China successfully tested new ultra hypersonic missile vehicle seeks to calm US fears

China hypersonic missile test not targeted at any country: DM CCTV News - CNTV English

The Ministry of National Defense issued a statement on Wednesday dismissing media reports that China's recent ultrahigh-speed missile test flight was aimed at delivering warheads through the missile defenses of the United States.

"It is normal for China to conduct scientific experiments within its borders according to its plans. The tests were not aimed at any nation nor any specific target," the ministry said in a written reply to China Daily.

Western media have been playing up the significance of the hypersonic missile delivery vehicle test since The Washington Free Beacon news website quoted an anonymous Pentagon official as saying that the test was conducted with the aim of sending warheads through US missile defenses.

In an article on the test, the website reported that the new hypersonic missile was detected traveling at extremely high speeds over China.

US Pentagon spokesman Jeffrey Pool told the website, "We routinely monitor foreign defense activities and we are aware of this test."

Observers said reports that play up competition on military capabilities indicate a lack of mutual understanding on the part of the militaries of China and the US, but the misperceptions can be resolved through talks.

Lack of mutual strategic trust between the two nations is the reason why the US is worried about China's military development, said Fan Jishe, an expert on US studies at the Chinese Academy of Social Sciences.

"Washington is afraid that China's growing power will reduce its influence in the region, and threaten the interests of its allies, such as Japan and the Philippines. ... The US still enjoys the leading position in military ability, both strategic weapons and conventional armaments," Fan said.

"The US has been devoted to high-tech weapons research for a long time, and China is still rather backward in this field," he said.

China has been sufficiently transparent on developments in its military technologies to allow for the development of mutual trust with other nations, he added.

Li Qingkong, deputy secretary-general of the China Council for National Security Policy Studies, said, "There is no need for the US or any other country to worry about the development of the Chinese military, given that China's military expenditure is much lower than that of the US."

Such weapons use cutting-edge technology for flying and maneuvering at ultrahigh speeds in space and within the Earth's atmosphere.

The advantages of hypersonic craft include precise targeting, very rapid delivery of weapons, and greater survivability against missile and space defenses.

The Washington Free Beacon said the US, Russia, and China are all engaged in research on hypersonic weapons, while India is also developing a hypersonic variant of its BrahMos cruise missile. - China Daily

Fighting ivory trade the China way

China crushed 6.1 tons of ivory on January 6. Image: @thewcs

CHINA, which has been described by conservationists as the world’s leading hub for the illegal ivory trade, took everyone by surprise recently by destroying some six tonnes of confiscated ivory from its stockpile.

The landmark destruction of the confiscated ivory and products such as carvings and ornaments, which were said to be amassed over the years, is indeed a good piece of news for the world and China deserve all-round applause. The fact that China chose to destroy the ivory on the first week of the New Year is a symbolic gesture of the Chinese leadership that they are in sync with the views and feelings of conservationists and animal-lovers on the subject.

The act of destroying the confiscated ivory in public for the first time by the Chinese authorities indicates that China is not prepared to tolerate the illegal trade in elephant ivory any more. The destruction of the ivory in Guangdong province sends a very powerful message to the Chinese people and the world that China is concerned with animal welfare and it is prepared to work with the international community in protecting and conserving our endangered wildlife.

Ivory is said to be a prized status symbol in the well-to-do Chinese community and it is used in traditional crafts and carvings. China and Thailand have been singled out as the two countries where the demand for ivory has been fuelling poaching activities in Africa according to the Convention on Interna­tional Trade in Endangered Species.

It was recently reported by the International Fund for Animal Welfare (IFAW) that an estimated 35,000 or more elephants are slaughtered annually in a barbaric manner by poachers for their ivory.

Ivory, which has been referred as “white gold”, is said to fetch between RM7,000 and RM8,000 per kg in the black market.

Ivory trafficking apparently is taking a toll on the elephant population around the world and its related activities are now seen by many countries as a threat to regional security.

The decision of China to step forward, perhaps for the first time in history, to destroy part of its stockpile of confiscated elephant tusks and products is indeed a giant step towards conserving and safeguarding these magnificent animals that roam our jungles.

Back home it is heartening to note that the Malaysian authorities too have been on high alert to these ivory smuggling activities. The several tons of ivory shipments worth millions of ringgit seized by our authorities over the years is still under lock and key.

I urge the authorities to emulate China’s move and destroy all the confiscated ivory in public.

Since no one has been arrested so far and we are not seeing any development on the matter, it is advisable for the authorities to destroy all the illegal ivory in our stockpile.

Destroying the confiscated stockpile of ivory will send a strong message to all parties concerned that Malaysia too does not tolerate ivory trafficking and it’s equally serious in wildlife conservation and protection.

The destruction of our stockpile will put a stop to all the speculation and allegations that some of the confiscated ivory in our stockpile has been “leaking out” secretly and is found on the black market.

The destruction of confiscated ivory in countries along the illegal ivory trafficking trade chain will send a powerful message to consumers all over the world that buying is unethical and wrong.

When the Chinese, who are well-known in the world to treasure ivory and its products, can come forward to destroy their stockpile to show their concern and support for wildlife conservation and protection, I am sure we can do the same or better.

Contributed by S. PARAM Ipoh Malaysia

Canadian entrepreneur: Malaysia conducive for start-ups

Hirsch: ‘It takes less than RM20,000 to start a new company within MGVD

KUALA LUMPUR: Canadian entrepreneur Adam Hirsch, who focuses on tech start-ups, finds Malaysia a conducive place for start-ups, not just because of low operational cost or the English language proficiency of the people, but also the ability to get fast results here.

With a recommendation from a friend in 2012 to start his business here, Hirsch told StarBiz: “We can quickly get feedbacks and easily validate the success or failure of a new idea.”

Citing an example of one of his recent ventures to provide a sales training programme for retail and food and beverages (F&B) personnels, he said after a quick check with potential clients on the ground, his team found out in less than a week that many wanted the course but were not willing to pay for it.

“This idea subsequently metamorphosised to become a digital marketing agency where we help our clients do search engine optimisation (SEO),” he said.

The venture, which is only three months old, has 15 clients comprising small and medium enterprises (SMEs).

Hirsch, who founded the Kuala Lumpur-based Mother Goose Venture Developer (MGVD) in early 2013, said he was solely interested in building businesses through his company which he described as a “venture builder platform” that brought people, ideas and resources together to build successful businesses.

The company has six active ventures at the moment, including Hijab2Go and Easy Read. Hijab2go is an e-commerce website specialising in women’s fashion brands, specifically traditional Muslim fashion, while Easy Read is a language education application that helps young adults and professionals learn new languages while reading content that is relevant to them.

“With so much of shared resources, it takes less than RM20,000 to start a new company within MGVD,” he said.
One of MGVD’s ventures, Ticket Hero, has also received a grant from Cradle Fund, an agency under the Ministry of Finance, which promotes early stage funding.

Ticket Hero is an event listing web and mobile application that helps Malaysians discover their city by listing all types of events including arts, cultural, nightlife and sports.

Hirsch, who started two Internet companies in his university days, said there were four categories of assistance available in the start-up community, namely the incubator, accelerator, venture capitalist (VC) and business builder.

“To assist a start-up is not as simple as giving them the funds and a strategy to work on. Hence, you encounter many VCs failing with that strategy. Those VCs that succeed will likely be attributed to the entrepreneurs in the start-up,” he said.

As a business builder, Hirsch, who is keen on the details of building a business, said MGVD used funds to build a business but did not disburse funds like a VC did.

“The No. 1 disease in the start-up community is talking about building companies and yet doing nothing about it. It is more hands-on where we are also involved in marketing and business development, beyond just being a service provider,” he said.

Planning to raise RM1.5mil within the start-up community this year, he said the group would start another 10 ventures within the next two years.

Adding that the group was looking for entrepreneur-in-residence, he said they would do all that was needed to get the business running to become profitable entities.

“We hope to attract more Malaysian entrepreneurs who are ready to lead a project and team. Our goal is to build as many successful businesses as possible and to help entrepreneurs to push themselves towards excellence,” he concluded.

Contributed by  Lim Wing Hooi The Star/Asia News Network

Related post:

The freelance generation

The freelance generation

Young people are finding typical nine-to-five office jobs less appealing, while companies are also realising the benefits of freelancers – more savings on office space and employee benefits.

Full-time jobs? Pfft. Who needs 'em when you can freelance at home in your jammies?

ONCE upon a time, it was only natural to seek and secure a stable job after you graduate, preferably with an established company where you can build your resume based on the reputation of the company.

But now, with the culture of the modern workforce, where demands are high and speed of work is essential, we are seeing the rise of “independent workers” – aka freelancers.

Malaysian Emoployers Federation executive director Shamsuddin Bardan said there has been a “rapid growth” in freelancing in Malaysia, especially with work that can be done online.

He said: “Freelancers have more freedom and flexibility. For some it is about following their passion and being their own boss, while at the same time earning some income.”

According to a PC.com article earlier this year, since Malaysians started using the Freelancer.com website in 2009, over 27,000 freelance jobs have been posted, and over US$851,000 earned by freelancers.

Most of the jobs originate from the Klang Valley, with Malaysian employers mainly hiring freelancers from South Asia. In line with the growth of ICT industries, the most popular projects are software architecture, MySQL and software testing.

The freelance generation

For graphic designer and videographer Zermi Ng, 25, being a freelancer had not only helped him become more productive, but also given him more free time.

“As a freelancer, I usually take about two to eight days to complete a film, and whatever time I have left is usually free for me to do what I want,” he said.

Ng said he could spend just a week to deliver a production and get the same monthly salary he would with a nine-to-five job with five days a week in the office. “The only problem is you might not get a job every month,” he said.

Shamsuddin said: “People who don’t want to be bound by the strict 9am to 5pm working hours would usually choose the freelancing path. But not all jobs can be done by freelancers.

“They usually are professions in the creative field like designers and copywriters, as well as IT or enginering professions.”

He pointed that more companies are now attracted to this new form of hiring and moving away from traditional employment.

The benefits for employers, he said, is they can “save on benefits and statutory payments” while maintaining a lean workforce and meeting bursts in demand.

“For example, a company who specialises in food and beverage will not need to hire a full-time web developer just to set up a website. In fact, the web developer doesn’t even need to show up to the office.

“By hiring full-time staff, there is space reduction, and more budget spent on benefits. If you hire a freelancer, it’s a win-win situation. Freelancers get the freedom they want and companies don’t need to spend on office space.”

According to Sam Haggar, the Malaysia country head of human resource consulting firm ManpowerGroup, freelancing is becoming a trend because more young people like the lifestyle that comes with it.

“The lifestyle of being able to be anywhere at any time while working is becoming more and more of a trend. There is also no geographical boundary when it comes to delivering their work.”

Fashion photographer Bibo Aswan, 24, started his freelance career in fashion photography and potraiture while studying in Form Two. Before he even graduated with his diploma in photography, he already had a handful of clients to start with.

Freelance fashion photographer Bibo Aswan hopes to work with a photography studio in the future to gain more professional experience and gain access to better equipment.

Even during his internship with a photography studio, he found that he preferred a more flexible working schedule. “I could actually continue to work with the studio full-time, but I chose not to. By freelancing, I don’t actually have to work everyday.”

A price to pay

It is important to note that there is a difference between freelance and part-time workers. Part-timers are employees who are entitled to all company benefits and social security like EPF and Socso, but with a lower level of commitment.

But of course, freelancers usually enjoy more freedom and flexibility. In the eyes of the law, however, they have very little leverage against their employers. And on top of that, their income is rarely as stable as that of a full-time or part-time employee.

“Freelancers are paid for their work but they have almost no benefits and have no rights of employment apart from a contract between the employer and the freelancer,” said Haggar.

According to Shamsuddin, there also have been cases where freelancers were scammed and cheated for their services. “There are ‘companies’ and ‘employers’ out there targeting freelancers. They ask for your services and then disappear without giving you payment.”

Shamsuddin said freelancers ought to be careful in dealing with their employers as they might encounter bogus companies or scams. It is vital for a freelancer to request for a civil contract, and also to check the employer and company’s background before committing to a job.

Through both freelancing and working as an employee, filmmaker Joshua Chay, 27, discovered what he wanted to achieve in his career.

Filmmaker Joshua Chay took his freelance career to the next level by starting his own production company called The Spacemen.

“I didn’t see myself working for a company because I wanted to be my own person. In that way I’m able to produce the kind of work I like and I’m passionate about,” said Chay.

Although Chay pursued a freelance career in filmmaking, he was working with many types of clients – including some he didn’t particularly enjoy working with.

“The biggest thing about my freelance career was that it was growing, and fast. But through the jobs, I realised what kind of work I didn’t want to do. So from there, I began to pick my clients and produce the type of work I enjoy and am actually good at,” said Chay.

Haggar added: “That’s one of the great advantages freelancers have – they get to choose their clients and enjoy their work.”

The path to entrepreneurship

Eventually, freelancing became a stepping stone for Chay to venture into something bigger – starting his very own company. He realised the importance of expanding his services, as well as presenting a higher credibility to clients, which is why he founded his own company, The Spacemen, with two other friends.

Ng had also taken steps to expand his services by starting his own company, Mime Studio. “Starting a company will attract more clients, and it makes it easier for us to convince them,” he said.

But on the flipside, despite the liberty freelancers have, Haggar said they often lose out on the mentorship you get from having a superior, and learning from other colleagues. “This form of working may cause young freelancers to be less business-savvy and structured, because they are without guidance.”

Because of this, Bibo plans to work with a professional photography studio in the near future. “I want to do that so I can learn the business side of things. Plus, a professional studeio would also have better resources, like proper production equipment.”

That’s one of the reasons why Chay spent around three years freelancing before he started his own company. He wanted to learn everything from scratch, from the top to the bottom of the production industry.

“Because I started out doing everything on my own, I had to learn everything. And I realised after a while that starting a company was the right move. Multi-national companies may not work with freelancers, but they might if you’re a legit company,” he said.

Freelancers may have the liberty to work when, where and how they want,but they lose out on full-time benefits and social security.

Contributed by  by Kevin Tan The Star/Asia News Network

Malaysia's property market to take a breather in 2014 and 2015

PETALING JAYA: The property market might need at least two years to digest and recover from the various cooling measures that came into effect this month, but expect it to surge again in 2016, say industry officials.

According to Malaysian Institute of Estate Agents president Siva Shanker, 2014 is expected to be a tough year for sales, but the market will find its footing next year and catch the next upcycle in 2016.

“The market ground to a standstill after Budget 2014. There was a knee-jerk reaction in sales.

“It will probably stay in the doldrums for the first half of 2014. The second half may be better,” Shanker, who is also CEO-Agency of property consultancy PPC International Sdn Bhd, told StarBiz by phone.

Shanker believes that speculation over the past few years in the primary market, resulting in “far more properties bought than needed”, had been put to a stop by the new curbs.

“The days of 20%-40% appreciation in property prices after only a few years is over, ” he said.

Even so, Shanker sees the secondary market, which he said had languished for years, regaining its lustre.

“A new launch in Bangsar could set you back RM1,500 per sq ft, compared to RM800-RM1,000 per sq ft for an existing property. The discount goes up to 50% in some prime areas,” he said.

An analyst with TA Research said that unlike previous years, many listed developers have held back on their 2014 sales targets – a departure from their usual forward guidance in December – until a clearer picture emerges from the effects of Budget 2014 and other tightening measures.

The exception is Mah Sing Group Bhd, which is aiming for a 20% increase in sales this year to RM3.6bil.

According to the analyst, policy uncertainty on several fronts – such as whether Iskandar Malaysia’s Medini is exempt from real property gains tax, or the pricing of bank loans using the net selling price of a property – remains an overhang on the market.

“The sector’s fundamentals are intact, but in terms of share prices, the catalysts are lacking,” she said.
Property players have noticed a marked slowdown in sales since the various curbs were put in place, although it is unclear by how much.

A number of high-end launches were also shelved, as developers switch their focus to the affordable segment of the market, where demand is more resilient.

Some of the projects launched post-Budget 2014 include block B of YTL Land & Development Bhd’s Fennel@Sentul East condominiums, which saw a take-up of 80% soon after it was opened for sale in mid-November, while tower A and B of Sunway Bhd’s Geo Residences were 85% sold within two weeks, HwangDBS Vickers Research noted.

In Iskandar Malaysia, however, the response to UEM Sunrise Bhd’s Almas Suites and WCT Holdings Bhd’s Medini Signature Tower 2 have been lukewarm, Maybank Research said in a report last week.

The brokerage’s only “buy” call is Glomac Bhd, even though the firm has cut its own sales target for the year ending April 30, 2014 by 18%.

CIMB Research is more upbeat. It expects buying interest to return in the first half of this year, albeit gradually, when potential homeowners realise that prices are unlikely to fall, and that inflationary pressure from the impending goods and services tax, along with other subsidy cuts, leads to higher prices.

“As these macro prudential and policy measures are meant to curb speculation and not restrain genuine demand, the impact (though negative in the short term) should be positive over the longer run because they should help to remove froth from some segments of the market.

“Also, affordability remains close to its highest ever. Robust sales by developers should provide impetus for a re-rating of property stocks,” the research house told clients earlier this month.

Hong Leong Investment Bank Research, which believes the market will stage a recovery in the second half of the year, advocates a buy-on-weakness strategy for shares amid trough valuations.

Contributed by John Loh The Star/Asia News Network

TPPA negotiations hot up in early 2014

Due to the United States political calendar and congressional politics, the TPPA negotiations will heat up the first few months of the new year. 

ONE of the major developments in the new year will be the negotiations and in fact the fate of the Trans Pacific Partnership Agreement (TPPA), which has stirred a lot of interest and controversy not only in Malaysia but also in the United States, whose government is its prime mover.

The first half of 2014 will be decisive because the US will hold mid-term congressional elections in November, and that nation’s attention will focus on that after mid-year.

Since free trade agreements are so controversial and in fact unpopular among the public in that country, the TPPA and other FTAs will be hard for the US president and his administration to champion near the election period.

This may explain why the US is in such a hurry to finish the TPPA negotiations as soon as possible. It had placed a deadline of end of 2013, but that has passed without success.
Indeed, the ministerial meeting in Singapore in the first half of December revealed many outstanding differences.

So, the negotiations will become even more intense in the next few months, with a possible ministerial meeting in February.

Malaysia is one of the significant countries that have raised several concerns about the proposals by the US.

Prime Minister Datuk Seri Najib Tun Razak himself, at a meeting in Bali last October, highlighted government procurement, state owned enterprises, investor-state dispute system and intellectual property as some of the issues that may infringe on sovereignty, implying that there should be careful consideration and caution during negotiations.

The US Trade Representative Michael Froman visited Malaysia a number of times to meet with some ministers and parliamentarians. He reportedly assured them of the United States’ understanding of Malaysia’s concerns, which he implied would be taken into account.

Malaysians are thus waiting to see how much flexibility will be given to accommodate the concerns of the public and the Government.

For instance, Malaysia formally proposed a comprehensive “carve-out” (exclusion from disciplines in the TPPA chapters) for tobacco control measures, a move that was advocated by health groups and the Health Ministry, and which has won warm congratulations from the public and media around the world, including in a New York Times editorial.

According to media reports, Malaysia has also opposed proposals for tight intellectual property rules that for instance extend the present terms for patents for medicines and asked for high thresholds for government procurement, and exemption for its bumiputra policies, while also challenging the proposed disciplines on state owned enterprises and the investor-state dispute system.

On goods market access, Malaysia will also find difficulties with the proposed ban on export duties. Recently the association of palm oil refining companies warned that their operations would be threatened if the TPPA forces the country to abolish its long-standing export tax on crude palm oil.

A ban would also cause the Government to lose around RM2bil annually in revenue, which would be a serious blow to efforts to reduce the budget deficit.

The question is whether Malaysia’s demands will be met. Even if compromise or flexibility is offered, it is crucial to examine how genuine or adequate they are. Often, the only “flexibility” is a longer period granted to implement the specific rule in question. That is not really much use.

Even if an exemption is given, it may be limited or useless. For example, in an early version of the investment chapter, available on the Internet, there is a clause that nothing in the chapter prevents the countries from undertaking health and environmental policies. But it also says provided those policies are consistent with the chapter, thereby negating the apparent space provided for exclusion.

Thus the devil is really in the details, as the saying goes. And the details have to be carefully scrutinised, because it is an old negotiating tactic to show a spirit of understanding and compromise politically but remain steadfast and uncompromising in the legal texts, and it is the latter that counts.

Another key point is that the US negotiators and government have little room to provide compromises, even if they want to. That is because it is the congress that has the real power over trade matters, including the TPPA.

Last week, some members of Congress introduced a Bill to provide the US President with fast-track authority, which means that a trade agreement like the TPPA can only be adopted or rejected by congress, but cannot be amended by it.

Without this fast-track authority, there is no confidence among other countries that what the US negotiators agree to or sign will be agreed to by congress, which can reject certain parts of the TPPA and demand changes.

As a condition for giving the fast-track authority, advocates are asking the US government to take a strong stand on issues.

This puts pressure on the US negotiators not to compromise, even if they wanted to.

For example, the Bill says that on state owned enterprises the US should seek commitments that eliminate unfair competition favouring SOEs doing commercial activity and ensure that their practices are based solely on commercial considerations.

Government policies and the SOE practices would have to abide by eliminating discrimination and market-distorting subsidies.

The US is already proposing that SOEs cannot discriminate when they buy and sell goods and services, and that they cannot receive any advantages such as cheaper loans or land and business from the government.

This would, for instance, imply SOEs being prohibited from giving preferences for bumiputra companies in their procurement.

If the definition of SOEs also include private companies in which government agencies have a share, the net will be cast very wide.

It is however still unlikely that the proposed Bill will pass, as many Democrats are opposed to fast track and some Republicans just don’t want to give President Obama anything he wants.

But here’s the problem. If fast track is given with the conditions attached, the US negotiators will have to abide by them and can’t show required flexibilities. If there is no fast track, the proposed texts agreed to by the US can more easily be rejected by congress.

Either way, there is only so much the negotiators can give in response to demands made by Malaysia or other countries, and even then the compromises can be rejected by congress.

Which goes to show how difficult FTAs are to negotiate or conclude when the US is involved, for commerce and politics are all mixed up in the pot.

Global Trends by Martin Khor

Related posts:
1. Winds of change blowing in Asia
2. Looming danger on contrast and competition of economic models
3. An eventful week on the TPPA
4. TPP affecting health policies?
5. ASEAN plans world's largest trading bloc in Asia, RCEP ...

Singapore may tighten finance rules, monitoring new forms of illicit financing

Move to curb money laundering, terror financing activities

The Monetary Authority of Singapore may step up regulations to curb money laundering and terrorism financing risks posed by remittance agents, money changers and some Internet-based payment systems. 

Controls on pawnbrokers and corporate service providers such as lawyers and accountants can also be improved, according to a government risk study released today. Singapore authorities are closely monitoring virtual currencies such as Bitcoins that may be used for illegal activities and will consider regulation if needed, according to the report.

“Singapore’s openness as an international transport hub and financial center exposes it to inherent cross-border” money laundering or terrorism financing risks, according to the study. MAS “has put in place a robust preventive regime. Nonetheless, there are areas for further enhancement.”

The risk assessment study comes seven weeks after Singapore police and the bank association urged residents to be wary of fraudsters seeking to use their bank accounts to funnel illegal funds after an increase of reported cases last year.

Remittance agents, who accept funds for transfer to individuals outside Singapore, and money changers operate in “cash-intensive” industries and offer greater risks of money laundering or terrorism financing, according to report.

Total outward remittance from Singapore amounted to S$24.1 billion ($19 billion) in 2012, while inward remittances were S$995 million, the government said in the study. Volumes in the money-changing business that year were S$36.8 billion. The implementation of controls in these industries isn’t as robust as in banks and MAS will ensure “enforcement efforts are further stepped up,” according to the report.

More Powers 

The pawnbroking industry had total loans outstanding at over S$1 billion in 2012, the study showed. The number of pawn shops in the city increased to 191 that year from 114 in 2008.

MAS is also considering additional supervisory powers and requirements to bolster “nascent” money laundering and terrorism financing controls for Internet payment companies such as PayPal Inc. or Alibaba Group Holding Ltd.’s Alipay.

Agencies involved in the study included MAS, the customs bureau, the casino regulator, the finance, home affairs and law ministries, and the Accounting and Corporate Regulatory Authority.

Accountants and other corporate service providers can be exposed to money laundering and terrorist financing activities if higher-risk customers hire them to set up complex structures that conceal ownership and reduce the transparency of transactions, according to the study.

Tax Evasion 

Singapore’s central bank is stepping up its anti-money laundering rules in line with global regulations following U.S. authorities’ investigation of several Swiss banks for their dealings on behalf of American clients. MAS made it a crime last July for clients to use financial institutions to evade tax.

UBS (UBSN) AG and Credit Suisse Group AG, Switzerland’s largest banks, are among firms implicated in a U.S. crackdown since 2008 on offshore tax evasion that led to charges against about 70 American taxpayers and 30 bankers, lawyers and advisers.

The U.S. charged UBS in 2009 with aiding tax evasion by thousands of American clients. The Zurich-based bank avoided prosecution by paying a $780 million penalty, admitting it fostered tax evasion and agreeing to hand over data on client accounts to U.S. tax officials.

Private Banking 

Risks for private banks operating in Singapore are lower than those for full banks because they have fewer clients, less physical cash transactions and more checks when customers open accounts, according to today’s report. Singapore is Asia’s largest private banking center with offshore assets of about $800 billion, Boston Consulting Group data show as of September.

In Singapore, the number of reported cases of illegitimate cash being given to so-called money mules to hand over to a third party increased to 133 in the first nine months of last year, up from 93 for all of 2012, local police, the bank association and the National Crime Prevention Council said in November. The amount of illegal monies in those cases fell to S$15.5 million from 2012’s S$24.6 million.

- Contributed by Darren Boey in Hong Kong at dboey@bloomberg.net; Sanat Vallikappen in Singapore at vallikappen@bloomberg.net

Singapore monitoring new forms of illicit financing

Asian financial hub Singapore on Friday said it was scrutinising trade in virtual currencies such as Bitcoin as well as precious stones and metals to forestall new forms of illicit financing by criminals and terrorists.

In an inaugural report on money laundering and terrorist financing risks, the city-state said these sectors were identified for further study "as technology evolves and criminals become more sophisticated".

"Authorities will seek to better understand how money laundering and terrorist financing can be carried out through these channels," said the joint report by the finance and home affairs ministries as well as the Monetary Authority of Singapore (MAS).

It said the government would "review international best practices, to determine whether any safeguards and mitigating measures are needed".

The report said virtual money and precious metal-backed currencies carry the risk of being abused due to their anonymity, cross-border nature and low transaction costs.

The MAS, which serves as the city-state's central bank, "is closely monitoring developments in this area and will consider the need for regulation if necessary", the report said.

Bitcoin, the world's most popular form of electronic money, made headlines last year when US authorities closed the Silk Road website when it was found the currency was being used to buy illegal drugs, forged documents, hacker tools and even the services of hitmen.

The report also said Singapore was monitoring the trade in precious stones and metals.

"There are international typologies on the use of precious stones and metals as a tool to launder money, particularly as a store-of-value to move illicit proceeds easily," it added.

The bank said of 22 sectors that were assessed, the city's vast financial sector remained among the most vulnerable to abuse owing to the large number of transactions that take place and its wide international reach.

Singapore houses the regional offices of some of the world's top financial institutions and its total assets under management are now around Sg$1.4 trillion ($1.02 trillion), according to the MAS.

The report said "relevant controls are in place" for financial institutions, including supervision by MAS, record keeping, transaction monitoring and rigorous customer due diligence measures.

It identified remittance agents, money-changers, Internet-based stored value facility holders, pawnbrokers as well as corporate service providers as sectors where "controls are relatively less robust".

"Relevant government agencies will be strengthening the legislative and supervisory framework through the year to address the risks in these sectors more effectively," it said.

"The possibility that terrorist elements may seek to direct funds from abroad to support terrorism activities in Singapore or use Singapore as a conduit for foreign (terrorist financing) cannot be discounted," the report said.

Singapore in 2001 said it crippled a cell of the Southeast Asia-based militant network Jemaah Islamiyah with the arrest of suspects linked to an alleged plot to bomb local and foreign targets including Changi Airport.

Officials say the island republic is a prime target for extremist groups because of its close ties with the United States and major role in global finance and business.- AFP

PCs Mark Steepest Drop in 2013, Lenovo maintained the No. 1

Personal-computer shipments fell 10 percent in 2013, marking the worst-ever decline after lackluster holiday sales underscored how consumers and businesses are shunning machines for mobile devices, two research firms said.

Manufacturers shipped 315.9 million units, returning to 2009 levels and making it the “worst decline in PC market history,” researcher Gartner Inc. said in a statement yesterday. IDC also said shipments had a record decline.

U.S. consumers omitted PCs from their holiday shopping lists while buyers in Asia opted for smartphones and tablets. More computing tasks are moving to websites and applications tailored for wireless gadgets, rather than software installed on laptops and desktops. The annual drop eclipsed the previous record decline of 3.9 percent in 2012, Gartner said.

“Consumer spending during the holidays did not come back to PCs as tablets were one of the hottest holiday items,” said Mikako Kitagawa, an analyst at Stamford, Connecticut-based Gartner. “In emerging markets, the first connected device for consumers is most likely a smartphone, and their first computing device is a tablet.”

Global sales fell 6.9 percent in the fourth quarter -- the seventh straight drop -- to 82.6 million units, Gartner said. IDC, based in Framingham, Massachusetts, reported a decline of 5.6 percent in the same period.

Corporate Upgrades

Lenovo Group Ltd. (996) maintained the No. 1 spot worldwide with 18.1 percent market share in the fourth quarter, helped by a 6.6 percent increase in shipments, according to Gartner. Hewlett-Packard Co. (HPQ) was second with a 16.4 percent share as shipments declined 7.2 percent. Dell Inc. was third, the researcher said.

“We are extremely optimistic about the future of the $200 billion-plus PC industry,” Yang Yuanqing, Lenovo’s chairman and chief executive officer, said in a statement. “We continue to outperform the market while steadily improving profit and margin.”

Lenovo shipped 14 million PCs in the last quarter, it said.

Growth in the PC market has become dependent on consumers and businesses replacing existing machines, rather than wooing new buyers. Enterprise demand is being driven in part by Microsoft Corp. (MSFT)’s plan to end support for its 13-year-old Windows XP operating system in April, compelling businesses to buy new PCs along with software upgrades.

U.S. shipments shrank 7.5 percent in the fourth quarter to 15.8 million units, Gartner said. Unit sales in Europe, the Middle East and Africa fell 6.7 percent to 25.8 million, while the Asia-Pacific region saw a 9.8 percent decline to 26.5 million.

Loren Loverde, an analyst at IDC, said the decline in PC shipments was the worst since the researcher started tracking data in 1981, with the previous record seen in 2001, when sales shrank 3.7 percent.

“We don’t think it’s quite the bottom yet,” Loverde said. IDC is predicting a 3.8 percent decline in PC shipments for 2014 this year, and then growth of less than 1 percent in 2015, he said.

Contributed  By Aaron Ricadela - Bloomberg