The Colombian government says it will seize and close a mine run by FARC guerrillas that has supplied tungsten to some of world’s leading multinational companies.
Colombian security forces are in the advanced stages of preparing an assault on Tiger Hill, the mine in a remote part of the Amazon jungle run by FARC, or the Revolutionary Armed Forces of Colombia, said National Police Colonel Jose Gerardo Acevedo.
The government action was triggered by a Bloomberg Markets magazine report in September, Acevedo said. The article showed how tungsten mined for the profit of FARC makes its way into the supply lines of the makers of BMWs, Ferraris, Porsches and Volkswagens, computers and BIC pens.
The planned raid on Tiger Hill follows a move by the European Union to impose tough laws to prevent companies from buying minerals that fund the conflict in Colombia.
Acevedo said the Colombian police already knew that FARC was illegally profiting from tungsten mining. What they didn’t know was that the metal, after being exported, was going to so many multinational companies, he said.
The plan to shut down Tiger Hll is part of a government push to close mines that are funding the Marxist guerrilla group’s half-century-old war to seize power in Colombia, said Mining Minister Amylkar Acosta.
FARC, which says it wants to take control of the Colombian government, holds sway over vast regions of Colombia’s Amazon and stages fatal attacks on police patrols near the area.
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South Dakota Address Helps Richest Shelter Wealth Forever
Among the nation’s billionaires, one of the most sought-after pieces of real estate right now is a quiet storefront or similar rentable property in Sioux Falls, South Dakota, in order to avail oneself of a type of tax vehicle known as a dynasty trust.
In the past four years, the amount of money administered by South Dakota trust companies like some of those operating for wealthy families in Sioux Falls has tripled to $121 billion, almost all of it from out of state. Little more than renting an address in Sioux Falls is required to take advantage of South Dakota’s tax-friendly trust laws.
In 1993, South Dakota repealed an old legal rule dating back to 1681 that limited the duration of trusts to the lifetime of a living heir, plus 21 years. Dynasty trusts have no such limits.
South Dakota’s sudden popularity illustrates how, at a time of rising U.S. economic inequality, the wealthiest Americans are embracing ever more creative ways to reduce taxes legally through the use of dynasty trusts. Executives at South Dakota Trust Co., one of the biggest in the state, estimate that one-quarter of their business comes from dynasty trusts, which are designed to avoid the federal estate tax. Creation of such trusts has surged in recent years as changes in federal law enabled more money to be placed in them.
The dynasty trust isn’t South Dakota’s only lure. Another attraction, for customers in places like New York and Massachusetts, is the chance to shelter their investments from income taxes in their home states.
Still others are drawn to South Dakota’s secrecy and protections of trust assets from creditors and former spouses. Many of these features emulate those available in Bermuda and other island havens. Some wealthy families are also attracted by South Dakota rules that enhance their control over investment decisions and make it easier for them to set up their own trust companies rather than rely on a bank trustee.
President Barack Obama has called for closing the dynasty trust loophole in annual budget proposals, even though the change wouldn’t boost tax receipts under his administration. The impact of dynasty trusts on federal revenue is far in the future -- though potentially enormous, said Lawrence Waggoner, a retired professor at University of Michigan Law School.
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Turkey Bank Stocks Approach Book Value Amid Corruption Probe
Turkish bank shares fell to the lowest level in almost five years relative to book value amid a corruption probe that has claimed a lender’s top executive and 10 government ministers.
Lenders in Turkey’s 16-company XBANK Index declined to 1.03 times book value in Istanbul trading, the lowest since early 2009, and may fall below book by the end of the year, data compiled by Bloomberg show. The index has plunged 17 percent since Dec. 16 to the lowest since June 2012.
The corruption investigation, which came to light on Dec. 17, has implicated a banking official as well as government ministers. Halkbank’s chief executive officer, Suleyman Aslan, remains in prison after $4.5 million in cash was found in his house during a police raid, according to news reports. Aslan said the funds were donations he’d gathered to help build Islamic schools, Hurriyet newspaper reported, citing his court testimony.
Separately, foreigners are dumping Turkish bonds at the fastest pace in two years, deepening a selloff that’s putting a blot on Prime Minister Recep Tayyip Erdogan’s image as the architect of the country’s economic turnaround.
The corruption probe, which has ensnared his cabinet and led to three ministerial resignations, is damaging his reputation and adding to a three-month rout in the lira that was triggered in part by the country’s widening current-account deficit.
Separately, European Union Enlargement Commissioner Stefan Fule voiced “growing concern” about events in Turkey, according to an e-mailed statement from Brussels. He welcomed the Dec. 27 administrative court decision to suspend the regulation requiring police and prosecutors to provide advance information about investigations.
German Cartel Office Filed 240 Million Euros in Fines in 2013
Germany’s Federal Cartel Office said it imposed fines in the amount of 240 million euros ($331 million) this year.
The competition enforcer filed fines in 11 cases against 54 companies and 52 private individuals in 2013, according to a statement. The regulator searched 84 companies and private homes in 17 cases this year to secure information, it said in the statement.
U.S. Home Ownership Rate to Decline, Rosner Says
Joshua Rosner, an analyst at Graham Fisher & Co., talked about the outlook for the U.S. housing market and banking industry.
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