UNODC and Siemens AG strengthen partnership for business integrity
Aug 2 2021
UNODC and Siemens AG strengthen partnership for business integrity

Vienna (Austria), 2 August 2021 – The United Nations Office on Drugs and Crime (UNODC) and Siemens AG signed a funding agreement worth US$ 4 million to strengthen business integrity.

The sum represents the largest single contribution by the private sector to UNODC’s anti-corruption work. It will be dedicated to funding a new UNODC project, called Global Action for Business Integrity, which aims to prevent and fight corruption by strengthening legal frameworks, helping small businesses identify corruption risks, and involving youth, civil society, and academia in developing anti-corruption responses. The scope of the project is global with a focus on seven countries: Brazil, Colombia, Egypt, Ethiopia, Malaysia, Saudi Arabia and Uzbekistan.

The Executive Director of UNODC, Ms. Ghada Waly, said: “To recover better from the COVID-19 crisis, businesses will need to recover with integrity. Thanks to the support of Siemens AG, UNODC will be able to help private sector companies build their capacity to play a bigger role in preventing and countering corruption, in line with the political declaration adopted in June by the UN General Assembly at its special session against corruption. I commend Siemens AG for its dedication to collective anti-corruption action, and I urge more companies to follow their lead.”

Sabine Zindera, Vice President, Siemens Legal and Compliance and head of Siemens’ global Collective Action activities and the Siemens Integrity Initiative added: “The fight against corruption is a clear business case for companies. What is more, Siemens has been constantly driving Collective Action over the past decade and has with a commitment of around 120 million US-dollars and 85 projects around the world strongly supported practical implementation on the ground. This is in our view indispensable for achieving lasting change and transforming the everyday into a true level playing field. We are very much looking forward to continuing our long-standing international cooperation with UNODC who is especially through the United Nations Convention against Corruption (UNCAC) ideally positioned to engage and inspire many partners for practical implementation on the ground.”

The project Global Action for Business Integrity will mobilize stakeholders from the public sector, the private sector, civil society and academia to develop common responses:
• In Brazil, the project will conduct a youth hackathon to identify solutions to improve the dialogue between public sector, private sector and civil society on business integrity.
• In Colombia, the project will target civil society and academia and build their capacity to participate in collective action against corruption.
• In Egypt, the project will implement “On the Job Training” modules on business ethics for senior university students to build a culture of integrity among young professionals.
• In Ethiopia and in Saudi Arabia, the focus of the project is on training small- and medium-sized enterprises on corruption risk assessment.
• In Malaysia, UNODC will assist national authorities in the development and implementation of regulations on the liability of legal persons and beneficial ownership transparency.
• In Uzbekistan, the project will build the capacity of the public sector and civil society organizations in the area of strengthening anti-corruption components in legislation.

The project’s implementation is guided by the United Nations Convention against Corruption (UNCAC), the only legally binding universal anti-corruption instrument to prevent corruption and criminalize conducts such as bribery, trading in influence, abuse of functions and various acts of corruption in the private sector. In addition to the initiatives led in the seven focus countries, the project includes a global outreach component designed to identify good practices on business integrity and share them widely through publications and a global webinar series.

The project Global Action for Business Integrity is funded by Siemens AG under the Golden Stretch Funding Round, which builds upon the earlier three funding rounds. Siemens AG will now contribute US$ 4 million to UNODC over the next three years. Since the launch of the Siemens Integrity Initiative in 2009, Siemens AG has contributed over US$ 13.5 million to UNODC, enabling the Office to deliver nine projects in 17 countries.

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Is it starting to form a new crisis after the pandemic?
May 30 2021
Is it starting to form a new crisis after the pandemic?

At a time when the world is experiencing an unprecedented health and economic crisis, the central banks are already wondering if the next one is coming.

From Washington to Frankfurt, what began months ago as a flurry of anxiety has become a chorus in which officials question whether the risk appetite for multiple asset markets could portend a destabilizing consequence that could thwart a global recovery.

In mid-May, the European Central Bank and the Central Bank of Canada warned of growing threats, reminiscent of what happened during the 2008 financial crisis. Meanwhile, the dramatic fluctuations of bitcoin after a warning about cryptocurrencies from the People’s Bank of China showed how sensitive some markets have become.

Pessimists in the world’s monetary institutions can find bubbles almost anywhere they look, from stocks to real estate, while officials like Federal Reserve Chief Jerome Owell say any threats remain limited.

Central banks have a certain responsibility for the flames of the financial market after huge doses of incentives and liquid injections to support the economy. The resulting volatility is at least in part an effect of euphoria applauding rapid growth, the extent of which can only be assumed – with possible consequences expected to range from a benign boom to an inflationary spiral.

Market speculations have led to high volatility in recent times, including wild increases and declines in bitcoin from the current high of 60,000.

Traditional assets are also struggling, as interest rates on German bonds, for example, are rising to about 50 basis points this year, closing.

The ECB monitors payments from economic inflows, for example from a stock market operation in the United States. Bank of Canada officials are looking for similar day-to-day operations and underpinning the housing market, as expectations are expected to continue.

Three weeks later, the Fed’s political situation turned into a debate on stability, followed by market participants watching “increases” in appetites. In the next report, they predict the “vulnerability” and “tightened assessments”, aggravated by the high corporate debt.

Meanwhile, the banker of the Bank of England, Andrew Bailey, is wondering whether the speculations with the shares and the bitcoin cannot be a “prelude”.

For some time now, the central banks have been facing difficulties. Even in January, the head of the market at the ECB, Isabel Schnabel, told his colleagues that the shares could become vulnerable to “the most common”.

In China, with a more advanced cycle of recovery from the United States, the best banks have managed to get through the fact that it is a “lot of money”.

Some senior central bankers are trying to be restrained in their statements, despite the flashing warning lights. Following Fed’s decision in April, Paul said that “the whole of financial stability is shifted, but balanced and managed.”

“Central banks are desperate to be digital,” said James Atey, an investment manager at Aberdeen Agence Management Company. “It also means that they are holding politics too long for too long.”

The employees of the financial institutions are ready to dare to pay for the incentives, which will take the liberty to suffocate the economic recovery.

Iceland made this week last week, leading the first tightening of policy in Western Europe with an increase in interest rates.

* The article is an analytical agent and is not a tip for the purchase or sale of assets.

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MEPs lay out plans for a fairer tax system fit for the digital age
Apr 29 2021
MEPs lay out plans for a fairer tax system fit for the digital age

Report on “Digital Taxation: OECD negotiations, tax residency of digital companies and a possible European Digital Tax” © Image used under the license from Adobe Stock

News | European Parliament

  • International tax rules set in early 20th century are not fit for the digital economy
  • A minimum corporate tax rate urgently needed at international level
  • Taxes should be paid where value is really created
  • If progress at international level stalls, the EU should go it alone

Outdated international tax rules need to be overhauled, including a minimum effective corporate tax rate; the EU should go it alone if global negotiations fail.

Adopting their resolution a few months ahead of decisions expected from the OECD, MEPs are seeking to keep the momentum going at European level while pushing for changes on their primary concerns.


Global minimum tax rate, new taxing rights and EU at the forefront


To reduce tax avoidance and make taxes fairer, MEPs make a number of suggestions to amend outdated rules established well before the digital economy existed.


They call for a minimum effective tax rate to be set at a fair and sufficient level to discourage profit shifting and prevent damaging tax competition. In this regard, the resolution also welcomes the US administration’s recent proposal of a 21 % global corporate tax rate.


Taxing rights should reflect that, as a result of digitalisation, the interaction between businesses and consumers significantly contributes to value creation in highly digitalised business models. This would allow more taxes to be paid where value is being created, as has always been the concept behind taxation, rather than where the rates are lowest.


Finally, MEPs insist that the EU should develop its own fall-back position, which would kick in if global negotiations do not yield results by the end of the year. By mid-2021, there should be a proposal on a digital services tax and a Commission road map with different scenarios, with or without agreement at OECD level.


The resolution was adopted 549 votes in favour, 70 against and 75 abstentions.


Quotes


During the debate on Wednesday, Andreas Schwab (EPP, DE), one of the co-rapporteurs said, “We have had a big problem in the last few years with digital services because they have been taxed more lightly than traditional ones. This problem grew further during the COVID-19 pandemic. Equal treatment in taxation is not only fair but it is also necessary for fair competition. This resolution provides clear and simple guidelines for how to break away from taxing digital and traditional businesses differently.”


Martin Hlaváček (Renew, CZ), the second co-rapporteur said, “Large digital players cannot have an unfair advantage over SMEs. We have a moral responsibility to ensure that digital multinationals will contribute their fair share, just like all other companies and citizens. Although this problem is best resolved at international level, this must be the last try – either there is agreement by the summer at the OECD or else the EU must adopt its own strategy. We cannot sit back forever and rely on the international level.”


Background


Talks are currently ongoing at OECD level to rethink international tax rules comprehensively so that they better reflect the significant changes that economies have undergone due to globalisation and digitalisation. The aim is to have agreement at this level by the third quarter of 2021.


Parliament has focussed on taxation challenges since 2015 when its first temporary committee on the matter was established. This committee continued until 2019 when a permanent subcommittee was set up. The subcommittee on tax matters began its work in June 2020.

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Parliament adopts InvestEU programme for strategic and innovative investments | News | European Parliament
Mar 9 2021
Parliament adopts InvestEU programme for strategic and innovative investments

News | European Parliament 09-03-2021

  • Programme aims to generate around €400 billion in additional investments
  • Companies will receive aid to get through the COVID-19 pandemic
  • Launchpad for investments that would otherwise be difficult to finance

On Tuesday, MEPs adopted the new InvestEU programme, which will mobilise public and private investments and guarantees simplified access to financing.

Parliament endorsed the provisional agreement reached with the Council with 496 votes in favour, 57 against and 144 abstentions.

With €26 billion (in current prices) set aside in the EU budget as a guarantee, InvestEU is expected to mobilise €400 billion to be invested across the European Union from 2021 to 2027. The new programme is part of the €750 billion Next Generation EU recovery package, and will foster strategic, sustainable and innovative investments and address market failures, sub-optimal investments and the investment gap in targeted sectors.

Sustainable and strategic investments

InvestEU supports strategic investments in manufacturing of pharmaceuticals, medical devices and supplies – crucial in the midst of a pandemic – as well as the production of Information and Communication Technology, components and devices in the EU.

It will also finance sustainable projects that can prove their positive environmental, climate and social impact. Those projects will be subject to the principle of “do no significant harm”, meaning they must not negatively affect the EU’s environmental and social objectives.

Furthermore, MEPs made sure that InvestEU contributes to achieving the target of spending at least 30% of EU funds on climate objectives by 2027 and that it provides support for SMEs negatively affected by the pandemic and at risk of insolvency.

Additional investments of around €400 billion

The additional investment across the European Union, expected to amount to €400 billion and the EU guarantee will be allotted to the following policy objectives:

  1. sustainable infrastructure: around 38%
  2. research, innovation and digitalisation: 25 %
  3. SMEs: around 26%
  4. social investment and skills: around 11%.

Moreover, the European Investment Fund (EIF), which will contribute to the implementation of the InvestEU programme, will get an additional €375 million.

Quotes

José Manuel Fernandes (EPP, PT), lead MEP from the Budgets Committee said during the debate on Tuesday: “The EU needs public and private investments to become more competitive, productive and to boost its territorial cohesion. Invest EU brings in additional funds to turn projects that otherwise wouldn’t see the light of day into reality. Our strategic sectors, such as pharmaceuticals, should be independent. We need to help regions that suffered the most, and EU citizens deserve investment and high-quality jobs”.

Irene Tinagli (S&D, IT) leading the negotiations on behalf of the Economic and Monetary Affairs Committee added: : “We diverted more funds to meet environmental targets, to support SMEs, which suffered because of the pandemic, and we succeeded in placing Invest EU at the heart of NextGenerationEU. Since InvestEU will also help us to recover from the pandemic, we created synergies with the Recovery and Resilience Facility, allowing member states to implement part of their recovery and resilience plans through InvestEU”.

Next steps

Once Council has also formally approved the regulation, it will enter into force on the twentieth day after its publication in the Official Journal of the EU.

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Negotiations on amount of tax multinationals pay in each EU country
Mar 4 2021
Negotiations on amount of tax multinationals pay in each EU country
  • Multinationals will have to disclose amount of tax they pay in each EU country
  • The public and tax authorities will be able to see what taxes are being paid where
  • Negotiations on final shape of EU bill set to begin very shortly

Four years after Parliament adopted its position on draft legislation on public country-by-country reporting, EU governments come to the table to negotiate a deal.

On Thursday, Parliament’s lead negotiators, Evelyn Regner (S&D, AT) and Ibán García Del Blanco (S&D, ES), were officially given the green light to enter into negotiations with the EU governments’ representatives, based on the position the EP adopted in 2017. Last week, member states were able to agree their negotiating position. These negotiations are now set to begin very shortly.

Evelyn Regner said:

“This is a breakthrough for tax fairness in the EU. Public country-by-country reporting will oblige multinational companies to be financially transparent about where they make profits and where they pay taxes. Especially in the context of the COVID-19 pandemic, where companies are receiving considerable support from public spending, citizens have an even greater right to know which multinationals are playing fair and which are free-riding.”

Ibán García Del Blanco said:

“We have been waiting for the Council for too long. We are ready to start negotiations immediately in order to reach an agreement under the Portuguese Presidency, thereby making progress on tax and corporate transparency. We urgently need meaningful financial transparency to fight tax evasion and profit shifting. Citizens’ trust in our democracies depends on everyone contributing their fair share to the recovery.”

The European Parliament’s main additions

The Parliament’s position adds to the Commission’s original proposal, notably in the following ways:

  • the information requested from multinationals should be presented separately, including for each tax jurisdiction outside the EU;
  • multinationals must make their annual report on income tax information publicly available and free of charge, and file the report in a public registry managed by the Commission;
  • a safeguard clause for sensitive corporate data has been added, allowing multinationals to temporarily omit information when disclosing it would be seriously prejudicial to their commercial positions;
  • additional items of information will be provided in the tax reports to help achieve a more complete picture, such as information on the number of all full-time employees, fixed assets, stated capital, preferential tax treatment, or government subsidies;
  • subsidiaries with a turnover of EUR 750 million or more would also be subject to country-by-country reporting requirements.

Background

This legislation is part of the EU’s regulatory measures to implement the OECD’s Base Erosion and Profit Shifting (BEPS) Action Plan 13. In essence, multinationals with annual turnovers of more than EUR 750 million will be required to provide an annual tax statement that breaks down key elements of the statements by tax jurisdiction. This will provide the public and tax authorities with more visibility on what taxes are being paid where.

On 4 July 4 2017, Parliament adopted its amendments to the Commission’s proposal. It then reconfirmed its position in its first reading on March 27, 2019. On 24 October 2019, MEPs passed a strong resolution urgently calling on the member states to break the deadlock and enter inter-institutional negotiations.

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Parliament gives go-ahead to €672.5 billion Recovery and Resilience Facility
Feb 10 2021
Parliament gives go-ahead to €672.5 billion Recovery and Resilience Facility

News | European Parliament

  • Biggest building block of the Next Generation EU stimulus package
  • €672.5 billion in grants and loans to curb the effects of the pandemic
  • Funds will support key policy areas such as green transition, digital transformation, crisis preparedness as well as children and youth
  • Respect for rule of law and the EU’s fundamental values a prerequisite to receive funding


On Wednesday, Parliament approved the Recovery and Resilience Facility, designed to help EU countries tackle the effects of the COVID-19 pandemic.

The regulation on the objectives, financing and rules for accessing the Recovery and Resilience Facility (RRF) was adopted with 582 votes in favour, 40 against and 69 abstentions. The RRF is the biggest building block of the €750 billion Next Generation EU recovery package.

Curbing the effects of pandemic

€672.5 billion in grants and loans will be available to finance national measures designed to alleviate the economic and social consequences of the pandemic. Related projects that began on or after 1 February 2020 can be financed by the RRF, too. The funding will be available for three years and EU governments can request up to 13% pre-financing for their recovery and resilience plans.

Eligibility to receive funding

To be eligible for financing, national recovery and resilience plans must focus on key EU policy areas – the green transition including biodiversity, digital transformation, economic cohesion and competitiveness, and social and territorial cohesion. Those that focus on how institutions react to crisis and supporting them to prepare for it, as well as policies for children and youth, including education and skills, are also eligible for financing.

Each plan has to dedicate at least 37% of its budget to climate and at least 20% to digital actions. They should have a lasting impact in both social and economic terms, include comprehensive reforms and a robust investment package, and must not significantly harm environmental objectives.

The regulation also stipulates that only member states committed to respecting the rule of law and the European Union’s fundamental values can receive money from the RRF.

Dialogue and transparency

To discuss the state of the EU recovery and how the targets and milestones have been implemented by member states, the European Commission, which is responsible for monitoring the implementation of the RRF, may be asked to appear before Parliament’s relevant committees every two months. The Commission will also make an integrated information and monitoring system available to the member states to provide comparable information on how funds are being used.

Quotes

Siegfried MUREŞAN (EPP, RO), one of the lead MEPs involved in the negotiations said during the debate on Tuesday: “Today’s vote means that money will go to people and regions affected by the pandemic, that support is coming to fight this crisis and to build our strength to overcome future challenges. The RRF will help to modernise our economies and to make them cleaner and greener. We have set the rules on how to spend the money but left them flexible enough to meet the different needs of member states. Finally, this money must not be used for ordinary budgetary expenditures but for investment and reforms.”

Eider GARDIAZABAL RUBIAL (S&D, ES), one of the lead negotiators said: “The RRF is the correct response to the impact of the virus. It has two aims: in the short-term, to recover by supporting gross national income (GNI), investments and households. In the long-term, this money is going to bring about change and progress to meet our digital and climate goals. We will ensure that the measures will alleviate poverty and unemployment, and will take into account the gender dimension of this crisis. Our health systems will also become more resilient”.

Dragoș PÎSLARU (Renew, RO), one of the lead MEPs involved, said: “Europe’s destiny is in our hands. We have a duty to deliver recovery and resilience to our youth and children, who will be at the centre of the recovery. One of the RRF’s six pillars is dedicated especially to them, which means investing in education, reforming with them in mind and doing our bit for youth to help them get the skills they will need. We do not want the next generation to be a lockdown generation”.

Next steps


Once Council has also formally approved the regulation, it will enter into force one day after its publication in the Official Journal of the EU.

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MEPs adopt Technical Support Instrument to speed up post-COVID-19 recovery
Jan 19 2021
MEPs adopt Technical Support Instrument to speed up post-COVID-19 recovery

News | European Parliament January 21, 2021

  • Support for economic recovery after and beyond the COVID-19 pandemic
  • Promoting digital and green transformation
  • 864 million EUR for 2021-2027

The Technical Support Instrument will help EU countries prepare the recovery plans needed to access funding from the Recovery and Resilience Facility.

The regulation adopted by Plenary on Tuesday, with 540 votes in favour, 75 against and 77 abstentions outlines how the Technical Support Instrument (TSI) will support economic recovery after and beyond the COVID-19 pandemic by promoting economic, social and territorial cohesion as well as digital and green transitions including biodiversity and implementation of climate targets. The reforms supported by the instrument should effectively address the challenges identified in the adopted country-specific recommendations.

 

Specific objectives and actions

The TSI will assist national authorities in preparing, amending, implementing and revising their national plans. The text sets out a list of key actions to be carried out, such as digitalisation of administrative structures and public services, in particular healthcare, education or the judiciary, creating policies to help people retrain for the labour market and building resilient care systems and coordinated response capabilities. A single online public repository managed by the European Commission will provide information on the actions that fall under the TSI.

 

TSI budget and implementation

The TSI will have a budget of €864 million over the period 2021-2027 (in current prices). In order to receive technical support, such as expertise related to policy change or to prepare strategies and reform roadmaps, a member state has to submit a request to the Commission by 31 October, outlining the policy areas it will focus on. To ensure resources are readily available and that there is an immediate response in urgent or unforeseen circumstances, up to 30% of the yearly allocation should be reserved for special measures.


Next steps


Once Council has also formally approved the regulation, it will enter into force one day after its publication in the Official Journal of the EU. There is going to be a transitional period for actions initiated before 31 December 2020, which will be governed by the Structural Reform Support Programme (2017-2020) until their completion.

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