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Global Business Briefing: a round-up of news, views and comment pertaining to global business


Global Business Briefing

A round-up of news, views and comment pertaining to global business


 PwC is hiring more companies’ tax teams

David McCann in explores why PwC is hiring more companies’ tax departments, the latest being 19 members of the tax team at Synchrony. Doug Thomas, leader of PwC’s Insourced Solutions for Tax (IST) unit, says: “When we do these deals, we always encourage the company to keep some people. There’s a handful of functions that a third party just can’t do, like final signoff on the [annual] tax provision, signoff on significant tax controversies, and interaction with the C-suite.” PwC’s strategy in absorbing corporate tax departments involves not only using the new staffers to service their former employer but leveraging their expertise for other IST clients as well. Mr Thomas adds that PwC is a learning organisation and that hiring more tax teams frees up time for the higher-level professionals who can then be redeployed to other clients.

 ICLR sets up research initiative

The Incorporated Council of Law Reporting (ICLR) has opened a research initiative entailing four projects to find new ways of harnessing an “ocean of insight” from 150 years of law reports. Daniel Hoadley, ICLR’s head of research, said the aim is “to provide a focal point for advanced development that stands to benefit ordinary people wherever they seek legal advice.” Research will be split into four related projects: Blackstone, which aims to enrich unstructured legal text; Friction, which will promote open access to case law; Raconteur, which will attempt to make the law more accessible; and Endless Blue, which will model the connections between different sources of law.

Law Gazette   Legal Futures

 Law academy launches anniversary initiatives

The Singapore Academy of Law has announced a number of new initiatives to mark the first anniversary of its Future Law Innovation Programme (FLIP). These include an initiative for small and medium law firms to engage the services of a consultant to advise how they can adopt technology to operate more cost effectively and efficiently. Rajah & Tann, Dentons Rodyk and Clifford Chance said “it has been encouraging to see buy-in from legal partners. The enthusiasm to transform and adapt to changing times can be seen in the efforts of FLIP participants.” This month, FLIP launches Asia’s first accelerator to groom promising legal tech start-ups, while 2018 will also see FLIP and its knowledge partner, the Singapore Management University, release an annual digest documenting the state of innovation in Asia-Pacific.

The Global Legal Post   The Business Times (Singapore)



 UK law firms are rare winners from Brexit

The New York Times’ David Segal reports that top British law firms are booming, with the UK’s impending departure from the European Union being the key driver in their fortunes. Regulatory lawyers have gone from “drudges to rainmakers” while the number of clients waking up to the risks of Brexit has doubled or even tripled over the last six weeks, according to Andrew Hood at London headquartered Fieldfisher. Profits are up as are staff numbers, with many partners surprised at the size of the upturn. Mr Segal notes that even practice areas that are not linked to Brexit have benefited from it – with the fall in the pound following the referendum bringing M&A work while the cheaper currency has also made London’s court system more popular with foreigners filing international lawsuits.

The New York Times

 KPMG inserts ‘Brexit clauses’ in audits

KPMG is inserting ‘Brexit clauses’ in its audits, saying it cannot be held accountable if the UK’s departure from the EU hits an audited business’s balance sheet. The Mail on Sunday says the clause first appeared in its audit report on Anglian Home Improvements, declaring that Brexit is “one of the most significant economic events for the UK”, and adding: “No audit should be expected to predict the unknowable factors or all possible future implications for a company and this is particularly the case in relation to Brexit.” A KPMG spokesman said: “With Brexit now widely accepted as presenting a range of potential risks and uncertainties for most businesses, we are giving particular consideration to its potential impact on each of the companies we audit.”

The Mail on Sunday



 China is increasingly crypto-sceptical

China, once an enthusiastic advocate for cryptocurrencies, is now moving against them. The National Development and Reform Commission, China’s top economic planning agency,  is looking to bring an end to Bitcoin mining in a move that would prohibit local governments in China from supporting makers of digital currencies through subsidies or other benefits. Meanwhile, the New York Times reports that few of the big finance companies have acted on their cryptocurrency plans. Goldman Sachs said last year that it was opening a Bitcoin trading operation but maintains that client interest has so far been weak. Paul Chou, a former Goldman Sachs employee who set up cryptocurrency exchange LedgerX to cater to big finance companies, observes: “It was definitely part of the original plan that institutions would be a big part of this market . . . We were wrong.”

New York Times   New York Times  

 Mexico to introduce free digital payments service

Mexico’s new government has announced measures aimed at making financial services more affordable in a nation where more than half the population is unbanked. It is planning a digital payments system run and built by the central bank that will allow Mexicans to make and receive payments through their smartphones free of charge. Jaime Cortina, director of operations and payments at the country’s central bank, said the goal was to develop a payment method that Mexicans could use to make payments between each other, in shops and online.


 ECB acts to boost struggling eurozone

The European Central Bank (ECB) has signalled interest rates in the eurozone will not rise until next year at the earliest, amid evidence of a slowdown in the 19 countries using the single currency. The ECB also unveiled a round of fresh stimulus, offering banks cheap loans to try to help revive the economy. The unexpected moves came as the bank made sharp cuts to its forecasts for both growth and inflation this year.

The Times   Financial Times   Bloomberg   The Guardian



 NYC won’t be getting 25,000 Amazon jobs

Amazon has said it will not build a new HQ in New York, after seeing fierce opposition from lawmakers, activists and labour union leaders. The company’s dramatic turnaround came just months after the firm named Long Island City in Queens as one of two sites selected for major expansion. Amazon said “A number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward.” The agreement between the city and the online retailer had stirred intense debate about the use of public subsidies to entice wealthy companies, and the rising cost of living in gentrifying neighbourhoods.  

Forbes   Wall Street Journal   CBS New York   New York Post  

 China-US trade war is harming overseas investment

Analysts have warned that the trade war between Washington and Beijing which has seen the US try and block Chinese access to its latest technology is harming cross-border investment in both countries. Observers fear the row could ultimately cause a long-term split in future research and development between rival tech leaders. S&P Global Market Intelligence data shows that investments by Chinese firms in the American semiconductor and technology hardware segments dropped by nearly five times in 2018, to US$203.4m.

South China Morning Post

 The boss who is transforming Volkswagen

The BBC profiles Hiltrud Werner, “the lone woman on Volkswagen’s management board” who joined the car maker as its head of integrity in February 2017. She was charged with putting VW’s house in order, and reforming a corporate culture which turned a blind eye to the widespread cheating of diesel-emissions tests. Although some may have considered the role a “poisoned chalice” at the time, Ms Werner says she considered it an « honour » to be asked to oversee VW’s turnaround. She also has her sights set on transforming her compatriots’ attitudes to women in power. She notes that, in 2006, Germany became one of the last developed economies to pass an anti-discrimination law, and is still without a female CEO among its top 30 firms.

BBC News



 Six women sue top US law firm for bias

Cleveland, Ohio-headquartered law firm Jones Day is being sued by six former female associates who accuse the company of engaging in gender and pregnancy discrimination. In their lawsuit filed in United States District Court in Washington, D.C., and seeking $200m in damages, the plaintiffs say Jones Day underpaid them, hindered their advancement at the firm, and pushed them out when they had children. “In Jones Day’s fraternity culture . . . male brotherhood is affirmed and strengthened by comments and conduct that derogate women, leaving female associates to choose between capitulation and exclusion,” the complaint says.

New York Times  

 Workplace gender equality could add trillions to global GDP

A new report says workplace gender equality ‘could add $8 trillion’ to global GDP by boosting employee innovation and company productivity. The report from Accenture suggests that staff willingness and ability to innovate is six times higher at organisations with a robust culture of gender equality than at companies with less equal treatment and representation of male and female employees. “In our increasingly competitive world, companies must create an environment that encourages and harnesses their employees’ innovative capabilities . . . Our research has shown that an empowering environment can have a more positive impact on employees’ innovation mindset than even pay rises or advanced degrees,” said Alexis Lecanuet, regional managing director for Accenture in the Middle East and Turkey, about his company’s Getting to Equal study.

The National (UAE)

 Middle class shrinks amid job fears

The Organization for Economic Cooperation and Development (OECD) warns that the world’s middle classes are shrinking rapidly as taxes squeeze incomes, inflation and rising house prices slash spending power. and robots threaten jobs. « The shift in employment towards high-skilled non-routine jobs and some low-skilled non-routine jobs has hollowed-out middle-skilled jobs, » says its report, Under Pressure: The Squeezed Middle Class. The OECD argues that a large middle class is crucial to maintaining political stability and economic progress. « The investment of the middle class in education, health, and housing, their support for good quality public services, their intolerance of corruption, and their trust in others and in democratic institutions, are the very foundations of inclusive growth, » it said.

The Globe and Mail   The Times   Taipei Times   Trade Arabia



 The biggest risks facing the world in 2019

The World Economic Forum (WEF) has warned that climate change and evolving cyber-threats are among the biggest risks facing the world in 2019. WEF president Borge Brende said the world must be prepared for an increased misuse of technology, as highlighted in the UK by the recent Gatwick airport drone incident. The WEF Global Risks Report 2018 focuses in particular on four key areas: environmental degradation, cybersecurity breaches, economic strains, and geopolitical tensions. In a new series called ‘Future Shocks,’ the report cautions against complacency and highlights the need to prepare for sudden and dramatic disruptions. Speaking at an event in London ahead of January’s annual summit in Davos, Mr. Brende said: “We are seeing complex and interconnected risks increasing globally” and he also noted a lack of collaboration between countries to mitigate such risks.

World Economic Forum   Computer Weekly

 Big Four face review in Australia

The Australian Securities and Investments Commission (ASIC) has been asked by the country’s joint committee on corporations and financial services to develop new audit quality measurements amid ongoing concerns about the industry. A report from the committee also called for a review of audit focussing on « market dominance and conflicts of interest.”  The report stated that there was a risk that Big Four firms “fail to fearlessly scrutinise the accounts and risks of the corporations they audit because it may be detrimental to the pursuit of their wider business interests.”

Australian Financial Review

 Nordic region’s money laundering noir tarnishes its spotless image

The FT‘s Richard Milne says the Nordic ‘dirty money’ scandal involving Danske Bank, Nordea and Swedbank « demonstrates how these supposedly whiter-than-white countries are an essential part of the alleged corruption. » Meanwhile, Yle Uutiset reports that the Finnish Financial Supervisory Authority (FIVA) is setting up a new unit to combat money laundering. Samu Kurri, head of the agency’s institutional supervision department, said  the new unit will introduce measures « closer to the international level. » He added: « We in the Nordic countries have been too gullible regarding money laundering. Finland is quick to advise others on how to do things right. Before we can further do so, we must do as we say and show an example. »

Financial Times   Yle Uutiset



 Global round-up

Members of Burkina Faso’s government resigned without giving a reason in January. Among those who resigned was Prime Minister Paul Kaba Thieba. President Roch Marc Christian Kaboré appointed Christophe Joseph Marie Dabiré as new Prime Minister . . . Comedian Volodymyr Zelenskiy, who has promised to wipe out corruption in Ukraine, holds a commanding lead after the first round of voting in the country’s presidential election, leaving incumbent President Petro Poroshenko a distant second . . . An election victory for Prime Minister Benjamin Netanyahu continues a long winning streak for Israel’s right wing . . . Protesters in Sudan continue to gather and march near the military headquarters in Khartoum, following the ousting of long-serving leader Omar al-Bashir last week . . . and hundreds of thousands of protesters have rallied in Algiers on successive Fridays to demand the departure of the ruling elite as Algeria prepares for a presidential election in July. President Abdelaziz Bouteflika succumbed to the protests on April 3rdand stepped down after 20 years in power.

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