing questions about the airport controversy from a panel of prominent Mexican journalists this month, Lopez Obrador was unrepentant about the referendum, saying that “errors” made were blown out of proportion by adversaries trying to hurt him.
“What I regard as most important in my life is my honesty,” he said. “We are not creating a dictatorship,” he added, repeating what is a frequent aside in his public pronouncements.
Nevertheless, Arturo Herrera, an incoming deputy finance minister, conceded this week that the transition had tested the next government, which must present its first budget by mid-December.
“What we’re all learning is that we need to be extremely careful,” he told Mexican television.
…
During Andres Manuel Lopez Obrador’s successful campaign for the Mexican presidency, his advisers met representatives of dozens of investment funds to allay fears about the leftist’s plans, saying he prized economic stability and wanted to attract foreign capital.
Initially, it worked.
When Lopez Obrador won office by a landslide on July 1, the peso and the stock market rose, buoyed by his conciliatory tone.
The rally continued when Mexico and the United States reached a deal to rework the NAFTA trade pact in late August.
But the mood has since changed.
Lopez Obrador, who takes office Saturday, began saying in September that Mexico was “bankrupt.” When he canceled a new $13 billion Mexico City airport on Oct. 29 on the basis of a widely-derided referendum, investors took flight.
“[Lopez Obrador] behaved quite well from the election in early July until the referendum on the airport. That was really an indication of his true colors,” said Penny Foley, portfolio manager for emerging markets and international equities groups at TCW Group Inc, which manages $198 billion in total.
Foley said the referendum prompted TCW to cut its exposure to bonds issued by state oil firm Pemex, on the grounds that under a Lopez Obrador administration the company would be driven more by politics than by profit.
“We are now slightly underweight Mexico in the dollar fund and neutral in the local currency fund,” she added.
Lopez Obrador wants to attract investment from home and abroad to fuel economic growth and drive an ambitious infrastructure agenda, including a major rail project linking Cancun to Mexico’s southeast, plus a new oil refinery.
Yet decisions such as the airport cancellation have fed investors’ concerns he could push Mexico toward a more authoritarian, arbitrary and partisan form of government.
Mexico’s S&P/BVM IPC stock index has tumbled 17 percent since the market’s post-election peak on Aug. 28, while the peso has fallen around 8 percent against the dollar.
Bond yields on Mexican 10-year sovereign debt have jumped 121 basis points, a sign investors see it as a riskier bet.
By contrast, yields on Brazil’s 10-year debt have fallen over 20 basis points since the Oct. 28 presidential election victory of Jair Bolsonaro, a far-right politician who has appointed a group of pro-market economists to his team. Mexican corporate debt markets have taken note.
Airport operator GAP, which controls terminals in a dozen cities including Tijuana and Guadalajara, canceled a planned 6 billion peso debt issuance this week.
“We decided to wait for better conditions,” GAP chief financial officer Saul Villarreal told Reuters.
Some European businesses are also in wait-and-see mode, said Alberico Peyron, a board member and former head of the Italian chamber of commerce in Mexico.
There was “no panic so far,” but a few executives had put plans on hold until the picture became clearer, he said, adding: “There are more who are worried than are optimistic.”
‘Errors’ made
After 30 years of kicking against the establishment, the veteran Lopez Obrador, a 65-year-old former mayor of Mexico City, claimed the presidency with a promise to clean up government, cut poverty and tame Mexico’s drug cartels.
Aiming to almost double economic growth to around 4 percent, Lopez Obrador wants to revive Pemex, increase pensions and spur development in the poorer south to contain illegal immigration that has strained ties with U.S. President Donald Trump.
Lopez Obrador says rooting out corruption will free up billions of dollars, while he intends to save more with pay cuts for civil servants. However, critics say the cuts could affect the quality of officials in his new administration.
Johannes Hauser, managing director of the German chamber of commerce in Mexico, told Reuters the association’s annual survey of firms, currently underway, was upbeat on Mexico.
Still, initial results suggested companies were not quite as eager to invest or create new jobs as they were a year ago. And the airport cancellation had been a shock, he said.
During their campaign outreach, some of Lopez Obrador’s advisers sought to play down the airport’s importance to markets, while others suggested it was likely to be completed.
Without providing evidence, Lopez Obrador said the project — which has been under construction since 2015 — was tainted by corruption. But more than once, Lopez Obrador had raised the possibility of turning its completion into a private concession.
Incoming Finance Minister Carlos Urzua, whose team sat down with financial heavyweights such as Bank of America, BlackRock, Credit Suisse and Morgan Stanley, told Reuters in April that foreign investors were “not very worried” about the airport.
Now, the scrapping of the hub has raised the prospect of a messy legal dispute with investors that could cost billions of dollars — as well as cloud interest in new projects.
Some members of Lopez Obrador’s incoming government privately express deep misgivings about the decision to cancel the airport, which was based on a referendum organized by his own party in which barely 1 percent of the electorate voted.
They felt the poll, which critics lambasted as opaque and open to abuse, undermined the credibility he had built up over the years he spent campaigning against corruption and vote-rigging.
Lopez Obrador’s taste for rule by referendum, and changes to laws governing everything from banking to mining and pension funds that have been proposed by his National Regeneration Movement and the party’s allies in Congress, have further curdled sentiment.
“I’ve moved from being cautiously optimistic after the election, to being quite pessimistic now,” said Andres Rozental, a former deputy foreign minister of Mexico. “He’s not building on what he got. He’s destroying little by little what he got.”
Facing questions about the airport controversy from a panel of prominent Mexican journalists this month, Lopez Obrador was unrepentant about the referendum, saying that “errors” made were blown out of proportion by adversaries trying to hurt him.
“What I regard as most important in my life is my honesty,” he said. “We are not creating a dictatorship,” he added, repeating what is a frequent aside in his public pronouncements.
Nevertheless, Arturo Herrera, an incoming deputy finance minister, conceded this week that the transition had tested the next government, which must present its first budget by mid-December.
“What we’re all learning is that we need to be extremely careful,” he told Mexican television.
…
It may be the world’s sixth largest, but most other things about India’s economy are up for debate.
The ruling Bharatiya Janata Party (BJP) is under fire for the release of new historical GDP figures that significantly downgraded growth during the years the opposition Congress party was in power, replacing old government estimates and those prepared by an independent committee.
The figures, released by the government’s Central Statistics Office (CSO), showed growth in the 10 years of Congress rule to 2014 averaged 6.7 percent, below an average of 7.4 percent under the current government. A previous government estimate had growth under Congress at 7.8 percent.
P. Chidambaram, a former Congress finance minister, called the release “a joke”. In response India’s current finance minister, the BJP’s Arun Jaitley, said the CSO was a credible organization.
The fallout comes at a critical time for Prime Minister Narendra Modi.
India’s economy grew a weaker-than-expected 7.1 percent in the July-September quarter, from a more than two-year high of 8.2 percent in the previous quarter, government data showed on Friday.
Modi faces a general election next year, when the performance of the economy under his pro-business administration compared with the Congress era is likely to dominate campaigning.
The spat has also alarmed India’s top statisticians, who have long faced the difficult task of estimating growth and unemployment in an economy with hundreds of millions of informal workers, and dominated its financial press and political cartoons in recent days.
“The entire episode threatens to bring disrepute to India’s statistical services,” said an editorial in Mint, one of the country’s leading business newspapers, on Friday.
A joke widely circulated on WhatsApp said the government would soon be reinterpreting the last cricket World Cup, in which India crashed out in the semi-finals, to say the country won based on a new methodology.
COMPETING INTERESTS
Unlike many major economies, India lacks an independent statistical body.
An organization called the National Statistics Commission (NSC) was formed in 2005 with that intention, though it is yet to be recognized as the official body for generating statistics.
Last year the NSC set up a committee, chaired by economist Sudipto Mundle, to come up with a new set of historical GDP figures.
Its report, published in July, showed growth averaged 8.1 percent in the decade before the BJP took power.
After the figures were cheered by the Congress, the government issued a clarification saying the report “had not yet been finalised and various alternative methods are being explored”. Shortly after, the report was pulled from the government’s website.
“The whole thing has unfortunately become very political,” said Mundle, on the battle between the two parties. “It is very troubling.”
Attempts to formalize the NSC’s role have been successively stonewalled by both Congress and the BJP, said N R Bhanumurthy, who sat on the committee chaired by Mundle.
“They have not shown much interest in making it independent from our government,” he said.
The debate over India’s true level of growth is the latest to frustrate economists looking to measure the performance of the country of 1.3 billion people.
India has not published its official employment survey since 2015, while a smaller quarterly survey on companies employing more than 10 workers has not been released since March while the government comes up with new methodology.
India’s large informal sector made calculating employment “almost impossible”, Bhanumurthy said, leading to a vacuum that was filled with competing political interests.
…
It may be the world’s sixth largest, but most other things about India’s economy are up for debate.
The ruling Bharatiya Janata Party (BJP) is under fire for the release of new historical GDP figures that significantly downgraded growth during the years the opposition Congress party was in power, replacing old government estimates and those prepared by an independent committee.
The figures, released by the government’s Central Statistics Office (CSO), showed growth in the 10 years of Congress rule to 2014 averaged 6.7 percent, below an average of 7.4 percent under the current government. A previous government estimate had growth under Congress at 7.8 percent.
P. Chidambaram, a former Congress finance minister, called the release “a joke”. In response India’s current finance minister, the BJP’s Arun Jaitley, said the CSO was a credible organization.
The fallout comes at a critical time for Prime Minister Narendra Modi.
India’s economy grew a weaker-than-expected 7.1 percent in the July-September quarter, from a more than two-year high of 8.2 percent in the previous quarter, government data showed on Friday.
Modi faces a general election next year, when the performance of the economy under his pro-business administration compared with the Congress era is likely to dominate campaigning.
The spat has also alarmed India’s top statisticians, who have long faced the difficult task of estimating growth and unemployment in an economy with hundreds of millions of informal workers, and dominated its financial press and political cartoons in recent days.
“The entire episode threatens to bring disrepute to India’s statistical services,” said an editorial in Mint, one of the country’s leading business newspapers, on Friday.
A joke widely circulated on WhatsApp said the government would soon be reinterpreting the last cricket World Cup, in which India crashed out in the semi-finals, to say the country won based on a new methodology.
COMPETING INTERESTS
Unlike many major economies, India lacks an independent statistical body.
An organization called the National Statistics Commission (NSC) was formed in 2005 with that intention, though it is yet to be recognized as the official body for generating statistics.
Last year the NSC set up a committee, chaired by economist Sudipto Mundle, to come up with a new set of historical GDP figures.
Its report, published in July, showed growth averaged 8.1 percent in the decade before the BJP took power.
After the figures were cheered by the Congress, the government issued a clarification saying the report “had not yet been finalised and various alternative methods are being explored”. Shortly after, the report was pulled from the government’s website.
“The whole thing has unfortunately become very political,” said Mundle, on the battle between the two parties. “It is very troubling.”
Attempts to formalize the NSC’s role have been successively stonewalled by both Congress and the BJP, said N R Bhanumurthy, who sat on the committee chaired by Mundle.
“They have not shown much interest in making it independent from our government,” he said.
The debate over India’s true level of growth is the latest to frustrate economists looking to measure the performance of the country of 1.3 billion people.
India has not published its official employment survey since 2015, while a smaller quarterly survey on companies employing more than 10 workers has not been released since March while the government comes up with new methodology.
India’s large informal sector made calculating employment “almost impossible”, Bhanumurthy said, leading to a vacuum that was filled with competing political interests.
…
A San Francisco chef is the first woman in the United States to be awarded three stars from the Michelin Guide.
Dominique Crenn celebrated the honor on Instagram Thursday with her staff at Atelier Crenn, posting “congratulations to my amazing team.”
It was not the only honor for Crenn in Michelin’s Bay Area guide. Michelin also awarded one star to her new wine bar, Bar Crenn.
One star means “a very good restaurant,” while three stars signify “exceptional cuisine that is worth a special journey.”
Michelin’s international director Gwendal Poullennec tells The Mercury News it sends a “very positive message.” Poullennec says Michelin hopes “it will lead to more women operating their own restaurants.”
FIFA’s ethics committee has imposed a four-year ban on a soccer official for accepting a bribe, reportedly from former presidential candidate Mohamed bin Hammam.
FIFA says Manuel Dende, former president of the Sao Tomean Football Association, is also fined 75,000 Swiss francs ($75,000).
FIFA gave no details about the charges Dende faced, of bribery and corruption plus accepting gifts.
Dende took a $50,000 cash gift from Bin Hammam, according to authors of “The Ugly Game” book about the now-banned Qatari official’s dealings at FIFA.
In 2009, the book states, Dende asked Bin Hammam for $232,000 in his personal bank account to help build artificial pitches on his home island in west Africa.
Citing Bin Hammam correspondence, the book said $50,000 was eventually wired months later.
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Angola’s most famous operatic tenor hopes to inspire more Africans to take up the classical music form. Nelson Ebo has performed around the world and is currently starring with the Heartbeat Opera company on stage in New York. He recently sang in Washington, where VOA Portuguese Service’s Mayra de Lassalette met up with him.
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Angola’s most famous operatic tenor hopes to inspire more Africans to take up the classical music form. Nelson Ebo has performed around the world and is currently starring with the Heartbeat Opera company on stage in New York. He recently sang in Washington, where VOA Portuguese Service’s Mayra de Lassalette met up with him.
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U.S. Deputy Attorney General Rod Rosenstein called on social media companies and technology firms Thursday to work with law enforcement to protect the public from cybercriminals.
Speaking at a symposium on online crime, Rosenstein said that “social media platforms provide unprecedented opportunities for the free exchange of ideas. But many users do not understand that the platforms allow malicious actors, including foreign government agents, to deceive them by launching vast influence operations.”
He said it was up to the companies to “place security on the same footing as novelty and convenience, and design technology accordingly.”
He warned that if the technology sector failed to do so, government would have to step in.
“I think the companies now do understand if they do not take it upon themselves to self-regulate — which is essentially the theme of my talk today — they will face the potential of government regulation,” he said.
Extortion scheme
Rosenstein’s remarks came a day after the Justice Department charged two Iranian hackers in connection with a multimillion-dollar cybercrime and extortion scheme that targeted government agencies, cities and businesses.
Rosenstein said many tech companies are willing to work with law enforcement and to prevent the use of their platforms to spread disinformation.
But he said that “some technology experts castigate colleagues who engage with law enforcement to address encryption and similar challenges. Just because people are quick to criticize you does not mean that you are doing the wrong thing.”
U.S. law enforcement officials have long been pushing tech companies to make it easier for them to access information on private devices such as cellphones and social media accounts. But most firms have resisted, citing privacy of the users.
Rosenstein said data encryption practices were a “significant detriment to public safety.”
“Improvements in the ability to investigate crime and hold perpetrators accountable must match the pace at which technology is making crimes easier to commit and more destructive,” Rosenstein said.
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The Mystery Writers of America withdrew a major honor Thursday from author Linda Fairstein after other writers condemned the ex-prosecutor’s role in New York’s notorious “Central Park Five” case.
The decision, just two days after the Grand Master Award was announced, marked the first time the group has ever rescinded the prize, which recognizes lifetime achievement and has been given to such scribes as Sue Grafton and Stephen King.
“MWA cannot move forward with an award that lacks the support of such a large percentage of our members,” the group said in a statement that also pledged to re-evaluate its process for selecting honorees.
Fairstein, known for her best-selling novels featuring prosecutor Alex Cooper, was speaking at a conference Thursday and referred an inquiry to her publisher, Penguin Publishing Group’s Dutton imprint. It had no immediate comment.
When the award was announced Tuesday, Fairstein called it “a thrilling surprise.”
“I’m pinching myself,” she tweeted at the time.
But some prominent mystery writers, including Attica Locke and Nick Kolakowski, expressed outrage over the decision. On Thursday, Locke tweeted “Thank you (at)EdgarAwards for listening.”
Fairstein was the top Manhattan sex crimes prosecutor when five teenagers were charged with the 1989 rape and beating of a female investment banker jogging in Central Park.
The attack became a national symbol of urban mayhem at a time when New York City’s murder rate was nearing its historical peak. The case also bared the city’s racial and class divide, painting a portrait of a crew of black and Hispanic youths “wilding” and preying on a white professional. Donald Trump, a New York real estate developer at the time, bought full-page newspaper ads reading “Bring Back The Death Penalty. Bring Back Our Police!”
The teens said they were coerced into confessing their involvement in the attack. Their convictions were overturned in 2002 after convicted murderer and serial rapist Matias Reyes confessed to committing the crime alone, and DNA linked him to it.
Prosecutors stopped short of declaring the five innocent but withdrew all charges. The legal time clock had run out for charging Reyes, who was already serving life in prison on other convictions.
Fairstein observed the boys’ 1989 interrogation, conducted by another prosecutor and police. She didn’t personally try the case.
Since its collapse, she has denied the teens were coerced and has defended authorities’ conduct in the case, explored in a 2013 documentary by Ken Burns.
The city reached a roughly $41 million settlement with the five the next year, while not admitting any wrongdoing.
Locke and Fairstein exchanged caustic tweets after the award was announced. Locke, who is working with Ava DuVernay on a Netflix docudrama about the case, called Fairstein “almost singlehandedly responsible for the wrongful incarceration of the Central Park Five” and castigated her for not apologizing.
Fairstein responded by tweeting Locke should “learn your facts,” adding: “Your anger and comments are so misdirected.”
Fairstein built a reputation as a pioneering prosecutor of sexual offenses during her 25 years of leading the Manhattan district attorney’s sex crimes unit. She retired in 2002, but was already established as a crime novelist.
In 1995, she agreed to a two-book, $500,000 deal. Her first novel, “Final Jeopardy,” came out in 1996 and was the basis for an Edgar-nominated TV miniseries starring Dana Delany. Her other books include “Killer Look,” “Devil’s Bridge” and “Lethal Legacy.”
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Police raided six Deutsche Bank offices in and around Frankfurt on Thursday over money laundering allegations linked to the “Panama Papers”, the public prosecutor’s office in Germany’s financial capital said.
Investigators are looking into the activities of two unnamed Deutsche Bank employees alleged to have helped clients set up offshore firms to launder money, the prosecutor’s office said.
Around 170 police officers, prosecutors and tax inspectors searched the offices where written and electronic business documents were seized.
“Of course, we will cooperate closely with the public prosecutor’s office in Frankfurt, as it is in our interest as well to clarify the facts,” Deutsche Bank said, adding it believed it had already provided all the relevant information related to the “Panama Papers”.
The news comes as Deutsche Bank tries to repair its tattered reputation after three years of losses and a drumbeat of financial and regulatory scandals.
Christian Sewing was appointed as chief executive in April to help the bank to rebuild. He trimmed U.S. operations and reshuffled the management board but revenue has continued to slip.
Deutsche Bank shares were down more than 3 percent by 1220 GMT and have lost almost half their value this year.
Offshore links
The investigation was triggered after investigators reviewed so-called “Offshore-Leaks” and “Panama Papers”, the prosecutor said.
The “Panama Papers”, which consist of millions of documents from Panamanian law firm Mossack Fonseca, were leaked to the media in April 2016.
Several banks, including Scandinavian lenders Nordea and Handelsbanken have already been fined by regulators for violating money laundering rules as a result of the papers.
The prosecutors said they are looking at whether Deutsche Bank may have assisted clients to set up offshore companies in tax havens so that funds transferred to accounts at Deutsche Bank could skirt anti-money laundering safeguards.
In 2016 alone, over 900 customers were served by a Deutsche Bank subsidiary registered on the British Virgin Islands, generating a volume of 311 million euros, the prosecutors said.
They also said Deutsche Bank employees are alleged to have breached their duties by neglecting to report money laundering suspicions about clients and offshore companies involved in tax evasion schemes.
The investigation is separate from another money laundering scandal surrounding Danish lender Danske Bank, where Deutsche Bank is involved.
Danske is under investigation for suspicious payments totaling 200 billion euros from 2007 onwards and a source with direct knowledge of the case has told Reuters Deutsche Bank helped to process the bulk of the payments.
A Deutsche Bank executive director has said the lender played only a secondary role as a so-called correspondent bank to Danske Bank, limiting what it needed to know about the people behind the transactions.
Under scrutiny
Weaknesses in Deutsche Bank’s controls that aim to prevent money laundering have caught the attention of regulators on both sides of the Atlantic. The bank has publicly said that it agreed it needed to improve its processes to properly identify clients.
In September, Germany’s financial watchdog – BaFin – ordered Deutsche Bank to do more to prevent money laundering and “terrorist financing,” and appointed KPMG as third party to assess progress.
In August, Reuters reported that Deutsche Bank had uncovered further shortcomings in its ability to fully identify clients and the source of their wealth.
Last year, Deutsche Bank was fined nearly $700 million for allowing money laundering through artificial trades between Moscow, London and New York. An investigation by the U.S.
Department of Justice is still ongoing.
Deutsche Bank has been under pressure after annual losses, and it agreed to pay a $7.2 billion settlement with U.S. authorities last year over its sale of toxic mortgage securities in the run-up to the 2008 financial crisis.
Police raided six Deutsche Bank offices in and around Frankfurt on Thursday over money laundering allegations linked to the “Panama Papers”, the public prosecutor’s office in Germany’s financial capital said.
Investigators are looking into the activities of two unnamed Deutsche Bank employees alleged to have helped clients set up offshore firms to launder money, the prosecutor’s office said.
Around 170 police officers, prosecutors and tax inspectors searched the offices where written and electronic business documents were seized.
“Of course, we will cooperate closely with the public prosecutor’s office in Frankfurt, as it is in our interest as well to clarify the facts,” Deutsche Bank said, adding it believed it had already provided all the relevant information related to the “Panama Papers”.
The news comes as Deutsche Bank tries to repair its tattered reputation after three years of losses and a drumbeat of financial and regulatory scandals.
Christian Sewing was appointed as chief executive in April to help the bank to rebuild. He trimmed U.S. operations and reshuffled the management board but revenue has continued to slip.
Deutsche Bank shares were down more than 3 percent by 1220 GMT and have lost almost half their value this year.
Offshore links
The investigation was triggered after investigators reviewed so-called “Offshore-Leaks” and “Panama Papers”, the prosecutor said.
The “Panama Papers”, which consist of millions of documents from Panamanian law firm Mossack Fonseca, were leaked to the media in April 2016.
Several banks, including Scandinavian lenders Nordea and Handelsbanken have already been fined by regulators for violating money laundering rules as a result of the papers.
The prosecutors said they are looking at whether Deutsche Bank may have assisted clients to set up offshore companies in tax havens so that funds transferred to accounts at Deutsche Bank could skirt anti-money laundering safeguards.
In 2016 alone, over 900 customers were served by a Deutsche Bank subsidiary registered on the British Virgin Islands, generating a volume of 311 million euros, the prosecutors said.
They also said Deutsche Bank employees are alleged to have breached their duties by neglecting to report money laundering suspicions about clients and offshore companies involved in tax evasion schemes.
The investigation is separate from another money laundering scandal surrounding Danish lender Danske Bank, where Deutsche Bank is involved.
Danske is under investigation for suspicious payments totaling 200 billion euros from 2007 onwards and a source with direct knowledge of the case has told Reuters Deutsche Bank helped to process the bulk of the payments.
A Deutsche Bank executive director has said the lender played only a secondary role as a so-called correspondent bank to Danske Bank, limiting what it needed to know about the people behind the transactions.
Under scrutiny
Weaknesses in Deutsche Bank’s controls that aim to prevent money laundering have caught the attention of regulators on both sides of the Atlantic. The bank has publicly said that it agreed it needed to improve its processes to properly identify clients.
In September, Germany’s financial watchdog – BaFin – ordered Deutsche Bank to do more to prevent money laundering and “terrorist financing,” and appointed KPMG as third party to assess progress.
In August, Reuters reported that Deutsche Bank had uncovered further shortcomings in its ability to fully identify clients and the source of their wealth.
Last year, Deutsche Bank was fined nearly $700 million for allowing money laundering through artificial trades between Moscow, London and New York. An investigation by the U.S.
Department of Justice is still ongoing.
Deutsche Bank has been under pressure after annual losses, and it agreed to pay a $7.2 billion settlement with U.S. authorities last year over its sale of toxic mortgage securities in the run-up to the 2008 financial crisis.
Norway’s Magnus Carlsen has solidified his claim to be the greatest chess player in the world.
Carlsen beat Fabiano Caruana of the United States 3-0 Wednesday in a rapid-chess tiebreaker game at the world chess championships in London.
Carlsen and Caruana played to 12 draws in their series of championship matches that started Nov. 9, games that lasted as long as seven hours each.
They decided to settle the impasse in games of speed chess, in which each player is given just 25 minutes to try to beat his opponent.
After the long excruciating series of ties topped off by three speed games, Carlsen would only say that he had a “really good day,” while Caruana admitted that he “had a bad day.”
Carlsen takes home a $621,000 prize while Caruana pockets $508,000.
Carlsen has been the world chess champion since 2013, when he took the title from India’s Viswanathan Anand.
Caruana was hoping to become the first American to win the title since 1972, when Bobby Fischer defeated the Soviet Union’s Boris Spassky in a thrilling series of matches that made global headlines.
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U.S. President Donald Trump said Wednesday that new auto tariffs were “being studied now,” asserting they could prevent job cuts such as the U.S. layoffs and plant closures that General Motors Co. announced this week.
Trump said on Twitter that the 25 percent tariff placed on imported pickup trucks and commercial vans from markets outside North America in the 1960s had long boosted U.S. vehicle production.
“If we did that with cars coming in, many more cars would be built here,” Trump said, “and G.M. would not be closing their plants in Ohio, Michigan & Maryland.”
The United States has a 2.5 percent tariff on imported cars and sport utility vehicles from markets outside North America and South Korea. The new North American trade deal exempts the first 2.6 million SUVs and passenger cars built in Mexico and Canada from new tariffs.
Several automakers said privately on Wednesday that they feared GM’s action could prompt Trump to act faster than expected on new tariffs.
GM did not directly comment on Trump’s tweets but reiterated that it was committed to investing in the United States. On Monday, the company said it would shutter five North American plants, stop building six low-selling passenger cars in North America and cut up to 15,000 jobs. The company has no plans to shift production of those vehicles to other markets.
The administration has for months been considering imposing dramatic new tariffs on imported vehicles.
The U.S. Commerce Department has circulated draft recommendations to the White House on its investigation into whether to impose tariffs of up to 25 percent on imported cars and parts on national security grounds, Reuters reported earlier this month.
“The President has great power on this issue – Because of the G.M. event, it is being studied now!” Trump said.
Shock to industry
The prospect of tariffs of 25 percent on imported autos and parts has sent shock waves through the auto industry, with both U.S. and foreign-brand producers lobbying against it and warning that national security tariffs on EU and Japanese vehicles could dramatically raise the price of many vehicles.
Trump has also harshly criticized GM for building cars in China. The United States slapped an additional 25 percent tariff on Chinese-made vehicles earlier this year, prompting China to retaliate.
China currently imposes a 40 percent tariff on U.S. automobiles, while the United States has a 27.5 percent tariff on Chinese vehicles.
U.S. Trade Representative Robert Lighthizer said in a statement on Wednesday that he “will examine all available tools to equalize the tariffs applied to automobiles.”
Additional tariffs on Chinese-made vehicles and parts would have a limited impact, said Kristin Dziczek, an economist at the Center for Automotive Research. She noted only a small number of vehicles were exported from China to the United States annually.
The White House previously pledged not to move forward with imposing national security tariffs on the European Union or Japan while it was making constructive progress in trade talks.
Trump wants the EU and Japan to buy more American-made vehicles. He wants the EU and Japan to make trade concessions, including lowering the EU’s 10 percent tariff on imported vehicles and cutting nontariff barriers.
The White House in recent weeks has reached out to the chief executives of German automakers, including Daimler AG, MW AG and Volkswagen AG about meeting to discuss the status of auto trade.
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Federal Reserve Chair Jerome Powell boosted U.S. stock markets on Wednesday when he said interest rates were “just below” estimates of a level that neither brakes nor boosts a healthy economy. Many took his comments as a signal that the Fed’s three-year tightening cycle is ending.
The S&P 500 and Dow posted their biggest percentage gains in eight months, while the Nasdaq saw its largest advance in just over a month following Powell’s speech to the Economic Club of New York.
Powell said that while “there was a great deal to like” about U.S. prospects, “our gradual pace of raising interest rates has been an exercise in balancing risks.”
Earlier in the day, in its first-ever financial stability report, the Fed cautioned that trade tensions, Brexit and troubled emerging markets could rock a U.S. financial system where asset prices are “elevated.”
‘Close to neutral’
“[Powell is] now acknowledging he’s close to neutral, which suggests maybe not quite as many rate hikes in the future as investors believed,” said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Chicago. “It’s certainly a change of language and welcome news to investors.”
The U.S. Commerce Department affirmed that U.S. GDP grew in the third quarter at a 3.5 percent annual rate, but the goods trade deficit widened, consumer spending was revised lower and sales of new homes tumbled, suggesting clouds are gathering over what is now the second-longest economic expansion on record.
The Dow Jones industrial average rose 617.7 points, or 2.5 percent, to 25,366.43, the S&P 500 gained 61.61 points, or 2.30 percent, to 2,743.78 and the Nasdaq Composite added 208.89 points, or 2.95 percent, to 7,291.59.
Of the 11 major sectors in the S&P 500, all but utilities were positive. Technology and consumer discretionary were the biggest percentage gainers, each up more than 3 percent.
The S&P 500 Automobile & Components index was up 1.4 percent after President Donald Trump said he was studying new auto tariffs in the wake of General Motors Co.’s announcement that it would close plants and cut its workforce.
Humana cuts forecast
Health insurer Humana Inc. cut its 2019 forecast for Medicare drug plan enrollment but upped its estimated enrollment in the company’s Medicare Advantage plan. Its stock ended the session up 6.2 percent.
Salesforce.com Inc. beat analysts’ earnings estimates and forecast better-than-expected 2020 revenue, sending its shares up 10.3 percent. Other cloud software makers rose on the news, with the ISE Cloud Index gaining 3.5 percent.
Microsoft Corp briefly surpassed Apple Inc. in market cap but Apple took back its lead by closing. Nevertheless, Microsoft closed 4.0 percent higher as it benefited from optimism regarding demand for cloud computing services.
Among losers, Tiffany & Co. shares dropped 11.8 percent after the luxury retailer missed quarterly sales estimates on slowing Chinese demand.
Advancing issues outnumbered declining ones on the NYSE by a 3.95-to-1 ratio; on Nasdaq, a 3.58-to-1 ratio favored advancers.
The S&P 500 posted 17 new 52-week highs and six new lows; the Nasdaq Composite recorded 37 new highs and 129 new lows.
Volume on U.S. exchanges was 8.04 billion shares, compared with the 7.82 billion-share average over the last 20 trading days.
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Chinese photographer Lu Guang has gone missing during a visit to China’s Xinjiang province.
Lu’s wife Xu Xiaoli, who is in the United States, set up a Twitter account this week to spread information about the disappearance of the award-winning photojournalist, who covers sensitive issues in China, such as pollution, poverty, and AIDS.
Xu said Lu had been missing since Nov. 3 after disappearing during a trip to attend several photography events in China. He was expected to meet a friend in Sichuan on Nov. 5, but failed to appear. Xu says the wife of Lu’s host in Xinjiang said he had been taken away by national security agents.
A friend of the couple, Chinese artist Wu Yuren, told VOA that Xu considered traveling to China to search for her husband. Wu said he managed to talk Xu into staying in the United States to publicize his disappearance.
“We were all very shocked,” Wu told VOA’s Mandarin service. “Ever since we came to the U.S., it’s rare to hear about someone we know disappeared like this.”
Wu said Lu may have fallen prey to media suppression in China. “He thought he had the experience of dealing with this,” Wu said, “But he could not have imagined how bad the situation is now.”
Xu told Radio Free Asia she has been calling officials in Xinjiang in search of word of her husband, but no one has picked up on the phone numbers published online.
Sophie Richardson, China director of Human Rights Watch, told VOA “the Chinese government has a long history of simply taking people whose views it doesn’t like, literally off the grid and disappearing them.”
She continued, “I think every time this happens, authorities diminish their claim that this country is governed by rule of law.”
The Associated Press cites Chinese officials as confirming that Lu and a fellow photographer were taken away by Xinjiang state security agents.
Xinjiang has recently been the subject of international concern, after news reports spread word that China has constructed internment camps there to conduct “re-education” of Muslim Uighurs and other ethnic groups.
A representative for Amnesty International, Patrick Poon, told Radio Free Asia that international concern caused by those reports has influenced the Chinese government to try to shut down information coming from the area.
Lu is the winner of a number of photojournalism awards, including the World Press Photo, a National Geographic Photography grant, and China’s highest domestic photography award. He holds a U.S. “green card” (permission to work in the United States) and in 2005 became the first photographer from China to be invited by the U.S. State Department as a visiting scholar.
VOA Mandarin service contributed to this report.
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U.S. President Donald Trump touted the use of U.S. tariffs on foreign small trucks Wednesday, saying their placement on other foreign vehicles would have prevented the closure of several General Motors plants and the loss of thousands of coveted manufacturing jobs.
Trump noted on Twitter that brisk U.S. small truck sales in the country are due to a 25-percent tariff on small truck imports.
The president reiterated on Twitter that “countries that send us cars have taken advantage of the U.S. for decades.” Trump added he has “great power on this issue,” which he said “is being studied now.”
Trump has threatened to eliminate all federal subsidies to GM in response to the company’s planned closure of five plants and the elimination of 14,000 jobs in North America. Questions remain, though, about whether Trump has the authority to act against the automaker without congressional approval.
Federal tax credits of up to $7,500 are available to those who buy GM electric vehicles. Killing the subsidies may have little financial impact on GM because it is on the cusp of reaching its subsidy limit.
Many of the jobs would be eliminated in Midwestern U.S. states, a region where Trump has long promised a manufacturing rebirth.
GM, which said it has invested more than $22 billion in U.S. operations since it came out of bankruptcy in 2009, has tried to appease the Trump administration while justifying its decisions.
“We appreciate the actions this administration has taken on behalf of industry to improve the overall competitiveness of U.S. manufacturing,” GM said in a statement Tuesday.
Before GM can shutter factories next year in Michigan, Ohio and Ontario, Canada, it must reach agreement with the United Auto Workers union. The union has vowed to fight the closures legally and in collective bargaining.
GM’s restructuring reflects changes in buying trends in North America, prompting vehicle manufacturers to shift away from cars and toward SUVs and trucks.
U.S. Federal Reserve Chair Jerome Powell said on Wednesday that while there was “a great deal to like” about U.S. prospects, the Fed’s gradual interest rate hikes are meant to balance risks as it tries to keep the economy on track.
“We know that things often turn out to be quite different from even the most careful forecasts,” Powell said in a speech that comes in the wake of last week’s volatile market selloff. “Our gradual pace of raising interest rates has been an exercise in balancing risks.”
Powell offered few clues on how much longer the U.S. central bank would raise interest rates in the face of a slowdown overseas and market volatility at home. Instead he highlighted a new financial stability report the Fed published earlier on Wednesday.
“My own assessment is that, while risks are above normal in some areas and below normal in others, overall financial stability vulnerabilities are at a moderate level,” he said at an Economic Club of New York luncheon.
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