0:00:16 > 0:00:17This is Business Briefing.
0:00:17 > 0:00:18I'm Sally Bundock.
0:00:18 > 0:00:20A huge new leak of financial documents -
0:00:20 > 0:00:23known as the Paradise Papers - has revealed how the powerful
0:00:23 > 0:00:26and wealthy secretly invest vast amounts of money in offshore tax
0:00:26 > 0:00:27havens.
0:00:27 > 0:00:30All smiles on the golf course but President Trump is talking tough
0:00:30 > 0:00:33on trade with Japan - saying the relationship is neither
0:00:33 > 0:00:39fair nor open.
0:00:39 > 0:00:40And on the markets -
0:00:40 > 0:00:43The price of oil hits a two-year high following a crackdown
0:00:43 > 0:00:57on corruption in Saudi Arabia.
0:01:09 > 0:01:13A huge leak of secret offshore investments has revealed the tax
0:01:13 > 0:01:17affairs of rich and powerful people around the world.
0:01:17 > 0:01:21The details are contained in millions of documents from a law
0:01:21 > 0:01:23firm which specialises in offshore arrangements
0:01:23 > 0:01:24for individuals and companies.
0:01:24 > 0:01:26They've been obtained by the German newspaper Su-deutsche Zeitung
0:01:27 > 0:01:29and shared with the International Consortium of Investigative
0:01:29 > 0:01:31Journalists - including the BBC's Panorama programme.
0:01:31 > 0:01:33Our economics editor Kamal Ahmed takes a closer look now
0:01:33 > 0:01:45at the system and the part the UK plays in it.
0:01:46 > 0:01:50For centuries, Britain has been a centre for global finance,
0:01:50 > 0:01:54focused here on the City of London - and that's seen by many
0:01:54 > 0:02:02as good for our economy and the development of global trade.
0:02:02 > 0:02:05To support that, we allowed companies to set up in the UK
0:02:05 > 0:02:09and not be taxed here.
0:02:09 > 0:02:11Our imperial past is also important.
0:02:11 > 0:02:14Across the world, the what are called Crown Dependencies,
0:02:14 > 0:02:16or Overseas Territories, places like Jersey and Guernsey
0:02:16 > 0:02:19and the Isle of Man, which have an arm's length
0:02:19 > 0:02:22relationship with us, and have based their economy
0:02:22 > 0:02:27on low tax offers to companies and individuals to hold some
0:02:27 > 0:02:29of their wealth there.
0:02:29 > 0:02:42Others are more far-flung - places like Gibraltar,
0:02:42 > 0:02:49as well as Bermuda, the British Virgin Islands,
0:02:49 > 0:02:51the Cayman Islands, and Turks and Caicos.
0:02:51 > 0:02:54Such places insist they are good for growth if they allow firms
0:02:54 > 0:02:56and individuals to avoid being taxed multiple times
0:02:56 > 0:02:57by different countries.
0:02:57 > 0:03:00There have been a lot of new rules on transparency as well,
0:03:00 > 0:03:02but they are criticised for being too secret,
0:03:02 > 0:03:05too weak on regulation, and too open to corruption.
0:03:05 > 0:03:07Critics say the laws have also failed to keep up
0:03:08 > 0:03:10with global companies, which can move vast amounts
0:03:10 > 0:03:13of money around the world at a touch of a computer key.
0:03:13 > 0:03:16We are not the only ones who've used tax competition and light-touch
0:03:16 > 0:03:18regulation to lure companies to our shores.
0:03:18 > 0:03:21Other countries that have been criticised include Switzerland,
0:03:21 > 0:03:23Singapore and America, which has low tax systems
0:03:23 > 0:03:33in many of its states.
0:03:34 > 0:03:36There is also an important distinction to remember
0:03:36 > 0:03:42when speaking about tax havens.
0:03:42 > 0:03:46Tax evasion is illegal, while tax avoidance is using legal
0:03:46 > 0:03:50structures to reduce tax levels.
0:03:50 > 0:03:52How much could tax avoidance be worth to national
0:03:52 > 0:03:55exchequers like the Treasury?
0:03:55 > 0:03:58Well, globally, anything between £75 billion and £180 billion.
0:03:59 > 0:04:12Many now believe that avoidance has become so controversial there needs
0:04:12 > 0:04:15to be a complete change to global tax laws so that taxes are paid
0:04:16 > 0:04:18in the country where the firm or the individual is based.
0:04:18 > 0:04:21That would mean the total tax take would go up,
0:04:21 > 0:04:23which some might disagree with, but public controversy
0:04:23 > 0:04:26would probably die down.
0:04:27 > 0:04:29The leaked documents show that US Commerce Secretary
0:04:29 > 0:04:33Wilbur Ross has shares in a company with ties to Russia.
0:04:33 > 0:04:36They reveal that Mr Ross owns a stake in Navigator Holdings
0:04:36 > 0:04:38which earns millions of dollars transporting oil and gas
0:04:38 > 0:04:41for the Russian firm Sibur.
0:04:41 > 0:04:45Two of Sibur's owners are under US sanctions,
0:04:45 > 0:04:47and are closely linked to President Putin.
0:04:47 > 0:04:50A BBC correspondent says although Mr Ross has done nothing
0:04:50 > 0:04:51wrong, the revelations make uncomfortable reading
0:04:51 > 0:05:05for President Trump.
0:05:05 > 0:05:08Stay tuned to BBC News where we'll bring you up to date coverage
0:05:08 > 0:05:10of the Paradise Papers story.
0:05:10 > 0:05:13And don't forget to check out our website for more in-depth
0:05:13 > 0:05:14comment and analysis.
0:05:14 > 0:05:24Just head to bbc.com/news.
0:05:24 > 0:05:28Donald Trump is talking tough on trade. It is the first day of formal
0:05:28 > 0:05:30talks with Japanese Prime Minister Shinzo Abe.
0:05:30 > 0:05:36Mariko Oi joins us from Tokyo.
0:05:36 > 0:05:40We were hearing from Steve earlier that President Trump started at a
0:05:40 > 0:05:45business breakfast with some quite half language about the trade
0:05:45 > 0:05:52relationship between the US and Japan.In deed. He said the current
0:05:52 > 0:05:58trade between the two countries is not fair and not open. I guess he
0:05:58 > 0:06:03had to talk tough on trade because it was one of the promises he made
0:06:03 > 0:06:08during the election campaign, to tackle the huge trade deficit
0:06:08 > 0:06:12America has. He has previously accused Japan and China of keeping
0:06:12 > 0:06:20their currencies weak in order to take advantage in exports. At the
0:06:20 > 0:06:25press briefing this morning with press leaders, the president said,
0:06:25 > 0:06:29"Why not make cars in America instead of just shipped them over?"
0:06:29 > 0:06:35That raised some eyebrows now because 75% of Japanese brand cars
0:06:35 > 0:06:40sold in America are built there and when he said virtually no cars get
0:06:40 > 0:06:45imported into Japan from America, I don't know if you remember but
0:06:45 > 0:06:49Rupert had a bit of an experiment driving an American car he and they
0:06:49 > 0:06:55are a bit too big for the narrow roads here in Tokyo and they are not
0:06:55 > 0:06:59too popular. Those remarks raised some eyebrows but some analysts say
0:06:59 > 0:07:04he has some point about the currency manipulation, that Japan has been
0:07:04 > 0:07:17keeping it again quite weak.What is the teeth? -- keeping the yen week.
0:07:17 > 0:07:25He withdrew from the Trans-Pacific Partnership and that was received
0:07:25 > 0:07:31well in Japan, was it?That is one of the things he is hoping to do,
0:07:31 > 0:07:33start negotiating a bilateral free trade deal between the two
0:07:33 > 0:07:41countries. I then think any deals will be reached. In this visit. It
0:07:41 > 0:07:45was widely expected he would withdraw from the TTP. It didn't go
0:07:45 > 0:07:49down too well here. The surveys show the Japanese public doesn't really
0:07:49 > 0:07:55trust him, that he is not too well respected. There was a lot of
0:07:55 > 0:08:02fanfare surrounding his daughter, though, Ivanka Trump who was here
0:08:02 > 0:08:06last week. A lot of talks about how she is so gorgeous and how her
0:08:06 > 0:08:10career and beauty should be admired and a lot of magazine specials were
0:08:10 > 0:08:18put on it as well.Interesting. Thank you, Mariko Oi way in Tokyo.
0:08:18 > 0:08:20Now let's brief you some other business stories ...
0:08:21 > 0:08:24Saudi Arabia says that it will freeze all the bank accounts
0:08:24 > 0:08:26of those arrested on charges of corruption after a purge
0:08:26 > 0:08:28of the kingdom's political and business leaders.
0:08:28 > 0:08:31Analysts say the move is aimed primarily at consolidating the power
0:08:31 > 0:08:33of the Crown Prince, Mohammed bin Salman.
0:08:33 > 0:08:35Prince Al-Waleed bin Talal was among those arrested.
0:08:35 > 0:08:38The prince has a majority stake in The Kingdom Holding Company,
0:08:38 > 0:08:42which owns the Savoy in London and the Fairmont Plaza.
0:08:43 > 0:08:46The UK Prime Minister is set to warn business leaders that it will not
0:08:46 > 0:08:49protect the economy from "market forces" when Britain leaves
0:08:49 > 0:08:50the European Union.
0:08:50 > 0:08:52Speaking at a conference held by the Confederation
0:08:52 > 0:08:55of British Industry, Theresa may will tell firms it has
0:08:55 > 0:08:58to make "strategic decisions" about how best to support different
0:08:58 > 0:09:02sectors of the economy.
0:09:03 > 0:09:06US President Donald Trump has urged Saudi Arabia to choose New York
0:09:06 > 0:09:10for the initial public offering of the state-owned oil giant Aramco.
0:09:10 > 0:09:13Mr Trump told reporters aboard Air Force One that he had spoken
0:09:13 > 0:09:17to the Saudi king and he would like Aramco to consider US exchanges.
0:09:17 > 0:09:20The Aramco IPO is expected to be the largest in history,
0:09:20 > 0:09:22raising around $100 billion in much-needed revenue
0:09:22 > 0:09:29for the kingdom.
0:09:34 > 0:09:37And now - what's trending in the business news this morning:
0:09:37 > 0:09:39The German Bundesbank has commissioned a study focusing
0:09:39 > 0:09:44on the activities of the central bank under Adolf Hitler.
0:09:44 > 0:09:46The FT says that the project aims to reveal more
0:09:46 > 0:09:50about what the Bundesbank describes as a "dark era" of German history.
0:09:50 > 0:09:56CNBC is reporting that Ford, Volkswagen, BMW and Daimler
0:09:56 > 0:09:59are teaming up to install a European network of 400 fast-charge stations
0:09:59 > 0:10:04for electric cars.
0:10:05 > 0:10:09They hope to have 20 of these up and running by the end of the year.
0:10:09 > 0:10:11Bloomberg says that Qualcomm is preparing to fend off
0:10:11 > 0:10:12a $100bn takeover bid.
0:10:12 > 0:10:17The chipmaker is an industry leader in smartphone components and,
0:10:17 > 0:10:20if completed, the deal would be the biggest acquisition
0:10:20 > 0:10:22in the history of the tech sector.
0:10:22 > 0:10:23And don't forget -
0:10:23 > 0:10:26let's us know what you are spotting online - use the hashtag
0:10:26 > 0:10:30BBCTheBriefing
0:10:38 > 0:10:42Before we go, financial markets. We mentioned the price of oil going up
0:10:42 > 0:10:46and up. Generally speaking, the markets are starting well. Share
0:10:46 > 0:10:51markets across the board in Asia, apart from Darrou say China. We talk
0:10:51 > 0:11:01declines there because of debt. -- dare I say.
0:11:01 > 0:11:04The news briefing is next.