Paradise Papers: Invest NI and the Mauritian giveaway

(THIS ARTICLE IS COURTESY OF THE BBC)

 

Paradise Papers: Invest NI and the Mauritian giveaway

Paradise Papers graphic

A number of business owners in Northern Ireland have been involved in aggressive tax avoidance schemes, an investigation by the BBC’s Nolan Show has revealed.

Sam McCrea MBE and his wife, Julienne, are owners of Springfarm Architectural Mouldings Ltd (SAM Mouldings) in Antrim.

The couple was involved in a Mauritian tax avoidance scheme.

The McCreas have said they have fully complied with their tax obligations.

Over a quarter of the people signed up to that scheme were from NI.

Julienne McCrea and her husband, Sam McCrea MBE, are owners of Springfarm Architectural Mouldings Ltd in Antrim
Image captionJulienne McCrea and her husband, Sam McCrea MBE, are owners of Springfarm Architectural Mouldings Ltd in Antrim

The Paradise Papers are a huge batch of leaked documents mostly from offshore law firm Appleby, along with corporate registries in 19 tax jurisdictions, which reveal the financial dealings of politicians, celebrities, corporate giants and business leaders.

The 13.4 million documents were passed to the German newspaper Süddeutsche Zeitung and then shared with the International Consortium of Investigative Journalists.

The Nolan Show team worked alongside colleagues in BBC Panorama, the Guardian, and nearly 100 media organizations worldwide.

Multi-million pound property given away

In 2000, SAM Mouldings bought land from Stormont’s Department of Enterprise for £280,000. The company built their business on the site. By 2014, the property, with its factory and offices, was valued on its balance sheet at £4m.

But the following year, SAM Mouldings gave the multi-million pound property away for just one pound to what the company described as an ‘unconnected third party’. The beneficiary was a company in Mauritius.

Documents seen by the Nolan Show reveal that the McCreas had control of the Mauritian company – they had given the multi-million-pound property to themselves in all but name. The couple was listed as ‘investment advisors’ to the company – but the leaked files suggest they were doing much more than just advising.

At one stage, Sam McCrea wrote to the company in Mauritius questioning why a payment was made without his or his wife’s permission.

Email from Sam McCrea

He asked how the company could make any payments without the approval of the IA or ‘investment advisor’ – meaning either himself or his wife Julienne.

In other documents, Sam McCrea advises that the Mauritian company buys shares from himself.

Invest NI

Since 2008, SAM Mouldings has received over £431,000 in financial assistance from Invest NI – who is a preferential shareholder in the company.

After the Antrim property SAM Mouldings operated from was given to the McCreas’ company in Mauritius, SAM took on a £270,000 annual rent bill. This rent was sent through various intermediaries – and ended up in the McCreas’ Mauritian company – where the income tax rate is just 3%.

This tax avoidance mechanism was promoted by the McCreas’ tax advisors who set up the Mauritian scheme as a form of ‘rent factoring’ – that’s where in exchange for a lump sum, a company diverts future rents from property to a financier.

Under this system, SAM Mouldings paid £270,000 annual rent to the Mauritian firm but Sam McCrea received a £200,000 loan from the firm. As a loan, it was not liable for tax.

Invest NI told the BBC in a statement that as part of their project monitoring and approval procedures of SAM Mouldings Ltd they “were aware of the property transfer in question and this was taken into consideration when approving their most recent project.”

“SAM Mouldings has continued to grow in terms of both exports and employment targets and is meeting the agreed repayment schedule for the preference shares.

Paradise Papers explainer box

“A company’s tax planning is a matter between it and HMRC. If it transpires that information provided to us as part of our approval process has been misleading and would have resulted in a different decision being made, we will review the specific case, as would be normal practice.

When asked about their involvement in tax avoidance schemes, the McCreas’ lawyers said their clients “are not going to enter into a course of correspondence concerning this sensitive and confidential funding arrangements of their business, with the BBC”.

They added: “Our clients have fully complied with their obligations to HMRC, specifically with regard to the Mauritian companies.

They also said, “there will be no loss to the UK Exchequer as a result of the Mauritian companies”.

They said the allegations were “untrue, defamatory and are particularly unpleasant slurs on two people who have brought prosperity and employment to the Antrim area”, adding “Mr. McCrea holds a public honor for his services to business and he guards his reputation carefully”.

The Nolan Show will be focusing on stories from the Paradise Papers across the week.

Paradise Papers: Full coverage; follow reaction on Twitter using #ParadisePapers; in the BBC News app, follow the tag “Paradise Papers”

Watch Panorama or listen back to the Nolan show on the BBC iPlayer (UK viewers only)

1 UK hostage killed, 3 freed in Nigeria, foreign office says

(THIS ARTICLE IS COURTESY OF CNN)

 

1 UK hostage killed, 3 freed in Nigeria, foreign office says

London (CNN)A British national who was taken hostage in Nigeria has been killed while three others have returned home safely.

Ian Squire was killed after being kidnapped on October 13. Abducted at the same time were Alanna Carson, David Donovan, and Shirley Donovan, according to a statement Monday by the hostages’ families and the UK foreign office.
The families said that Nigerian authorities had helped negotiate their release and they thanked British authorities for their “support.”
“We are delighted and relieved that Alanna, David, and Shirley have returned home safely. Our thoughts are now with the family and friends of Ian as we come to terms with his sad death,” they said.
“This has been a traumatic time for our loved ones who were kidnapped and for their families and friends here in the UK.”
The statement did not make clear who was behind the abductions. An investigation into the incident is ongoing.
The four were kidnapped in the country’s oil-rich southern Delta region, Nigerian police there told CNN.
In its travel advice, the UK foreign office warns there is “a high threat of criminal kidnap” in the Delta area and advises against all but essential travel there.

Fact-checking President Trump’s speech on the Iran deal

(THIS ARTICLE IS COURTESY OF THE WASHINGTON POST)

 

Fact Checker

Fact-checking President Trump’s speech on the Iran deal

 October 14 at 3:00 AM
 Play Video 3:00
Trump’s Iran deal announcement, in 3 minutes
President Trump announced Oct. 13 that his administration would take new steps going forward to confront Iran. (The Washington Post)

In his speech on the Iran nuclear agreement, known formally as the Joint Comprehensive Plan of Action (JCPOA), President Trump made a number of factual assertions. The deal was negotiated by Iran, the five permanent members of the U.N. Security Council (United States, Russia, United Kingdom, France and China), Germany and the European Union.

Here’s a guide to some of his rhetoric, in the order in which he made these statements.

“The regime harbored high-level terrorists in the wake of the 9/11 attacks, including Osama bin Laden’s son.”

The president recounted a long list of aggressive acts by the Iranian government toward the United States since the shah was overthrown in 1979, many of which would be familiar to Americans. This claim — that Iran harbored al-Qaeda terror suspects — might be less well-known, but it was recently documented in a 2017 book, “The Exile,” by investigative reporters Cathy Scott-Clark and Adrian Levy.

The book noted that the steady flow of senior al-Qaeda figures into Iran after the Sept. 11, 2001, attacks was controversial among various factions. The government actually made some arrests and sent some al-Qaeda figures back to countries of origin. But the Revolutionary Guard was more supportive. Trump, in using the phrase “regime,” glosses over the debate within the country.

“The regime remains the world’s leading state sponsor of terrorism, and provides assistance to al-Qaeda, the Taliban, Hezbollah, Hamas and other terrorist networks.”

Trump suggests the assistance to al-Qaeda continues to the present day. This is in line with the latest State Department Country Reports on terrorism, released in July, which said: “Since at least 2009, Iran has allowed AQ facilitators to operate a core facilitation pipeline through the country, enabling AQ to move funds and fighters to South Asia and Syria.” This phrasing marked a shift from previous reports, which indicated the support was in the past.

“The previous administration lifted these sanctions, just before what would have been the total collapse of the Iranian regime, through the deeply controversial 2015 nuclear deal with Iran.”

There is little evidence that the Iranian government was on the verge of “total collapse,” though it was certainly struggling because of international sanctions. The Obama administration had been able to win broad international support for crippling sanctions precisely because it convinced Russia and China, two major Iranian partners, that the pressure was designed to curb Iran’s nuclear ambitions and force the government into negotiations. If the government had started to teeter because of the sanctions, especially if it was perceived as part of an American campaign of regime change, that support probably would have been withdrawn.

JCPOA “also gave the regime an immediate financial boost and over $100 billion its government could use to fund terrorism. The regime also received a massive cash settlement of $1.7 billion from the United States, a large portion of which was physically loaded onto an airplane and flown into Iran.”

Trump often suggests the United States gave a $100 billion to Iran, but these were Iranian assets that had been frozen. The Treasury Department has estimated that once Iran fulfills other obligations, it would have about $55 billion left. (Much of the funds were tied up in illiquid projects in China.) For its part, the Central Bank of Iran said the number was actually $32 billion, not $55 billion. Iran has also complained that it cannot actually move the money back to Iran because foreign banks won’t touch it for fear of U.S. sanctions and their U.S. exposure.

As for the $1.7 billion in cash, this was related to the settlement of a decades-old claim between the two countries. An initial payment of $400 million was handed over on Jan. 17, 2016, the same day Iran’s government agreed to release four American detainees, including The Washington Post’s Jason Rezaian. The timing — which U.S. officials insisted was a coincidence — suggested the cash could be viewed as a ransom payment.

But the initial cash payment was Iran’s money. In the 1970s, the then-pro-Western Iranian government under the shah paid $400 million for U.S. military equipment. But the equipment was never delivered because the two countries broke off relations after the seizure of American hostages at the U.S. Embassy in Iran.

Two other payments totaling $1.3 billion — a negotiated agreement on the interest owed on the $400 million — came some weeks later.

“The deal allows Iran to continue developing certain elements of its nuclear program and, importantly, in just a few years, as key restrictions disappear, Iran can sprint towards a rapid nuclear weapons breakout.”

JCPOA has been in place for two years. Certain provisions of the nuclear aspects of the deal do not last indefinitely, but virtually all phase out between years 10 and 25. It’s doubtful Iran would have agreed to an indefinite ban on nuclear activities, given that it has a right to have a nonnuclear program under the Nuclear Non-Proliferation Treaty. Critics of the agreement argue that Iran’s past behavior suggests it will cheat in any case and thus has forfeited its rights.

Trump does not mention that under the agreement, Iran is permanently prohibited from acquiring nuclear weapons, and will be subject to certain restrictions and additional monitoring indefinitely. (Readers may also be interested in a previous fact check we did on whether Iran’s supreme leader, Ayatollah Ali Khamenei, has issued a fatwa against the development of nuclear weapons; we found the claim dubious.)

It’s unclear why Trump refers to a “few years” before a potential nuclear breakout. Nonnuclear provisions having to do with arms-related transfers to and from Iran will expire in three years, or possibly sooner. In six years, U.N. Security Council restrictions end on any activity related to ballistic missiles designed to be capable of delivering nuclear weapons.

“Those who argue that somehow the JCPOA deals only with nuclear matters and should be judged separate from the restrictions in [U.N.] Resolution 2231 fail to explain that a nuclear weapon is a warhead and a delivery system,” noted David Albright, president of the Institute for Science and International Security, in testimony before Congress. “Today, the delivery vehicle of choice is a ballistic missile.”

“The Iranian regime has committed multiple violations of the agreement. For example, on two separate occasions, they have exceeded the limit of 130 metric tons of heavy water. Until recently, the Iranian regime has also failed to meet our expectations in its operation of advanced centrifuges.”

Trump is right that Iran twice exceeded the deal’s limit on heavy water. But supporters of the deal say it shows JCPOA is working. Iran tried to take advantage of fuzzy language in the agreement but was immediately caught by international inspectors; the other partners objected and forced Iran to come back into compliance.

As for the centrifuges, the deal limits both the number and type of centrifuges Iran is permitted to use. Again Iran tried to take advantage of ambiguous limits — “roughly 10” advanced centrifuges — by operating slightly more than that number.

The dispute for the moment also appears to have been resolved, though Albright in his testimony noted that “Iran has also built and operated more advanced centrifuges than it is allowed, and it has misused quality assurance limitations to conduct banned mechanical testing of advanced centrifuges.”

“There are also many people who believe that Iran is dealing with North Korea. I am going to instruct our intelligence agencies to do a thorough analysis and report back their findings beyond what they have already reviewed.”

This was a puzzling statement. The phrasing suggests there is not enough evidence to claim that Iran has dealings with North Korea, but the intelligence agencies will keep looking. But it raises the question about why the president made the assertion in the first place.

“It is under continuous review, and our participation can be canceled by me, as president, at any time.”

The other partners to the agreement dispute that Trump has the authority to end the deal. In an unusual joint statement, British Prime Minister Theresa May, German Chancellor Angela Merkel and French President Emmanuel Macron noted: “JCPOA was unanimously endorsed by the U.N. Security Council in Resolution 2231. The International Atomic Energy Agency has repeatedly confirmed Iran’s compliance with the JCPOA through its long-term verification and monitoring program.”

Similarly, Federica Mogherini, the E.U. foreign policy chief, said no one country could terminate the deal. “This deal is not a bilateral agreement,” she said. “The international community, and the European Union with it, has clearly indicated that the deal is, and will, continue to be in place.”

However, a president can stop waiving nuclear sanctions at any point, causing nuclear sanctions to come back into force. Moreover, U.S. law requires Trump to waive nuclear sanctions regularly, so he could simply not do anything and nuclear sanctions come back. In effect, that would terminate the deal, whether the other partners like it or not.

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Fox News Being Pulled Off The Air In The U.K. Because No One Is Watching It

(THIS ARTICLE IS COURTESY OF THE HUFFINGTON POST)

 

V viewers in the United Kingdom will likely not miss watching Fox News, as the network’s parent company 21st Century Fox announced on Tuesday that the company would pull the channel amid low ratings.

“Fox News is focused on the U.S. market and designed for a U.S. audience and, accordingly, it averages only a few thousand viewers across the day in the U.K.,” 21st Century Fox said in a statement provided to CNN. “We have concluded that it is not in our commercial interest to continue providing Fox News in the U.K.”

While 21st Century Fox said its decision was based on the channel’s inability to attract a considerable audience, critics say it’s actually an attempt to smooth over the media giant’s bid to take over European satellite company Sky. (21st Century Fox owns a controlling stake in Sky PLC, the parent company of the London-headquartered network.)

HuffPost UK reports that if the takeover is successful, it would give Fox mogul Rupert Murdoch access to Sky’s 22 million customers in Europe. This audience would be in addition to those of the three U.K. newspapers ― The Sun, The Times, and The Sunday Times ― that the media mogul already owns.

In June, officials delayed Murdoch’s attempted takeover of the 61 percent of Sky that his family does not currently own. British authorities asked regulators to review the deal to see if the takeover would give the family too much control over the country’s media landscape.

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Sky ceased broadcasting Fox News on Tuesday at 4 p.m.

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