May 9, 2011

Local Tax Auth. Faces off Int’l Tax Evaders

Filed under: Ethiopia,Lybia,Nethrelands,Shell — ethiopiantimes @ 6:59 pm
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The news story headlined, “Tax auth. claims 210 million Br in back taxes from Libya Oil,” (Volume 12, Number 574, May 1, 2011) is evidence of tax evasion by international giant, Shell Ethiopia, which is part of Royal Dutch Shell Plc.

The parent company of Shell Ethiopia is registered in London but its headquarters and tax residency is in The Hague, Netherlands. The Netherlands is known as one of the tax havens and jurisdictions that attract multinational corporations (MNCs) with sophisticated structures and tax avoidance schemes.

The acquiring company, Libya Oil, is registered in Mauritius, an African country with an escalating reputation as a tax haven.

An investigative team by the Ethiopian Revenues and Customs Authority (ERCA) followed the trail to London.

Perhaps, it is possible to obtain information from foreign government departments, such as Her Majesty’s Revenues and Customs (HMRC), in accordance with information sharing agreements. Yet, it is insufficient to reveal the whole picture of the deal between Shell Ethiopia and Libya Oil.

The ERCA would need to see the contract, the valuation of the shares, the banking of the proceeds of the share disposal, and any other considerations in kind to calculate the appropriate tax amount. To obtain this information, tax officials must have contacted several parties, including solicitors, bankers, and accountants.

Without a doubt, the ERCA can use its authority to obtain the required information within its jurisdiction, and it could finalise the investigation at a low cost and within a short time.

However, with parties outside of its jurisdiction the matter is complicated. Those involved in share transfers would never provide a shred of evidence about the deal to any external entity due to strict privacy laws of the country they are operating in. This was seen in the response of the solicitor in England.

If the ERCA carried the investigation further, it will possibly lead to another jurisdiction with strict privacy laws, and surely it will get nowhere. It would cost an enormous amount of money, and years to close the investigation.

With an increasing number of tax havens, a huge tax avoidance and evasion industry has sprung up with several beneficiaries at the expense of developing countries and hardworking taxpayers in developed countries.

To bypass disclosure requirements in transparent countries, MNCs are often based in tax havens by creating layers of company structures across borders.

They use all means of tax avoidance schemes to get around laws and regulations to minimise their tax bills. In case of developing countries, such as Ethiopia, with underdeveloped tax regimes, they resort to outright tax evasion.

Solicitors draw big fees from drafting phony contracts and advising clients on tax havens. Designing layers of company structures and tax avoidance schemes is a big money maker for accounting firms.

Big global banks keep enormous amounts of their customers’ money in offshore financial centres. The banks accept any monies from dubious sources, including evaded taxes.

For this reason, so many MNCs set up a tiny invoicing office with few staff members and open an offshore bank account to enjoy low (zero) taxes amid strict secrecy laws.

These offshore financial centres are mainly found in Europe and the United States (US). The most notorious are British crown dependencies and overseas territories as well as small islands such as Jersey and Guernsey.

The Cayman Islands is strongly linked with London. They are well known for lax transparency requirements, secrecy, and low taxes.

What is worse is the reluctance of the politicians of these, tax havens, and offshore financial centres to enact appropriate transparency laws.

The case of Shell Ethiopia reveals the sophistication of cross border transactions. It is not an isolated incident, but a global problem that has been around for decades.

With the increasing number of foreign investors flooding to Ethiopia, the ERCA cannot deal with cross border transactions with its existing outlook, laws, and institutional capability.

It needs global cooperation, reviewing the existing tax laws by taking into account global developments, and development of its institutional capability.

The ERCA also needs to be part of a global community such as Tax Justice Network and Global Financial Integrity, which are working for more transparency and oppose tax havens and offshore finances.


Kenyans Demand Ethiopia Punish Militants Who Killed 31 in Attack Last Week

Filed under: Ethiopia,Kenya — ethiopiantimes @ 6:54 pm
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Northern Kenyans want Ethiopian authorities to prosecute members of the Merille-tribe militia suspected of carrying out a cross-border raid last week that left as many as 31 Kenyans dead.

About 2,000 residents of Todonyang village fled 25 kilometers (15 miles) to Lowoarengak on May 2 when suspected Merille tribesman ambushed the border town, the Turkana Professionals Association said in an e-mailed statement today from Nairobi, Kenya’s capital. Fifteen people in an area populated by the Turkana ethnic group are missing.

Kenya’s government put the death toll at 20 and sent a “protest note” to the Ethiopian government, according to a May 5 statement on the country’s Office of Public Communications’ website, citing Internal Security Minister George Saitoti.

Amid a lack of security, schools in Todonyang have closed, as food and clean drinking-water supplies dwindle even after the government promised to provide aid, the association said.

“We are calling on the Ethiopian government to comply with her obligations under international humanitarian and human- rights law and bring justice to the perpetrators of the Todonyang killing,” the citizens’ group said in the statement. “We urge the international community to provide support and humanitarian assistance to the displaced population.”

The Kenyan government should beef up security to protect civilians living along the border with Ethiopia and set up permanent immigration posts and military camps in four rural communities to help keep the local economy going, it said.
‘Operating With Impunity’

“These militia groups are operating with impunity within the Kenyan territory for control of resources such as water and fishing,” Gregory Akall, a spokesman for the association, said by phone today from Nairobi. “Ethiopia must prosecute them for the problem to ever stop.”

Last week’s attack on a group of Turkana traders returning from a market in Ethiopia was probably to avenge the earlier alleged killing of a Merille tribesman in a church compound housing internally displaced people in Todonyang, Akall said.

It brings the number of Kenyans killed in clashes with the Merille to 86 in 16 incidents since November 2008, according to data collected by the association.

More than 100 people are expected to take part in a march tomorrow in Nairobi to deliver a letter to Saitoti containing the association’s list of demands, Akall said.

To contact the reporter on this story: Sarah McGregor in Nairobi at

To contact the editor responsible for this story: Paul Richardson at

EU to expand political engagements in Ethiopia

Filed under: Ethiopia,Meles Zenawi — ethiopiantimes @ 8:01 am
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“Looking forward to support GTP”

By Yemane Nagish

The European Union delegation to Ethiopia expressed intentions to expand its political engagements in the country. The union also noted that it is assessing the Growth and Transformation Plan (GTP), the ambitious Plan of the Ethiopian government, and looking ways of supporting it.

On the occasion of the Europe Day to me marked on Monday, May 9, the Union held a press briefing yesterday at the headquarters of the delegation in Addis Ababa. Ambassador Xavier Marchal, delegation head in Ethiopia explained the Union’s and its member states’ political and economic relationships with Ethiopia, focusing on his current meetings held with Prime Minister Meles Zenawi.

EU to expand political engagements in EthiopiaHighlighting that the European Union is the most important partner of Ethiopia, Marchal said that donors support through over one billion Euro per year. He further asserted that the EU member states have discussed with Meles on issues ranging form current political environment of the country to the GTP.

As to the head, according to the three pillars of the bilateral relationships – namely political, economic cooperation and trade – they reached an agreement to expand the political engagements as per Art. 8 of the Cotonuo trade agreement, allowing the EU to pursue political dialogue with African – Caribbean Partnership (ACP-EU) countries, including Ethiopia.

“We will have a number of additional meetings [with the PM] to discus specific issues of interest in different domains, whether they are governmental or non-governmental,” the head noted.

Comparing the Union’s previous engagements with the government with the current one, Marchal noted “Before, we used to meeting the PM twice a year. Now we will still be meeting, but we will also go into more details to specific meetings and specific actors.”

He said the Union has plans to reach political and civil organizations unilaterally. Nevertheless, the official asserted that the union has no plans to engage in bringing the opposition the government together for political dialogues.

The head also said that the member states have discussed with Meles about the Plan. “We openly discussed the … GTP. It is legitimate. Of course we are all assessing it and looking forward to supporting it. And the EU is aiming at better communicating its response”, he noted. But the official reserved to speak of any specific decisions reached by the Union and member donors to support the Plan.

Ambassador Koen Varvaek, head of the EU delegation to the African Union, on his part highlighted the importance of the relationship existing between the EU and AU. He acknowledged that Africa is following a similar process of integration that Europe has succeeded in attaining.

With regard to new agreements reached between the two Unions, he said “We have discussed what we want to do together and particularly what Africa wants to do.”

Recognizing what AU is doing to tackle African problems, he praised that Africa has been an important global player when speaking as one voice on issues like climate change, having Meles as its spokesperson and “Making a difference.”

Eritrean president slams the separation of Sudan into two states

Filed under: Eritrea,Sudan — ethiopiantimes @ 7:37 am
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May 9–KHARTOUM — The Eritrean president Isaias Afewerki criticized the split of Sudan into two states saying that it was a result of “political blunders”.

In an interview with the pro-government Al-Shorooq TV, Afewerki said that Eritrea worked for Sudan’s unity over the last twenty years emphasizing that breaking up its territory into blocks may cast a shadow on the fate of the state which has seen a quantum leap in the areas of development.

Afewerki added that separation of the south was the inevitable result of political blunders and international intervention that affected the region. He urged Sudanese people to preserve the unity of the remaining land.

Southern Sudanese voted in January to separate from the north and form a new nation, a referendum promised to them as part of a 2005 peace deal which ended the decades of civil war.

But many countries in the region have expressed unhappiness with the breakup of Sudan saying that it could set a precedent in the continent and trigger regional instability.

Afewerki also warned against the “internationalization” of the Darfur crisis stressing that it will only complicate the situation. He pointed out that the Darfur Peace Agreement (DPA) signed in Abuja five years ago came through U.S. and international support but did not solve the problem and “failed miserably”.

“Are the Sudanese people unable to resolve the crisis themselves?” he said . “I do not see the need for internationalization because it could lead the region ultimately to the same fate of South Sudan.”

The insurgency in Darfur by African rebels has commanded unprecedented international attention and sparked a humanitarian emergency which claimed 300,000 lives and drove more than 2 million people from their homes according to UN estimates.

The Qatar-hosted peace talks have been delayed by rebel divisions and continued military operations on the ground.

U.S. & French Officials Present At Djibouti Inauguration With Bashir

Filed under: Djibouti,France,US — ethiopiantimes @ 7:34 am
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Washington — U.S. and French officials were present at the inauguration ceremony of Djibouti president Ismail Omar Guelleh on Sunday along with Sudanese president Omer Hassan Al-Bashir.

France, Djibouti’s former colonial ruler, was represented at the inauguration by Cooperation Minister Henri de Raincourt while the United States sent its deputy assistant secretary of state for African affairs, Karl Wycoff.

Bashir is wanted by the International Criminal Court (ICC) on charges of war crimes, crimes against humanity and genocide in Sudan’s western Darfur region.

Djibouti is a signatory of the ICC Statute and was therefore theoretically obligated to apprehend Bashir once he sets foot on its territory.

But Djibouti made it clear along with Comoros Island since the issuance of the arrest warrant against the Sudanese president that it will not execute the warrant despite being members of the court.

The African Union (AU) issued two decisions since 2009 instructing its members not to cooperate with the ICC with regards to the the arrest warrants even if they are members of the court.

Kenya and Chad are the two other countries from ICC members that have agreed to receive Bashir in the past. However, both nations later hesitated to allow him to visit at subsequent events held on its territories.

On Saturday, Human Rights Watch (HRW) condemned Djibouti’s decision to receive Bashir.

“Djibouti’s welcoming of Sudanese president Omar al-Bashir is an affront to victims of the horrific crimes committed in Darfur,” said Balkees Jarrah, international justice counsel with Human Rights Watch.

“As a state party to the International Criminal Court, Djibouti is obligated to arrest al-Bashir, who is charged with genocide, war crimes and crimes against humanity by the court. Activists across the African continent have repeatedly called on their governments to support the ICC and arrest al-Bashir or at least bar him entry to their territories.”

Kenneth Roth, the Executive Director of HRW, also chided Djibouti on a twitter entry saying that they should have never invited Bashir and said that other states should boycott to respect Darfur victims.

Bashir returned to Khartoum on Sunday after participating in the ceremony, state media reported.

Egypt promises Sudan’s Bashir immunity once it joins ICC

Filed under: Egypt,Somalia — ethiopiantimes @ 7:30 am
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(Source: Sudan Tribune)trackingBy Sudan Tribune

May 9–KHARTOUM — The Egyptian government assured Sudan that president Omer Hassan Al-Bashir will not be arrested on its territories once Cairo ratifies the Rome Statute which is the founding treaty of the International Criminal Court (ICC).

Bashir is wanted by the International Criminal Court (ICC) for allegedly orchestrating war crimes, crimes against humanity and genocide in Sudan’s western Darfur region against the African tribes of Fur, Zaghawa and Masaalit.

Last month, the Egyptian foreign minister Nabil Elaraby said that his country will soon accede to the Rome Statute as part of its efforts to become a “legally constituted state” after the overthrow of President Hosni Mubarak last February.

Egypt followed the path of Tunisia which also saw a popular uprising last January that toppled the regime of Zine el Abidine Ben Ali who stayed in power for 23 years. The major Arab power signed the Rome Statute in 2000 but has yet to ratify it, a process which required parliamentary review.

The topic was subject of discussion between Elaraby and his Sudanese counterpart Ali Karti who was on a visit to Cairo.

Sudan’s foreign ministry spokesperson Khalid Moussa was quoted by the country’s official news agency (SUNA) as saying that Egypt will invoke Article (98) of the Rome Statute which will allow it to receive Bashir without being obligated to arrest him.

Article 98 of the Rome Statute prohibits the Court from requesting assistance or the surrender of a person to the Court if to do so would require the state to “act inconsistently” with its obligations under international law or international agreements either regarding its own third-party states or international agreements either regarding its own third-party states unless the state or the third-party state waives the immunity or grants cooperation.

The United States under George Bush’s administration has signed bilateral immunity agreements with over 100 states under this clause to protect its citizens from possible ICC prosecutions and being extradited to the Hague.

In an interview with the independent Al-Shorooq newspaper last April in Cairo, the Egyptian top diplomat referred to Article 98 with regard to the status of Bashir should he visit. However, he fell short of saying that Egypt will resort to this legal tactic.

Sudanese officials have privately expressed concern over Egypt’s intention to join the court which they see as a blow to their efforts to undermine the ICC in Africa and the Arab world.

The former Sudanese justice minister Abdel-Basit Sabdarat echoed the sentiment telling a visiting Egyptian delegation consisting of political leaders on Sunday that Cairo should review its decision on joining the ICC.

“I blame the Egyptian foreign ministry for their decision to ratify the [Rome] treaty which was rejected by the Arab League besides ignoring the feelings of the brotherly Sudanese people which the court is working to threaten their security,” Sabdarat said.

“Did Egypt solve all its internal and external problems to worry in the present time about joining the ICC?” he added.

Sabdarat further said that Sudanese people felt “stabbed in the back” when Egyptian officials met with ICC prosecutor Luis Moreno-Ocampo during his visit to Cairo in early April. He said that the Egyptian diplomacy should act in a more “awareness” when dealing with Sudanese issues.

The New-York based Human Rights Watch (HRW) hailed Egypt’s decision to ratify the Rome Statute saying that it sends an important message to Egyptians about the direction the country intends to take.

“At a time when there is a major risk of crimes against humanity and war crimes in many countries in the region, the move by Egypt to ratify the Rome Statute sends a strong message that the days of absolute impunity for these crimes are ending,” said Sarah Leah Whitson, Middle East and North Africa director at Human Rights Watch.

“Foreign Minister El-Araby’s announcement is very significant” Whitson said. “Now Egypt should make a clear break with the obstructionist foreign policy of its predecessor, and take a leading role in protecting human rights in Africa, at the UN, and on international justice.”


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