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BRUSSELS: June 16, 2016. The European Commission has published its latest EU Air Safety List that includes 216 airlines that do not meet international safety standards and are therefore banned or restricted from operating within the European Union.

Following today's update, all airlines certified in Zambia are cleared from the list, along with Air Madagascar and three airlines certified in Indonesia, Citilink, Lion Air and Batik Air.

Lion Air is part of the Lion Air Group, together with Wings Air, Batik Air, Lion Bizjet, Malindo Air (based in Malaysia) and Thai Lion Air.

Lion ParcelThe Commission said it also cleared most Iran Air aircraft to resume services to and from the EU.

EU Transport Commissioner Violeta Bulc noted: "I am happy to say that after seven years of work and extensive European technical assistance, we were able to clear all Zambian air carriers from the list. Following my visit to Iran in April, a technical assessment was successfully carried out in May. Based on this I am happy to announce that we are now also able to allow most aircraft from Iran Air back into European skies."

The ban include 214 airlines certified in 19 states plus Iraqi Airways (Iraq) and Blue Wing Airlines (Suriname) - both based on safety concerns.

Six more airlines are subject to operational restrictions and can only fly to the EU with specific aircraft types: Afrijet (Falcon 50 and 900) and Nouvelle Air Affaires SN2AG, Gabon (Challenger 601 and HS125-800); Air Koryo, Democratic People's Republic of Korea (only a TU 204); Air Service Comores, the Comoros (only the LET 410); Iran Air, Iran (no B747 nor Fokker 100) and TAAG Angola Airlines, Angola (only a B737 and B777).

The full list can be downloaded here: EU_banned_airlines_2016.pdf

MUSCAT: June 08, 2016. The Oman government is to set up the Oman Global Logistics Group, a holding company to consolidate all its investments in the country’s ports, Freezones, rail, maritime and trucking sectors.

Menzies AviationAccording to minister of Transport and Communications Ahmed bin Mohammed Salem al-Futaisi, the aim of the new company is to create major growth opportunities in the logistics sector, increase its contribution to the country’s GDP, and maximize the government’s ROI.

Al-Futaisi said his department is currently working on setting-up a similar holding company for Oman Air, the country’s airports and its air navigation services.

The government said the Oman Global Logistics Group will build on the country’s “massive infrastructure investments” in specialized industrial zones and deep-water ports by encouraging private-public partnerships  through joint investments and innovation.

One example is the recently announced MoU between Menzies Aviation and Oman Air to set up a joint venture for ground handling services at Muscat, Salalah, Duqm, Sohar and Ras Al Hadd airports.

Oman Air’s CEO Paul Gregorowitsch commented: “Our partnership will enable us to access new technology, improve training and achieve the highest standards with regard to ground handling operations.”

Menzies Aviation managing director Forsyth Black added: “There is a great tradition of co-operation between British and Omani partners; we hope to add this new joint venture to that list.”

Alibaba HONG KONG: May 24, 2016. In its annual report filing to the U.S. Securities & Exchange Commission (SEC), Alibaba Group Holding (AGH) has acknowledged the SEC is investigating whether the group has violated any U.S federal securities laws.

The holding company, based in Hong Kong and registered in the Cayman Islands, said the SEC has requested documents and information relating to the consolidation policies and practices of its Cainiao Network logistics subsidiary, as well as policies and practices applicable to related party transactions in general, and Alibaba’s reporting of operating data from its Singles Day that generated sales of US$14.3 billion in November 2015.

Cainiao Logistics received 467 million delivery orders during the 24-hour shopping period, more than 15 times its daily average and a 68 percent year-over-year increase from 2014. The company also generated more than 120 million e-waybills with delivery firms, customers and merchants.

“We are voluntarily disclosing this SEC request for information and cooperating with the SEC and, through our legal counsel, have been providing the SEC with requested documents and information,” said AGH in a statement. “The SEC advised us that the initiation of a request for information should not be construed as an indication by the SEC or its staff that any violation of the federal securities laws has occurred,” it added.

In the year ending March 31, 2016 AGH reported revenue of US$15.86 billion and net income of US$11.08 billion. China accounted for US$13.0 billion in revenue while international sales accrued revenue of US$1.18 billion. Cloud computing produced an additional US$468 million and ‘Others’ a further US$958 million in revenue.

MOSCOW: May 19, 2016. Singapore has signed an MoU with the Eurasian Economic Commission (EEC) to boost trade and increase Customs and IT collaboration.

Singapore Prime Minister Lee Hsien LoonThe EEC is the executive regulatory body of the Eurasian Economic Union (EAEU), made up of Russia, Armenia, Belarus, Kazakhstan and Kyrgyzstan.

Singapore prime minister Lee Hsien Loong (right) said the agreement was a concrete step towards a deepening and widening engagement with the EEU and an eventual free trade zone between Singapore and the Eurasian Economic Union (EAEU).

Speaking with Russian president Vladimir Putin, Lee noted: "We assume that the agreement on a free trade zone between Singapore and the EAEU will support the development of trade. A feasibility study to assure us that an agreement like that is economically viable, would be the first step towards making such an agreement," he added.

According to the EAEU its collective GDP was US$2.2 trillion in 2014; industrial production was US$1.4 trillion; and the volume of external trade with third countries was US$877.6 billion – equal to 3.7 percent of world exports and 2.3 percent of world imports.

Putin said the creation of a free trade zone between the EAEU and Singapore would boost bilateral trade and added that Moscow plans to "facilitate further development of the ties" between them. He also noted that Russia’s investment in Singapore currently totals US$2.5 billion while Singapore’s investment in the Russian economy is US$1 billion.

LUXEMBOURG: April 26, 2016. Two former PricewaterhouseCoopers (PwC) employees and an investigative journalist have gone on trial in Luxembourg accused of leaking confidential information on over 300 companies that registered in the country between 2002 and 2010 to avoid tax liability.

Many of the tax loopholes were prevalent when current European Commission (EC) president Jean-Claude Juncker was Luxembourg’s prime minister and finance minister.

Following a complaint by PwC, two former employees Antoine Deltour and Raphael Halet are being prosecuted for passing hundreds of documents to Edouard Perrin, a member of the International Consortium of Investigative Journalists (ICIJ) that published a report in November 2014 on how Luxembourg had effectively become a tax haven within the EU.

Luxembourg for financeA statement from Luxembourg's Finance Ministry said at the time that while its behavior had been "totally legal", it acknowledged that since the Great Recession of 2008 "the legitimacy of certain mechanisms, which are compliant with international law, is put in doubt".

Finance minister Pierre Gramegna (pictured right) declared Luxembourg now "believes that it is not acceptable that companies take advantage of the international legal framework to avoid de facto all taxation" and the international community "needs to adapt to today's realities".

After the ICIJ revelations, Juncker denied any wrongdoing and has since backed plans by the EC, the Luxembourg government, the OECD and the G20 to introduce tax avoidance measures.

This week the EU’s 28 finance ministers agreed Member States will require multinational corporations operating in Europe to report their earnings and taxes on a country-by-country basis in a bid to curb profit shifting and corporate tax avoidance. The Commission estimates that Europe’s governments lose €70 billion to corporate tax avoidance each year.

The new rules are expected to be adopted by June and be applied to foreign companies with European subsidiaries from 2017.

According to corruption watchdog Transparency International (TI), most European countries do not have whistleblower protection laws. Although Luxembourg has such a law, Deltour is not considered a whistleblower because the legislation is limited to corruption offences. In addition, it only protects whistleblowers against dismissal, not against prosecution.

The former PwC auditor faces charges of theft, violating Luxembourg’s professional secrecy laws, violation of trade secrets and illegally accessing a database. If found guilty he could be sentenced to 10 years in jail and fined up to €1.25 million.

“Deltour should be protected and commended, not prosecuted. The information he disclosed was in the public interest,” said Cobus de Swardt, TI managing director.  

ICIJ director Gerard Ryle said Perrin’s indictment for doing his job as a journalist was an affront to press freedom and the charges against the others showed that Luxembourg was "recklessly dismissive" of the role whistleblowers play in ensuring transparency.

“For a founding member of the EU to bring charges against a journalist in relation to reporting that is clearly in the public interest shows a lack of respect for the important role journalism plays in holding the powerful accountable. For a country to also charge two alleged whistleblowers shows Luxembourg has not yet caught up with public opinion,” Ryle added.

PwC: industrial scale tax avoidance schemes

FedEx named in Luxembourg tax avoidance schemes

LONDON: May 12, 2016. As former Mayor of London Boris Johnson begins his ‘Brexit’ tour of Britain on a bus made by the MAN Group in Germany and Poland (examples below), the Bank of England has echoed an IMF report that warns a vote to leave the European Union (EU) could materially affect Britain’s future economic output and rate of inflation.

The Bank estimates that roughly half of the 9.0 percent fall in sterling since its November 2015 peak could be accounted for by risks associated with a vote to leave the EU.

With greater uncertainty about the UK’s future trading relationships, it says sterling is expected to depreciate further, “perhaps sharply”.

German busIn its latest Monetary Policy report, the Bank notes a ‘no’ vote could see a drop in household consumption and companies delay investment decisions as asset prices fall - resulting in tighter financial conditions and increasing unemployment.

“Taken together, the combination of movements in demand, supply and the exchange rate could lead to a materially lower path for growth and a notably higher path for inflation,” it said.

According to international courier company ParcelHero, any attempt to replace the loss of EU access by increasing trade with Brazil, Russia, India and China will cost companies an average £163,000 per annum in higher transport costs, tariffs and extra bureaucracy.

Head of Consumer Research David Jinks explained: “The reason why small businesses are less keen to trade beyond the comfort of the EU is not hard to fathom. Brazil is currently suffering economic and political difficulties; 
Russia does not allow courier shipments to private addresses, only business ones; India has some steep tariffs: 125 percent for a CKD car kit for example; while China has tough Customs clearance procedures - and its growth rate is slowing.

“So what do these figures tell us? UK products will struggle to be competitive in many overseas markets. And further, were the UK to de-link its duty structure from the EU’s common 
external tariff, other nations considering trading with us might find an independent UK’s unique tariff structure equally bewildering and unattractive,” Jinks concluded.

WASHINGTON, DC: April 19, 2016. A report by the U.S. International Trade Commission (USITC) says exports of agricultural and manufactured goods to Cuba could increase with the lifting of trade and travel restrictions that have prevented U.S. suppliers and investors from accessing the Cuban market.

port miami entranceCuba imported U.S. goods worth US$9.3 billion in 2014, while services totaled US$2.5 billion. Before the 1960 trade embargo the country was ranked as the seventh-largest U.S. export market. By 2014 it had fallen to 125th place, importing just US$299 million of U.S. goods.

Cuban imports from the U.S. reached a high of US$712 million in 2008; however the global recession, restrictions on credit and the Cuban government's decision to reduce U.S. food purchases, saw imports from the U.S. total just US$180 million in 2015.

The USITC said U.S. government restrictions that require Cuba to pay for most U.S. goods in cash or via third-country banks have shut suppliers out of a market in which they could be competitive on price, quality, and proximity.

The report says that even with the lifting of trade barriers, the continuing Cuban government control of trade and distribution, legal limits on foreign investment and property ownership, the country's dual currency and exchange rate systems, and politically motivated decisions regarding trade and investment, would be a barrier to the expansion of trade between the two countries.

The USITC report noted that if Cuba was to respond to the lifting of trade barriers like a market-based economy, U.S. exports to Cuba of selected agricultural and manufactured products could increase in the medium term to US$1.8 billion from a an average of US$400.8 million between 2010-2013.

NEW DELHI: May 04, 2016. India’s logistics market is forecast to be worth US$307 billion by 2020 according to Ram Kripal Yadav, the country’s minister of State for Drinking Water & Sanitation.

Speaking at a logistics conference organized by the Associated Chambers of Commerce and Industry of India (ASSOCHAM), Yadav said India spends around 14.4 percent of its GDP on logistics and transportation compared to less than 8.0 percent by other developing countries.

India multimodalHe said India’s cargo and logistics Industry can expect to grow at CAGR of 16 percent in the next few years as new investments create additional opportunities for the logistics sector.

In a bid to reduce costs and promote its ‘Make in India’ campaign, he said the government intends to encourage private investment in the country’s ports via a INR 2.87 trillion program to increase port capacity to 3.2 billion metric tonnes in anticipation of a rise in cargo traffic to 2.5 billion tonnes by the end of 2020.

Yadav noted the country’s plan to build dedicated rail freight corridors (pictured: APM Terminals Pipavav port on India's West Coast) will promote efficient haulage of containerized cargo and reduce times between Mumbai and Delhi to 18 hours from the current 60.

The minister’s comments follow a report by ASSOCHAM that India can save up to US$50 billion if logistics costs are brought down from 14 percent to nine per cent of country’s GDP.

The study suggests logistics service providers should have access to cheap capital to improve infrastructure while the government should create a uniform tax structure and remove multiple checkpoints and documentation requirements to improve the flow of cargo.

“Appropriate policy changes and opening up capacity together with increase in speed for transportation of goods and services through various modes, rail, road, water and others, is imperative for the growth of cargo and [the] logistics industry in India,” commented ASSOCHAM secretary general D.S. Rawat.

PORT SABETTA, Russia: April 14, 2016. GAC Russia has partnered with Russia’s Far East Development Fund (FEDF), set up by president Vladimir Putin and prime minster Dmitry Medvedev, to address challenges faced by ship owners transiting the Northern Sea Route (NSR).

NSR mapGAC and FEDF have launched a survey https://www.research.net/r/northernsearoute to gather data on NSR navigation experiences and then explore a range of options to make the route more competitive and attract more traffic.

Commenting on the NSR, Putin said: “It is difficult to underestimate the significance of the most northern transport route in terms of geopolitics and geostrategy: it’s the framework of the whole infrastructure of the Russian arctic zone. The development and exploration of the Arctic is one of the priorities of the national strategy.”

The FEDF is a Russian Federation development institution that invests in infrastructure for a “significant social and financial impact on the economic development of the region”. Based in Moscow, it works in cooperation with the Ministry of Far East Development and its principal stakeholder, the former Soviet-era Vnesheconombank.

Denis Askinadze, FEDF managing director, explained the new tie-up: “It would be hard to overstate the significance of the NSR for Russia’s economy. It has been an important transport corridor contributing to the economic growth both of the Arctic regions and of Russia as a whole. Pursuing the goal of practical development of the NSR and drawing on the GAC Russia team’s extensive local knowledge of the Arctic region and global shipping and logistics expertise, we believe that this partnership will address the challenges and help to form a hands-on solution for all users of the NSR.”

Since 2010 the amount of cargo shipped via the NSR has risen from 110 tons to four million tons with the amount of transit permits rising to a current figure of 600 per annum. FEDR expects traffic to increase to 80 million tons by 2020.

GAC Russia’s managing director Arkady Podkopaev added: “We firmly believe we’re on course to make the NSR more attractive to shipping companies and encourage them to take advantage of the shorter distance and time benefits on offer. Our aim is to bring about fast and positive change by July 01 2016 when summer navigation commences, and all those who take part in the survey will in turn benefit from the expected mitigation of economical, technical and organizational challenges highlighted leading to optimum support during their NSR navigations.”

BRUSSELS: May 01, 2016. The European Commission (EC) has introduced a new Customs framework - the 'Union Customs Code' (UCC) – to replace existing regulations throughout the European Union by the end of 2020.

EU UCC The EC said the UCC is designed to complete the shift to a paperless and interoperable Customs environment; offer greater legal certainty and uniformity to businesses; and simplify Customs rules and procedures to make transactions more efficient, modern and faster.

Doug Brittin, secretary general of The International Air Cargo Association, said his organization would conduct a workshop at the Air Cargo Forum in October to explain the new UCC framework that is expected to require a paperless interchange between the air cargo industry and EU Customs Union by 2020.

Pierre Moscovici, EC commissioner for Economic and Financial Affairs, Taxation and Customs commented: "An efficient EU Customs Union facilitates trade while at the same time enforcing necessary rules for security, safety and intellectual property rights. The new Union Customs Code opens the door to new state-of-the-art IT systems that will provide fast and quality data on goods being traded and will allow extremely close coordination among the administrations of our Member States."

The EC said the new rules aim to allow traders to clear Customs procedures more simply and quickly, getting goods to consumers faster and more cheaply; better protect consumers against illegal goods or goods which don't respect European environmental, health and safety requirements; and improve cooperation between Customs administrations with the help of new IT systems.

The UCC is a major overhaul of existing EU Customs legislation that dates back to 1992. Until 2020, the new rules will use existing IT systems and paper forms to handle the almost 15 percent of world trade in goods, worth €3.5 trillion, that flows in and out of the EU every year.

Once cleared by Customs in one Member State, goods can move freely within the Union on the basis that all countries apply the same revenue and protection rules at external borders. In 2014 Customs collaboration by the 28 Member States resulted in the seizure of 454.2 tonnes of drugs, 35 million counterfeit goods and 3.2 billion cigarettes.

More information on the UCC: http://ec.europa.eu/taxation_customs/customs/customs_code/union_customs_code/ucc/index_en.htm

DUBAI: April 12, 2016. Men and women aged 18-24 from 16 countries in the Middle East say the lack of jobs is the No.1 reason why Daesh/ISIS targets their demographic, even though 76 percent don’t think the terrorist group will be successful in establishing an ‘Islamic State’ in the region.

Arab surveyAccording to the eighth annual ASDA’A Burson-Marsteller Arab Youth Survey, ISIS remains the single biggest challenge facing the Middle East with 13 percent of respondents now saying they could support the organization, down from 19 percent in 2015.

Only 44 percent of those surveyed think there are good job opportunities available to them – particularly in countries where ISIS has actively recruited young people.

Commenting on the latest survey results Sunil John, founder and chief executive of ASDA’A Burson-Marsteller observed: “The stark reality is that fewer than half of all Arab youth believe they have decent prospects in the jobs market. The International Labour Organisation believes up to 75 million young people alone are jobless in the Arab world. This depressing statistic, and the corresponding pessimism felt by so many responders to our survey, is a damning indictment of the governments that have failed to address this key issue.”

John said the 200 million young people in the Middle East and North Africa represent either the region’s biggest dividend, or
its biggest threat: “It is my personal view that they are a dividend; a wellspring of untapped potential to rival any oil or gas field, and a net benefit to the region and the world. The governments of the Middle East and North Africa cannot afford to let them down,” he added.

According to the survey, Arab youth view Saudi Arabia as their biggest ally for the fifth-year running (31 percent), followed by the UAE (28 percent) and the U.S. (25 percent). However while two-thirds of respondents view America as a friend, one third see it as an enemy - particularly in Iraq (93 percent), Yemen (82 percent) and Palestine (81 percent).

Iran is viewed by 13 percent of the youth as their biggest ally while 52 percent see it as an enemy; 53 percent think promoting stability in the region is more important than promoting democracy (28 percent); and 52 percent think religion plays too big of a role in the Middle East with 47 percent saying Sunni-Shia relations have worsened in the past five years.

On a positive note, 22 percent of the respondents say the UAE is the best place to live and 25 percent think it’s the best place to start a business.

CSAFE Global

 

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