CAPITALI$M WITH CHINESE CHARACTERISTICS

China Shadow Banks Snap Up Property to Rescue Own Investments

Bloomberg News, Bloomberg News

Apartments at China Evergrande Group's Life in Venice real estate and tourism development in Qidong, Jiangsu province, China, on Tuesday, Sept. 21, 2021. Evergrande slid deeper in equity and credit markets Tuesday, fueling concerns about broader contagion after S&P Global Ratings said the developer is on the brink of default. Photographer: Qilai Shen/Bloomberg , Bloomberg

(Bloomberg) -- China’s shadow banks are emerging as unlikely white knights for embattled property firms by becoming mini-developers themselves.

Trust companies including MinMetals Trust Co. and Zhongrong Trust Co. have bought stakes in at least 10 real estate projects this year, betting that the unfinished homes will eventually yield cash to pay off some of the $280 billion in property-backed funds sold by trusts to investors.

The push by these lenders to get into the real estate business offers some relief for investors and developers in the wake of China’s property collapse that has rattled global markets and led to more than a dozen defaults. The moves free up cash to help real estate firms tackle some of their $3.4 trillion in liabilities.

The shadow banks are doing these deals now, knowing creditors may have limited room to negotiate payments or deals with developers like China Evergrande Group once restructuring plans are announced, according to one trust executive.

“Taking up property projects during an enduring downturn is more about saving themselves,” said Zhu Yiming, a property analyst at China Real Estate Information Corp., referring to the trusts. Rather than await credit improvement, “it’s better for trusts to regain the initiative through getting a controlling stake.”

China Evergrande, the country’s most-indebted developer that’s at the center of the property crisis, is among firms unloading housing projects. The Shenzhen-based company sold stakes in at least seven housing developments to three trust firms. Pricing details weren’t disclosed, though Evergrande said it recovered its initial capital contribution of 2 billion yuan ($300 million) and settled trust liabilities of 7 billion yuan with the sales.

State-owned AVIC Trust, the second-largest trust lender to Evergrande as of June 2020, took control of two residential projects from Evergrande in March. They include Sunny Peninsula, a stalled seaside development in Guangzhou slated to house 5,000 families. Logan Group Co., which was cut deeper into junk this month, and Zhenro Properties Group Ltd. are among other developers selling projects to trusts.

Evergrande said in an investor call last week that transferring some investments and deferring housing operations has become a “new model” of cooperation with trust companies. MinMetals Trust said adding development stakes is the “optimal option” of dissolving Evergrande debt risk, while helping get the projects back on track.

Here are some recent deals:

Local governments are pushing creditors, including trusts, to help distressed developers like Evergrande offload stakes in projects and find strategic investors to raise cash, according to people familiar with the matter. The most pressing concern for authorities is to ensure housing construction, and many trusts are considering taking additional stakes in Evergrande projects, said the people, who declined to be identified discussing private matters.

The trust industry has plenty at stake in the ongoing property woes. The shadow banks have more than $3 trillion outstanding in high-yield products sold to wealthy individuals, including about $280 billion backed by developers like Evergrande. Evergrande defaulted in December, and is headed for one of the largest debt restructurings ever in China. Its bonds due in 2025 trade at about 13 cents on the dollar.

China’s crackdown on borrowing combined with a slowdown in the housing market contributed to a surge in missed payments on these investment vehicles. Defaults on property-linked funds jumped to 92 billion yuan last year, accounting for more than 60% of the total, according to research provider Use Trust. That sparked protests in several cities as buyers demanded repayment on what were supposed to be safe, short-term investments. 

Though the developers are ultimately on the hook for these products, trusts are trying to make investors whole since they pitched the securities to investors in many cases.

“In theory, it’s individual buyers of trust products who should bear the loss of missed repayments,” said Lan Wang, an analyst at Moody’s Investors Service. “But in reality, sometimes trust firms still need to compensate investors, especially if their sales behavior was inappropriate.”

Pressure is mounting. About 352 billion yuan of property-related trust products mature by September, according to Moody’s. Growing concerns over developers may limit the trusts’ ability to refinance these products.

“The moves by trust firms to take over property projects may help dissolve risks on real estate lending,” said Shuai Guorang, a researcher at Use Trust. “But they also bear risks, given the property market hasn’t bottomed out.”

©2022 Bloomberg L.P.

US watchdog proposes new disclosure requirements for SPACs

The move is part of a broader crackdown on SPACs after a frenzy of deals in 2020 and early 2021 sparked concerns that some investors are getting a raw deal.

The United States Securities and Exchange Commission has stepped up oversight of SPACs amid worries of inadequate disclosures and lofty revenue projections 

[File: Al Drago/Bloomberg]

Published On 30 Mar 2022

Wall Street’s watchdog on Wednesday unveiled a draft new rule to enhance blank-cheque company investor disclosures and to strip them of a legal protection critics argue has allowed the shell companies to issue overly optimistic earnings projections.

The move by the United States Securities and Exchange Commission (SEC) is part of a broader crackdown on special purpose acquisition companies (SPACs) after a frenzy of deals in 2020 and early 2021 sparked concerns that some investors are getting a raw deal.

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Wall Street’s biggest gold rush of recent years, SPACs are shell companies that raise funds through a listing to acquire a private company and take it public, allowing the target to sidestep the stiffer regulatory scrutiny of a traditional initial public offering (IPO).

The SEC proposal, which is subject to consultation, broadly aims to close that loophole by offering SPAC investors protections similar to those they would receive during the IPO process, the SEC said.

“Today’s proposal, if adopted, would represent a sea change to the rules applicable to SPACs,” John Ablan, a partner at law firm Mayer Brown who advises companies on deals including IPOs, wrote in an email. “The SEC is clearly focused on creating incentives … to undertake the same amount of due diligence that would be done in a traditional IPO.”

The rule would require SPACs to disclose more details about their sponsors, their compensation, conflicts of interest and share dilution.

It would also enhance disclosures about the target takeover, known as the “de-SPAC,” more information, including the sponsor’s view on whether the deal is fair to investors and whether the proposed transaction has been vetted by third parties. Such disclosures would have to be issued at least 20 days prior to any solicited votes on the acquisition.

“Companies raising money from the public should provide full and fair disclosure at the time investors are making their crucial decisions to invest,” SEC Chair Gary Gensler said.

The rule would also strip SPACs of a liability-safe harbour for forward-looking statements, such as earnings projections.

The SEC has stepped up oversight of SPACs amid worries of inadequate disclosures and lofty revenue projections. Reuters news reported last year that the SEC was considering new guidance to rein in SPACs’ growth projections.

SPAC sponsors say the projections are important for investors, especially when targets are unprofitable startups, but investor advocates say they are frequently wildly optimistic or misleading but have been shielded by the legal safe harbour.

Improving disclosures “might not necessarily spell the death of SPACs, but I hope that better disclosures push them to evolve into less costly and more sensible forms,” said Michael Ohlrogge, a New York University law professor who has criticised SPACs for not being upfront with investors about their full costs.

If SPACs do not meet certain conditions they may have to register as investment companies, subjecting them to a slew of other rules, the SEC said.

Those conditions include: maintaining assets in certain forms, entering into a deal with a target within 18 months of the SPAC IPO, closing the transaction within 24 months and ensuring that the newly merged company engages primarily in the same business as the target.

Gatekeepers who facilitate the deals, such as auditors, lawyers and underwriters, should also be held responsible for their work before and after the SPAC listing, Gensler added.

The US SPAC market experienced a wild ride in 2021, with an explosion in deals during the first half of the year that quickly cooled off in the second half. All told, 604 SPACs raised $144bn in 2021, according to data from Renaissance Capital.

SOURCE: REUTERS

Kellogg’s workers win big raises, better benefits after striking

From Amazon to Starbucks, United States companies are seeing a revival in the power of worker unions and collective bargaining.

Workers at the Kellogg Company plant that makes Cheez-Its will receive 6 percent raises in the first year of their new contract, 5 percent raises the following year and 4.5 percent raises and a $500 bonus in the third year [File: Josh Funk/AP ]

Published On 30 Mar 2022

Several hundred workers at a Kellogg’s plant that makes Cheez-Its won a new contract that delivers more than 15 percent wage increases over three years after 1,400 workers at the company’s cereal plants went on strike for nearly three months in late 2021.

The wage and benefits improvements that 570 workers at the Kellogg’s plant secured this week are the largest that have been seen by the Retail, Wholesale and Department Store Union (RWDSU), it said Wednesday.

United States companies are struggling to fill the more than 11 million job openings across the country that represent nearly two openings for everyone unemployed, and workers are demanding more after keeping plants operating throughout the coronavirus pandemic.

Job openings hovered at a near-record high for the second consecutive month in February, the US Department of Labor reported this week.

“This contract is further evidence of the power of a union voice and collective bargaining,” said RWDSU President Stuart Appelbaum.

Kellogg’s, which is based in Battle Creek, Michigan in the US, didn’t immediately comment Wednesday on the contract it offered its workers in Kansas City, Kansas.

Besides the strike at Kellogg’s plants in Nebraska, Michigan, Pennsylvania and Tennessee last fall, workers also walked out last year at a Frito-Lay plant in Topeka, Kansas, and at five Nabisco plants nationwide. And meatpacking workers have been winning significant raises when their contracts come up at plants across the country.

Unions in other industries, including one that represents more than 10,000 John Deere workers, also went on strike last year. The John Deere workers received 10 percent raises and improved benefits after going on strike for a month.

Workers have also voted to unionise at more than a half dozen Starbucks stores across the country and unions are trying to organise at roughly 140 other stores nationwide. And Amazon is trying to stave off unions at two of its warehouses in New York and Alabama, where ballots are in the process of being counted now.

Experts say the ongoing labour shortages have given unions more leverage than they have had in decades during contract talks.

A spokeswoman for the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union that represents the Kellogg’s cereal plant workers said that strike and the others across the industry in the past year have helped it secure significant gains for workers at other companies.

The Cheez-Its workers will receive 6 percent raises in the first year of their new contract, 5 percent raises the following year and 4.5 percent raises and a $500 bonus in the third year. The workers will also see improved health and pension benefits with no increase in their health insurance premiums. And new hires will move up to higher pay rates more quickly

“These wage increases will help us better provide for our families and improve the quality of our lives,” said Larry Smith, who leads the local union at the Kellogg’s plant.

SOURCE: AP

Canada unveils multibillion-dollar plan to cut carbon emissions

Environmentalists welcome emissions reduction plan, but say it will be vital to ‘hold politicians’ feet to the fire’.

Last year, Canadian Prime Minister Justin Trudeau's government set a new target of slashing carbon emissions by 40 to 45 percent below 2005 levels by 2030 [File: Jacquelyn Martin/AP Photo]

Published On 29 Mar 2022

Canadian Prime Minister Justin Trudeau has unveiled a $7.3bn (9.1 billion Canadian dollars) plan to help the country meet its carbon emissions target, including significant reductions in the oil-and-gas sector.

Speaking in Vancouver on Tuesday, Trudeau linked Europe’s effort to move away from Russian oil and natural gas after the country’s invasion of Ukraine to a broader, global push towards renewable energy.

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“The leaders I spoke with in Europe over the past few weeks were clear: They don’t just want to end their dependence on Russian oil and gas, they want to accelerate the energy transformation to clean and green power,” Trudeau told reporters.

“The whole world is focusing on clean energy,” he said, “and Canada cannot afford not to do that.”

The plan announced on Tuesday includes a $2.3bn (2.9 billion Canadian dollars) investment in zero-emission vehicles and related infrastructure, as well as $800m (one billion Canadian dollars) to “green” Canadian homes and buildings.

The government also says it will work closely with provinces and territories to develop an approach to cap oil-and-gas sector emissions to achieve net-zero emissions by 2050 and reduce oil-and-gas methane emissions by at least 75 percent by 2030.

Trudeau has been hailed as a climate leader internationally, pledging to cut Canada’s emissions and invest in cleaner energy. But his Liberal government has been slammed for backing the expansion of oil pipelines and other energy projects that critics have said would worsen the climate crisis.

Last year, the Liberals set a new target of slashing carbon emissions by 40 to 45 percent below 2005 levels by 2030. But an independent parliamentary watchdog concluded that Ottawa had not done enough to reach that goal, after poring over decades of government climate actions that yielded an increase in emissions.

Environment Commissioner Jerry DeMarco said in November that Canada was ranked the “worst performer” among the G7 industrialised nations in cutting emissions.

While Canada represents about 1.6 percent of global CO2 emissions, it is among the top 10 largest emitters globally and one of the highest emitters per capita.

Trudeau’s new emissions reduction plan comes just days after his government last week announced it would raise oil and gas exports this year by up to 300,000 barrels per day – an increase of about 5 percent.

The move, Environment Minister Jonathan Wilkinson said last Thursday, aimed to help Canada’s allies respond to “an energy security crisis” caused by Russia’s continuing invasion of Ukraine.

Canada, home to the tar sands of northern Alberta, is the fourth-largest oil producer in the world after Russia, Saudi Arabia and the US, and for weeks, pro-oil Canadian politicians have called for the expansion of fossil fuel projects in response to the Ukraine crisis.

On Tuesday, environmentalists welcomed Ottawa’s plan, but said they would be watching its implementation closely.

“The government’s new plan marks the first time that the oil and gas sector is being asked to significantly reduce emissions, even if it still isn’t enough and is more focused on public funding of risky techno-fixes than the proven solution of transitioning to clean energy,” Keith Stewart, senior energy strategist at Greenpeace Canada, said in a statement.

“Given three decades of successful oil industry lobbying against implementation of past climate plans, it is vital that people hold all politicians’ feet to the fire to make sure they force industry to do its fair share. We need real action this time.”

Canada’s West Coast Environmental Law Association also said the plan does not show “a complete path” to the reductions promised, but was a good step that provides more accountability to ensure the government meets its commitments.

“Canada has failed to meet every single climate target it has set for itself,” Anna Johnston, a staff lawyer with the group, said in a statement. “Hopefully, we stay on track, and even increase our ambition to the 60 percent reduction needed for us to do our global fair share.”




SOURCE: AFP, AL JAZEERA

LME Is ‘Open for Business’ Amid Calls to Sanction Russian Metal

 James Attwood and Yvonne Yue Li, Bloomberg News

Traders on the trading floor of the open outcry pit at the London Metal Exchange Ltd. (LME) in London, U.K., on Monday, Sept. 6, 2021. After 18 months away, brokers returned Monday to the red leather couches of the London Metal Exchange’s floor, where they set benchmark prices of metals such as copper and aluminum by screaming orders at one another. Photographer: Jason Alden/Bloomberg , Bloomberg

(Bloomberg) -- The London Metal Exchange has no plans to ban Russian metal from its platforms on the grounds that governments are responsible for setting any sanctions, according to a senior exchange official.

The LME is “open for business,” Adrian Farnham, chief executive officer of the LME’s clearing house, who has been tapped to head the exchange on an interim basis, told the CRU World Copper Conference in Santiago. “Our view is that it’s up to governments to set sanctions. We don’t think it’s our role to go ahead.”

Still, the bourse is listening to some in the industry who support sanctions amid an ongoing debate, he said.

Commodities from wheat to oil to nickel and aluminum have been caught up in market turmoil in the wake of Russia’s attack on Ukraine. Aluminum and nickel haven’t been targeted by sanctions, but if the LME were to take action, such a ban could have a seismic impact in markets for those metals.

The exchange’s copper committee, which only plays an advisory role at the LME, recommended banning new supplies of Russian metal from the bourse, according to people familiar with the matter, Bloomberg News reported in mid-March. 

The exchange said at the time it doesn’t plan to take any action that goes beyond the scope of the Russian sanctions.

Nickel Tumult

The LME is working to shore up confidence in the bourse amid tumult in nickel. The exchange halted nickel trading and canceled nearly $4 billion in transactions earlier this month after prices spiked by 250% in two days, as it sought to protect its brokers from huge margin calls owed by Tsingshan Holding Group and other short position holders.

After a haphazard effort to restart trading, nickel has spent much of the past fortnight locked at the upper or lower limit of a new daily price cap designed to rein in the unprecedented volatility.

Nickel trading on the LME is “back functioning again” in the wake of the historic short squeeze, Farnham said, acknowledging that it’s taking time for people to regain confidence.  

LME remains open to further measures after introducing price bands and over-the-counter reporting, he added. 

SYRIA  GRAVE ROBBERS

Searching for antiques | “National Army” factions continue excavating two archaeological sites in Afrin

On Mar 31, 2022

Aleppo province: SOHR activists have reported that factions of the “National Army” continue excavating and searching for antiques in Beir Al-Athary hill, which is located southern to Shirkan village in Al-Ma’batly district, where the hill was subjected to sabotage by heavy machineries affecting most of the hill’s low side and its surroundings in search for buried treasures.

Moreover, the archaeological Juwaik hill was subjected to excavations by heavy machineries destroying its archaeological layers, in addition to the uprooting of dozens of nearby fruitful olive trees, where the excavations affected nearly (7000) square meters on the Acropolis and the extension to the vicinity of the high hill.

On March 20, SOHR activists reported that Turkish-backed factions continued excavating and bulldozing Tarnada hill for four years, since they controlled Afrin.
The archaeological hill is located near Afrin river south eastern of Afrin, and is registered under the Syrian Antiquities Directorate.
It is worth noting that the hill was subjected to systematic bulldozing by bulldozers and heavy machines, before the eyes of Turkish forces deployed near the hill.
Moreover, the bulldozing operations affected the base of the hill and caused destruction of archaeological layers, in search for treasures and buried archaeological findings.
This came as a part of the series of violations by Turkish-backed factions in “Olive Branch” area in Afrin.

Eastern Europe welcomes some refugees, not others. Is it only racism?

Darko Vojinovic/AP

Kyiv resident Polina Shulga and her 3-year-old daughter, Aria, run for a train to Budapest in the Hungarian border town of Zahony, March 7, 2022, as they flee the war in Ukraine. "I explained to her that we're going on vacation and that we'll definitely come home one day when the war is over," Ms. Shulga says.

March 24, 2022

By Monika Rębała Special contributor
Dominique Soguel Special correspondent

CHRISTIAN SCIENCE MONITOR
PRZEMYŚL, POLAND; AND BASEL, SWITZERLAND

When Victoria, a retired university lecturer, fled Ukraine as the Russian military devastated her home city of Kharkiv, she didn’t have many options of where to go.

She has no relatives in Ukraine, or in other parts of Europe. But she still has a friend from school in Warsaw, the Polish capital, who she used to visit frequently before the war began. So she got on one of the crowded trains leaving the city and headed westward.

But when she arrived in the Polish border city of Przemyśl, she did not expect the warmth of the reception she got.

WHY WE WROTE THIS

After failing to help non-European refugees in the past, Eastern Europe is coming through for Ukrainians. The stark change suggests racism. That’s accurate, but not the whole picture.

“I was surprised that Poles received us so well. I travel to Poland regularly, and this time the Poles were nicer,” she says. “If you speak to someone, they help you right away. The attitude of Poles toward Ukrainians has changed.”

Władysław, a Polish volunteer with the Food not Bombs group feeding refugees at the Medyka border crossing, agrees: The Polish public’s generous outpouring of support to the Ukrainian refugees is not something he saw coming.

“We didn’t expect such a positive response from Poles toward refugees, considering what happened recently on the Belarusian border,” he says. He is referring to a tense standoff last year when Middle Eastern asylum-seekers were trapped in a freezing buffer zone between Poland and Belarus, which exploited the migrants to put pressure on the European Union. At least 19 people died, in part because the Polish government held good Samaritans back from aiding them.

“The question is how long this friendly attitude [toward Ukrainians by Poles] will last,” adds Władysław, who didn't give a last name.

Poland, like much of Eastern Europe, has a troubled relationship with outsiders, and a particularly dismal record handling asylum-seekers from outside Europe. But in a twist in fate and geography, Poland, Hungary, and other similarly closed-door Eastern European nations have been the hardest hit by the humanitarian crisis arising out of Ukraine’s refugee exodus.

And in a reversal of history, even the governments of Poland and Hungary laid out the welcome mat for Ukrainians. Charities there rushed to help the new arrivals. Grassroots and individual efforts have been notable – with Polish mothers even leaving baby strollers at the train station for Ukrainian women with small children.

But the contrast between the reception that Ukrainians are seeing now and the cold shoulder that refugees from Syria received during the 2015 refugee crisis in Europe is stark. Whereas just seven years ago Eastern Europe refused to take in more than a token number of asylum-seekers from the millions fleeing civil war in Syria, now they are throwing open their doors to those in a very similar situation.

Why?

“It is a very difficult conversation to have right now. You cannot deny the generosity and the scale of the crisis that Poland and other neighboring countries are having to respond to,” says Rachael Reilly of the Geneva-based Global Detention Project. But “look at what happened in Syria, look at what’s happened in Afghanistan, look at Iraq. Refugees from all those countries were fleeing similar situations of aggression, conflict, warfare, human rights violations, hostility, and they haven’t received the same reception.”
A tale of two migrations

The speed and scale of the refugee crisis are unprecedented. So is the European response.

More than 3.5 million Ukrainians have fled their country since the start of Russia’s invasion on Feb. 24, with the vast majority traveling westward to EU territory. The lion’s share – over 2 million – have gone to Poland, according to figures from the United Nations High Commissioner for Refugees. And they have been broadly welcomed, both in Eastern Europe and across the EU.

Petros Giannakouris/AP
Refugees from Ukraine rest inside an indoor sports stadium being used as a refugee center in the village of Medyka, Poland, located just next to Ukraine, March 15, 2022.

“All those fleeing [Russian President Vladimir] Putin’s bombs are welcome in Europe,” President of the European Commission Ursula von der Leyen was quick to declare. In a rare display of solidarity, EU ministers unanimously granted blanket protection to Ukrainian refugees, making first-time use of a 2001 directive. The move allows them to live, travel, and work in the bloc for three years – a sweeping and critically needed empowerment of the displaced Ukrainians.

In 2015, the scale of the crisis was similar but the quality of the reception was far less welcoming. That year saw more than 1.3 million people arrive in Europe seeking asylum, primarily from Syria’s civil war, but also from turmoil in Afghanistan and Iraq. And with a few notable exceptions like Germany, which took in more than a million refugees, most European countries declined to accept them in substantial numbers.

The issue was particularly acute in Eastern Europe. In Hungary, right-wing conservative Prime Minister Viktor Orbán erected a 100-mile-long razor-wire fence to keep out asylum-seekers from the Middle East, casting Muslims as a civilizational and security threat.

“Those arriving have been raised in another religion, and represent a radically different culture. Most of them are not Christians, but Muslims,” he said in September 2015. “This is an important question, because Europe and European identity is rooted in Christianity.”

And in Poland, which was voting for a new parliament in 2015, the centrist government agreed to take in only about 9,000 asylum-seekers. The populist-conservative Law and Justice party, which came to power later in the year, reneged on the deal after party officials suggested that refugees could be terrorists or carriers of disease.
“Real refugees”?

Clearly, the Ukrainian refugee crisis is being seen very differently from the one in Syria, where Russia helped government forces reduce cities to rubble. Some argue the key difference from earlier refugee crises is that the Ukrainian refugees are mostly women and children, but that doesn’t bear up to scrutiny. Women and children were present – along with men – in 2015.

“It cannot be challenged that there is a sense that Ukrainians are Europeans and there is a sense of solidarity in some parts of Europe that applies to Ukrainians but does not apply to Syrians or Afghans, or people from Ethiopia and Eritrea, or Somalis,” says Camille Le Coz, a senior policy analyst with the Migration Policy Institute Europe in Brussels. “This is considered a European crisis.”

Biases around nationality and culture play a large part in that, Ms. Reilly says, pointing to the justifications offered by national leaders for their sudden change of heart toward refugees.

For example, she cites Bulgarian Prime Minister Kiril Petkov. “These people are Europeans. ... These people are intelligent, they are educated people,” said the centrist leader early on in the Ukrainian crisis. “This is not the refugee wave we have been used to, people we were not sure about their identity, people with unclear pasts, who could have been even terrorists.”

The rhetoric of politicians reflects the perception that Ukrainians are “real refugees’’ and pose no threat, unlike those who fled conflicts outside the European continent. The apparent shift in attitude is in many ways “specific” to the Ukrainian context and still “very tainted by racism and xenophobia,” Ms. Reilly says.

For Witold Klaus, a professor at the Institute of Law Studies of the Polish Academy of Sciences, the primary reason for the reception of Ukrainians, at least in Poland, is the “very positive narrative of the government and the media around the refugees.” He points to the negative portrayal that the government framed the Syrians with in 2015, as compared with the positivity that it showed in bringing some 900 Afghan refugees to Poland last year during the West’s withdrawal from Afghanistan.

“They were treated well, and received help,” he says. “The thing that has the biggest impact on how the majority of the Polish society treats refugees is therefore what kind of narrative will be built by those in power and the media. It matters if it is a narrative based on fear and xenophobia, or on mobilization and willingness to help.”

Double standards are still evident now at the border, says Władysław, the volunteer aid worker.

“A few days ago, we were the only group helping refugees of a different skin color; they were treated very badly here,” he says. “Polish border guards drove up here in cars to take the refugees, but nobody wanted to take non-Ukrainians in.

“Why? We simply defend ourselves from what we don’t know.”
“Ukrainians, we know them”

Familiarity fuels solidarity, Władysław adds. “Ukrainians, we know them, we work together, we live in the same cities. That’s why we want to help them.”

About 2 million Ukrainian workers were already in Poland before this crisis, many of them economic migrants working low-end jobs. While Poles and Ukrainians have clashed, like any longtime neighbors, they have much in common as well, including similar language and culture.

Polish goodwill toward Ukrainians has been increasing since the fall of communism, with a spike in positivity coming in the last two to three years. Marta Jaroszewicz, an assistant professor at the Centre of Migration Research at the University of Warsaw, credits the COVID-19 pandemic for that, as Poles came into greater contact with Ukrainians who work in services, including delivering parcels and food during lockdowns. “We’ve started to get to know each other better.”

Michał Szachmat, a translator and member of the Association of Ukrainians in Poland, only hopes the goodwill will last. On his mind are memories of being punched in the teeth by locals in Przemyśl a few years ago for singing Ukrainian songs with his friends by the river.

Poland’s relationship with Ukraine has been marred by memories of the Ukrainian Insurgent Army (UPA), a nationalist paramilitary group operating in the region during and after World War II. The UPA massacred Poles in the border areas with Slovakia and Ukraine, which had been inhabited by a Ukrainian minority for generations. Communist authorities eventually forcibly resettled the Ukrainians, including Mr. Szachmat’s grandparents, in 1947 to weaken the UPA.

“Now I see how kindly the Poles living in Przemyśl are toward Ukrainians fleeing from the war ... but I’m afraid that politics may change this,” he says. “When the war ends, some people will return to Ukraine, but others will stay. Living under one roof might be full of challenges.”

Those who fight against Russia

In Hungary, however, that same degree of familiarity is not present.

Hungarians have historically viewed themselves as closer to the Western cultural sphere and Ukrainians as members of the East, says Hungarian historian Krisztián Ungváry, who specializes in Eastern European history and minority questions. “Ukraine was another part of the world.”

While Poles are able to understand a bit of the Ukrainian language, that is not the case for Hungarians. Religion is another point of divergence: The majority of Ukrainians identify as Orthodox Christians, whereas Christians in Hungary (and Poland) are Roman Catholics.

Anna Szilagyi/AP
People use lights to create a peace sign for Ukraine at Heroes Square in Budapest, Hungary, March 9, 2022. Russia's invasion of Ukraine has set off the largest mass migration in Europe in decades, with more than 3.5 million people having crossed from Ukraine into neighboring countries.

In more recent times, Ukrainians came as guest workers, primarily filling blue-collar jobs. Many of them belonged to the Ukrainian Hungarian minority, so they spoke the language but were still viewed as holding a lower social status, says Dr. Ungváry.

But aid groups and ordinary Hungarians from across the political spectrum have been central to efforts to assist more than 450,000 new arrivals from Ukraine. That may be in part because there’s a shared worry around the Ukrainians’ persecutor: Russia.

“The danger of Russia has united Ukrainians and others,” says Dr. Ungváry. “The history of Ukraine is absolutely different from the history of Hungary. ... The only topic in common in recent times is Putin and the question of East versus West.”

“This is very, very emotional for many Hungarians,” says Márta Pardavi, co-chair of the Budapest-based Hungarian Helsinki Committee, an organization working on refugee issues. “The pictures are very reminiscent of [the Soviet crushing of the Hungarian Revolution of] 1956, when Hungarians saw the Russians invade Budapest and there were tanks on the streets and people died and refugees had to flee Hungary.”

The sympathy for Ukrainians in the face of a common enemy runs even stronger for Poles. Dr. Klaus says, “We fear Russia and support those who are fighting the Russian aggressor. Those who fight against Russia, which has long been a declared enemy to us, elicit our sympathy.”

Dorottya Czuk contributed reporting from Budapest, Hungary, to this story.

Ontario Hits Foreign Homebuyers With 20% Tax as Election Looms

Derek Decloet, Bloomberg News

A "For Sale" sign in front of a row of homes in a subdivision in Vaughan, Ontario, Canada, on Thursday, March 11, 2021. The buying, selling and building of homes in Canada takes up a larger share of the economy than it does in any other developed country in the world, according to the Bank of International Settlements, and also soaks up a larger share of investment capital than in any of Canada’s peers. Photographer: Cole Burston/Bloomberg , Bloomberg

(Bloomberg) -- Ontario is raising a tax on home purchases by some foreigners to 20% and removing exemptions as it seeks to cool a scorching real estate market.   

The so-called non-resident speculation tax will apply to homes bought anywhere in the Canadian province by foreign nationals and foreign companies, provincial Finance Minister Peter Bethlenfalvy said in a statement. Currently, the tax is 15% and applies only to homes in Toronto and surrounding areas.  

Foreign citizens can apply for a rebate if they become permanent residents of Canada within four years of paying the tax. But rebates will no longer be given to international students, or foreign nationals who are temporarily working in Ontario.

Home prices nationwide posted a record monthly surge in February as buyers piled into the market ahead of interest rate increases by the Bank of Canada. Benchmark home prices rose 3.5% last month from January, according to data from the Canadian Real Estate Association. 

In Toronto, the average sale price in February was C$1.3 million ($1 million), seasonally adjusted. The soaring cost of homes and rents has become a significant political issue in the province of about 15 million people, and Premier Doug Ford faces an election in June. 

©2022 Bloomberg L.P.

Can Russia’s Oligarchs Be Brought to Justice?

Only if we fight the corruption coming from the Kremlin and its coterie of oligarchs in earnest do the Russian people have a fair chance for a decent future.

By Frank Vogl, 

March 29, 2022

THE GLOBALIST


Takeaways

The sanctions will do grave damage to the Russian economy. But will sanctions on scores of individual Russians curb corruption? One needs to be skeptical.


It is good news that the U.S. Justice Department has now established a special task force to hunt for the klepto-cash.


Even if Western prosecutors can locate parts of the Russian oligarchs’ wealth, then they have an even larger challenge: Can they prove the cash is the product of crime?


It is Western banks that allocate the incoming Russian oligarch cash to numerous hedge funds and private equity firms, mostly in the world's largest capital market - the United States.


It is high time that the EU, the UK and the U.S. devote serious cash to the investigation and prosecution of corrupt Russian and other oligarchs who launder their billions into Western markets.


Speaking in Warsaw, President Biden declared: “We have to fight the corruption coming from the Kremlin to give the Russian people a fair chance.”
The great battle for freedom

No U.S. President has more clearly related pervasive corruption to what Biden has rightly called: “The great battle for freedom: a battle between democracy and autocracy, between liberty and repression, between a rules-based order and one governed by brute force.”

The sanctions on major Russian industries and the banking system will do grave damage to the Russian economy. But will sanctions on scores of individual Russians curb corruption? One needs to be skeptical.
Who is targeted?

The scale of U.S. and European sanctions that are now being enforced is unprecedented.

When it comes to directly attacking corrupt Russians, then the prime targets are the business billionaires who are closest to Vladimir Putin and senior Kremlin officials, plus more than 350 members of the Russian Duma.

No opportunity will be missed for Western authorities to seize whatever assets – from mansions and yachts to fine art – that they can prove belong to sanctioned oligarchs and others.

Their Western bank accounts are being frozen – at least the ones that can be easily traced.
Finding the dirty cash

But the real wealth – the laundered dirty cash – of these sanctioned Russians is invested in Western stocks and bonds.

This may amount to hundreds of billions of dollars – compared to which the value of the yachts and mansions are peanuts.
Secrecy is paramount

Russian oligarchs have employed the highest priced lawyers, auditors, bankers and financial consultants in London, Zurich, New York and other financial centers.

These enablers have worked assiduously over many years to build complex systems to ensure that the Russian cash is safely invested – and secretly invested.

Vast sums of cash have been moved from Russia, via Cyprus, Luxembourg, London, Zurich, Geneva, Vienna and other European locations to multitudes of banks.

This is done via offshore holding companies registered in jurisdictions that ask no questions about who the true beneficial owners are.
Aiding and abetting Russian oligarchs

Then, portions of the funds from these shell companies go via law firms and consulting firms into the international wealth management departments of major international banks.

The banks do not press for beneficial ownership information. These banks then allocate the incoming cash to numerous hedge funds and private equity firms, mostly in the world’s largest capital market – the United States.
Proving crimes

It is good news that the U.S. Justice Department has now established a special task force to hunt for the klepto-cash.

But, even if they can locate a small fractions of the oligarchs’ wealth, then they have an even larger challenge: Can they prove the cash is the product of crime?
Are we defenseless?

In time, the oligarchs will go into court and challenge the seizures of their homes and yachts in Europe, and the freezing of their bank accounts. They will claim that all these assets were bought legitimately.

For example, two prominent oligarchs, Petr Aven and Mikhail Fridman, co-owners of Russia’s Alfa Bank, have long been the lead shareholders in a Luxembourg investment company called Letter One and its British affiliate of the same name.

Sanctioned Aven and Fridman have been forced to give up control of Letter One, but they will no doubt claim that its business has always been legitimate and that their personal European properties and art collections have been financed from profits from this corporation, and perhaps others in Europe.

It may be exceedingly difficult to prove that this is not the case, especially when the oligarchs engage the highest paid lawyers to tie government prosecutors in knots.
Inadequate enforcement

Despite President Biden’s bold anti-corruption assertions and all the current high-profile press coverage of some of the oligarchs, the bitter fact is that the budgets of Western anti-corruption agencies are woefully inadequate.

Right now, there are no positive indications that a dramatic increase in funding for anti-corruption enforcement is being contemplated.

The key U.S. Treasury Department’s enforcement branch had just 300 employees. This total may rise modestly as a result of a modest budget increase.

Even so, its resources are totally inadequate when it considered that hundreds of billions of dollars of dirty cash from oligarchs, kleptocrats and organized crime flow into the U.S. each year.
Tax evasion anyone?

So, you might say, if it is hard to prove corruption against some of the oligarchs, then why not take a leaf out of the old Al Capone book, and bring tax evasion charges against them?

Perhaps there is some merit here. But note – and here the oligarchs are no doubt laughing – a very recent White House budget request to give the Internal Revenue Service (IRS) $30 million to go after sanctioned individuals was blocked in the U.S. Congress.

The IRS has long claimed it lacks adequate funds to do its routine work, let alone pursue special oligarch-related investigations.

Until the European Union, the UK and the U.S. government devote serious cash to investigation and prosecution of corrupt Russian and other oligarchs who launder their billions into Western markets, so long will Biden’s important words have a slightly hollow ring.

More on this topic
A New Crisis of Faith
The Biden Administration’s Anti-Corruption Agenda
Trump’s Betrayal and the Future of the EU


About Frank Vogl
Frank Vogl is co-founder of Transparency International and author of and author of “The Enablers - How the West Supports Kleptocrats and Corruption-Endangering Our Democracy" (Roman and Littlefield)
Full bio → | View all posts by Frank Vogl →

THE NEXT WAR WILL BE FOR THE ARCTIC

Britain to boost its military presence in the Arctic

A U.K Marine strike group will be permanently active in the Nordic states, said Defense Minister Ben Wallace.

By

 Gwladys Fouche, Reuters

 -

March 29, 2022

British Defense Secretary Ben Wallace walks outside Downing Street in London on March 8, 2022. (Peter Nicholls / Reuters File Photo)

OSLO — Britain plans to increase its military presence in the Arctic, Defense Minister Ben Wallace said on Tuesday, amid increased concerns among NATO allies about Russia following its invasion of Ukraine.

Britain would commit militarily “to deeper integration, interoperability with countries such as Norway” to protect the seas of the North Atlantic, Wallace told a news conference in Bardufoss, northern Norway.

“We are going to effectively, permanently, have a … Marine strike group permanently … active in the Nordics,” he said, adding the force would likely rotate between Norway, Sweden, Finland and elsewhere in the region.

Wallace was speaking while visiting a NATO exercise in Arctic Norway involving 30,000 troops.

[Arctic security also altered by Russian offensive, NATO chief says, in visit to Cold Response]

The biennial Cold Response exercise has taken on added significance because of the invasion of Ukraine. NATO-member Norway shares a border with Russia in the Arctic.

“Our Arctic strategy commits us to more training and working together,” Wallace said.

“I think we’ll be in the area a lot more. Our ambition is bold and we will make sure that we are there to answer the demand if called upon,” he added.

[NATO, in Arctic training drills, faces up to Putin’s ‘unpredictable’ Russia]

Norwegian Defence Minister Odd Roger Enoksen welcomed the commitment.

“We want more allied activity up north,” Enoksen said.

While tensions in the Arctic region have been low, Norwegian leaders have been concerned that a confrontation between NATO and Russia could spill over in the Arctic, where both sides have increased their military presence in recent years.