06/11/2017 Business Briefing

This is Business Briefing.

I'm Sally Bundock.

A huge new leak of

financial documents -

known as the Paradise Papers -

has revealed how the powerful

and wealthy secretly invest vast

amounts of money in offshore tax

havens.

All smiles on the golf course

but President Trump is talking tough

on trade with Japan -

saying the relationship is neither

fair nor open.

And on the markets -

The price of oil hits a two-year

high following a crackdown

on corruption in Saudi Arabia.

A huge leak of secret offshore

investments has revealed the tax

affairs of rich and powerful

people around the world.

The details are contained

in millions of documents from a law

firm which specialises

in offshore arrangements

for individuals and companies.

They've been obtained by the German

newspaper Su-deutsche Zeitung

and shared with the International

Consortium of Investigative

Journalists - including

the BBC's Panorama programme.

Our economics editor Kamal Ahmed

takes a closer look now

at the system and the part

the UK plays in it.

For centuries, Britain has been

a centre for global finance,

focused here on the City of London -

and that's seen by many

as good for our economy

and the development of global trade.

To support that, we allowed

companies to set up in the UK

and not be taxed here.

Our imperial past is also important.

Across the world, the what are

called Crown Dependencies,

or Overseas Territories,

places like Jersey and Guernsey

and the Isle of Man,

which have an arm's length

relationship with us,

and have based their economy

on low tax offers to companies

and individuals to hold some

of their wealth there.

Others are more far-flung -

places like Gibraltar,

as well as Bermuda,

the British Virgin Islands,

the Cayman Islands,

and Turks and Caicos.

Such places insist they are good

for growth if they allow firms

and individuals to avoid

being taxed multiple times

by different countries.

There have been a lot of new rules

on transparency as well,

but they are criticised

for being too secret,

too weak on regulation,

and too open to corruption.

Critics say the laws have

also failed to keep up

with global companies,

which can move vast amounts

of money around the world

at a touch of a computer key.

We are not the only ones who've used

tax competition and light-touch

regulation to lure

companies to our shores.

Other countries that have been

criticised include Switzerland,

Singapore and America,

which has low tax systems

in many of its states.

There is also an important

distinction to remember

when speaking about tax havens.

Tax evasion is illegal,

while tax avoidance is using legal

structures to reduce tax levels.

How much could tax avoidance

be worth to national

exchequers like the Treasury?

Well, globally, anything between £75

billion and £180 billion.

Many now believe that avoidance has

become so controversial there needs

to be a complete change to global

tax laws so that taxes are paid

in the country where the firm

or the individual is based.

That would mean the total

tax take would go up,

which some might disagree with,

but public controversy

would probably die down.

The leaked documents show that

US Commerce Secretary

Wilbur Ross has shares in a company

with ties to Russia.

They reveal that Mr Ross owns

a stake in Navigator Holdings

which earns millions of dollars

transporting oil and gas

for the Russian firm Sibur.

Two of Sibur's owners

are under US sanctions,

and are closely linked

to President Putin.

A BBC correspondent says

although Mr Ross has done nothing

wrong, the revelations make

uncomfortable reading

for President Trump.

Stay tuned to BBC News where we'll

bring you up to date coverage

of the Paradise Papers story.

And don't forget to check

out our website for more in-depth

comment and analysis.

Just head to bbc.com/news.

Donald Trump is talking tough on

trade. It is the first day of formal

talks with Japanese Prime Minister

Shinzo Abe.

Mariko Oi joins us from Tokyo.

We were hearing from Steve earlier

that President Trump started at a

business breakfast with some quite

half language about the trade

relationship between the US and

Japan.

In deed. He said the current

trade between the two countries is

not fair and not open. I guess he

had to talk tough on trade because

it was one of the promises he made

during the election campaign, to

tackle the huge trade deficit

America has. He has previously

accused Japan and China of keeping

their currencies weak in order to

take advantage in exports. At the

press briefing this morning with

press leaders, the president said,

"Why not make cars in America

instead of just shipped them over?"

That raised some eyebrows now

because 75% of Japanese brand cars

sold in America are built there and

when he said virtually no cars get

imported into Japan from America, I

don't know if you remember but

Rupert had a bit of an experiment

driving an American car he and they

are a bit too big for the narrow

roads here in Tokyo and they are not

too popular. Those remarks raised

some eyebrows but some analysts say

he has some point about the currency

manipulation, that Japan has been

keeping it again quite weak.

What is

the teeth? -- keeping the yen week.

He withdrew from the Trans-Pacific

Partnership and that was received

well in Japan, was it?

That is one

of the things he is hoping to do,

start negotiating a bilateral free

trade deal between the two

countries. I then think any deals

will be reached. In this visit. It

was widely expected he would

withdraw from the TTP. It didn't go

down too well here. The surveys show

the Japanese public doesn't really

trust him, that he is not too well

respected. There was a lot of

fanfare surrounding his daughter,

though, Ivanka Trump who was here

last week. A lot of talks about how

she is so gorgeous and how her

career and beauty should be admired

and a lot of magazine specials were

put on it as well.

Interesting.

Thank you, Mariko Oi way in Tokyo.

Now let's brief you some other

business stories ...

Saudi Arabia says that it

will freeze all the bank accounts

of those arrested on charges

of corruption after a purge

of the kingdom's political

and business leaders.

Analysts say the move is aimed

primarily at consolidating the power

of the Crown Prince,

Mohammed bin Salman.

Prince Al-Waleed bin Talal

was among those arrested.

The prince has a majority stake

in The Kingdom Holding Company,

which owns the Savoy in London

and the Fairmont Plaza.

The UK Prime Minister is set to warn

business leaders that it will not

protect the economy from "market

forces" when Britain leaves

the European Union.

Speaking at a conference held

by the Confederation

of British Industry,

Theresa may will tell firms it has

to make "strategic decisions"

about how best to support different

sectors of the economy.

US President Donald Trump has urged

Saudi Arabia to choose New York

for the initial public offering

of the state-owned oil giant Aramco.

Mr Trump told reporters aboard

Air Force One that he had spoken

to the Saudi king and he would like

Aramco to consider US exchanges.

The Aramco IPO is expected to be

the largest in history,

raising around $100 billion

in much-needed revenue

for the kingdom.

And now - what's trending

in the business news this morning:

The German Bundesbank has

commissioned a study focusing

on the activities of the central

bank under Adolf Hitler.

The FT says that the project

aims to reveal more

about what the Bundesbank describes

as a "dark era" of German history.

CNBC is reporting that Ford,

Volkswagen, BMW and Daimler

are teaming up to install a European

network of 400 fast-charge stations

for electric cars.

They hope to have 20 of these up

and running by the end of the year.

Bloomberg says that Qualcomm

is preparing to fend off

a $100bn takeover bid.

The chipmaker is an industry leader

in smartphone components and,

if completed, the deal would be

the biggest acquisition

in the history of the tech sector.

And don't forget -

let's us know what you are spotting

online - use the hashtag

BBCTheBriefing

Before we go, financial markets. We

mentioned the price of oil going up

and up. Generally speaking, the

markets are starting well. Share

markets across the board in Asia,

apart from Darrou say China. We talk

declines there because of debt. --

dare I say.

The news briefing is next.