Global Business Magazine - December 2011 by Corporate ABM

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December 2011 • GBM • 1

INSIDE This Month:

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Business Talk With the recent loss of one of the world’s greatest entrepreneurs, it seemed only fitting to devote our cover story to Steve Jobs and the incredible life he led. We also dedicate a section to the microfinance investment vehicles market, given its steady growth over recent years. Among others we bring you a 2011 microfinance investment vehicles report and Luxembourg’s publicprivate fund structure. And with Luxembourg a preferred platform for the structuring of Islamic finance products, we examine the history of Shariah-compliant investment funds and the role Luxembourg has to play. Our energy, mining & natural resources section begins with a 2011 energy, mining and natural resources sector report. And as the mining industry has again become a target for government tax increase, we examine the concept of ‘resource nationalism’. Among others we also look at the significant challenges facing the extractive industries and Ecuador’s recent hydrocarbons law reform. In amongst the changes brought about by globalisation lies the world of translation and localisation services. From services in southeast Europe to finding a reliable Latin American service, we give you need-to-know information. While other financial markets are on a downslide, Turkey’s is active and filled with opportunities. Our first country profile looks at Turkey in detail, from its legal framework to recent evolutions, M&A and private equity to recent changes in legislation. Our second country profile covers the Ukraine, a transition market economy state with the highest rate of GDP growth in Europe. We provide a country overview, and among others show you why the Ukraine is an undisputed leader in the CEE outsourcing market and recent trends in competition law and enforcement. As always we bring you the latest deals from around the globe, address the healthy side to your work life and highlight a success story to keep you inspired. And as we finally have to acknowledge that winter is indeed upon us, we hope to raise your spirits by showing you the best luxury ski resorts 2011 has to offer.

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The opinions expressed in GBM do not necessarily reflect those of the editors, publishers or their agents. The information provided in GBM is general and may not be applied to a specific situation. GBM does not purport to provide legal or other professional advice and takes no responsibility for actions taken on the basis of information provided herein. Legal advice should always be sought before taking any such action. Laws and government policies are constantly changing and accordingly GBM takes no responsibility for the accuracy or currency of the information provided herein. If you require particular information you are advised to consult with the article’s author or seek legal advice.

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50 years of amnesty international

amnesty international – 50 years

“Brother Lamri. They are going to execute us. Please get in touch.” This was the SMS that flashed up on the mobile phone of Amnesty International’s Yemen researcher at its London headquarters on a Monday morning in October 2007. It was sent by Hafez Ibrahim, hours away from a death sentence in a Yemeni prison after being convicted without appeal for a killing committed when he was a child aged 16. What followed was a flurry of emails, faxes and text messages to Amnesty International supporters around the world, to media, to local activists and to the President of Yemen himself. He responded with a stay of execution but no pardon and it took many more months of campaigning to secure Hafez’s release. He went on to study law and last year expressed his determination to make the most of the life that was returned to him. “I owe my life to Amnesty International”, he said. “Now I am dedicating that life to campaigning against the death penalty and raising awareness about human rights.”

For 50 years Amnesty International has shown that determined individuals joining together with other individuals and using the most effective technology available can be incredibly powerful defenders of justice and promoters of freedom. In our 50th anniversary year, the ordinary people that took to the streets in the Middle East and North Africa are a living testament to the same dream. Whether it be 27-yearold Asmaa Mahfouz, who helped spark the Egyptian revolution with her video blog posted one week before the uprising or cyber activist Jamal al-Hajji, one of the first to call for demonstrations in support of greater freedoms in Libya – the power of the individual has never been clearer. In some ways the uprisings in the Middle East and North Africa mirrors Amnesty’s own journey. This extraordinary social movement was born in 1961 when one London lawyer by the name of Peter Benenson transformed a personal protest into something more, by urging others to join him in “righteous indignation” and disgust at brutality and injustice. Outraged by the tale of two Portuguese students imprisoned for drinking a toast to liberty during the dark days of the Salazar regime, he came up with an idea that was as simple as it was original - a network of individuals that would write letters to other individuals and to the governments that were imprisoning them simply for their beliefs – people he defined as “Prisoners of Conscience.” Amnesty International was in effect one of the world’s first social networks although few recognised it at the time. Indeed, the idea that letter writing could be an effective way of bringing people together in common action was as challenged in its day as the idea that wall posts, tweets and downloading YouTube videos are today. Perhaps all the more remarkable was Benenson’s commitment to impartiality, independence and the human experience, above the political. Amnesty International was launched just months before the Cold War ideological division was to reach its symbolic apex with the construction of the Berlin War. Yet Benenson wrote, “The force of opinion, to be effective, should be broadly based, international, non-sectarian and all-party.” Described shortly afterwards as one of the "larger lunacies of our time”, the

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principles and practices on which Amnesty International was founded is probably a “lunacy” that many of today’s young Arab protesters might recognise and embrace. Their struggle for human rights has also been the struggle of individuals joining together, often without leaders and ungoverned by traditional political or religious ideologies. 50 years since Amnesty International was born to protect the rights of those detained simply for their opinions there has been a human rights revolution, a massive cultural, social and political shift that has transformed the call for justice, freedom and dignity into a truly global demand. Amnesty International has become the world’s largest human rights organisation but, as the uprisings in the Middle East and North Africa remind us today, as other activists across the world have throughout our 50 years, the communities most affected by human rights abuses are the real driving force behind this revolution. Human rights violations are very much at the heart of key challenges facing today’s changing world. While brave and determined individuals claim their rights and freedoms, governments, armed groups, corporations and international institutions continue to seek to evade scrutiny and accountability. That is why in our 50th anniversary year we are focusing on six areas where people power can help tip the scales against repression and injustice: freedom of expression, abolition of the death penalty, reproductive rights for women and girls, ensuring international justice, corporate accountability and ending injustice and oppression in the Middle East and North Africa. But above all, this anniversary is a moment to imagine how much individuals working together can achieve. That is why we are asking everyone, in particular Amnesty International’s three million members worldwide to “Be one more, ask one more, act once more” – to each ask one more person to take action. 50 years of standing up to tyranny and injustice has shown that every individual can make a difference. But whether it is writing letters or blogs, sending emails or texts, demonstrating or uploading videos, 2011 has reminded us all that millions of individuals standing together and uniting against injustice can change the world. For more information please visit www.amnesty.org.uk/

Amnesty International - Key Events Amnesty event

World event

Amnesty event

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Outraged by the imprisonment of two Portuguese students for toasting freedom, British lawyer Peter Benenson on 28 May launches and “Appeal for Amnesty 1961” in the Observer newspaper. The article is the birth of Amnesty International.

Patrice Lumumba, newly elected President of the Congo, is murdered. Building of the Berlin Wall begins.

Amnesty International now has sections in 27 countries.

In September, Jordan expels the Palestinian Liberation Army and Palestinian civilians, the majority going to Lebanon and Syria. Salvador Allende is elected president of Chile.

The Prisoner of Conscience Fund is established to provide relief to prisoners and their families. Amnesty International’s first annual report highlights the cases of 210 prisoners.

The Cuban missile crisis brings the US and the Soviet Union to the brink of war. Algeria gains independence from France.

The International Secretariat is set up in London. Ukrainian Archbishop Josyf Slipyi, who was sent 7,000 cards by Amnesty International members, is released from prison in Siberia.

US President J.F. Kennedy is assassinated in Dallas, Texas. The Organisation of African Unity is founded.

New Amnesty International sections are formed in Bangladesh, Mexico and South Korea.

One hundred and forty prisoners are released. The UN grants Amnesty International consultative status. Now three years old, Amnesty International has a total of 329 prisoners released.

Martin Luther King receives Nobel Peace Prize. The Brasilian military overthrows President João Goulart in a coup, starting 21 years of dictatorship.

Amnesty International’s first reports focus on prison conditions in East Germany, Paraguay, Portugal, Rhodesia, Romania and South Africa.

The UK abolishes the death penalty for murder. India and Pakistan go to war over Kashmir. A coup brings Suharto to power in Indonesia, leading to the deaths of between 500,000 and a million people over the next year.

Following resistance in the USA to military service in Vietnam, Amnesty International gives prisoner of conscience status to all who refuse to fight wars.

Cultural Revolution announced in China. UN adopts the Covenant on Civil and Political Rights.

An Amnesty International section is set up in the USA. Amnesty International has its 1,000th prisoner released. Fearing that intervention could jeopardize a prisoner’s chance of release, Amnesty International refrains from adopting prisoners of conscience in China. Amnesty International has 550 groups in 18 countries, and nearly 2,000 prisoner cases ongoing.

The Six Day War brings Israel victory over its Arab neighbours and control over East Jerusalem. Che Guevara is executed. Civil war begins in Biafra, Nigeria.

Amnesty International announces its opposition to the death penalty for political prisoners.

Mass student protests in Brazil, Mexico and across Europe. Martin Luther King assassinated. Soviet tanks invade Czechoslovakia.

After campaigning by Amnesty International members, 2000 prisoners have been released since the organization’s foundation.

Colonel Mu’ammar al-Gadaffi comes to power in Libya. In South Vietnam the government detains thousands of civilians, many of them pacifists or advocated of a negotiated settlement.

“When the first letter came it was like something from another planet” – Marina Aidova, speaking to Amnesty International 2006 about the letter-writing campaign to release her father, Slava Aidov. A prisoner of conscience, Slava was arrested 1966 for attempting to obtain a printing-press and print leaflets denouncing the Soviet regime. He was released in 1971, and after the fall of the Berlin Wall went to Newbury in England to visit the couple who had sent him his first postcard in prison.

Idi Amin comes to power in Uganda. Bangladesh born as independent state.

Amnesty International launches campaign for the abolition of torture.

Martial law declared in the Philippines. President Nixon visits China.

First Urgent Action issued, on behalf of Brazilian political prisoner Luiz Basilio Rossi

Ceasefire agreed in Vietnam. General Augusto Pinochet becomes President of Chile after military coup.

“I knew that my case had become public. I knew they could no longer kill me.” Amnesty International publishes report on political oppression, executions and torture in Chile. Seán McBride, Chair of the International Executive Committee of Amnesty International, is awarded Nobel Peace Prize. Mumtaz Soysal of Turkey becomes the first former prisoner of conscience elected to the International Executive Committee.

President Richard Nixon resigns after Watergate scandal. Dictatorships in Portugal and Greece collapse.

Amnesty International now numbers 1,592 groups in 33 countries and more than 70,000 members in 65 countries.

UN unanimously adopts the Declaration against Torture and other Cruel, Inhuman or Degrading Treatment or Punishment. General Francisco Franco dies in Spain. Khmer Rouge seize power in Cambodia.

A worldwide campaign against torture in Uruguay is launched. In November, Amnesty International lists 167 trade unionists as imprisoned in 16 counties.

In China, Mao Tes-Tung dies, marking a final end to the Cultural Revolution.

Amnesty International is awarded the Nobel Peace Prize. The Stockholm Conference calls on all governments to “bring about the immediate and total abolition of the death penalty”.

General Zia overthrows Pakistan’s first elected Prime Minister, Zulfikar Ali Bhutto. In South Africa student leader Steve Biko dies of head injuries in police custody.

Amnesty International is awarded the UN Human Rights prize for “outstanding contributions in the field of human rights”.

Egypt and Israel reach peace agreement at Camp David in the USA.

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50 years of amnesty international

Amnesty event

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Amnesty event

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Amnesty International publishes a list of 2,665 people who disappeared after the military coup led by Jorge Rafael Videla in Argentina. Amnesty International starts working against political killings.

The Soviet Union invades Afghanistan. The UN passes a Convention on the Elimination of Discrimination against Women. In Iran the Shah is ousted by mass protests.

Amnesty International launches reports on the death penalty in Iran and the USA.

The UN Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment enters into force. Slobodan Milosevic comes to power in Serbia.

Amnesty International launches its first campaign against the death penalty.

The UN sets up the Working Group on Enforced or Involuntary Disappearances. Iraq invades Iran.

Sting and Bruce Springsteen headline the Human Rights Now! tour in 15 countries in Africa, the Americas, Asia and Europe.

Amnesty International launches the Disappearance Campaign. It now numbers over 250,000 members, subscribers and supporters in more than 150 countries or territories.

France abolishes the death penalty. President Anwar Sadat of Egypt is assassinated.

The Iraqi government uses chemical weapons to kill thousands of Kurdish villagers in Halabja. The Iran-Iraq war ends. In Myanmar thousands of pro-democracy protesters are killed when soldiers fire into crowds.

Amnesty International condemns and opposes laws and practices of apartheid, and reaffirms its opposition to inhumane treatment of people because of their sexuality. Amnesty International launches and appeal for a universal amnesty for all prisoners of conscience and collects more than 1 million signatures to deliver to the UN.

Israel invades Lebanon. Lebanese Christian forces in Israeli-controlled West Beirut kill at least 900 Palestinians in the Sabra and Shatila refugee camps.

Amnesty International launches a new campaign against the death penalty, with a major report, When the state kills: The death penalty v. human rights.

The Soviet army withdraws from Afghanistan. In China the authorities massacre pro-democracy students in Tiananmen Square. Revolutions takes place throughout Eastern Europe. In Czechoslovakia, prisoner of conscience Vaclav Havel is released and by the end of the year becomes president.

Amnesty International launches its campaign against political killings and disappearances.

Argentina returns to civilian rule and begins to investigate the Dirty War in the thousands of people disappeared.

Nelson Mandela is released. In Myanmar, the opposition National League for Democracy, led by Aung San Suu Kyi, wins the election but the military stays in power.

Amnesty International launches its second Campaign Against Torture, which includes a 12-point plan for the abolition of torture.

The Convention against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment is adopted by the UN General Assembly. In India Indira Ghandi, the Prime Minister, is assassinated, and a leak at the Union Carbide pesticide plant in Bhopal kills thousands.

Amnesty International’s Urgent Action on torture and extrajudicial executions in Brazil receives an immediate response from President Fernando Collor, who says “We cannot and will not again be a country cited as violent.” In it’s 30th anniversary year, Amnesty International pledges to promote all the Universal Declaration of Human Rights and to include work on abuses by armed opposition groups. People imprisoned because of their sexual orientation are now considered prisoners of conscience.

War breaks out in the Balkans and in Somalia, where rebels outs the dictator Mohamed Siad Barre. A military coup ousts Haiti’s President Aristide. The Soviet Union collapses.

Work for refugees is included in the Amnesty International statute. Amnesty International now has more than half a million supporter and subscribers. Amnesty International’s first education pack, Teaching and learning about human rights, is launched in Helsinki in Finland.

Mikhael Gorbachev becomes leader of the USSR and begins introducing economic reform.

“In Mikuyu prison where I was, no letters were allowed, no newspapers were allowed, no radio was allowed... For some strange reason somebody in Holland sent me a postcard. And for some strange reason that postcard arrived... The postcard said in Dutch, ‘greetings from Holland’”.

Amnesty International USA launches the Conspiracy of Hope tour featuring U2, Fela Kuti , Sting, Peter Gabriel, among others.

Governments of Ferdinand Marcos in the Philippines and Baby Doc Duvalier in Haiti fall

- Jack Mapanje, who was detained by the Malawian authorities from 1987 to 1991 for writing poetry critical of President Kamuzu Banda’s government. He was released following intense public pressure from around the world.

“My father, Fela Kuti, was released from prison in 1986 after Amnesty International took him on as a prisoner of conscience. So I am one of the thousands of people whose life has been directly affected by Amnesty’s work. Please support Amnesty by taking action for those whose freedom of expression has been taken away from them.” Message from Fela Kuti’s son Femi to the audience at the opening of the show “Fela!” in London, UK.

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Amnesty International’s membership reaches 1 million. Amnesty International calls for an end to centuries of human rights abuses against Indigenous people.

In Algeria a military coup cancels the elections, and President Boudiaf is assassinated. The war in former Yugoslavia spreads to Bosnia.

Amnesty International launches The Lives Behind the Lies, an international campaign on political killings, disappearances and extrajudicial executions. In Milawi, Vera Chirwa, the longest serving prisoner of conscience in Africa, is released after 11 years.

In Vienna, the World Conference on Human Rights confirms that human rights are universal and indivisible, and leads to the setting up of the UN Office of the High Commissioner on Human Rights.

Amnesty event

World event

Amnesty event

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Amnesty International launches a major campaign on women, Human Rights are Women’s Rights, and a worldwide campaign against disappearances and political killings.

Between April and July in Rwanda, Hutus murder half a million Tutsis. Nelson Mandela is elected President of South Africa.

Amnesty International is granted access to Myanmar for the first time after many years of requests.

Amnesty International launches the campaign Stop the Torture Trade.

Ken Saro Wiwa (pictured) and eight campaigners against the destruction of Ogoniland are executed in Nigeria. In Bosnia, Serb troops take over the UN “safe area” of Srebrenica and kill more than 7,000 men and boys.

The USA and UK invade Iraq. Armed conflict breaks out in the Darfur region of Sudan, between Darfuri rebel movements and a governmentbacked militia, the Janjaweed

At least 4,272 prisoners are executed in 39 countries: China leads, with 3,500 executions, followed by Ukraine, Russia and Iran. Israeli forced shell the UN compound in Qana, Lebanon, killing 102 civilians.

Amnesty International launches Respect Refugees! an international campaign for refugee rights . Analysis of executions of prisoners in the USA shows that a black person convicted of killing a white person if 15 times more likely to be executed than a black person convicted of killing a black person.

In Zaire [now the Democratic Republic of the Congo] rebels capture the capital, Kinshasa, overthrowing President Mobutu. In Algeria, armed groups kill hundreds of civilians in attacks on rural areas.

Amnesty International launches the Get Up, Sign Up! campaign to mark the 50th anniversary of the Universal Declaration of Human Rights, collecting 3 million pledges of support.

General Augusto Pinochet is arrested in the UK for crimes committed in Chile. The Rome Statute of the International Criminal Court is adopted. In Indonesia, protests forced President Suharto to resign after 32 years in power.

Amnesty International broadens its scope to work on the impact of economic relations on human rights. Amnesty International and five other international NGOs launch the Coalition to Stop the Use of Child Soldiers.

NATO launches air strikes over Kosovo, and Yugoslav federal troops expel tens of thousands of ethnic Albanian civilians from the territory but are eventually forced to withdraw.

Amnesty International launches its third campaign against torture Stamp out Torture - its first digital campaign. Amnesty International joins forced with Oxfam to campaign for tougher export laws for the arms trade.

IN Serbia, mass protests after an allegedly rigged election leads to the overthrow of Milosevic. In Zimbabwe government forces attack political opponents and farmers.

Amnesty International commemorates its 50th anniversary. The organization adopts a new mission focusing on the indivisibility of human rights and changing the organization’s statute to include work for economic, social and cultural rights.

On 11 September two planes are flown into the Twin Towers in New York, killing nearly 3,000 people; a third plane hits the Pentagon in Washington and a fourth crashes in Pennsylvania. President George W. Bush declares the “war on terror” and launches air strikes to remove the Taleban from power in Afghanistan.

Work begins to combat torture used in the US-led “war on terror”. Amnesty International visits Israel and the Occupied Territories and reports evidence of war crimes in the West Bank city of Jenin.

The 60th state ratifies the Rome Statute, paving the way for the establishment of the International Criminal Court. The first prisoners arrive at the US military base in Guantánamo Bay in Cuba.

Amnesty International’s inaugural Ambassador of Conscience award goes to released prisoner of conscience and former President of the Czech Republic, Vaclav Havel. Amnesty International launches an international campaign: Stop Violence Against Women. At the International AIDS Conference, Amnesty International calls for respect for the human rights of those living with HIV/AIDS.

Simultaneous attacks on packed rush-hour trains in Madrid kill 191 people. In Beslan, Russian Federation, an armed group takes more than 1,000 people hostage, resulting in the death of nearly 350 people in the ensuing battle with Russian forces.

Amnesty International launches the Make Some Noise campaign, harnessing the music world in support of its work. Peter Benenson, Amnesty International’s founder, died aged 83. Amnesty International now has 2 million members worldwide.

In Uzbekistan at least 190 people are killed when troops open fire on demonstrators in the city of Andizhan. In Kuwait women are granted the rights to vote. In London, suicide bombings on the public transport system kill 52 people.

Amnesty International’s Control Arms campaign achieves a major victory when the UN votes overwhelmingly to start work on a treaty.

The first trial in the International Criminal Court begins, of Thomas Lubanga from the Democratic Republic of the Congo. Russian journalist Anna Politkovskaya is murdered outside her Moscow flat.

Amnesty International organizes worldwide protests against five years of unlawful detentions in Guantánamo Bay. Amnesty International highlights human rights violations in China before the 2008 Beijing Olympics.

The UN General Assembly adopts the first-ever resolution calling for a global moratorium on the death penalty, after campaigning by Amnesty International and its partners in a world coalition. In Myanmar huge pro-democracy protests are violently suppressed.

2006

Amnesty International begins campaigning for a permanent international court to try war criminals.

The global Control Arms campaign is launched by Amnesty International, Oxfam and the International Action Network on Small Arms (IANSA), to demand an international arms trade treaty.

“I owe my life to Amnesty International. Now I am dedicating that life to campaigning against the death penalty and raising awareness about human rights.” – Hafez Ibrahim, who received a stay of execution in 2007 after an Urgent Action appeal by Amnesty International. He was later pardoned and released. He is now studying law at Sana’a University.

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end of year reVieW 2011

Global Business Magazine

END OF YEAR REVIEW 2011 Our End of Year Review profiles organisations that merit a special spotlight for the work that has been carried out during a very tough financial year. Organisations have struggled in the past 12 months to even survive, but there are a few diamonds in the rough that have not only survived but have achieved great results during a tough economic crisis. These firms deserve all the recognition that they can get, so that the business, advisory and investor communities can appreciate their quality of work.

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Every jurisdiction has its own legislations and regulations this means that there is not one general recipe for success across the globe, but leading organisations have used their market knowledge and expertise to remain at the very top of their sectors.

AUSTRIA Erich Baier, MBA, LLM (Int’l Tax Law) TEP Certified tax adviser Bilanz-Data Wirtschaftstreuhand GmbH

Schwarzenbergstraße 1-3/14a 1010 Vienna, Austria Phone: (+ 43 1) 516 12 0 Fax: (+ 43 1) 516 12 14 baier@austrian-taxes.com

The Austrian Private Foundation - going offshore onshore Achieving income and accumulating significant wealth is hard enough and requires hard work or a large portion of sheer luck. Unfortunately, life is designed in a way that we more often are confronted with hard work than with sheer luck. But then, having harvested the crop, we are instantly confronted with the next problem - where to store the fruits and where to find a secure and safe place to protect them from harm. Since 1993, such a place exists - Austria. In 1993, the Austrian Private Foundation (APF) Act was written into law and became an overwhelming success as it proved to be a flexible instrument for preserving and creating wealth for a family accompanied by a large number of tax benefits serving the needs of a modern family. Legal status of the APF The APF is a corporate entity, but has no shares and no shareholders; it is an independent legal entity. It comes into existence when the resident or non-resident founder (any individual, corporate entity, partnership, trust or association) is endowing assets to the APF. The APF can be established on an irrevocable or revocable basis whereby only individuals can establish an APF on a revocable basis. The APF is managed by a board of directors consisting of at least three individuals, two of which have to be in resident in the EU/EEA. The charter of the APF is a public document and governs the name of the APF, its seat, whether it is revocable or irrevocable and whether the charter can be amended or not. The important details (like the name of the beneficiaries, the payments to be effected in favour of the beneficiaries and the total amount of assets endowed to the foundation) are included in the non-public by-laws. Rights of the founder The rights of the founder of an APF are very far reaching He can: select the first board of management; amend the charter and the nonpublic by-laws at any time provided he has foreseen so in the charter and the by-laws; determine how much is paid to whom and when, determine what happens after he has died, give guidelines to the management board of how to invest and into what;

revoke the APF at any time; and, determine additional or new beneficiaries at any time. Taxation of an APF One has to differ between three stages: its establishment; the current income; and, the dissolution or revocation. When the APF is established, the founder has to endow at least €70,000. Any endowment, regardless whether endowed by the founder or an unrelated third party, is exposed to a one-time 2.5% foundation entrance tax. Debts effectively connected with the assets endowed to the APF can be deducted from the tax base but only up to an amount equal to three times of the fiscal value of the asset endowed. The APF is a corporate entity and its income is exposed to the flat statutory 25% corporate income tax bracket. Capital investment income enjoys material tax exemptions. The APF has access to all 89 Austrian tax treaties and therefore foreign source income is tax exempt in the hands of the APF. Interest income is due to the so-called 25 % interim corporate tax, which is reimbursed to the APF whenever it effects payments in favour of the beneficiaries and this payment triggers a 25% withholding tax at source in Austria. Such a tax usually comes due when payments are made in favour of resident beneficiaries; for non-resident beneficiaries, the majority of the Austrian tax treaties foresees a zero rate withholding tax, only a few treaties allocate the right to levy a withholding tax within a range of 5% to 25% to Austria. This tax is then credited against any income tax in the country of residence of the beneficiary.

Once assets or, eg, shareholdings in other corporations are endowed to the APF they become the legal property of the APF and whenever the founder dies no inheritance tax is coming due. An additional benefit is achieved due to the fact that the APF has access to tax treaties and therefore only a reduced withholding tax is levied upon dividends distributed by the underlying subsidiaries to the APF. Dissolution or revocation of the APF In case of a dissolution, the final amount that is paid out of the APF is due to a 25% withholding tax; for foreign beneficiaries it is either reduced to zero or to a lower rate, but in any case granted as a foreign tax credit in the country of residence of the beneficiary. In case of a revocation, only the amount which exceeds the initial and further endowments to the APF, and which has not yet been paid to the beneficiaries, is due to the flat 25% tax, unless paid to non-resident beneficiaries where the majority of Austrian tax treaties foresees a zero rate withholding tax. In summary The APF is a worldwide-recognised instrument with access to all 89 Austrian tax treaties, can obtain capital investment income free of any taxes and can be utilised for avoiding inheritance tax. These advantages, combined with the fact that the settlor or founder can keep control over the assets endowed to the APF without having to include the income achieved in his own tax return make the APF a robust and elegant fortress strong enough to protect the wealth of a family.

When the APF is revoked, all interim corporate taxes are reimbursed so that domestic and foreign source interest income can be achieved free of any taxes. Domestic and foreign source dividend income and capital gains resulting from the sale of shares in corporations are tax-exempt when achieved by the APF. The APF is also a very helpful instrument to avoid inheritance tax in a legal way.

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CHINA Cassie Wong Regional Tax Leader, Asia Pacific, PwC +86 (10) 6533 2222 cassie.wong@cn.pwc.com www.pwc.com

Creating a better tax system for businesses is high on the agenda for the Chinese government The goals behind China’s latest tax reforms are to drive quality improvements in the economic growth model, upgrade industrial structure and improve income distribution among the Chinese people. Understanding these tax reforms and their significance is key to businesses. Released March 2011, the latest tax reforms are outlined in the 12th Five-Year Plan, a series of initiatives proposed and driven by the Communist Party of China to shape China’s economic and social development. This latest plan covers five years starting from 2011. In the mid-1990s, China introduced a new indirect tax and fiscal revenue sharing system. This system divided tax collection and administration powers between central and local governments. China has since undergone a series of tax reforms over the past decades, working towards a more advanced and robust tax system. Key areas of tax reform in the 12th Five-Year Plan While corporate income tax is the theme for tax reforms in the previous five-year plans, indirect tax, individual income tax and tax administration were the key areas of focus in the 12th five-year plan. Indirect taxes: Under the current indirect tax system, goods and services are subject to different taxes, namely value added tax for goods and business tax for services. Consumption tax is also levied on manufacturers and importers of certain consumer goods. The main idea of the reform is to streamline the indirect tax system. This includes expanding the scope of value added tax to cover all goods and services and gradually eliminate business tax. A consumption tax will be imposed on certain high-end services and may be extended to cover goods that use up scarce resources in order to reduce resource exploitation, as well as luxury and sumptuary products. Individual Income Tax: The proposed reforms on individual income tax will establish annual reporting and calculating standards for regular and recurring income. Capital and incidental income will be calculated and filed separately on a transaction basis. Additional changes will introduce deductions for living 10 • GBM • December 2011

expenses and adjust the various tax rates for different types of income. Others: Reform for real estate tax aims to streamline the different taxes in the real estate business cycle. The scope of resource tax would be extended so that its taxable base would be adjusted and certain surcharges currently imposed on resources would be removed or incorporated into the tax. On environment, the reform will levy a tax on pollutant emissions, which is more in line with international practices. This environment tax will replace the current pollutant emission surcharges. Where China’s tax reform stands PwC believes that China’s tax reforms will speed up improvements in the economic development model. For example, the proposed indirect tax reform to eliminate the current double (or multiple) business tax on the service industry is going to boost the development of service sectors and build up industrial structure. Further, the proposed consumption tax reform will be more effective in enhancing energy/resource conservation and encouraging rational consumption. In addition, the proposed resource tax reform and introduction of environment tax are also expected to promote resource conservation and environmental protection. However, the indirect tax reform is likely to require extra attention by governments at both the state and local levels. PwC predicts that the individual income tax (IIT) reforms will play an important role in income distribution. The 12th five-year plan provides a direction for a more advanced regime. At this point, it appears that some of the more critical changes to the current IIT system haven’t been finalised, though we believe they’ll be phased in gradually within the next five years. Further improvements to the existing CIT regime may also be made and priority would be placed on encouraging innovation in science and technology. China also aims to develop a more robust local tax system by developing stable local tax revenue sources while giving more authority to the local governments in the administration of these taxes. This should be

welcomed by local governments, as they’ll be able to secure a stable source of tax revenue and gain added flexibility in furthering infrastructure development and standard of living improvements. What this means for companies In summary, the 12th Five-Year Plan has given us a blueprint for tax reform over the next five years. This reflects the objectives stated by the tax policy leaders, such as “to optimise tax systems, enhance fairness in tax cost, and improve the mechanism for income distribution.” These are expected to contribute to the overall goals of speeding up improvements in the pattern of economic development, upgrading industrial structure and improving China’s standard of living. Businesses in relevant industries should give the 12th Five-Year Plan and the outline of the tax reforms a thorough review to prepare for the implementation guidelines that will follow. Globally, PwC firms help organisations and individuals create the value they’re looking for. We're a network of firms in 158 countries with close to 169,000 people who are committed to delivering quality in assurance, tax and advisory services. Leveraging on a strong international network, our tax specialists are striving to offer technically robust, industry specific, pragmatic and seamless solutions to our clients on their tax and business issues locally. With over 1,300 China tax professionals and over 50 China tax partners in 13 cities in mainland China, Hong Kong, Singapore, and Taiwan, our PwC China tax and business service team provides a full range of tax advisory and compliance services. The Global Tax Monitor recognises PwC as having the strongest overall reputation for tax services in China, with a lead over the competition.

UNITED KINGDOM Christopher Walter Chair of ELA’s International Committee Partner, Covington & Burling LLP +44.(0)20.7067.2061

cwalter@cov.com www.elaweb.org.uk/ www.cov.com/cwalter/

Employment Law - an International Perspective The UK Employment Lawyers Association has over 5,900 members specialising in employment law. I am fortunate enough to chair ELA’s International Committee, which is comprised of 26 senior employment lawyers - both in-house and in private practice - with deep expertise in cross-border and multi-country employment projects. Over recent years, numerous other national employment lawyer associations have been established across Europe and elsewhere, to promote discussion on employment and benefits issues and to provide training to junior members of the profession. In May this year, members of my Committee met with representatives from AVOSIAL in France, the AADA (labour law group of the German Bar Association), the Italian AGI, the Dutch VAAN and the Spanish FORELAB to explore ways in which we might build links between our national associations. In October this year, ELA will be teaming up with the American Bar Association for a one-day event on cross-border employment law. Meantime, we are hosting employment lawyers from India, China and Russia in London this year for discussions on developments in employment laws in those jurisdictions.

overtime, maternity and anti-discrimination provisions) for assigned temporary workers are no less favourable than those offered to employees recruited directly by the hirer. Temporary workers will also be entitled to equal access to employment, collective facilities and vocational training. The UK Equality Act 2010, and the Bribery Act 2010 are compelling employers to re-visit their policies and procedures, and to adapt generally to important new legal concepts and obligations. Employers have also seen significant changes in Italy, Belgium and France. Russia has introduced a new labour migration regime for highly qualified specialists. Those falling within the remit of this new regime will be entitled to a number of benefits not available to those falling within other immigration categories. For example, highly qualified specialists will be treated as tax residents and will be eligible to use the 13% personal income tax rate from day one, as opposed to other foreign employees who will need to spend at least 183 days in Russia before switching from the 30% non-resident rate.

In New Zealand, the Employment Relations and Holiday Act implemented several key workplace changes for employers, particularly in relation to trade union rights, sick leave and annual leave. While in China, the PRC Social Insurance Law goes into effect in July. It establishes five new social insurance systems basic pension insurance; basic medical insurance; work-related injury insurance; unemployment insurance; and maternity cover. And the All China Federation of Trade Unions continues to intensify its efforts to unionise foreign-invested enterprises and to implement collective bargaining agreements across China. The July issue of Global Business Magazine provides useful insight into these and other developments.

All this activity confirms that employment law is evolving internationally at an impressive rate. The increasing globalisation of business continues to throw up crossborder employment and data privacy compliance challenges for multi-nationals, often involving complex conflicts of law. Local laws are also being implemented continuously across the globe - just a few examples of which are provided below. This year has seen the overhaul of pay governance in the European financial sector. Amendments to the EU Capital Requirements Directive (CRD), known as CRD 3, imposed on a broad range of firms requirements to adopt new remuneration policies and practices with effect from 1 January 2011. And the EU Temporary Agency Workers Directive is likely to change the way in which European businesses structure their workforces - particularly in the UK. From the end of 2011, Member States must ensure that the provision of basic working and employment conditions (for example, remuneration, paid holiday, working hours, December 2011 • GBM • 11

end of year reVieW 2011

ENGLAND 2011 - the path to the future: Increased transparency and sophisticated fiduciary services with competent advice In the spirit of advance disclosure, transparency and tracking of transactions, the UK tax authority, Her Majesty’s Revenue and Customs (HMRC) announced earlier this year an extension of the Disclosure of Tax Avoidance Schemes (DOTAS) provisions to UK inheritance tax (IHT).

Dr Richard Gassmann Principal, head of dispute resolution practice group and member of wealth management group of Baker & McKenzie Zurich, admitted to practice in Switzerland Tel: +41 44 384 12 42 richard.gassmann@bakermckenzie.com www.bakermckenzie.com/ RichardGassmann Baker & McKenzie Zurich Lyubomir Georgiev, LLM Associate, member of Baker & McKenzie Europe & Middle East wealth management steering committee and of global wealth management group, admitted to practice in England & Wales, US Tax Court, Washington, DC (US) Tel: +41 44 384 14 90 lyubomir.georgiev@bakermckenzie.com www.bakermckenzie.com/ LyubomirGeorgiev

Consequently, this mandatory disclosure regime applies where property is, at some stage of a scheme or arrangements, transferred into trust and the IHT entry charge on such transfers is extinguished, reduced or delayed. Schemes existing as of 6 April 2011 are exempt from this disclosure as are schemes involving immediate postdeath interest, a transitional serial interest, a disabled person’s interest, a trust for a bereaved minor, or an age 18-25 trust. Under the scheme reference number (SRN) system, the ‘promoter’ (which could include a trustee or its adviser) of an IHT scheme will be provided with an SRN by HMRC when the scheme is disclosed. The promoter must provide the SRN via form AAG 6 (IHT) to any person (eg, the client) to whom the promoter provides, or has provided, services in connection with the disclosed scheme or any scheme that is substantially the same. This must happen within 30 days of either being provided with the SRN or becoming aware of any transaction that forms part of the scheme, whichever is later. The scheme user receiving an IHT advantage must include the SRN and other information on an IHT account (form IHT100) or on form AAG 4 (IHT). One scheme that can eliminate IHT and that has been approved by HMRC is the Qualifying Non-UK Pension Scheme (QNUPS). It is a pension product that is likely to continue on the path of increasing popularity with UK-domiciled persons and persons deemed domiciled for IHT purposes. The QNUPS must be recognised as a pension scheme in the non-UK jurisdiction where it is established. The QNUPS requires asset management and fiduciary services for the life of the client after the assets are contributed to the QNUPS free of IHT. The scheme also preserves the long-term relationship with the client lasting until the assets pass upon the client’s death, again free of IHT. As offset to mandatory disclosures and threats of criminal prosecutions and civil tax fraud investigations, HMRC has an ongoing voluntary UK tax disclosure facility, the Liechtenstein Disclosure Facility (LDF), available generally to persons with existing or newly established Liechtenstein connections no later than April 2015 (unless extended further by HMRC). Where the trustee provides services to a client who

12 • GBM • December 2011

may have past due UK taxes, the LDF is a favourable and relatively fast avenue of assisting the UK client (such as the trust settlor or beneficiary) to regularise their tax affairs as soon as practicable. The trustee could establish the requisite Liechtenstein connection via an underlying Liechtenstein bank account, establishment, company, insurance policy, etc. Alternatively, a trust with a majority of Liechtenstein-based trustees could also serve as a meaningful connection. Then, in principle, the LDF will be available for all unpaid UK taxes on any of the client’s assets or interests as soon as the connection is established. HMRC has provided assurances against criminal investigations in cases of such full, accurate and unprompted disclosures. Until the LDF disclosure registration is done, the government of Liechtenstein may and is expected to decline any request made under the Tax Information Exchange Agreement (TIEA) with the UK if HMRC seeks to obtain information on a Liechtenstein assets, account or structure. The LDF process above is also available to the trustee if in its fiduciary capacity it has unpaid UK inheritance, income or capital gains tax liabilities. Such disclosure opportunities are of particular importance in light of the decision earlier this year of the Court of Appeal in Pitt v Holt and Futter v Futter [2011] EWCA Civ 197. The decision corrected a perceived misunderstanding of the rule in Re HastingsBass about the court’s power to set aside trustee’s exercise of discretion or power when its effect was not intended. Accordingly, the exercise of the trustee power will be void and ineffective if there was fraud on the power or if the exercise was otherwise beyond the trustee’s powers. In contrast, the exercise of the power will be voidable by the beneficiary who was adversely affected if the trustee has breached its fiduciary duties (eg, disregarded relevant considerations or considered irrelevant considerations). If the exercise of the power was to achieve tax benefits, the trustee will not be liable if advice was taken from a qualified and competent tax adviser. Any resulting unforeseen tax liabilities will be a consequence (and not a mistake as to the legal effect of the transaction or as to an existing fact that is fundamental to the transaction). Consequently, the court will not set aside the voluntary transactions involved. Losses due to erroneous tax advice will need to be recovered via litigation against the trustee and/or the lawyer involved. The LDF disclosure mentioned above might help alleviate such losses in certain cases.

USA Jennifer Jordan McCall 650 233 4020 jmccall@pillsburylaw.com

United States Federal Estate and Gift Tax Laws for 2011-2012 On 17 December 2010, US Congress passed the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the Tax Relief Act), which included new federal estate and gift tax laws applicable during 2011 and 2012. These laws provide opportunities to transfer assets to desired beneficiaries at a tax cost that is significantly lower than under the tax laws prior to 2010. The following is a brief summary of the new US federal estate and gift tax laws in effect for 2011 and 2012. Estate and gift taxes The Tax Relief Act establishes a $5m estate tax exemption (the applicable exclusion amount) and a 35% maximum federal estate tax rate, applicable from the beginning of 2010 through the end of 2012. However, the estates of decedents who died during 2010 have the option to elect out of the estate tax laws under the Tax Relief Act. In so choosing, the estate would be subject to no federal estate tax, but all inherited property would be subject to modified carryover basis for income tax purposes. The federal estate and gift tax exemption amounts are unified under the Tax Relief Act, resulting in a $5m dollar gift tax exemption applicable to gifts made in 2011 and 2012. The gift tax rate during this time is 35%. Allocation of available gift tax exemption during one’s lifetime will reduce the estate tax exemption amount available upon death. Even if a person has already made taxable gifts and allocated the full $1m of the prior maximum gift tax exemption amount, such person will now have a ‘new’ gift tax exemption of $4m in 2011 due to the increase in the gift tax exemption to $5m under the Tax Relief Act.

spouses. The portion of the $5m applicable exclusion amount not used by a deceased spouse’s estate may be used by the surviving spouse. However, under the Tax Relief Act, in the case of multiple marriages portability is limited to only the most recently deceased spouse. In order to take advantage of this rule, the executor of the deceased spouse’s estate must affirmatively elect portability on a timely filed estate tax return. If portability ‘sunsets’ at the end of 2012, as the Tax Relief Act provides, this benefit will be lost, therefore reliance upon portability for estate planning purposes is risky. Generation-skipping transfer taxes The US federal government levies an additional tax on gifts to persons who are more than one generation below the person making the gift (ie, a gift from a grandfather to his granddaughter), called the generationskipping transfer (GST) tax. The GST tax exemption and tax rate in 2011 and 2012 are equal to the applicable exclusion amount and maximum estate tax rate: a $5m GST exemption; and, a 35% GST tax rate. Allocation of GST exemption is automatic in some cases unless the donor timely elects out of this automatic allocation. The deadline for electing out of this automatic allocation is the gift tax return due date. It may be advisable to allocate additional GST exemption to a trust that has been allocated GST exemption previously, as there is an increased GST exemption applicable in 2011

and 2012. For example, a trust that has been allocated the maximum available (before 2011) GST exemption amount of $3.5m could receive an additional $1.5m of GST allocation in 2011 or 2012, to exempt additional assets from GST tax. If Congress does not act, the GST exemption amount will return to $1m (indexed for inflation, to approximately $1,360,000) with a GST tax rate of 55% for transfers made starting in 2013. Therefore, 2011 and 2012 provide an opportunity to make gifts to grandchildren and descendants of younger generations while the $5m exemption is in place and a lower 35% rate is applicable. About Pillsbury’s estates, trusts and tax planning practice Jennifer Jordan McCall is a partner in the New York and Silicon Valley offices of Pillsbury Winthrop Shaw Pittman LLP and is the leader of the estates, trusts & tax planning practice section. Her practice focuses on the representation of individuals, families, foundations, museums and charities regarding domestic and international gift and estate planning. Her clients have included internationally renowned museums and corporations as well as domestic and foreign individuals and fiduciaries of estates and trusts. Ms McCall is a fellow of the American College of Trust and Estate Counsel, where she serves as a member of the Estate and Gift Tax Committee, and has lectured and authored extensively on estate and tax planning.

If Congress does not enact another gift tax law before the end of 2012, the estate and gift tax rate will increase to 55% beginning in 2013, and the estate and gift tax exemptions will return to $1m. Therefore, 2011 and 2012 are opportune years to make gifts of cash or other assets, either outright or in trust, if financial circumstances permit and one is so inclined. Portability for spouses The Tax Relief Act also establishes portability of the applicable exclusion amount between December 2011 • GBM • 13

end of year reVieW 2011

GLOBAL PwC Yasar Jarrar Partner Tel: +971506407281 yasar.jarrar@ae.pwc.com www.pwc.com

The future of government Around the world, governments are faced with new demands, increased expectations and a fast growing array of new technologies and tools by which such demands and expectations can be met. This is particularly striking in times like the ones we are living, as the emergence of global challenges (eg, climate change, water management, migrations, and global governance) combine with a deep economic crisis. Beyond the traditional pendulum swings of big versus small government (the public sector being called to the rescue when the economy suffers, and being urged to ‘get out of the way’ when conditions improve), we see in all parts of the world an unprecedented wave of new ideas about what government could and should do, and how. Against this new and rapidly changing background, and in the face of growing global and systemic challenges, the institutions and governments inherited from the 19th Century (dominated by the importance of stabilising nationstates borders) are losing relevance and effectiveness. Over the past two years, the World Economic Forum (Switzerland) established the Global Agenda Council on the Future of Government. During our meetings, we debated these issues and their potential consequences: how do all these phenomena affect our ability to address current and future global issues, and how can government be reshaped and rejuvenated to help us do it? Today, our governments are in danger of becoming irrelevant. There are four ‘inconvenient truths’ about government. First, the future of government is not anymore what it used to be: basic ‘public functions’ have been re-defined already, as various combinations of public and private entities have been tested around the world (in education, in health, even in the military and in tax matters). Second, the future of government is less and less in the hands of governments alone technology (in particular, the Internet and social networking) have empowered ordinary citizens by offering them a way to make their voices heard, and to challenge both leaders and wannabes about their ability and

14 • GBM • December 2011

willingness to address public concerns and requests. Government 2.0 is a transformative process to be reckoned with. Third, definitions have changed, and so have expectations from governments - innovative government has ceased to be an oxymoron, and sustainability is now understood beyond the somewhat limited scope of environmental sustainability: socially sustainable, demographically sustainable, economically sustainable and politically sustainable proposals are now expected to emerge from a much more open process in which governments, business and citizens can actively contribute. Finally, information technologies are opening new possibilities to move mankind closer to ‘global democracy’, through higher degrees of inclusion and participation, and higher levels of transparency and accountability in particular. However, they also raise new issues (privacy, security, cyber-criminality and cyber-terrorism, for example) while not eliminating the need to address long standing ones (such as inequality in access to information infrastructure and services). Government of the future will need to continuously prove relevant, efficient and coherent: relevance will imply speed and responsiveness to rapidly changing conditions and citizens expectations; efficiency will require accountability and transparency, as citizens will demand more and more visibility in the ways in which public resources are being used; and, coherence may prove the biggest of those three challenges. As new communication tools keep spreading and gaining in sophistication, ‘good ideas’ will continuously emerge from a growing number of sources, governments will remain the ‘chamber’ through which arbitrages need to be made among such ideas and proposals, which will require that somehow, the authority of its leaders be recognised and accepted. In this context, we need a new form of leadership in the public sector to drive Government 2.0. This poses a huge challenge in governments around that world - how to attract and retain the best talent and nurture this new form of dynamic public sector leader?

The future is now and there is an urgent need for ‘new’ leadership for government excellence. The key challenge impacting levels of innovation and learning in government is organisational culture and public sector adversity to change. The ‘new’ leadership has an important part to play in this regard, as it provides a vision and cultivates an organisational culture that embraces positive change towards the achievement of that vision. In order to maintain the fine balance between the creation of public value and achieving greater efficiency, government leaders are required to combine strong personal commitment and passion with out-of-thebox conceptualised thinking. While learning from best practices in the private sector is important for drawing applicable lessons, government leaders need to recognise the fundamental differences between public and private organisations and their intended outcomes. Future government leaders must have a clear understanding of the performance anatomy of the public sector along with a strong vision for the future that is citizen-centric in all respects. While the former will allow future government leaders to navigate public sector organisations, employees, citizens and stakeholders, the vision will ensure that the end goal is clear and not lost in the journey. Furthermore, future government leaders must recognise the increasing level of collaboration between different sectors of society and leverage on multi-stakeholder partnerships to create public value.

GHANA Accra Office No. 12 Airport City Una Home, 3rd Floor, PMB CT42, Cantonments, Accra Tel:+233(0)302761500 Website: www.pwc.com/gh

Takoradi Office Plot No.51, Airport Ridge, P.O.Box TD274, Takoradi, Ghana Tel:+233(0)312028416 Fax:+233(0)312028410 www.pwc.com/gh

PwC 2011 Business Effectiveness and Benchmarking Survey This survey, due to be launched in December 2011, is aimed at providing the Ghanaian business community with a database of benchmarks relevant to the various areas of a business enterprise. As a valuable source of insight, overtime, it will help to identify market best practice in Ghana. The survey will benchmark companies in the following areas of their business: • People (span of control & diversity) • Business insights (working capital , forecasting, etc) • Finance function and processes • Systems • Internal audit • Governance and Compliance • Corporate Social Responsibility • Manufacturing and Inventory (if applicable)

network with regard to global trends and best practices in these business areas.

• Improved process flow and efficiency resulting from a business process review

During the launch of the survey, a general survey report will be publicly available, showing the general trends emerging from the survey, insights from global best practices and examples from world-class

• Increased effectiveness of cash management through improved reporting, budgeting and effective cash management

companies. The survey results are intended to be viewed as a starting point for further discussions, rather than a conclusive assessment of participants’ performance. In time we anticipate that this document will serve as a guide to decision making within businesses in Ghana.

• Increased shareholder value through improved information for decision making • Improved staff moral through the appropriate matching of full-time equivalents to workload This survey is anticipated to be conducted every other year, and is expected to become a trusted source of industry and business insights for Ghana.

It is expected that discussions to interrogate the survey results, and subsequent corrective action to improve low rankings, will yield benefits to participating companies. These benefits include:

The survey also will consider Subject Matter Experts’ views from around the global PwC

December 2011 • GBM • 15

luxemBourG CarBon Credits funds rePort

luxemBourG CarBon Credit funds rePort Carbon investment vehicles Since early 2007, carbon investment vehicles (CIVs) have set-up their domicile in Luxembourg, stemming from the long international negotiations that started in Rio de Janeiro in 1992 and subsequently led to the Kyoto Protocol in 1997. Restrictive carbon reduction objectives were set to signing countries by the Kyoto Protocol, which has also implemented mechanisms, such as the clean development mechanism (CDM), to allow signing countries to achieve their targets. Overview of the ‘compliant market’ Within the framework of the UNFCCC (United Nations Framework Convention on Climate Changes), the CDM allows developed countries to reach their carbon emission reduction objectives by reducing their carbon emissions outside their national territory, giving them some flexibility on how they meet their limitations. In other words, under the CDM, an industrialised country finances emission reduction projects in developing countries to earn, in exchange, carbon credits called certified emission reductions (CERs), each equivalent to one ton of carbon. Several types of projects are registered under the CDM, including, among others, wind or hydropower, methane capture or landfill gas recuperation. There are currently 3,557 registered CDM projects having issued in total 759,784,805 CERs, meaning a carbon emission reduction in excess of 759 million tons. These CERs are being traded and sold by emitters from industrialised countries, within the European Union Emission Trading Scheme (EU ETS). Launched in 2005, the EU ETS is currently the largest emission trading scheme in the World to reach Kyoto Protocol objectives - other carbon exchange markets are in place in states inside the Kyoto Protocol (Japan, Great-Britain) or outside (California, Australia), implemented by the EU. The EU ETS currently concerns energy producers and industries that are collectively responsible for close to half of the EU's carbon emissions. In 2013, EU airlines will join the EU ETS. Under the EU ETS, these large carbon emitters have to monitor their carbon emissions resulting from their production, as they are obliged, every year, to return an 16 • GBM • December 2011

amount of carbon credits to their local government which is equivalent to their carbon emissions that year. Concretely, the EU ETS emitters receive an initial allocation of carbon credits (named European Union Allowances or EUAs) from EU member states’ governments, corresponding to their emission targets. Whereby they do not reach such targets, the EU ETS emitters may either purchase EUAs from other EU ETS emitters that have decreased their emissions compared to their assigned target, or CERs issued by projects in developing countries registered under the CDM. By way of illustration, in case the carbon limitation emission of an EU ETS emitter A is set at 100 tons, it will be allocated 100 EUAs for that year by the relevant EU member state’s government. If the effective carbon emission resulting from its production for that year reaches 105 tons, EU ETS emitter A may either purchase five EUAs from another EU ETS emitter, or five CERs resulting from CDM projects (this illustration does not take into account the limited use of CERs within the EU ETS). These carbon credits, being CERs or EUAs will be transferred to EU governments at the end of each reference period to be officially destroyed. Within the EU ETS, final buyers are emitters purchasing carbon credits to comply with the current environmental legislation, and hence the features referred to previously can be qualified, for the purpose of clarity, as the ’compliant market’. Overview of the voluntary market Beyond the compliant market, voluntary emission reductions (VERs), being the voluntary market equivalent of the CERs awarded under the CDM, are typically purchased by businesses and individuals seeking to offset their own carbon emissions. Reducing carbon emissions for ethical reasons or good press purposes is becoming a

trend in the business world and in the day-today life of environment-cautious individuals. By way of illustration of this trend, the voluntary carbon emission reduction market is estimated at US$414m, with an expected growth of 20% per year until 2020. Indeed, business corporations promote carbon emission reduction as a major objective to influence households’ consumption. Reaching this target is nevertheless only possible by implementing carbon reduction measures (decreasing transportation, packaging, etc) and to appeal to voluntary carbon compensation. VERs are carbon credits provided by emission reduction projects that have attained voluntary third party certification standards but have not been certified within the CDM and are then not yet tradable within the EU ETS. VERs tend to be awarded by smaller scale community-based emission reduction projects that cannot afford to go through the CDM approval process. These projects may take the form of management and rehabilitation of tropical forests in countries like Brazil or Indonesia. Forest management covers, among others: aforestation, namely the establishment of a forest in an area where there was no forest; reforestation, hence the re-establishment of forest, either naturally or artificially; and, avoiding deforestation. Voluntary third party certification standards, promoted and designed by several nongovernmental organisations (NGOs), certify that VERs issued from these projects ensure genuine, quantifiable and permanent carbon capture and sequestration within managed forests. The quality of a VER also depends on the positive social human impact the project may have on local communities living

in these forests. Indeed, these communities are usually the first concerned by the preservation of their land. Luxembourg: the CIV centre of excellence Having attracted fund initiators from all over the world, Luxembourg is Europe’s leading centre for the incorporation of investment funds. Since the introduction of the SICAR (Société d’investissement à Capital à Risque) and SIF (specialised investment fund) laws, respectively in 2004 and 2007, Luxembourg is the place of choice to launch sophisticated investment funds meeting the specific needs of private equity funds including carbon finance. A wide range of corporate vehicles in Luxembourg are suitable for structuring compliant or voluntary carbon investment, being regulated (SIF, SICAR, etc) or unregulated (securitisation vehicle, commercial company, trust, etc). In kind dividend distribution of carbon credits by Luxembourg CIVs A major competitive advantage of Luxembourg as domicile is the ability for a CIV to distribute dividend in kind, namely carbon credits, directly as remuneration from the CIV to its investors. As a result,

CIV investors may be carbon credits buyers, who, in return for their investment, will receive carbon credits traded directly by the CIV, hence benefiting from the waiver of intermediaries, risk mitigation offered by an investment vehicle, and the collective use of the skill of a specialist carbon investment manager. Compliant or voluntary CIV at a glance A compliant CIV contracts directly with project developers implementing carbon emission reduction projects registered under the CDM. This allows the CIV to purchase, at an agreed price, the future carbon credits to be issued by the project once they have been certified by an auditor supervised by the UNFCCC. Once physically delivered to the CIV, carbon credits may be sold to EU compliant buyers needing additional carbon credits to reach their emission reductions target, or to financial institutions acting as intermediaries. A voluntary CIV usually invests by acquiring land or forests that require management and development costs to comply with the third party certification standard in place. Meeting these requirements allows the CIV to receive, upon an agreed frequency and following an audit, carbon credits corresponding to the carbon storage that has been possible thanks to forest management financed by the CIV. CACEIS, your partner to set-up a CIV The above processes and carbon instrument

specifics are features that CACEIS deals with daily as service provider to CIVs. CACEIS has developed a strong expertise in this domain since 2007, supporting CIVs investing both in the compliant and voluntary markets, through a dedicated private equity business unit, including carbon finance experts. Currently, CACEIS services six CIVs (Luxembourg and foreign). CACEIS is a leading securities services provider, held at 85% by Crédit Agricole and 15% by BPCE Group, with a top ranking position in the investment fund servicing business in Europe and worldwide, a domain in which it has been active for over 25 years. Full service or modular solutions are offered by CACEIS to carbon investment managers wishing to establish a CIV, services spanning from company secretary and domiciliation, to investor services, accounting, financial reporting, depository and custody. CACEIS’ expertise in CIVs enhance the carbon investment managers’ ongoing development and management of its CIV; the manager will be able to fully delegate its middle and back office functions to CACEIS, including the understanding and analysis of agreements in place, and valuation of carbon credits in stock or purchased as forwards. Moreover, CACEIS will manage, on behalf of the CIV, carbon credit transfers from sellers to CIVs, and from CIVs to buyers, via an online fully secure access to National Carbon Registry accounts (carbon credit flows are registered through National Carbon Registry accounts).

Figure one: Compliant and voluntary CIVs (voluntary in grey)

CACEIS Bank Luxembourg Nicolas Palate Senior Relationship Manager nicolas.palate@caceis.com Phone +352 4767 2356 www.caceis.com

December 2011 • GBM • 17

... and climbing.

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Carbon fund structuring: Challenges and pitfalls Despite a difficult economical and political backdrop, carbon finance is still an area of growth. From the start of 2013 and until 2020, the EU will enter into the third phase of the EU Emission Trading Scheme (EU ETS) [Directive 2009/29/EC]. The EU Commission has announced it will be continuing to toughen its greenhouse gas (GHG) reduction targets constraining European companies from the compliance sector (electricity, steel and cement producers) to seek new carbon credits sourcing solutions. Without a doubt, Luxembourg schemes will continue to be shortlisted by carbon finance managers among the possible domicile for their new generation of carbon funds. Why using a fund for investing carbon assets? Carbon credits are tradable units representing the emissions reduction of one ton of carbon dioxide or the mass of another greenhouse gas with a carbon dioxide equivalent. Carbon credits include: emission reduction units (ERU) from joint implementation projects (JI); voluntary emission reduction (VER) from emission reductions projects not covered by the Kyoto Protocol; certified emission reductions (CER) arising from clean development mechanism [article 12 of the Kyoto Protocol]; and, derivative products linked to emissions reduction. The interposition of an investment fund between the end-investors and the creation of the carbon credits can be beneficial in numerous respects. The value of this asset class remains uncorrelated to traditional equity or bond markets, but they are highly relying on political decision. In addition, the CDM programmes for CERs in Asia and the BRIC countries are not all offering the same quality/number of credits. The pooling of a greater number of investors through a single fund may help mitigate or segregate the counterparty risks throughout the value chain (project developers, the carbon asset manager and/or the other investors). Last but not least, the sourcing of carbon credits needs to be driven by carbon finance experts having sufficient experience to select the projects and negotiate the emission reduction purchase agreement (ERPA) in that very particular area sector. The carbon finance asset management firm, a regulated entity, will charge a fee to the fund that can be shared between the investors.

A carbon fund will seek to maximise its returns of asset portfolio by either: re-selling the carbon credits generated from the emission reduction programs from CDM or JI on the secondary carbon market and to distribute the disposal proceeds to the investors; and/or, to invest into projects on the primary market in order to distribute the credits directly to the investors. This is the typical business model of a compliance buyer. The carbon fund can therefore be set-up under numerous structures: a corporation, a contractual fund, a trust, or even a securitisation vehicle. The structuring option will often rely on the nature of the investor profile depending on tax, regulatory and legal driving factors. Innovative fund structures Over the past decade, most of the Luxembourg carbon funds were established under the form of SICARs (société d’investissement à capital risque) or SIFs (specialised investment fund). Obvious merits are put forward to use a regulated fund: tax efficient, permit cash in-outflow in a flexible manner, possibility of using ring-fenced compartments, easier to market with the stamp ‘regulated fund’ and safeguards provided by the fund auditors, the depositary bank and the Luxembourg regulator. While such Luxembourg carbon funds suit to traditional investors, these funds have shown limits and constraints for compliant buyers whose primary goal is to receive the credits preferably ‘at cost’ in return of their initial cash investments in the fund. First, a return in-kind will be regarded in the country location of the investor as a return in capital subject to possible taxation of capital gains. Second, the acquisition by the fund through in-kind distributions might often give rise to VAT leakage at the level of the fund if the transfer of, for example, CERs to the investors does not entitle full recovery of the input VAT incurred (ie, reverse charge minus 15%) on the acquisition of the carbon credits. Third, the sourcing of the carbon credits through a SICAV (société d’investissement à capital variable) or a SICAR will also often trigger domestic accounting hurdles if the carbon credits sourced via redemption in-kind cannot be recorded as a supply. Ultimately, the fund regulation and the Luxembourg regulator’s practice are not particularly inclined to accept returns of carbon credits if the redemption value is too far from the fair value.

The carbon vehicle for compliant buyers shall preferably be a look-through entity from a tax and accounting standpoint. Depending of the country location of the investor, Luxembourg governed trust schemes (fiduciary contracts) might address and solve most the above issues. The Fiduciary agent shall be eligible under the Luxembourg fiducie Law of 27 July 2003 and the contractual provisions of the trust arrangement will often replicate the typical mechanics and rules of a regulated investment fund. What’s next? The Kyoto Protocol period is due to end in a year. The future of carbon finance is filled with question marks - is the cap-and-trade model efficient enough to prevent long-term average global temperatures from rising more that 2ºC above pre-industrial levels? Will the clean development mechanism going be maintained and if so, under which form? Whatever the talks of the next Durban will look like, the EU is likely to be continuing to exercise a steep pressure to third-countries to foster equivalent ETSs to the EU ETS that oblige major green house gas emitters to pay for permits within the EU or outside under an equivalence systems. Luxembourg legal practitioners will continue to provide the carbon finance market participants with efficient solutions.

Laurent Fessmann Partner Investment funds Baker & McKenzie 12 rue Eugène Ruppert 2453 Luxembourg Luxembourg Tel: + 352 26 18 44 205 Fax: + 352 26 18 44 99 laurent.fessmann@bakermckenzie.com www.bakermckenzie.com

December 2011 • GBM • 19

luxemBourG CarBon Credits funds rePort

With the United Nations’ climate change conference getting underway at the end of November in South Africa, climate change mitigation will again take centre stage in the international press. Ahead of the conference, UN secretary-general Ban Ki-moon has increased pressure on world leaders to launch the Green Climate Fund at the upcoming conference. While raising the hundreds of billions targeted for the fund will be challenging to say the least, the multi-billion euro market for greenhouse gas emission reductions that has emerged over the last decade has already led to the establishment of dynamic carbon credit fund markets. The carbon credit fund market has developed in response to the recognition that market-based instruments are essential for mobilising the scale of public and private financing needed to achieve a global shift towards increased reliance on renewable energy. Europe has long been a frontrunner when it comes to tapping into market-based instruments to mitigate climate change. To date, some 800 million tonnes of CO2 (equivalent in certified emission reductions with a current market value of close to €6bn) have been generated and traded under the Kyoto Protocol. First Climate AG has been a key player on international carbon markets since their inception, and has developed expertise spanning the entire carbon credit value chain, including clean energy finance, carbon asset development and trading, climate neutral services and carbon investment management through First Climate Asset Management S.A. First Climate Asset Management S.A. offers carbon and clean energy fund structuring, investment advisory and management, and fund administration. Based in Luxembourg, the firm benefits from Luxembourg’s favourable legal and taxation framework and reputation as a respected global centre for fund domiciliation offering a high degree of transparency and quality control. With the country increasingly becoming known for its range of alternative investment classes, First Climate’s funds are well positioned to garner the attention of fund managers attracted to the country’s supportive policies. A suite of established carbon funds First Climate’s experience in carbon markets

20 • GBM • December 2011

has led to it being selected as the investment adviser to the Post 2012 Carbon Credit Fund established by the European Investment Bank, Caisse des Dépôts, Instituto de Crédito Oficial, KfW Bankengruppe and the Nordic Investment Bank. The Post 2012 Carbon Credit Fund purchases post-2012 carbon credits from all major clean development mechanism markets and currently has €125m in assets under management. First Climate Asset Management is also investment adviser to Climate Change Investment I and II (CCI I and CCI II), two investment vehicles incorporated under Luxembourg law as SICARs (societé d’investissement en capital à risque) and registered with the Luxembourg Financial Supervisory Authority (CSSF). Their objective is to generate long-term capital growth by originating, structuring and commercialising carbon assets sourced from a diversified portfolio of project-based emission reduction certificates. Currently, CCI I has €54m in assets under management, CCI II has €39m in assets under management. They are structured to exist until 2013 and 2016, respectively, with a limited possibility of extension. As a reliable buyer of carbon credits, both funds have proven attractive to project developers and owners, establishing a framework for attractive returns.

New markets require integrated expertise Navigating carbon market risks calls for much more than sound financial analysis. It calls for fund advisers with an excellent understanding of the broader political, regulatory and macroeconomic context: Which countries are ramping up support for offsetting? What types of projects produce the highest quality CERs? Where is the economy heading and what will this mean for industrial production and carbon credit demand? First Climate’s international presence and in-house sourcing of the credits that compose its funds make the company uniquely qualified to meet these challenges. Project managers all over the world not only assess the facilities issuing CERs, they also have an intimate understanding of the local political landscape and, importantly, a direct line of communication to First Climate’s Luxembourg-based fund managers. Equipped with this first-hand knowledge, the fund managers then have the tools they need to build financial structures with the innovation to tap into the potential of carbon and clean energy markets based firmly on sound analysis that ensures their products offer long-term stability; and play a crucial role in combating climate change.

And more funds to come… Following in the footsteps of the Post 2012 Carbon Credit Fund is the International Carbon Compliance Initiative, a buying pool that will buy certified emissions reductions (CERs) for delivery until 2020. Its unique and innovative structure allows for the cost and tax efficient procurement and distribution of carbon credits, while also mastering any accounting issues at investor level. First Climate has also recently launched a fund investing directly in the production of carbon neutral fuel in the shape of wood and agricultural pellets - First Biomass. The market for pellets to produce industrial electricity is currently estimated at 15 million tonnes. It is expected to at least triple by the year 2020. First Biomass Limited is offering shares and subordinated debt in the company as a precursor to an initial public offering (IPO) on the Australian Stock Exchange. Committed capital of AU$100m is being sought.

Ralph Broedel Managing director First Climate Asset Management S.A. 4, Place de Strasbourg 2562 Luxembourg Phone +352 27 48 58-0 Fax +352 27 48 58 58 ralph.broedel@firstclimate.com www.firstclimate.com

Carbon and Clean Energy Funds Advisory Management Administration

dairy

holy

profitable

Methane avoidance and biogas projects are just one part of First Climate`s high-quality carbon credit portfolio.

Carbon Investment Management

Carbon Asset Development

Sales and Trading

www.firstclimate.com

Project Finance

Climate Neutral Services

luxemBourG CarBon Credits funds rePort

2012 - a make or break year for the carbon credit market With the Conference of Parties to the UN Framework Convention on Climate Change to be held in Durban (South Africa) in December 2011, the focus of the world will once again be on the issue of Carbon Finance. It is, of course, not possible to discuss carbon finance without mentioning the Kyoto Protocol, a treaty requiring developed countries to reduce greenhouse gasses that came into force in 2005 after it was adopted in 1997. It introduced a commitment period that commenced in 2008 and will end in 2012. During this period, participating countries pledge to reduce greenhouse gasses by a pre-determined ratio relative to emissions in 1990. With the end of the first commitment period fast approaching, the carbon market growth seems to have reached a temporary plateau as uncertainty prevails over whether a second commitment period will be agreed on at the upcoming conference in Durban. This uncertainty has specifically impacted the clean development mechanism (CDM), which is a measure defined by the Kyoto Protocol that lets wealthy countries offset emissions by paying poor countries for polluting less. With spectacular growth during the period from 2005 to 2008, there was a sudden slowdown in the growth trend, with the carbon market closing 2010 slightly lower than 2009 on roughly $142bn (World Bank annual report ‘State and Trends of the Carbon Market 2011’). Investors in the carbon market have historically gained access to the market through a variety of carbon investment vehicles (CIVs). These vehicles include structures that directly purchase carbon credits on the primary market from projects reducing greenhouse gas emissions, structures that directly finance such projects, structures active on the voluntary market and structures implementing trading strategies on secondary carbon-emissions markets. The motives behind investing in these vehicles range from speculative investors (who wish to profit from the possible rise in carbon prices on the market) through to compliance buyers who participate in the Kyoto Protocol and are obliged to reduce greenhouse gas emissions. Why Luxembourg Luxembourg is a well-known investment

22 • GBM • December 2011

funds hub and the second largest place of domiciliation for investment funds after the US. Luxembourg can attribute its attractiveness as a place of domiciliation to factors such as the existence of an efficient and well-established regulatory framework. What further aids fast developing industries such as the carbon markets is that the local regulator, the Commission for the Surveillance of the Financial Services Sector (CSSF), tends to follow a pragmatic approach and is supported by a responsive government. With careful planning, Luxembourg can also prove to be very attractive from a tax perspective. A wide range of legal forms already exists that are suitable for CIVs. A few examples of these include lightly regulated mutual funds such as specialised investment funds (SIFs), investment company in risk capital (SICAR) and undertakings for collective investments regulated by part II of the 17 December 2010 law. The existence of appropriate investment vehicles and regulatory structure is further reinforced by the presence of a highly skilled and educated workforce with experience in the carbon credit fund industry. The vast majority of world financial institutions and law firms are present in Luxembourg, offering world-class fund administration services from a global perspective. Luxembourg also has very strong anti-money laundering and fraud legislation in place imperative for any market as large as that of carbon credit trading, which frequently attracts white-collar criminals. Why Deloitte Carbon markets may be a relatively new topic, Deloitte member firm practitioners have already gained substantial experience in this field. Deloitte member firms around the world have provided services in emissions verification, CDM validation, emission allowance valuation, emissions trading internal controls, accounting and tax advice for CDM project developers and emissions traders, carbon valuation for M&A advice to insurers with respect to climate change impact and advice to governments on carbon policy development. Carbon markets create needs that cut across conventional service offerings, and member

firm clients can benefit from receiving integrated services across audit, risk management, tax, consulting, and financial advisory. An integrated approach allows the proper addressing of risks that may be more pronounced in the carbon market than in those of the traditional markets. Risks involved in the trading of carbon credits have recently been highlighted in the massive frauds perpetrated in the carbon markets. Some of the main risks that need to be addressed in CIVs, and that will be tested during the audit of financial statements of such entities investing in carbon markets, include the existence of investments, the valuation of those investments, as well as the existence of transactions (whether transactions which occurred during the period under review are valid). Particular attention has to be paid to the method of valuation adopted, and whether an investment vehicle uses the quoted market prices of the compliant markets, or if investments are valued using the prices available on the voluntary market. It is the latter that raises the largest uncertainties around valuation of investments in the accounts of the investment vehicles. With more than 1,100 staff (of which about 10% focus on alternative investments) across the audit, tax and consulting service lines in our Luxembourg office, clients can be assured that a close interaction of staff will result in an efficient and effective provision of services. Deloitte Luxembourg is also an active member of the Association of Luxembourg Fund Industry (ALFI), as well as the Luxembourg Private Equity Association (LPEA). Both the ALFI and LPEA are dynamic associations that actively promote and support the carbon finance and sustainable energy sectors.

Deloitte Luxembourg Christiane Chadoeuf Audit partner - private equity Tel: +352 451 452 065 cchadoeuf@deloitte.lu www.deloitte.lu

a whole new world of fund solutions For innovative fund solutions please contact: Colin Stott Manager, Business Development Tel: + 44 (0) 1624 630660 Mob: + 44 (0) 7624 410660 Email: newbus@ifgfund.com IFG Fund Administration (IOM) Limited is licensed by the Financial Supervision Commission of the Isle of Man. IFG Fund Administration (IOM) Limited is a member of the IFG Group plc.

www.ifgint.com

united nations disCuss Human riGHts

1. An overview of Human Rights in Business. Business can have positive and negative impacts on virtually all human rights. For this reason, the United Nations Global Compact – the UN's initiative for businesses that are committed to greater corporate sustainability in the spirit of universal values – calls on businesses everywhere to support and respect internationally proclaimed human rights as its first principle. In recent years, we have come to develop a much better understanding of the human rights challenges and opportunities for business of all sizes, sectors and geographies. The Guiding Principles on business and human rights endorsed in June 2011 by the UN Human Rights Council and the UN Protect-RespectRemedy Framework that they elaborate are helpful in explaining the differentiated roles that governments, businesses and other actors play with regard to human rights, adding much needed conceptual and operational clarity. Among other things, they reinforce that it is governments' role to protect human rights and business' role to respect human rights. The Guiding Principles are also helping to accelerate efforts by business to make the management shifts required to ensure that human rights are respected. The Global Compact's annual implementation survey, which maps the policies and practices of more than 1,000 corporate participants, reveals that human rights remains one of the most challenging sustainability issues for business. With so much human suffering around the world, there are no shortages of calls on business, as well as opportunities, to take action to help improve the situation. The first priority must be to ensure that businesses do not cause or contribute to human rights abuses, through their operations, or through their products or services. An increasing number of businesses are recognizing that innovative core business approaches, strategic social investments, public policy and advocacy, and public private partnerships and other forms of collective action can yield business benefits as well as advance human rights.

2. What role does the UN play in the sector?

united nations discuss Human rights

Various UN entities play a role in the area of business and human rights. For example, the UN Human Rights Council endorsed the Guiding Principles referred to above, helping to reinforce what is required and expected from Governments and businesses. Among other roles, the Office of the UN High Commissioner for Human Rights helps to build government and other actors' capacities in advancing human rights in business. Other UN entities provide instruments or guidance on more specific issues, such as the ILO on business and labour rights, UN Women on gender equality and women's empowerment, and UNICEF on business and children. The UN Global Compact is working with all these agencies, funds and programmes to gather practical solutions and concrete actions by business. The initiative further integrates human rights within its overall concept of corporate sustainability, seeing respect and support for human rights as essential components of the social sustainability of business.

3. How important is it for business owners and leaders to understand Human Rights and in particular legislations and regulations? Advancing awareness that human rights are both an important concern and an opportunity for business 24 • GBM • December 2011

everywhere is a key priority for the UN Global Compact. In addition to the moral case, there is also a strong business case for better human rights performance. For instance, global sourcing and distribution mean that companies need to be aware of potential human rights issues, both upstream and downstream. Further, companies that operate globally are also often visible to a worldwide audience, creating material risks to brand and reputation when things go wrong. Conversely, addressing human rights issues proactively can bring rewards at both the local and the global level. Accordingly, businesses should consider their potential impact on all rights as a strategic priority that is essential to the long-term sustainability of their business. Ensuring that business operations are consistent with the legal principles in the country of operation is of great importance. However, if national law falls short of international standards, companies should strive to meet international standards. Where national law directly conflicts with international standards, companies are not expected to violate national laws. Instead, there may be other ways to support the spirit of international human rights standards. The UN Global Compact’s Human Rights Working Group recently released a Good Practice Note on this dilemma situation (http://www.unglobalcompact.org/docs/ issues_doc/human_rights/Human_Rights_Working_ Group/Conflict_of_Laws_GPN.pdf).

4. What role do Human Rights Lawyers play in this sector? And how important is the work that they do? Among corporate legal counsel, corporate responsibility for human rights remains, in many ways, an emerging field. However, through the design and management of corporate responsibility policies and processes, lawyers can play an important role in helping clients to minimize the risk of adversely impacting human rights while also identifying opportunities in the sustainability field. To increase awareness of the legal issues associated with corporate sustainability, as well as to encourage in-house lawyers to become more engaged in and supportive of their company's sustainability efforts, the UN Global Compact and the International Bar Association (IBA), with the support of LexisNexis, are developing a video “training manual”. Titled Lawyers as Leaders: The Essential Role of Legal Counsel in the Corporate Sustainability Agenda, the video will consist of four separate modules — one each on human rights, labour, the environment and anti-corruption — and will feature remarks from prominent legal experts as well as general counsel who are leaders within their companies on sustainability issues. While the video is directed primarily at in-house counsel, as an introduction to the Global Compact’s ten principles and issues of corporate responsibility generally, Lawyers as Leaders will hold value for any lawyer or student of the law interested in corporate sustainability issues, as well as for those interested in these issues from civil society and other organizations.

5. Is there any other organisation along with the UN that is regarded as leader in the Human Rights sector?

business and human rights. Another example is the Global Business Initiative for Human Rights (GBI), a business-led effort to support the exchange of ideas, challenges and good practices in relation to business respect for human rights. It works with Global Compact Local Networks, the Global Compact Human Rights Working Group, and other key actors to convene business-to-business roundtables around the world. The next GBI Roundtable will take place in November in Malaysia. The UN Global Compact’s Human Rights Working Group is multi-stakeholder in composition and includes members from international NGOs, local civil society organizations, academia, human rights groups, National Human Rights Institutions and business representatives. All are active in the field of business and human rights.

6. Has there been any significant changes in Business Human Rights recently? In addition to the Guiding Principles, we have seen an increase in practical guidance for companies on how to respect and support the human rights of particular groups and in specific contexts. For instance, in March 2010, the UN Global Compact and UN Women launched the Women’s Empowerment Principles – Equality Means Business (WEPs). Informed by real-life business practices and input gathered from across the globe, the WEPs provide seven steps for business on how to empower women in the workplace, marketplace and community. To date more than 250 executives from around the world have signed a CEO Statement of Support to signal their commitment to gender equality and the goals of the Women’s Empowerment Principles. Similar to the Women’s Empowerment Principles, the UN Global Compact has teamed up with UNICEF and Save the Children to provide guidance for business on Children’s Rights. Following an extensive international consultation process, the Principles on Business and Children’s Rights are due to be launched in the first quarter of 2012.

7. Is there any specific case studies you would like to mention? The UN Global Compact and the Office of the High Commissioner for Human Rights publish a business and human rights case study series called “Embedding Human Rights in Business Practice”. Case studies published as part of this series highlight efforts to respect and support human rights and the lessons learned from these efforts. The fourth edition of EHRBP is currently in development and will include case studies on topics such as corporate efforts to combat human trafficking, human rights and supplychain management, and implementation of the Guiding Principles. The development of case studies is a great way to highlight good practices, explore what works and what doesn't work as well, and encourage peer-topeer learning. To review this series of case studies and for other guidance material on business and human rights, please visit http://unglobalcompact.org/Issues/ human_rights/Tools_and_Guidance_Materials.html

The UN Global Compact works with numerous organizations to promote the business and human rights agenda. The Business and Human Rights Resource Center (www.business-humanrights.org) is a vast resource of information on all dimensions of December 2011 • GBM • 25

Country Profile - neW Zealand

Country proﬁle

new Zealand

TAKING FRESH SOLUTIONS TO THE WORLD Versatility, self-reliance and creativity are hard-coded into the DNA of New Zealand. As a young country accustomed to being at the furthest reaches of international trade, the country has developed a unique and vibrant business culture. As technology reduces the effect of geographic isolation, New Zealand companies are taking fresh solutions to clients all over the world. New Zealand is a very straightforward country to do business with. It has a market-oriented economy with a flexible labour market and freely functioning financial markets. A highly efficient agriculture sector is complemented by strong manufacturing and service sectors. The 2012 World Bank Doing Business report ranked New Zealand first in the world for starting a business and protecting investors. The report ranked 183 economies across 11 areas of business life, such as dealing with construction permits, registering property and getting credit. The higher the ranking, the more conducive an economy’s regulatory environment is to starting and operating a business. It is the fourth year in a row that New Zealand has been ranked number one for both starting a business and protecting investors. New Zealand was third (behind Singapore and Hong Kong) in the report for ease of doing business. Extensive deregulation over several decades has reduced many regulatory burdens and created one of the world’s most efficient, competition-friendly economies. The 2011 Index of Economic Freedom, compiled by The Heritage Foundation and The Wall Street Journal, ranked New Zealand the fourth freest economy in the world. It is a strongly trade-oriented society of 4.34 million people that has developed sophisticated infrastructure and policies to support companies that do business internationally. New Zealand is a strong advocate for free trade and was the first developed country to enter into a free trade agreement (FTA) with China in 2008. Since the signing of the FTA, exports to China have grown by 148%. New Zealand also has FTAs with many other nations, including Singapore, Thailand, Australia, the ASEAN nations and Malaysia. Australia and New Zealand have one of the most open economic and trade relationships between any two countries.

26 • GBM • December 2011

While New Zealand has about 0.1% of the world’s population, its economy produced 0.3% of the world’s material output. Compared with the rest of the world, it is one of the richer economies. New Zealanders are generally well educated, healthy, and have a comfortable standard of living. Two of its cities, Auckland and Wellington, feature in Mercer’s Quality of Living top 15. New Zealand has a mixed economy that operates on free market principles. It has sizeable goods-producing and service industries, complemented by a highly efficient primary sector. Merchandise exports were valued at $43.5bn in 2010, up 9.7% from $39.7bn on 2009. The largest increase in export value was in dairy, up 28%. The secondlargest increase was in wood, up 27%. HSBC has predicted that New Zealand’s trade will grow substantially and faster than world trade in the near-term, with volumes growing by 83% in the next 15 years. This represents a change from $52.86bn to $96.97bn. Exports of goods and services account for 28.3% of GDP. New Zealand is an agricultural powerhouse, and the dairy industry is the biggest export earner. An established global industry with an exciting future, New Zealand dairy products account for one third of the international dairy trade, and New Zealand remains the largest exporter of dairy products. Key strengths of New Zealand’s world-class dairy industry are its efficient all-grass farming system, large-scale processing, high research and development investment and creative marketing. Australia is the largest market for exports, with almost a quarter of total exports. China, the US, Japan and the UK are New Zealand’s other top export partners, and trade is predicted to grow with all but Japan over the next 15 years. Exports to APEC economies accounted for 71% of New Zealand’s exports in 2010 and the European Union accounted for 11%. Trade routes are emerging with Argentina, India and Indonesia reflecting the importance of New Zealand as an agricultural producer

with strong trade routes to Asia and South America.

Main export commodities

2010 (NZ$m) 2005

Milk powder, butter and cheese

8,841

4,924

Meat and edible offal

5,058

4,577

Logs, wood and wood items

2,638

1,984

Crude oil

2,126

389

Mechanical machinery and equipment

1,647

1,628

Fruit

1,489

1,212

Fish, crustaceans and molluscs

1,231

1,134

Aluminium

1,065

1,053

Total

40,672

30,618

Dominant import sectors are oil, petrol cars, pharmaceutical and computers. New Zealand’s economy suffered during the financial crisis, but the growth in exports created a strong rebound in the economy during 2010 and the economy is faring well. Nominal GDP grew by 6.5% in 2010. Unemployment stands at 6.5% and manufacturing sales have increased, with manufacturers active in aviation, clean technology, defence, heavy and light engineering, marine, plastics, composites and metals, as well as other industries. The technology sector is now New Zealand’s second biggest exporter, behind dairy. New Zealand technology companies had a 5% increase in revenue in 2011 and passed the $7bn revenue mark for the first time, according to Technology Investment Network (TIN). New Zealand has a reputation for creating high quality and innovative products such as cutting edge clean technology and IT solutions needed for a sustainable and technology-rich future. The country is among the leaders in the world in protecting its natural resources and biodiversity. New Zealand leads global research efforts to mitigate greenhouse gas emissions from primary production and, under recent legislation, became the first country in the world to include agriculture in a domestic emissions trading scheme. It recognises the importance of demonstrating sustainable credentials to people who buy and use our goods, and has strict biosecurity and traceability systems. New Zealand produces up to 75% of its electricity from renewable resources such as hydro, wind and geothermal power. This is targeted to rise to 90% by 2025 as it further harnesses existing resources and utilises emerging energy resources such as biomass and tidal power. New Zealand has a stable democracy, and was ranked second in the world to Singapore for ease of doing business, and was named least corrupt nation in the world in 2010 (in a tie with Denmark and Singapore) by the Transparency International Corruption Perceptions Index.

In 2011, Forbes nominated New Zealand one of the most businessfriendly environments in the world, ranked at number two (up from number five in 2009). New Zealand has a positive economic outlook underpinned by strong commodity prices, rapidly growing trade with Asia, strong links with Australia, historically low interest rates, increased rates of savings and rebuilding following the earthquakes in Christchurch. Commodity exports will always be a critical part of New Zealand’s economy. But in order to grow the tradable sector and raise living standards, there is a need to sell more high-value goods and services overseas. International tourism has grown to become New Zealand’s largest earner of foreign exchange, pumping around NZD9.7bn annually into the nation’s economy. It employs one in ten New Zealanders and is made up of a handful of major publicly listed companies, and between 13,500 and 18,000 small- to medium-sized enterprises. The country received more than 2.5 million visitors in the year ending September 2011. Visitors from overseas were highly satisfied with their holiday experiences in New Zealand in 2009/10, rating them 9.0 out of 10 on average. Activities, the environment and accommodation are the three areas that have the most influence on overall visitor experience. New Zealand’s reputation as a holiday destination relies on its ability to consistently provide world-class visitor experiences with a distinctly New Zealand flavour from a land of mountains and forest, with beautiful coastlines, abundant wildlife and stunning natural landscapes. Yet there is much more to New Zealand than its natural beauty. The country recently hosted the Rugby World Cup 2011 (RWC 2011), the world’s third largest sporting event, spanning 45 days and held in 12 venues across the country. The RWC 2011 brought 20 teams, 900 players and support staff, and tens of thousands of visitors to New Zealand’s shores. The success of the tournament has given proof to New Zealand’s ability in planning for and providing the infrastructure, transport and tourism capability, needed to host such an event and it has highlighted the vast range of holiday and business experiences that visitors to New Zealand can expect. Māori, the indigenous people of New Zealand, have been involved in tourism in New Zealand for many years, and the past few years have seen a renaissance in the types of Māori tourism products on offer. From traditional marae (meeting area) and hangi (meal) experiences, to more contemporary Māori arts tours or eco-tourism products that integrate Māori beliefs and stories, Māori continue to offer unique, authentic tourism experiences that also help keep their culture alive and improve New Zealand’s offering as a tourism destination. New Zealand was recognized in the 2011 Global Green Economy Index, for the second year in a row, as an international leader in promoting green tourism, in part due to the strength of the country’s national quality and environmental tourism accreditation scheme.

www.newzealand.com

December 2011 • GBM • 27

Country Profile - neW Zealand

NEW ZEALAND: SEIZING ITS POTENTIAL, SLOWLY BUT SURELY Located in the southwest Pacific Ocean with Australia as its most prominent neighbour, New Zealand draws from its rich landscape when it comes to its economic foundation. With agricultural and food products as its main trade, and industries such as tourism on the rise, the small country of nearly 4.5 million is starting to experience slight economic growth following a wobbly past few years. Economic pillars International trade plays a vital role for New Zealand, accounting for more than 50% of its GDP. The country’s main partners for both imports and exports are the US, China, Japan, and Australia, with the latter acting as its primary customer and supplier. It depends on imported commodities such as machinery, plastics, petroleum oil, and electronic equipment. Agricultural products and processed foods make up the bulk of exports, with a heavy emphasis placed on dairy, meat, and fruit. Besides also being an important exporter of wood and wool, New Zealand has made enormous strides in both wine production and exportation. As one of the ‘New World’ wine producers, which also include South Africa and Australia, New Zealand has seen its wine trade boom to reach an annual export value of more than one billion New Zealand dollars. While 70% of its wine exports currently end up in Englishspeaking markets, the country is eying the potential offered by its Asian neighbours, with Japan as a primary point for expansion. Furthermore, industry leaders hope to double the current export value of New Zealand wines by 2020.

minister Bill English predicted that the repercussions would erase 1.5% off of the country’s GDP over the next five years. New Zealand also suffers from a substantial ‘brain drain’, with thousands of highlyskilled workers moving to make their living in other countries such as Australia and the UK. With unemployment hovering at 6.4% in 2011 and GDP per capita lying lower than that of its peer nations, many young New Zealanders contemplate life abroad. A national poll conducted earlier this year showed that one fifth of 18-30-year-olds consider leaving New Zealand for long-term, better-paying jobs elsewhere. On the way up Despite being shaken by a variety of factors, New Zealand’s economy is returning to growth. In the wake of the crisis, the official cash rate was slashed from 8.25% to 2.5% and a stimulus plan targeting unemployment, education, tourism, and infrastructure development was instituted. The country also recorded its largest trade surplus ever in April this year, coming in at 1.1 billion New Zealand dollars, or US$890m. One of the top dairy producers in the world, New Zealand has seen its milk powder exports boom as Chinese demand increased following a national food-safety scandal. The World Bank has consistently ranked New Zealand as one of the most businessfriendly nations in its annual index. Currently third on the list, New Zealand trails only Singapore and Hong Kong when it comes to having the infrastructure and regulations necessary for facilitating efficient and easy business operations.

Besides its strong agricultural base and focus on food products, New Zealand counts tourism, textiles, and transportation equipment production as its other economic pillars. The island country’s tourism sector has grown rapidly, with direct and indirect earnings totalling 9% of GDP in 2010.

Despite a tough past few years, New Zealand’s economy is slowly leaving its fragile days behind. As the country continues to register a trade surplus, New Zealand is seizing the promise offered by its natural resources by translating it into both exports and the basis of its tourism industry.

Aftershocks

GlobalTrade.net

The New Zealand economy has been repeatedly rattled over the past few years, first by the global financial crisis and then by a series of earthquakes that hit its southern island. Between 2008 and 2010, New Zealand saw its GDP contract for 18 months, marking its first recession since 1998 and the longest in the nation’s history. Already one of the smallest economies in the OECD, its problems were further aggravated by soaring levels of government and household debt, rocketing inflation rates, and a strong appreciation of its currency.

For more on New Zealand, head over to GlobalTrade.net, the premier network of international trade professionals. We offer a Directory of International Trade Service Providers, with over 20,000 trading companies, agents, and service providers listed. Our knowledge resource also contains more than 18,000 market analyses and business tips on all countries and industries. With over 100 articles and qualified service providers listed on the New Zealand page alone, explore GlobalTrade.net for your international business operations today.

The earthquakes that shook the country’s second-largest city Christchurch in 2010 and 2011 caused an estimated 15 billion New Zealand dollars in damages, or US$11bn. Following the natural disaster, finance

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Lauren Stephenson Content and marketing manager lauren.stephenson@globaltrade.net +33 1 55 27 25 25 www.globaltrade.net Linda Witters Content and marketing assistant linda.witters@globaltrade.net www.globaltrade.net/international-tradeimport-exports/m/c/New-Zealand.html

PRIVATE BANKING PROFILE - NEW ZEALAND FOCUS Bank of New Zealand (BNZ) Private Bank takes a personal approach to the management and enhancement of New Zealanders’ wealth. BNZ Private Bank looks after personal and family wealth. As the name suggests, it’s a discreet service with an emphasis on providing investment advice, as well as finance and banking services.

These are accessed through our team of private bankers, who can easily collaborate with any legal and accountant representatives, whether they are based in New Zealand or offshore.

New Zealand has a reputation as being one of the most transparent countries in the world, and is ranked first, equal with Singapore and Denmark in the Transparency International CPI index (2010). We believe this national brand is fundamental to a country’s economy, as the global marketplace decides who to do business with and where is seen to be economically safe.

The mix of products and services that clients need from Private Bank is linked to specific circumstances, whether for an individual or an institution. Our nationwide advisory team includes more than 40 authorised financial advisers (AFAs) who are qualified to provide financial advice and investment services with access to a network of specialists (BNZ authorised financial advisers’ disclosure statements are available on request and free of charge).

We believe that wealth brings influence and responsibility, and has a big part to play in maintaining this strong New Zealand brand. BNZ puts customers first, with Private Bank existing to make life easier for clients and supply a stable hand in helping them achieve their goals. Our reputation rests on the ability of our private bankers to build enduring relationships, with a number of clients having been with us for many years, often across generations. We recognise that for people who acquire significant wealth, traditional banking services are often not enough. We ensure our private bankers come with a high level of expertise so our clients can hit the ground running with the best banking solutions available to them. We also understand there is no such thing as a typical client and that no two customers are the same. We work with a variety of people, ranging from those progressing quickly in their careers to those who are retired. They may be a successful business owner, a farmer who has sold their farm, a wealthy investor, a senior executive, or someone looking to retire with substantial wealth. What our clients all share is a requirement for a high level of personalised service to make their lives easier. We offer a range of services to cater to each client, including personal finance, customised investment solutions and access to specialised funds, among many others.

An important first step in developing these banking relationships sits with the client, in evaluating what they require to ensure that we not only live up to, but also exceed their expectations. We ask clients to set goals, identifying risk and planning for achievement. The initial meeting with a private banker is complementary, recognising it’s their choice to bank with us. From here, fees are charged depending on the level of advice and management services we provide, and the types of investments selected. BNZ Private Bank operates under a duallevel governance framework to ensure best practice is adopted across the business unit. The governance structure involves an Investment Review Committee (IRC) and an Oversight Committee (OC). Private Bank’s IRC is responsible for providing governance over our research and

investment strategies. Our governance and risk management structures ensure the IRC (and research team) maintain a disciplined and rigorous oversight on the investment advice we provide. The IRC’s focus is towards ensuring our investment strategies and advice suits prevailing and forecasted market conditions. Sitting over the top of the IRC is a separate OC. The OC is designed to ensure that the decisions and operations of the business are within good market practices, as defined by external parties. BNZ Private Bank employs approximately 100 people and has footings in excess of $5bn. BNZ is AA rated with total assets of NZ$69.6bn, and is owned by National Australia Bank Group (NAB), which also includes MLC and JB Were. We work with industry experts and have access exclusive to Private Bank within the wider National Australia Group. We’re one of only eight banking groups in the world to retain its rating beyond the global financial crisis, and one of the top-15 banking groups in the world by market capitalisation. If you are interested in learning more about BNZ Private Bank, or would like to speak to someone from BNZ, please contact Tracey Berry, head of wealth and private bank, phone 0064 21 414 845 or email tracey_berry@ bnz.co.nz.

Tracey Berry Head of Wealth and Private Bank 0064 21 414 845 tracey_berry@bnz.co.nz www.bnz.co.nz

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Country Profile - neW Zealand

NEW ZEALAND: LAND OF INVESTMENT OPPORTUNITY The people of New Zealand are rightly proud of their nation’s international clean and green image, and the indigenous (Maori) people of the unique culture that reflects their spirituality and pride in the land. Successive New Zealand governments have had to manage the politics of meeting public demand to maintain New Zealand’s pristine natural environment while maximising the benefits of a developed economy, and of affording respect and recognition to Maori culture while encouraging economic development for the benefit of all the people of New Zealand. An easy place to do business There are, of course, differing views as to whether the right balance has been achieved. But things are rosy here at the moment. We have just hosted the Rugby World Cup and put on a great party for the thousands of people who flocked to the country from all over the world. Our infrastructure coped well. The current regulatory and geopolitical landscape is conducive to wider and more prolonged overseas investment. The annual Fraser Institute survey into barriers to investment in oil and gas exploration and production ranks New Zealand the 5th nation in the world. The most recent corruption index ranks us equal first alongside Denmark and Singapore. The legal system is based on the English common law system, well known to many Commonwealth and other countries, and we have a stable and democratic government. Our clients often tell us how impressed they are with the openness and approachability of government officials, and with their trustworthiness and freedom from corruption. The general perception rightly held - is that it is easy to do business here. Manage the process However, New Zealand is not a regulationfree zone and overseas investors need to understand and address the politics of conservation and the requirement for consultation with Maori. The consent of the Overseas Investment Office is required for certain acquisitions by ‘overseas persons’. As it relates to

Bob Roche Partner, Wellington Direct dial: (04) 494 8504 Mobile: 0275 948 504 bob@grclegal.com

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land transactions, this regime is aimed at controlling investment in rural or ‘sensitive areas’. Generally, acquisition of urban property does not attract the attention of the regulations. Business acquisitions over NZ$100,000,000 are also caught. Applicants must demonstrate that the investment satisfies a “benefit to New Zealand” test. The process is not necessarily a barrier, but any overseas applicant must address not only the legal criteria but also the political sensitivities, as a certain amount of discretion is left with the central government and ministers. Much of the public land of New Zealand is held in trust by the government under the auspices of the Conservation Act, which, again, gives the relevant minister a wide discretion, subject to certain parameters, to allow or restrict commercial activity in areas with conservation values. The Resource Management Act regulates the use of land, water and other natural resources by encouraging their sustainable management. The Act controls activities by considering their effect on the natural environment. Throughout each of these regulatory regimes runs the recurring theme of consultation with Maori at various points in the process. In addition, many Maori groupings have been given enhanced participation rights in decision making through their ‘Treaty settlements’ with the government. The treaty in question is the Treaty of Waitangi where, in 1840, the chiefs of the Maori tribes agreed to allow the British government to rule subject to certain principles. These principles were ignored in the latter part of the 19th and the early 20th centuries. The settlement of these breaches is a contemporary political process that is having a significant effect on many aspects of the regulatory regime in New Zealand. Greenwood Roche Chisnall At Greenwood Roche Chisnall, we are at the forefront of advising private and public sector clients on all these issues. All our partners have had years of experience in national and international firms, working in London, Paris, Melbourne and elsewhere.

We are now committed to New Zealand and to providing legal, commercial and practical advice to those who want to invest in our country. The specialist firm set up in 2005 by our founding partners has now expanded to include a range of complementary practice areas: property, public law, corporate/ commercial, energy resources, banking and finance, and tax. We now also have a strong energy, oil and gas practice. We have successfully acted on permit applications, farm in transactions, joint ventures, M&A transactions in the petroleum and resources sectors and on the regulatory landscape for energy and resources generally. We act for numerous overseas commercial property investors and developers, from Singapore, to the US and the UK and all points between. Recently, we acted for a USbased global hotel operator on its entry into the New Zealand market. We have been successful in gaining consents from the Overseas Investment Office for many significant property and business acquisitions by overseas persons. We act for Transpower, the national grid operator, as it builds new transmission lines across the North Island. Importantly too, we are the government’s preferred legal service provider for the Treaty of Waitangi settlement process. We understand how government works and we have strong connections with Maoridom. Give us a call if you want to find out more about investing or doing business in New Zealand.

IMMIGRATION OPTIONS FOR INVESTORS AND BUSINESS PEOPLE IN NEW ZEALAND Being a small economy on the world stage, New Zealand is very keen to attract quality investment from offshore. The stated objective of the New Zealand government’s business immigration instructions is to “contribute to economic

growth through increasing New Zealand’s level of human capital, encouraging enterprise and innovation; and fostering external links”. There are currently two options for investors wishing to gain residence in New Zealand: the Investor 1 (or Investor Plus) category or the Investor 2 category. Both require funds be put into an acceptable investment and held for a period of either three or four years, with an easing of the other requirements under Investor 1 category as a trade-off for the significant investment amount (NZD10m) required. There are no English language requirements or upper age restriction under the Investor 1 category, with the main requirement being that a sum of NZD10m be invested in a suitable vehicle in New Zealand for a period of three years.

Under the Investor 2 category, a points test applies. Applicants must be able to score a minimum of 20 points, comprising at least one point for English language (IELTS 3.0), nine points for business experience (minimum of three years) and ten points for investment funds (minimum NZD1.5m). The upper age limit is set, under this category, at 65 years of age at the time of application. While the Investor 1 category is not capped, the number of visas to be granted under the Investor 2 category is currently capped at 300 per programme year. The application process for the Investor 2 category requires an applicant to initially submit an Expression of Interest, which provides information only and no supporting documentation. Selections are made every fortnight from the pool, the number of Expression of Interests selected being managed in accordance with Immigration New Zealand’s target of 300 visas granted per programme year. After an initial assessment, an applicant will then be formally invited to apply for residence, at which time the documentation supporting claims made in the Expression of Interest will need to be provided. Investor 2 category requires a minimum of NZD1.5m to be invested, with a further NZD1m in net assets required to ensure that the applicant can reside comfortably without the investment funds during the investment period. The settlement funds are not required to be transferred to New Zealand, only their existence and ownership must be evidenced at the application stage. Once the investment has been made, the residence visa is granted subject to ongoing requirements to be met under both categories. These relate to the minimum number of days to be spent in New Zealand for each 12 month period excluding the first year (at least 44 days in each of years two and three for Investor 1 holders, at least 146 days in each of years two, three and four for Investor 2 holders), how long the investment must be maintained (three years for Investor 1 applicants and four years for Investor 2 applicants) and the submission of a monitoring report to Immigration

New Zealand (at the end of year two of the investment period). Upon completion of the relevant investment period, visa holders are granted a permanent resident visa that allows them indefinite access to New Zealand, as a resident, regardless of how much time they have spent (or not) in New Zealand. This is, of course, subject to meeting the ongoing requirements for three (Investor 1 visa holders) or four (Investor 2 visa holders) years post visagrant. These visa categories have been very attractive to business people and investors who wish to ultimately move to a developed country where the economy is stable (as can be in these times), business opportunities abound and investment returns are reasonable in global circumstances. It is possible to secure residence status without committing to an actual move to New Zealand in the short-term, providing the applicant is willing to spend some time in-country within their investment period. Residence status will allow holders to remain in New Zealand indefinitely, to undertake studies (all levels, from primary through to tertiary) as domestic students and to gain access to the public health care system, among other benefits. Fragomen is widely experienced in assisting business people and investors with their immigration applications to New Zealand. We believe it is critical to take the time up front to ascertain the best visa type that suits each individual - what they want to ultimately achieve, what time they have available to spend in New Zealand in the short to medium-term, and what investment profile is best for their circumstances. We would be delighted to offer an obligation-free assessment for those interested in finding out more about migration to New Zealand.

Fragomen Karen Justice Principal and licensed immigration adviser +64 4 499 2043 kjustice@fragomen.co.nz www.fragomen.com

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Country Profile - neW Zealand

GETTING A NEW ZEALAND BUSINESS OR INVESTOR VISA New Zealand is an attractive place to do business. Apart from its famous ‘clean green’ living environment, it is one of the world’s least-regulated jurisdictions (see for example Doing Business Report 2011). The government is keen to attract talented entrepreneurs, and the country needs a lot of investment capital. There are four main routes to explore, depending on your means and life goals: The Long-Term Business Visa (LTBV) is a three-year work visa to start a new venture or buy an existing business. After two years, you can apply for residence if the business is doing well. You must provide a detailed business plan including profit and cashflow forecasts. The business must “benefit New Zealand” by (say) introducing a new service to the market or by reviving a failing business. An application is unlikely to succeed unless it creates employment for at least one New Zealander. Entrepreneur Plus is an add-on to the LTBV

scheme. If you can invest at least NZ$500,000 or create at least three new jobs you can apply for residence immediately, rather than wait for two years first. This time saving is significant if you want to get citizenship later. Investor 1 is a direct path to residence if you invest at least NZ$10m for at least three years. The government recently expanded the range of “acceptable investments” to include residential developments in order to boost NZ’s housing stock. Investor 2 is another investment residence policy for those who put in between NZ$1.510m, and bring another NZ$1m in settlement funds (to buy a house, etc). Applicants must show at least three years experience owning or managing a business turning over at least NZ$1m pa or employing at least five people. There is also a minimum English requirement and a maximum age of 65, unlike Investor 1. Both Investor policies require you to live in New Zealand for a certain time each year for the first few years. Most Chinese business

LaurentLaw Barristers & Solicitors Simon Laurent Principal Tel: +64-9-630-0411 slaurent@laurentlaw.co.nz www.laurentlaw.co.nz

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people have trouble transferring funds because of PRC foreign exchange controls, so that very few are approved from China. LaurentLaw has specialised in immigration law for 15 years. We assist clients to navigate the often complex rules surrounding all types of visa applications. Our passion is solving the ‘hard cases’ that are often referred to us by other lawyers and advisers. For LTBVs we outsource the preparation of comprehensive business plans to an expert who used to be a business migration visa officer. Simon Laurent, the principal of LaurentLaw, is current chairman of the NZ Association for Migration and Investment and is involved in cutting edge dialogue with Immigration New Zealand about its policy and practice

CorPorate PHilantHroPy

Corporate Philanthropy Business at its best: Creating long-term societal and business value For the past 12 years, the Committee Encouraging Corporate Philanthropy (CECP) has convened a prestigious membership of leading global business CEOs and chairpersons to advance the role of business in addressing societal problems. Founded in 1999 by the actor and philanthropist Paul Newman, former chairman of Goldman Sachs John Whitehead, and a prominent American real estate executive Peter Malkin, together with other business leaders, CECP continues to inspire and challenge the private sector to find innovative ways to fulfil unmet community needs and to lead the way towards better alignment of business and societal strategies. Today, the forum includes more than 180 CEOs and chairpersons. While the majority of companies are headquartered in the US, global membership is increasing, with representation in 15 other countries. CECP pioneers corporate philanthropy’s most comprehensive benchmarking and measurement initiative, the Corporate Giving Standard (CGS). Data from the CGS is published annually in a report, ‘Giving in Numbers’, available for download from CECP’s website at no cost. The 2011 Edition of ‘Giving in Numbers’ included 184 companies, including 63 of companies in the top 100 of the Fortune 500. These companies collectively gave $15.5bn in cash and product to non-profit organisations in 2010. While corporate giving accounts for only 5% of total philanthropy in the US, according to ‘Giving USA’, corporations have the ability to leverage unique resources and talent, including product donation and the time and expertise of employees, in support of non-profits. In the CECP sample, the typical company gave $22.1m in 2010, 19% of which is comprised of donations of non-cash resources, including pro bono service. While in past years, companies spread funding more widely among multiple issue areas, companies have become more focused with their giving: 33% of companies provided 50% or more of their total funding to one programme area in 2010.

Compact, CECP played a leading role in developing the first Principles for Social Investment (PSI), a set of voluntary principles to guide the ongoing practice of social investment by organisations seeking to increase the impact and scalability of such contributions. In support of the global evolution of corporate philanthropy, CECP has also undertaken, with the assistance of Deloitte, the creation of a platform to measure responsible social investments worldwide. This project will reconcile the international discrepancies to what constitutes ‘a charitable contribution’ and standardise the definition across borders so that when multi-national companies report on their global charitable giving, the repository of peer benchmarking data is that much clearer and more conducive to comparative analysis. Business leaders today realise that investing in addressing societal problems is not only important in order to be a good corporate citizen, but is essential to a company’s future business success. In a convening of global CEOs in New York in February 2011, CECP asked: “Over the last five years, what trend has most driven companies to focus on solving societal problems?” A quarter of respondents cited greater community need, 22% said globalisation, 18% chose the war for talent, and 16% pointed towards the rise of transparency. Recent forward-looking research reports, ‘Shaping the Future: Solving Social Problems through Business Strategy’, and ‘Business at its Best: Driving Sustainable Value Creation’, published by CECP with research partners McKinsey & Company and Accenture, respectively, indicate that companies are going beyond corporate philanthropy to integrate societal initiatives into their business strategy. Indra Nooyi, chairman and CEO, PepsiCo, said: “There’s not enough money that we can give away to be viewed as a responsible company in 200 countries. And we can’t do it sustainably. So the only way it can work is to weave responsibility into the core business of the company.”

Responding to greater needs in their communities in the economic downturn, companies have prioritised funding to areas such as education, health and human services, and community and economic development. Companies are in a unique position to leverage their relationships with customers, vendors, suppliers and employees to raise additional funds for non-profit partners.

Some companies are realising that societal issues, such as scarcity of natural resources that are inputs to their product or a lack of specialised talent for their workforce, are standing in their path of future business success. Instead of accepting higher costs of business by getting materials or workers elsewhere, leading companies are investing in the infrastructure to create economic opportunity around their sourcing locations locally, and in improving workforce readiness and STEM education.

Working with the United Nations Global

These approaches are examples of sustainable

Committee Encouraging Corporate Philanthropy Charles Moore Executive director Tel: +1 212 825 1000 cmoore@corporatephilanthropy.org www.corporatephilanthropy.org

value creation, a core business strategy focused on addressing fundamental societal issues by identifying new, scalable sources of competitive advantage that generate measurable profit and community benefit. The complexity of societal issues requires companies pursuing this strategy to adjust the timeframe allotted for success. Chad Holliday, former CEO of DuPont and chairman of the board of Bank of America, said: “With sustainability, there can be an inherent tension between looking for quarterly results for financial markets and the longer time that it takes to implement a social program as well as to see the results.” CEO leadership is essential in inspiring employees, guiding consumers, educating investors, and engaging partners. Peter Brabeck-Letmathe, chairman, Nestlé S.A. said: “When you integrate shared value creation into your strategic thinking, acting, and planning, it is sustainable. And that’s what I think is so exciting.” Companies are taking a more proactive stance in their communities. Instead of simply funding problem solving, leading businesses want to be actively engaged in finding solutions to today’s most pressing challenges, utilising both their traditional corporate philanthropic resources, as well as the core expertise and strategy of the firm. CECP looks forward to continuing to convene business leaders and to pioneering thought leadership around the opportunities for companies to lead positive social change and to create stronger and more innovative companies.

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CorPorate PHilantHroPy

Corporate philanthropy’s evolution and effect on business The importance of linking philanthropy to business has become an increasingly prominent topic of the 21st century. Especially following the recent economic crisis, companies have become even more concerned with responsible philanthropic giving strategies that ultimately strengthen the community and bottom line. Gone are the days of charitable activities for purely altruistic purposes. Businesses have looked at ways to make the process more strategically aligned to business priorities and are looking at alternate opportunities to allocate nonfinancial resources, such as skills-based volunteering, product giving and other pro bono services. But no matter what form the donation takes, the ability to track the impact and sustainability of the donation is increasingly imperative. In order to be justifiable, corporate social responsibility (CSR) must be linked to tangible benefits such as increased employee engagement and satisfaction, lower environmental impact, reduced supply chain risk and brand building. About the Association of Corporate Contributions Professionals (ACCP) Over the course of the past 12 years, ACCP has expanded to become a leading centre for advocacy, information and continuing education for corporate contributions, community relations and employee volunteerism professionals. ACCP strives to keep its members educated and prepared to react to the strategic shifts in the corporate contributions field, as well as provide the tools necessary to enable these professionals to work smarter, not harder. Today, ACCP represents approximately 130 member companies and their corporate giving professionals at all hierarchical levels. Member companies collectively contribute more than $8bn in charitable donations annually. Each year, ACCP surveys its membership to better understand their budgeting and forecasting plans for the coming year. From this survey, ACCP produces the Corporate Giving Trend Report, which is designed to fill the void often left by retrospective trending data. The survey compiles information from an average of 65 companies and then dissects this data to then establish what trends will be most prevalent in the coming year. We then adapt our offerings and curriculum so our membership will be as equipped as possible to meet the upcoming challenges that lay in the year ahead. The multi-year findings of the Corporate Giving Trend Report highlight three main categories: overall philanthropic giving trends, changes in cash giving and

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their driving factors, and funding new programmes. In its inaugural year, 2008, the survey found that during the height of the economic crisis (08-09) 37% of companies anticipated a decrease in their 2009 philanthropic giving budgets. Over the next two years, this number decreased as the majority of companies indicated their giving would remain unchanged. A renewed optimism occurred in 2010 when 37% of companies surveyed expected an increase to their 2011 giving budgets. This was also reflected by the 80% of companies that indicated they were making changes to their cash giving budgets for 2011. Of that 80% of companies making changes, 90% anticipated an increase in cash contributions. Overall business performance was the driving force behind the increase of 75% of the companies surveyed, while 31% pointed to external economic factors as the catalyst. This year’s Budgeting and Forecasting Survey revealed numerous trends; however, four stood out above all: philanthropy’s link to CSR and business priorities; refining cause brand; emphasis on volunteerism; measurement and impact; and, consumer engagement. Trend one: Philanthropy’s link to CSR and business priorities As so often stated by opponents of corporate social investing, companies are ultimately in the business of business. However, corporations continue to expect more from these activities with a common purpose to connect philanthropic initiatives directly to their overall business and CSR agendas. Of the companies that responded to the 2010 survey, 65.3% intended to create a stronger link between philanthropic initiatives and their company’s business/CSR initiatives in 2011. Companies who excel at this have gone so far as to identify actionable ways to measure business benefits through philanthropic efforts. Trend two: Reﬁning cause brand Whereas many companies have traditionally kept their corporate giving activities close to the vest, this trend indicates a slow shift from that perspective. Instead, businesses are branding their programmes in an effort to differentiate their philanthropic initiatives with consumers, peers, suppliers, and many others. Of the companies participating in the 2010 survey, 22.4% intended to increase an emphasis on cause branding in 2011. By doing so, companies are learning that the benefits can be significant in terms of improving the company’s image to the public as well as to shareholders and employees. Trend three: Emphasis on volunteerism

Volunteerism has been steadily increasing since ACCP’s initial 2008 survey. As companies continue to place emphasis on deploying human capital, the nature of volunteering and volunteer-related giving continues to evolve. In 2010, 67.8% of companies surveyed indicated their companies planned to increase volunteer activities in 2011. Additionally, 46.2% planned to increase their financial and/ or product contributions associated with volunteerism. For many corporations, volunteerism is no longer viewed as solely an employee benefit or community obligation; rather it is viewed as a legitimate resource that can contribute to the social issues the company views as important. Trend four: Measurement and impact The ability to measure the effectiveness of charitable investments is a crucial element of a successful corporate contributions programme. As such, another trend that has been consistently gaining momentum is the focus on measurement and impact of philanthropic initiatives. In 2010, 61.2% of companies surveyed indicated an intention to place greater emphasis on measurement of programmes’ outcomes and impacts. By implementing parameters on measurement and impact, companies are able to better determine if their efforts are ‘moving the needle’ in the philanthropic cause they aim to improve or eliminate. Establishing measurement standards The profession of corporate contributions has long been lacking a global standard by which to determine the social impact of grant making and corporate contributions. For this reason, ACCP and the London Benchmarking Group (LBG) recently launched a partnership to improve companies’ ability to measure the impact of corporate community involvement. Through this partnership, ACCP and LBG seek to establish best practices and standards that will provide a much-needed measurement approach that has been absent for far too long. ACCP and LBG’s combined global

scope includes more than 375 member corporations. By joining the efforts of these two organisations, the best practices of North America, Europe and the rest of the world will be brought together for the betterment of the profession. The pilot programme, focused on the LBG measurement model, began in the fall of this year and will culminate in March 2013. Over the course of the 18-month programme, a series of intensive workshops will take place applying the model, which was recently adopted by The Dow Jones Sustainability Index (DJSI) as their gold-plated assessment criteria for measuring corporate citizenship. Multiple research and summary reports will be jointly developed by ACCP and LBG as part of the programme. Companies participating in the pilot programme include Cisco, ConAgra Foods, Dow Chemical Company, FedEx, Goodrich Corporation, ING Foundation, Mutual of Omaha and Pacific Gas and Electric Company. Utilising technology to further the industry It has become a necessity for corporate citizenship managers to be able to link corporate responsibility back to the business bottom line. To do so, many executives spend countless hours, and sometimes dollars, for staff or consultants to research and advise them on how to benchmark their programmes with other companies. In an effort to eliminate such a daunting task, ACCP created a suite of tools which allows members to benchmark peers within a

company’s industry as well as more broadly. The first in this suite enables members to query a variety of information by simply visiting the benchmarking tool on the ACCP website. From there, members may run search queries based on approximately 60 different contributions data points including, but not limited to matching gifts ratios, philanthropic focus, industry group, company revenue size, volunteer programming, or department structure. These queries provide member companies information on the structure of their company’s philanthropic activities. This system was designed to allow ACCP member companies easy access to vital information, as well as serve as a conduit for communication. Once a query is run, our members have the option to email all companies, download a file of the filtered results or click on a specific company and obtain an individual’s contact information and initiate one-on-one conversation. In addition to the benchmarking tool, ACCP recently deployed a mapping solution, Giving in Action. The mapping tool is a datadriven system that allows ACCP members to understand broad socio-economic conditions in the geographical areas they support, as well as where other corporations are giving. The mapping tool empowers users to provide grant-making information to ACCP then compare and contrast the data by industry, company and philanthropic focus. Filters can

be applied simultaneously or individually to customise the results for whatever a member may be looking for. This eliminates the need to spend priceless time researching dense data to determine ‘who is doing what, where’. The Giving in Action mapping tool is the most efficient way to see where others’ initiatives are taking place while providing decision-making resources that help corporate executives assess social investment strategies based on actual, available data. Looking ahead Companies are shifting from analysing how much they give to analysing the recipient and what is accomplished with their investment dollars. Executives are expanding their tool kits to determine what it will take to meet this challenge. They are proceeding with a clear understanding that this change requires a different lens by which to assess the impact in charitable giving from both a business and social perspective. Additionally, the relationship between the corporate responsibility (CR) officer and colleagues within the corporate structure is changing rapidly. Savvy CR managers have, and continue to, adopt a more ‘business development’ mindset in supporting the needs of the company, which includes building alliances with other departments and strengthening relationships with external partners to build social equity helping the business achieve its long- and short-term goals. That being said, these are exciting times for corporate philanthropy and the executives responsible for its success.

Association of Corporate Contributions Professionals Dawn Henry Manager, marketing & communication Tel: 407 650 9748 E-Mail: dawn@accprof.org Web: www.accprof.org Article Contact Details: Association of Corporate Contributions Professionals Mark Shamley President & CEO Tel: 407 650 9748 mshamley@accprof.org www.accprof.org

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triP adVisor

Hard-earned and much-anticipated holiday time should be enjoyed to its full potential, but with such an abundance of hotels in nearly every tourist destination in the world, the decision of where to stay can be a difficult one. With over 50 million users, TripAdvisor travellers have visited and reviewed hundreds of thousands of hotels around the world. Heed their advice – the below hotels are tried, tested and the luxury travel world’s best as decided by travellers themselves.

“These are the world’s best luxury hotels according to TripAdvisor travellers,” commented TripAdvisor spokesperson Emma Shaw. “These properties are up against extensive and tough competition from around the world, but their superior service, stunning accommodation and enviable locations puts them at the top of their game.” Whether in search of a beach break, city escape or historic hideaway, these luxury hotels are sure to please even the most discerning of guests.

the World’s ultimate luxury escapes 1. Golden Well – Prague, Czech Republic

6. Hotel Villa Ducale - Taormina, Italy

This boutique hotel in Prague has been named the world’s best luxury hotel by TripAdvisor travellers. With its enviable location, the Golden Well’s rooms offer beautiful views over Prague Castle’s royal gardens, while the rooms’ antique-style decor fits perfectly with its historic surroundings.

Enjoy views over the Mediterranean and imposing Mount Etna from the terrace in one of 17 luxury rooms, all featuring traditional Sicilian decor. This property prides itself on its service and no request is too much.

As one TripAdvisor traveller said, “This hotel was absolutely fabulous. The staﬀ couldn't do enough for us and the rooms are all so unique and beautiful. It felt like I was walking into a spa every time I came into our room.”

2. Hotel Prinsenhof Bruges – Bruges Belgium A mainstay of TripAdvisor’s Best Luxury Hotel’s list, this boutique property is famed for its exceptional service and homemade hot chocolate recipe. Centrally but quietly located, this property is a perfect luxury base for a trip to Bruges. As one TripAdvisor traveller said, “My husband & I spent 3 nights at this beautiful hotel. The service was absolutely wonderful and our room was just stunning.”

3. Alchymist Grand Hotel and Spa – Prague, Czech Republic

As one TripAdvisor traveller said, “We spent four nights at this simply perfect hotel and it was the highlight of a memorable vacation to Sicily.”

7. Taj Lake Palace – Udaipur, India Arguably one of the world’s most famous hotels, the Taj Lake Palace is uniquely located amidst Lake Pichola. Guests are greeted with a rose petal shower and rooms come complete with a Royal Butler. As one TripAdvisor traveller said, “From the moment you are greeted you are made to feel special. Service was wonderful, room superb, gardens and public areas stunning. You will not want to leave.”

8. Hotel Palazzo Zichy – Budapest, Hungary This 19th Century property previously served as the home of famous Hungarian Noble. The hotel prides itself on its history, with beautifully maintained period features throughout the entire property.

The Alchymist is enviably located inside Prague’s Mala Strana neighbourhood, a designated World Heritage Site. It boasts 27 individually designed rooms and a renowned luxury spa.

As one TripAdvisor traveller said “You can't fail to be impressed when you pass through the imposing entrance of Hotel Palazzo Zichy! The room was modern, comfortable, ultra stylish. Another big plus was the excellent staﬀ, friendly and always on hand with practical advice.”

As one TripAdvisor traveller said, “This is absolutely top in every respect. Highly recommended.”

9. Banyan Tree Mayakoba – Playa Del Carmen, Mexico

4. Aria Hotel – Prague, Czech Republic This luxury property is themed after Prague’s musical heritage, with each of its 27 rooms dedicated to a specific style of music or artist. The property was designed by the same Italian designers whose work can also be viewed in Versace stores.

Beautifully located in Mexico’s Playa Del Carmen, the Banyan Tree Mayakoba spares no expense when it comes to luxurious privacy, with each guest villa looking out onto its own courtyard, hammock, private pool and wetland.

As one TripAdvisor traveller said, “Wonderful location, ﬁrst-class property.”

As one TripAdvisor traveller said, “All I can say is WOW! The Villas are beautifully designed, comfortable, and well-appointed, step out of your room and your own private pool and hot tub are right there.”

5. Cocoa Island Resort – South Male Atoll Maldives

10. Baros Maldives, North Male Atoll Maldives

Quiet and secluded, the over-water bungalows at this private island resort offer the ultimate in idyllic luxury.

This luxury resort is on a coral-fringed island in the Maldives. Rooms come complete with private pools and butlers, while several excellent restaurants are dotted around the island.

As one TripAdvisor traveller said, “I can honestly say this hotel & Island was out of this world. If are looking for peace, tranquillity, seclusion and beauty, this is the place to go.”

As one Tripadvisor traveller said, “This place is amazing, unbelievable, magical.”

The best luxury hotels were determined by a combination of TripAdvisor’s Popularity Index and traveller ratings of speciﬁc property attributes. 36 • GBM • December 2011

December 2011 • GBM • 37

Luxury Brand Series – Hotels and Resorts

Luxury Brand Series

Luxury Hotels & Resorts 2011 Indulge your senses with our collection of the finest luxury hotels and resorts from around the world. We profile only the most exquisite and exclusive establishments. Whether you are looking for a luxury retreat or a classy city hotel, our guide has everything for those who expect only the very best.

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aster

anc ospes L H l e t o H ance Paris Fr

A Small cosy Palace a skip away from the Champs-Elysées with One of the Paris’ finest Restaurant “La Table du Lancaster Michel Troisgros” awarded One Michelin Star. The Lancaster was born out of an intuition. The intuition of Emile Wolf, a native of Switzerland, who purchased a hôtel particulier, or grand private house, and turned it into a hotel. The building had belonged to a Cuban plantation owner of British origin called Santiago Drake del Castillo, and was transformed, under Emile Wolf’s direction, into a new Parisian hotel. While refurbishment works were being carried out, his housekeeper, who was the daughter of an antiques dealer, and he visited markets and shops to furnish the rooms of the Lancaster. The hotel opened in 1930.

Hotel Hospes Lancaster 7 rue de Berri - Champs Élysées, 75008 Paris T +33 1 40 76 40 76 - F +33 1 40 76 40 00 concierge.hospes.lancaster@fuenso.com www.hospes.com www.hotel-lancaster.fr

In keeping with his times, where the world was broadening as a result of advances in transport, Emile Wolf wished to offer travelers a hotel specially tailored to their needs. Comfort being at the top of his list and being true to the idea he had in mind, particularly with regards to service and bedrooms, he created unique spaces, where he placed the pieces of furniture and paintings he had collected with the help of his housekeeper, while four extra floors were being added to the original building. Wolf wanted travelers to make of the Lancaster their home. And that was the case, for instance, of Marlene Dietrich. She stayed at the Lancaster for three years on her first visit to Paris in the 1930s. And when she settled down in her Park Avenue apartment in New York, she tried to imitate the Lancaster’s ambiance. Her project thus seemed to echo these two moments, as her apartment showed a sort of Haussmann art-déco style! In fact, the essence and structure of Marlene Dietrich’s apartment, despite following a truly New Yorker fashion, reflect the Haussmanian style of the Lancaster, but topped off with a Marlene- art-déco touch. A glass vanity or… The wooden floors thus make a comeback paying a double tribute: to Marlene Dietrich’s glamour and also to the magnificence desired by Wolf. Indeed, the first refurbishment works that were made at the time of the hotel’s founder sought to respect the original structure of the manor, which dated from the 1880s. The building’s structure has remained untouched and reforms have focused on stressing each particularity in order to create a familiar reference. The aim was to bring them back to the place and prominence they once had when the Lancaster first opened its doors.

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luxury Brand series – Hotels and resorts

Rome Soﬁtel rghese Villa Bo aly t Rome, I

Located in the heart of Rome, between Via Veneto, Piazza di Spagna, Villa Borghese and Villa Medici, Sofitel Rome Villa Borghese Hotel represents the sense of harmony between life’s pleasures and elegance where the “French art of hospitality” meets the very best of local culture. For those who come to Rome in search of art and history but are also willing to be seduced by its elegant boutiques, the hotel has the perfect location. It's located within walking distance of Villa Borghese, the Galleria Borghese, the Spanish Steps, Pantheon, Trevi Fountain and the most exclusive boutiques in downtown Rome.

Sofitel Rome Villa Borghese Via Lombardia, 47 00187 Rome – Italy Tel. +39 06 47 80 21 www.sofitel.com Reservation Department: Rita Tarantino & Elena Ruzzini Tel. +39 06 47 80 22 958 Fax. +39 06 48 21 019 H1312-re@accor.com

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Sofitel Rome Villa Borghese offers luxury based on a concept of hospitality that combines elegance, excellence in service and the desire to offer a unique and exclusive setting that is distinguished by its cultural vitality and open-minded spirit. The lobby has a warm, intimate sitting area with a large selection of books on art, travel and contemporary literature as well as international newspapers and magazines. These can be enjoyed while comfortably sitting on soft sofas in a relaxing setting that feels like home. Housed in a historic building, the hotel has 104 luxurious rooms including 3 suites and 1 Executive suite, each with a unique setting, from which to enjoy spectacular views of Rome. Located on the seventh floor, the suites are large, comfortable apartments with panoramic private terraces that offer spectacular views of the Villa Borghese gardens.

All rooms are furnished with modern technology that guarantees maximum comfort. All are air-conditioned and feature the innovative MyBed sleep system with orthopedic mattress and down comforter to guarantee a restful sleep; fine bathrobes and linen sheets add a sense of luxury. These rooms also have a Bose stereo system and I-Pod docking station, LCD television, high speed internet access, two phone lines with direct dialing, mini-bar and safety deposit box. La Terrasse Cuisine & Lounge is Sofitel Rome Villa Borghese's newly completed terrace, with a breathtaking panorama overlooking Rome and the Villa Borghese gardens. Open daily between 10.30 a.m. and midnight, one can enjoy Mediterranean meals or have a glass of a selection of Italian or French wines. The terrace is the ideal place to relax in an elegant atmosphere. Select ingredients, love of Italian and French

tradition and constant innovation are the characteristics that distinguish the cuisine and the professional nature of Chef Giuseppe D’Alessio. At La Terrasse Cuisine & Lounge, experience a culinary journey of light, original and fresh flavor. Chef Giuseppe D’Alessio, has marked the gastronomic selection of the Sofitel Rome Villa Borghese with his unmistakable touch, a cuisine entirely dedicated to great Italian traditions, while at the same time, open to creative experimentation and to the influences of celebrated French cuisine. Le 49 previously the stables in which Caravaggio used to find refuge, is now a comfortable and elegant venue reserved for breakfast and special events. The “Club Le Boston” that can be privatized, is one of the two bar of the Sofitel Rome Villa Borghese, offers an ideal atmosphere for a moment of relax, or an afternoon meeting sipping some tea, or for an after dinner with

a Cognac and Armagnac selection. An elegant British style room, with a fireplace, welcomes guests ensuring privacy and tranquility. Sofitel Rome Villa Borghese has three spacious and elegant meeting rooms, which originally belonged to the Maroniti College. To make a business meeting become a special event, Sofitel Rome Villa Borghese has created a program called Inspired meetings, a personalized service to help organize meetings with diverse activities ranging from a coffee break to luncheons, from evening cocktails to dinner, from relaxing breaks with soothing massages to having the chef or barman reveal their trade secrets, from wine tastings, to private visits in the Villa Medici gardens or guided tours of the city and its surroundings. Sofitel Rome Villa Borghese offers a new service to health conscious guests who wish to work out and keep fit even on vacation: the brand new fitness room. Located on the

main floor, the fitness room features state of the art Technogym equipment such as “Jog Visio i-Pod”, a treadmill with touch screen program selection and TV that can be used during the training session, “Unica Evolution Silver” a multifunctional machine used to exercise all muscles of the body with 25 different exercises available in a single machine and “Vario Visio i-Pod” the newest step machine for smooth move cardiovascular training with digital “visioweb” platform. Sofitel Rome Villa Borghese’s strategic position, next to the vast Villa Borghese Park allows guests to continue their open air training by venturing into one of the most luxuriant areas in Rome: jogging itineraries, trails with facilities or cycling trails make this sporting experience even more exciting in the Roman capital.

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luxury Brand series – Hotels and resorts

n Bars In m a h t a Ch SA gland, U n E w e N

History Chatham Bars Inn has been an idyllic Cape Cod hotel family vacation retreat noted for its excellent service, fine cuisine and beautiful surroundings since 1914. The Inn is nestled near the heart of Chatham on 25 beautifully landscaped acres overlooking Pleasant Bay and the Atlantic Ocean. This world-famous turn-of-the-century landmark has a remarkable ambiance. The expansive lounge, front veranda and main dining room have been returned to their original grandeur, affording panoramic ocean views and gentle sea breezes. Chatham Bars Inn Tel: 1800 527 4884 www.chathambarsinn.com

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If you’re looking for boat charters on Cape Cod, you’ll love the top-notch fleet operated by Chatham Bars Inn. A variety of luxury boats offer unforgettable Cape Cod vacation experiences. Memorable and unique boating excursions offered by Chatham Bars Inn include Cape Cod sunset cruises on Pleasant Bay, big game sport fishing, sailing tours, family activities, and private charters to Nantucket and Martha’s Vineyard. You’ll also love our Cape Cod sailing packages, including our popular Cape Cod Sunset Cruises Package.

In addition to popular Cape activities such as golf, tennis, fishing, water sports, and bird watching, our guests also enjoy summer beachfront theme dinners, Cape Cod spa treatments, and an array of children’s programs and family activities: everything you need for a Cape Cod vacation. Most important, the grand tradition of relaxing in casual, unhurried comfort continues yearround at this historic Cape Cod vacation resort. Chatham, one of the oldest villages on Cape Cod, is just a brief stroll away, where pictureperfect streets are lined with historical homes, unique shops, art galleries, and glorious gardens. Anchored by the historic Chatham lighthouse, the village boasts a lively, architecturally rich Main Street where merchants cater to locals and strolling visitors from around the world. Chatham Bars Inn offers Cape Cod vacation packages to suit a variety of interests and abundant Cape Cod vacation resort amenities and a luxurious spa and Fitness Center. Please accept my invitation to join us yearround at Chatham’s premier resort for a vacation on Cape Cod that you will never forget. "One of the Top Resorts in the World", Conde Nast Traveler - Gold List Luxury Resort Less than a quarter mile from the charming village of Chatham, one of New England’s

most perfectly preserved towns, Chatham Bars Inn occupies a prime spot on the shore of the Atlantic Ocean—a centrally located midpoint for visitors to the Cape. Built in 1914 by a wealthy Boston family, this remarkable New England resort, built on 25 acres atop a bluff overlooking the Atlantic Ocean, recalls those days of grandeur that are long gone from other Cape Cod vacation destinations. From the spacious veranda of the Main Inn, guests take in picture-postcard views of Pleasant Bay and the open ocean, or settle into an Adirondack chair on their cottage's private lawn or balcony and savor the ocean view from this peaceful place by the shore. Although the atmosphere is charming, the amenities are contemporary. The Fitness Center has been completely remodeled and renovated with the latest, state-of-the-art equipment. It features cardio equipment by Precor and Stairmaster, and strength training equipment by Cybex. Yoga classes, water aerobics, cardio kickboxing and power walks ensure that guests stay in top shape while on vacation. Chatham Bars Inn built one of the first “classic clay” tennis courts on the Cape: a state-of-the-art composition that combines the play and feel of clay with the convenience of a hard court. Private lessons, tournaments and matches arranged by our resort professional provide opportunities for countless games.

The most recent addition to Chatham Bars Inn is The Spa at Chatham Bars Inn, a stateof-the-art facility featuring a dozen king and queen-size suites—each is an ideal setting for the ultimate retreat experience, combining the spaciousness of a 600-square-foot master suite with the amenities of a world class spa—all inside your own private world. All suites offers a hydrotherapy tub, sauna, spacious steam shower, plasma TV, Bose wave radio, and of course the warmth of a Chatham Bars Inn signature fireplace. It is the perfect sanctuary for total privacy and secluded in-room spa treatments. Couples & Honeymoon Resort Imagine waking to the gentle sound of the surf breaking against the shore. As you lie in a king size bed, made up with luxurious linens and fluffy down comforters, you open your eyes to take in your surroundings, which include furnishings and unique works of art created by Cape Cod artisans. You step onto a private balcony overlooking the ocean. A marble-clad bathroom features both a shower and separate bathtub, both spacious enough for two in the resort’s master suites. There’s nothing more memorable than a romantic stay at Chatham Bars Inn. Couples enjoy the Inn’s private sandy beach, heated outdoor pool at water’s edge, tennis courts, bike rides, croquet, and horseshoes. The concierge will arrange for visits to nearby golf courses, sailing and fly fishing at the resort and the Cape Cod National Seashore,

horseback riding, harbor tours, and shopping trips to Main Street Chatham. Cape Cod and the nearby islands of Martha’s Vineyard and Nantucket are some of the most magical places in the world. With miles of ocean beaches, sandy dunes and quaint town centers these unspoiled places have escaped overdevelopment and serve as reminders of the way life used to be. Cape Cod Located on the elbow of Cape Cod, the town of Chatham features a quaint and walkable Main Street with numerous family owned and operated shops, restaurants and businesses. Chatham has a rich seafaring history, a railroad museum, and summer concerts held in a gazebo on Main Street. The famous islands of Martha’s Vineyard and Nantucket are a short trip from the private dock at Chatham Bars Inn. We can whisk you and your guests to the islands on Five Star, our privately owned 55’ Hinckley jet boat. Chatham Bars Inn unique ferry to the islands is unmatched on Cape Cod and we are the only resort which gives you the complete New England experience. Enjoy secluded beaches and sandy dunes, go shopping in Edgartown on Martha’s Vineyard or see perfectly preserved 17th century cottages alongside the cobblestone streets with gas lanterns in Nantucket.

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luxury Brand series – Hotels and resorts

ingham 51 Buck ites and aj Su Gate, T ences, Resid d , Englan n o d n o L

51 Buckingham Gate, Taj Suites and Residences is a luxury five star hotel located minutes from Buckingham Palace. Part of Taj Hotels Resorts and Palaces, the property boasts many signatures of excellence including butler service, a Michelin star restaurant, an award-winning courtyard, grand banqueting facilities and exclusive Spa. Combining all facilities of a luxury hotel with the space and convenience of a private home, 51 Buckingham Gate consists of three individually designed buildings: Kings, Falconers and Ministers. The buildings have been beautifully restored, offering 86 elegant suites from one to nine bedrooms, including a Presidential floor and the World’s first Jaguar Suite. Each suite feature separate living room, fully-equipped kitchens and luxurious bathrooms. The world’s first Jaguar Suite, launched in October 2011, is a result of the exciting collaboration between two TATA-owned companies, Taj Hotels Resorts and Palaces and Jaguar. The sleek design of the 1,832 square foot, two-bedroom abode alludes to classic and contemporary Jaguar models, from the legendary 1960’s E-type to the stateof-the art C-X75. Overseen by Jaguar's in-house Design Director Ian Callum, the suite boasts specially-commissioned artwork and intriguing design features such as a

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minimalistic clean-fuel fireplace referencing the shape of the brand's hallmark back window, the finest Italian leather that lines the cars, ebony veneer doors and custommade Jaguar wallpaper. The Michelin star Quilon restaurant, part of the Taj group, specialises in cuisine from the Indian states of Kerala, Goa and Karnataka with seafood being a particular speciality. Among a new generation of Indian restaurants specialising in lighter sauces and more progressive offerings, it is the sister restaurant of the highly acclaimed Bombay Brasserie. The Spa at 51 brings a touch of Paris to London, offering both guests in residence and day visitors luxurious Anne Sémonin pampering in an exclusive setting. The Spa faces onto 51 Buckingham Gate’s historic and award-winning Courtyard Garden - a quiet and relaxing enclave whose centrepiece is an elegant fountain surrounded by manicured flowerbeds.; With a bespoke treatment range designed by Anne Sémonin, The Spa at 51 is centred around an ‘a la carte’ concept, tailored to guests’ requirements. Each treatment begins with a full consultation, where an Anne Sémonin trained therapist consults the guest on his or her specific skin needs. The treatments are then adapted and ‘made to measure’ in the famous Anne Sémonin tradition. Boasting a synonymous reputation for flawless service with a quintessentially London experience, 51 Buckingham Gate is in exclusive partnerships with London’s finest stores, Harrods and Hamleys. The chic shopping packages entitle guests to a number of exclusive extras, such as store hampers, bespoke store tours, in-store discounts and personal shopping experiences.

Phone (0)20 7769 7766 info@51-buckinghamgate.co.uk www.51-buckinghamgate.co.uk

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luxury Brand series – Hotels and resorts

Le Gray Beirut

With the opening of Le Gray, Beirut has finally the hotel it deserves – a contemporary luxury hotel as stylish as the city itself. Le Gray is located in the historic heart of downtown Beirut, 15 minutes from Rafic Hariri International Airport, in the smart Beirut Central District. It stands at the very entrance of Downtown offering the opportunity to discover the best of the city on foot. From the ancient ruins to the historical churches and mosques, the trendy and luxurious shopping boutiques, the generous food scene and the unparalleled nightlife. It is equally very well located for business travelers, walking distance from major international institutions and the banks street. The hotel offers cool, modern interiors, with 87 wonderfully spacious rooms and sensational suites, exciting restaurants and bars, all accompanied by warm and highly professional service. There are spectacular vistas of the Mediterranean, Mount Lebanon and the city’s impressive architecture and ancient ruins from the rooftop, where Bar ThreeSixty, Indigo on the Roof restaurant, the Cigar Lounge and Cherry on the Rooftop lounge have superb vantage points. The outstanding facilities are completed by the chic Gordon’s Café with its sidewalk terrace. Besides, Le Gray has what’s needed for a comprehensive pampering experience. PureGray Health Club and Spa, featuring six individual treatment rooms including one double, proposes a generous menu of body and skin treatments with the natural Spanish products, Natura Bissé. A state-of-the-art gym, sauna rooms and the expertise of professional trainers is what makes the experience even more special. Le Gray brings the individuality of the CampbellGray Hotels to the heart of the Middle East, after award-winning Antigua bolthole, Carlisle Bay. Its WOW factors include: A dramatic rooftop pool with purple glass mosaic where you can watch the city with all its vibe and see how the mountains look on the Mediterranean Sea A bottom to top atrium where a thousand fibre optic lights hang from a unique chandelier to light the romantic evenings 550 pieces of art hand-picked by Gordon Campbell Gray from Paris, London, Beirut, Damascus, Cuba, Ethiopia, etc.. Spacious rooms and suites between 40 and 220 square meters equipped with an Espresso machine, an iPod docking station, a full HD LCD screen TV, a Bathroom TV, etc.. Le Gray Martyr’s Square, Beirut Central District, Lebanon Tel: +961 1 971 111 Fax: +961 1 971 112 www.legray.com info@legary.com

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n e Crillo Hotel d s Pari

A brief history of a legendary palace… In 1758, King Louis XV commissioned the greatest architect of his day, Jacques-Ange Gabriel, to build twin structures fronting the Place de la Concorde in Paris. The result was a masterpiece of 18th century architecture. Behind one of these majestic facades rose a sumptuous private residence decorated by the era’s finest artists and craftsmen. Such are the origins of the Hôtel de Crillon, created to welcome the world’s greatest Ambassadors. Long owned by the illustrious family of the Counts of Crillon, this private mansion was transformed into a luxury hotel in 1909. Since then it has welcomed travelers from around the world in search of comfort and service in the incomparable luxury of this former private Parisian palace. Reza Shah Pahlavi of Iran, Emperor Hirohito of Japan, King George V of England, their Majesties King Juan Carlos and the Queen of Spain, U.S. presidents Herbert Hoover, Theodore Roosevelt, Richard Nixon and countless other statesmen, celebrities, and artists are among those who have signed their names to the Crillon’s guest book. The Crillon is the only French luxury hotel to have one of its rooms, the “Duc de Crillon Suite”, exhibited—complete with its period woodwork—at the Metropolitan Museum of Art in New York City. Its historic salons have often served as a backdrop for international diplomacy, and notably hosted the signing of the treaty to form the League of Nations in 1919. Flagship of the Concorde Hotels & Resorts Group, the Hôtel de Crillon is a member of Leading Hotels of the World. Situated in the heart of the City of Light on the world-famous Place de la Concorde,

Hôtel de Crillon is steps away from the luxurious boutiques of the Faubourg St.Honoré, and is within walking distance of the Champs Elysées, the Avenue Montaigne, the Louvre, the Tuileries Gardens and many more of this famous city’s most acclaimed attractions. The 103 guest rooms and 44 suites or “Grand Apartments” (including 5 overlooking the Place de la Concorde) have been restored in Louis XV style under the auspices of the French National Historic Landmark Commission and joint efforts of Sybille de Margerie. In April 2010, Christopher Hache and his new team reopened Les Ambassadeurs restaurant. Just one short year later, it is with great joy and pride that Hôtel de Crillon announces its first Michelin star.

Tel. 33 (0) 1 44 71 15 01 Fax 33 (0) 1 44 71 15 03 reservations@crillon.com www.crillon.com

Thanks to its history, its charm, its outstanding service and its unique location that the Hôtel de Crillon has been granted the Best City Hotel in The World Award 2011 by UltraTravel. Copyright : Eric Cuvillier

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luxury Brand series – Hotels and resorts

t ide Sain Le Plac es Prés nd Germai rance Paris, F Bruno Borrione, of the Philippe Starck design firm, the hotel offers 21st Century style, comfort and luxury. Le Placide Saint Germain des Près - 4* hotel A new precious jewel in the heart of SaintGermain des Prés On the Left Bank, in the heart of cultural and residential Paris, with its art galleries, historic churches, lush parks and gardens. Just a few steps from the chic ‘Le Bon Marché’ department store and fashionable designer shops, Le Placide blends well in the neighborhood, offering charm, fashionable contemporary style and discreet luxury set in a former family townhouse from the nineteenth century. The ultimate boutique hotel on the Left Bank A former 19th Century private home with just 11 rooms, Le Placide has the feel of an exclusive private club, in a superb location in the 6th district. Completely redesigned by

Welcome home The hotel reception features a fluid marriage of natural stone, concrete, glass and rosewood, the choice of the designer. The reception shines with its currentstyle furniture exclusively created for ‘The Placide’.

featuring taupe, almond green, black and white, purple and ochre according to mood and taste. Design elements feature white Moroccan leather, glass, a bit of chrome and a crystal pedestal table creating a clean but welcoming ambiance. Fresh flowers adorn each accommodation as well as window boxes with colourful plants. Fine bed linens with high thread count and down comforters.

In the lounge, a low fireplace and tall rosewood panels contrast with the stone floor and concrete walls.

All the rooms share a unifying decoration concept: white walls corresponding with a leather bench that matches the headboard of the bed, chrome, glass and crystal adorning the end tables and storage modules.

Here, you can feel ‘at home’, this intimacy atmosphere invites you to sit and relax… Take your time and drink a glass of champagne.

Spacious and bathed by the daylight. Bathrooms, all overlooking the patio, are separated from rooms by a glass panel and a velvet curtain.

A place for the privileged few, with just eleven rooms

White marble tiles floor, fresh flowers adorn each accommodation… Every detail was considered for a subtle and refined sensibility.

Each level has just two accommodations, each floor designed in a different colour

Le Placide Saint - Germain des Prés Luxury hotel in the heart of Paris 6, rue Saint-Placide, 75006 Paris - France Tel. : +33 (o) 1. 42. 84. 34. 60 Fax : +33 (o) 1. 47. 20. 79. 78 contact@leplacidehotel.com www.leplacidehotel.com

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al ntinent o C r e t n I rance Paris, F

InterContinental Paris avenue Marceau - 5* hotel Located in the heart of the most exclusive area of Paris, a short stroll from the worldwide famous Champs-Elysées avenue and the Arc de Triomphe, close to some of the finest, trendiest French restaurants and the avenue Montaigne's fashion designers, at walking distance from the main touristic attractions, the InterContinental Paris avenue Marceau is the ideal address for your stay in Paris. It is also the place for business' stays, with an easy access to Porte Maillot, La Defense, le Palais des Congres, Orly and Roissy Airports. Harmony of modernity, comfort, design, a metaphorical jewellery box of unique furniture, the InterContinental Paris avenue Marceau is the new place to be of the capital. The art of the diﬀerence This luxurious boutique hotel mingles periods with audacity and originality. This former private mansion owned in the past by the “Count of Breteuil”, known both as a great swordsman and a seducer, displays an Haussmannian facade which hides from glances two other buildings of surprising architectural style. Once the porch has been passed through, discover the masterpiece of Raymond Moretti, a student of Picasso, as well as the

vertical garden and the Renaissance turret of the hidden patio. In such an atmosphere, the guests feel immersed in a universe mingling warm colours, immaculate white, works of art and noble materials. Designed by Bruno Borrione, a member of Philippe Starck’s team for more than 20 years, the decoration of this luxurious hotel of 55 rooms and suites plunges the guests into a warm and comfortable atmosphere. The art of ﬁnest food At the M64,’s table the Chef Romain Marzet proposes an authentic culinary experience, with a simple and healthy card, based on products coming directly from the market. The Menu is composed with affordable noble products, complemented by a daily menu inspired from seasonal flavours. The kitchen is open on the dining room and the guest can choose to eat either casually at the counter or in comfortable Club armchairs in a lounge atmosphere. A cosy and welcoming restaurant where a talented and passionate Chef takes care of his customers as if he was inviting them at home. The art of detail The InterContinental Paris avenue Marceau features a flexible room of 300 m2, divisible into 3 areas, equipped with the latest technology (integrated wall screens, video conference, video projector...) so as to ensure the full success of your business seminars or private events. Our dedicated conference & banqueting team is committed to tailor make your event and insure the excellence of your service. Whatever the type or size of the event, our team will provide you the requested and personalized service.

InterContinental Paris avenue Marceau 64 avenue Marceau, 75008 Paris - France Tel. : +33 (0)1 44 43 36 36 Fax : +33 (0)1 42 84 10 30 contact@ic-marceau.com www.ic-marceau.com

luxury Brand series – Hotels and resorts

e Vendôm e d l e t Hô rance Paris, F

Hôtel de Vendôme is a jewel located in the heart of Paris at 1, Place Vendôme. This five-star boutique luxury hotel is an elegant retreat with attentive service, fine cuisine and a discreet atmosphere in the centre of the most fashionable district in Paris. Twenty-nine luxuriously appointed guest rooms and suites include ten suites and nineteen guest rooms each individually decorated with antique furniture, noble woods and upholstery manufactured by the finest French craftsmen. Bathrooms feature rare marbles. High ceilings, chandeliers, frescos, oil paintings and windows that open onto spectacular views of the Place Vendôme make for a truly Parisian experience. The building at number one, the private mansion that houses Hôtel de Vendôme, gives Place Vendôme its name as it is the site of the original Vendôme family’s residence. The residence was built in 1723 and converted into a hotel in 1907.

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Hôtel de Vendôme is surrounded by the city’s finest jewellery boutiques and is ideally situated steps away from the Tuileries gardens, Musée du Louvre, National Opera and the stylish rue Saint-Honoré for shopping in city’s premier designer stores. A revolving door entrance leads into an elegant reception area with the intimacy of a private home and the professionalism of a luxury hotel. A winding marble staircase leads up to a comfortable and inviting bar and restaurant with magnificent views of the Place Vendôme from a luxuriously private setting. The new One Place Vendôme Restaurant launched September 2009 with a sophisticated and elegant design by world-renowned architect and interior designer Michele Bonan that optimises this unique location. Bonan’s other projects include the JK Place Firenze in Florence, JK Place Capri, Heidelberg Suites Boutique Hotel, and Ferragamo’s Lungarno Hotels in Florence. Head Chef Nicolas Rucheton has created a unique and exquisite seasonal menu using fresh, locally sourced cuisine. The menu benefits from culinary advice and guest visits by Chef Didier Aniés, Meilleur Ouvrier de France 2000, of Restaurant Le Cap (1* Michelin 2010) at the Grand-Hotel du Cap-Ferrat.

Hôtel de Vendôme, 1 Place Vendôme, 75001 Paris Tel: +33 (0) 15504 5500 Fax: +33 (0) 14927 9789 reservations@hoteldevendome.com www.hoteldevendome.com Press contact: Lisa Walker Telephone: +44 (0)20 8969 4700 lw@lisawalker.net

The bar is an ideal place to enjoy a drink and quiet conversation and serves some of the best cocktails in Paris. The cocktail menu changes each season and is themed around three seasonal fruits carefully blended with fresh herbs. The signature cocktail is “The Vendôme” with raspberries, fresh mint, black pepper and champagne. Hôtel de Vendôme is an ideal location from which to explore the best that Paris has to offer. Guests benefit from the services of Hôtel de Vendôme’s excellent concierge team to make the most of their stay in the French capital. Rates from 320 euros per night including breakfast. Romance in Paris is a special package available year-round that includes flowers upon arrival, a chocolate massage for two and a romantic three course dinner served with Champagne. Hôtel de Vendôme is a member of Small Luxury Hotels of the World.

nda of Elou s e m o D Greece

Domes reinvents Elounda, restoring its lost principal of exclusivity. The essence of the Mediterranean, the culture, the cuisine, the temperament, the architecture, are holistically captured in the form of a luxury resort consisting for the first time of only suites & villas that provide a small number of exclusive guests with all the amenities of a resort, while offering an abundance of living space, privacy and extraordinary service. Minimally interfering with the natural habitat and harmonically blended with their surroundings, domed structures with breathtaking ocean views emerge from the ground. Respecting its natural contours and creating a Mediterranean settlement on a hillside of flower gardens, stone pathways, and olive groves just a stone’s throw away from the Venetian castle on the island of Spinalonga,

the setting for Victoria Hislop’s bestselling novel “The Island”... It is all is part of our new design inviting the senses to feast on sights, scents and tastes from the rich outdoors through large windows, and spacious verandas that capture sea breezes and provide the perfect setting for the ultimate fantasy getaway. We invite you to experience... Domes of Elounda. Honeymoon In this special time of your life, let us make your honeymoon in Greece a time to remember. Domes of Elounda honeymoon resort specializes in creating the honeymoon of your dreams. Located in Elounda, Crete, one of the most exclusive romantic destinations of the world, let us cater to your needs while you immerse yourself in luxury and celebrate your love. Whether you plan on relaxing in your honeymoon suite by your personal pool, soaking in the sun on our sandy beach by the crystal blue waters of the Mediterranean, or self-indulging at the Domes spa we have ensured that your honeymoon in Greece will be more than you ever imagined!

Thomas Kostopoulos Reservations Manger +30 2310 810624 +30 2310 810634 info@domesofelounda.com www.domesofelounda.com

December 2011 • GBM • 51

Jersey offsHore Profile

As Jersey reflects on 50 years of finance, the industry is looking to the future Jersey’s 50-year pedigree as an international finance centre is proving an attractive feature to potential new international investors and their advisers who seek a jurisdiction of substance when choosing a location. One of the longest established international finance centres, Jersey is able to trace its move into global finance to 1961, a year when UK merchant banks first opened offices in Jersey to meet the demand for expatriate banking and to help facilitate international business. From its early origins as a centre for expatriate and private banking, trust and estate planning, Jersey’s finance industry has diversified to encompass a raft of corporate services including company management and corporate governance, listing services, structured finance, fund management and administration, insurance and capital markets business. Since 1998, the formation of The Channel Islands Stock Exchange, which offers a full listing and trading facility for commercial business and closed ended investment companies, has added a further dimension to Jersey’s offering; in recent times, Jersey holding companies have proved increasingly popular as a vehicle for listing on exchanges worldwide. The services available today from Jersey are designed to meet the requirements of corporate clients, institutional investors and high-net-worth individuals managing cross border assets or seeking shelter for their investments in a stable, well regulated location. But while we have been marking this achievement and the growth of the industry over five decades, the industry remains focused on the need to look forward rather than back. Market innovation Legislative enhancements will remain a vital aspect in developing Jersey’s offering to key markets. With an ongoing programme of new measures in support of the legislative and regulatory environment, Jersey continues to

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instil confidence in international investors and their advisers and remains a preferred jurisdiction for financial planning and investment needs. Jersey remains a leading centre for funds business and it continues to streamline and innovate its fund offering. The authorities are working on the provision of a new private placement fund that will improve speed to market and ease of formation. The introduction earlier this year of incorporated limited partnerships (ILPs) and a new dedicated and distinct law for the constitution of separate limited partnerships (SLPs) has also widened the appeal of the structures available and the choice for practitioners, including fund promoters. Meanwhile in the wealth management sector, new trust law amendments are imminent and foundations continue to grow in popularity amongst professional advisers and their highnet-worth clients. There are now over 100 foundations registered in Jersey, providing Jersey with broader appeal, particularly important as it seeks to attract business from the new major economies such as in the Far East and India. Jersey companies continue to be a preferred choice for institutional clients, particularly those seeking to invest in the west. For example, Chinese investment in Jersey is growing rapidly. Nearly £9bn of banking deposits held in Jersey are from Greater China and the Far East and three influential deals have been listed since approval was given for Jersey holding companies to list on the Hong Kong Stock Exchange. Worldwide, there are more than 90 Jersey companies listed on leading stock exchanges with a combined market capitalisation of more than £135bn.

both Mumbai and Delhi. It has become far more important to have a consistent presence in the markets where economic growth is so rapid and where growing numbers of high-net-worth individuals are based. So while the traditional markets of London are not neglected, the role of Jersey as a jurisdiction in developing wealth management strategies and supporting corporate investment has to be conveyed to other markets where the jurisdiction is less well known. Jersey Finance has an overseas programme designed to create a platform for Jersey business by building commercial ties, raising awareness of the services available from the industry in Jersey and outlining our focus on high standards of regulation and corporate governance to government officials, regulatory authorities and key intermediaries. Reputation and rankings Jersey’s growing international appeal has been helped by further independent endorsement of its willingness to co-operate in information exchange when wrongdoing is suspected, the confirmation that Jersey’s revised zero ten tax regime has a long-term future, increasing evidence that Jersey investment structures are ideal for listing purposes and enhanced interest among Asian investors in the investment structures used in wealth planning strategies. Furthermore, in the most recent GFCI rankings, Jersey continues to be featured as the number one offshore jurisdiction, thanks to the expertise of its workforce and long-term reputation. It has also entered the top ten jurisdictions for wealth management and private banking and is now ranked fifth among European locations behind London, Zurich, Geneva and Frankfurt.

International markets

Agreements

To help Jersey gain traction and establish itself in these new markets, Jersey Finance has opened offices in Hong Kong and Abu Dhabi and appointed representatives in

One of the factors that is helping Jersey retain this leading international position has been its reputation for being a willing partner in the fight against fiscal crime and the global

Jersey Finance Limited Geoff Cook Chief Executive T: +44 (0)1534 836000 Geoff.Cook@jerseyfinance.je www.jerseyfinance.je

drive for greater transparency, without compromising a legitimate client’s right to confidentiality. For example, Jersey’s effective procedure for identifying beneficial owners of companies was singled out in a comprehensive report published this quarter by the World Bank and United Nations Office on Drugs and Crime. The report stated that: “… of the 40 jurisdictions reviewed only one – Jersey – required the beneficial owner to be identified and recorded by a government body, the Companies Registry within the Jersey Financial Services Commission.” Jersey’s procedures were then used in a case study within the report. Abroad, Jersey continues to sign tax information exchange agreements, the latest being an important agreement with India, the 13th signed with a G20 nation. There are more in the pipeline.

legislative armoury required to support the needs of financial institutions and other corporate clients, high-net-worth individuals and their families worldwide. Jersey Finance’s latest e-newsletter, available at www.jerseyfinance.je/News/Publications/, reviews some of the developments affecting those that do business with Jersey and highlight regulatory and legislative moves that may offer international investors more choice when working with practitioners in Jersey. Quality of life Other factors combine to make Jersey a premier business location, such as the high quality of life the Island boasts. With a stable business tax system, premium but

affordable office space, quality education, health and housing opportunities, coupled with our beautiful natural environment, Jersey remains an attractive domicile for fund managers and boutique providers of international financial services. As the curtain closes on its 50th anniversary year, 2012 will see Jersey’s finance industry seek to consolidate and build upon its reputation in key oversees markets and continue to innovate its market offering in order to meet the challenges and opportunities ahead. By Geoff Cook, chief executive, Jersey Finance

Top tier In a report to the G20 from the Financial Stability Board, Jersey is listed among jurisdictions in the top tier for demonstrating strong adherence to international standards of regulation and information exchange, while the Financial Action TaskForce also has Jersey in the top tier. Backing up these endorsements on its international status, Jersey continues to maintain the regulatory conditions and

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Jersey offsHore Profile

Telecoms, IT & Communications Services Economically, it could be argued that Jersey’s biggest asset is its location. On the doorstep of both Europe and the UK, and ready to enjoy the benefits of its geographical, political and cultural proximity to both while standing apart and make its own decisions. From a telecommunications perspective, this positioning has relied on long-term investment in the island’s infrastructure, as well as continued focus on off-island connectivity allowing finance, and other industries, to reach customers across the globe and keep our economy driving forward. To continue to ‘future proof’ the island’s infrastructure, a risk lies in the fact that broadband in Jersey is being delivered already to the limit of a legacy copper network. To keep up with increasing demand for bandwidth that both business and domestic customers now expect, and also plan ahead, we are replacing this with a ubiquitous fibre-optic network aiming to bring the world’s fastest broadband to the Channel Islands. Falling under our ‘Gigabit Isles’ strategy, it will position Jersey and the Channel Islands well ahead of most other developed countries, delivering tomorrow’s future today for Jersey residents. Earlier this year we began trials of Gigabit speed broadband (1024Mb) within residential developments in Jersey and Guernsey, enabling our customers to be the first to experience an unparalleled range of innovative products/services. We are nearing completion of the first major milestone of Gigabit Isles with the installation of an £11m next generation network meaning all homes on the island will be able to receive a minimum of 2Mb broadband speeds with a further two thirds being able to achieve up to 20Mb. A ubiquitous fibre network will also put Jersey in an exceptionally strong position to develop, by encouraging valuable new businesses to move to the Island, and trade in high-value, low-impact, knowledge-based sectors as well as service local customers. We signed a memorandum of understanding with the global telecoms firm UTStarcom

(UTSi), enabling them to locate their entire European research and development function in Jersey. The relationship will make the most of JT’s installation of fibre-optic broadband, which provides the network speed, resilience and capacity necessary for companies like UTS to use Jersey as their European hub - a concept we call ‘JT Lab’. We are meeting other firms in the US, UK, China, Israel and beyond to build on the UTSi test case and develop opportunities to bring substantial new business to Jersey. Looking further afield for new business opportunities has also meant focusing on our wholesale division. We have a global client base that chooses our SMS platform over that offered by our global competitors; last year, JT Group exported 650 million SMS messages - a vast number considering our size and geographical location. Our team is now aiming to exceed one billion in 2011, again demonstrating JT and Jersey’s ability to ‘punch above our weight’. Initiatives like this, along with strengths like our excellent global roaming coverage and our rating as a tier 1 telecoms operator, put us firmly ahead of our competitors. We take seriously our role as partner to the Jersey finance industry in our home territory and our commitment is clear; eg, by investing further in a submarine fibreoptic cable linking the Channel Islands to the south UK coast, we brought true resilience to our international connections meaning our finance industry customers can continue to rely on us to conduct their business from Jersey. For those looking for new opportunities beyond the Channel Islands, we are also geared up to extend our support globally. Equally through our partnerships with global providers, companies can now set up a private communications network, linking their office in Jersey with other sites worldwide, which is continuously monitored and ensures that data can be shared quickly, securely and cost-effectively. In addition, with servers being the critical hub of IT networks, the requirement is increasingly for server environments that provide exceptional physical security, precise climate control, advanced fire suppression

systems and uninterrupted power supplies: in short, reliability, safety and security. The cost implications of a potential systems failure for local and international financial service based businesses are immense, so our investment into our six Channel Islandsbased data centres means our customers can benefit from resilient and highly secure hosting facilities including the powerful computer servers that run finance industry clients’ critical systems. As the largest provider of data hosting services in the Channel Islands, we are also in a position to support the islands to make the most of the e-Gaming market worth £50m to Guernsey alone last year. The States of Jersey have now also passed the necessary regulations to open up that market, and our investment in data centres and infrastructure means the JT Group is well poised to support this industry. We appreciate that to realise Jersey’s full potential as a place to do business, having a high-capacity, resilient and super-fast communications infrastructure is important - without it, our economy is potentially limited by our own shores. But get our communications network right, and our businesses can work with customers and colleagues from New York to Beijing, which is why we are working and always will to fulfil our own vital role in making this happen as the Channel Islands leading provider. JT bio JT is part of the JT Group, an innovative and progressive communications enabler based in the Channel Islands providing worldclass products and solutions to a diverse client base of business and retail customers. JT Group’s product range encompasses all the products and services expected from a cutting edge provider, from voice and data, consultancy, co-location, internet, security, mobile and support services and is widely recognised as the largest provider of data hosting services in the Channel Islands. Author: Tim Ringsdore, managing director, global enterprise division, JT Group

JT Business Solutions Team Tel: +44 1534 882882 (option 3) jtglobal.com

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Deutsche Bank db-ci.com

Looking for a global custodian in the Channel Islands? Deutsche Bank has the solution. Deutsche Bank in the Channel Islands provides a complete global custody solution for open and closed-end funds worldwide, complemented by banking, treasury and credit facilities. For more information please contact: Keith Johnson Head of Custody Solutions Tel: +44 1481 702206 Email: keith.johnson@db.com

Euromoney Awards for Excellence: Best Global Bank 2011

Adam Buxton Relationship Manager, Financial Intermediaries Tel: +44 1534 889223 Email: adam.buxton@db.com

Deutsche Bank International Limited is regulated by the Jersey Financial Services Commission and licensed by the Guernsey Financial Services Commission to conduct Banking and Investment Business

Jersey: A jurisdiction of choice for custody services Having weathered a difficult period, Jersey’s funds sector is one area that has particularly demonstrated a degree of resilience. In fact, the most recent statistics published by the Jersey Financial Services Commission show that the total value of funds under administration in Jersey, for the second quarter of 2011, stood at £196.7bn, the highest level since June 2009, reflecting a 10.5% yearon-year increase and a 4.2% increase on the previous quarter.

Today, Deutsche Bank has a formidable reputation for global custody solutions, looking after in excess of €13trn of assets globally. The Jersey office acts as custodian for assets valued at several billion Euros. Tax neutrality still plays an important part in making Jersey an attractive custody centre, but it is also increasingly about technological capabilities, global expertise, a flexible approach and standards of corporate governance.

The strength of Jersey’s funds sector is not just positive news for the sector itself, it has also brought with it a number of additional opportunities, particularly for custodians and bankers.

Jurisdiction of choice

Evolution With Jersey celebrating 50 years as an international finance centre this year, it is interesting to reflect on how custody services have evolved over recent decades. While there used to be demand for the more traditional ‘safe-keeping’ services, the real rise of custody in Jersey accompanied the growth of the retail funds industry in the 1970s, allied to the growing accessibility of the stock market to the general public as a result of privatisations in the 1980s. Over the years, UK tax legislation changes fuelled the growth and attractiveness of Jersey custody services, whereby the deferral of tax enabled clients to maximise their cashflow. Since then, custody has come a long way and become increasingly sophisticated, both in terms of what and how it is being held. For example, 30 years ago, tangible assets such as share certificates and bearer bonds would have been physically held in vaults. Technological changes over the past few decades have seen the removal of physical assets and their replacement almost entirely with electronic settlement and registration. This has led to increased efficiency and security with almost instantaneous transaction settlement. It seems an obvious observation, but it is a significant shift in the way custodians have had to adapt to the times. Deutsche Bank has had an established custody service through its Jersey office for more than 35 years and has played no small part in positioning Jersey as a major European centre for custody business.

Deutsche Bank is still seeing real growth in its Jersey custody business. As well as Jersey based institutions whose preference or legal requirement is to work with a locally based custodian, there is also significant interest from funds outside of Jersey that are relocating their custodian services away from other jurisdictions. This is an excellent reflection of Jersey’s reputation on the international stage. The hard work Jersey has put in over the past decade to establish itself as a jurisdiction of choice for specialist funds work means that there continues to be significant growth in the demand for custody services. For instance, the alternative asset class, including real estate, hedge and private equity funds, now represents around 58% of the total value of funds under administration in Jersey. In addition, legislation continues to focus on flexibility and a prompt approval process, in a pragmatic and risk controlled environment, geared towards the needs of sophisticated investors. In this way, the evolution of Jersey’s funds industry has presented firms in Jersey with an opportunity to develop in parallel a highly sophisticated, high quality custody solutions business. Of course, with greater innovation comes the responsibility of ensuring that standards of corporate governance are fit for purpose and this is where Jersey has managed to gain a real competitive advantage. Against a backdrop of increasing global financial services regulation, Jersey has been quick to commit to implementing the highest standards of compliance and governance and ensure its regulatory frameworks are robust and fully internationally compliant.

Partnerships Next year, Deutsche Bank will celebrate its 40th year of being present in Jersey. In those 40 years, what has really helped Deutsche Bank achieve success has been its willingness to form strategic partnerships with local and international law firms and fund administrators. As well as acting as custodian and banker for large and long-established funds, for example, it has also been important to support more bespoke custody business, such as alternative asset classes and start-ups. The global reach offered by custodians in Jersey, such as Deutsche Bank, means that clients can also benefit from a worldwide network and complementary financial solutions such as banking, foreign exchange, hedging and credit. With a growing reputation as a centre for specialist funds work and a responsible approach to corporate governance, Jersey will continue to receive a steady flow of high quality custody business. With further growth anticipated in 2012, Deutsche Bank is looking forward to helping Jersey affirm its reputation as a first class centre for international custody services. Bio Keith joined Deutsche Bank in 2007 as director to focus on developing the custody offering. He supports Deutsche Bank’s businesses in the Channel Islands, Cayman and Mauritius. Keith is also responsible for custody business reviews and leads the development of online banking platforms to meet the needs of Deutsche Bank’s clients. He has over 30 years of experience in all aspects of investment administration and global custody solutions covering middle and back office functions. Keith is a fellow of the Institute of Chartered Accountants (FCA) in England and Wales and holds a diploma in business studies majoring in law.

Keith Johnson Director Head of custody solutions Deutsche Bank International Limited Tel: +44 1481 702206 keith.johnson@db.com

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Jersey offsHore Profile

How many times have you been captivated by a concept of the quick return? Realistically, we all have - the hope of that timely investment that galvanises your fortunes almost overnight… that firmly pocketed lottery ticket… - and very occasionally we do win and it does come good. Today, your investment brief is going to be a story about a bull, a bear and a tortoise (hint: back the tortoise). Investors in equities generally hope for a bull market, an extended period in which investment prices rise faster than their historical average as they did in the early 1990s, often as a result of an economic recovery, (which looks increasingly distant for large parts of the western world!). Right now, the bull is disappearing over the horizon. What we have is the exact opposite; a bear market. We are experiencing a prolonged period in which investment prices fall, accompanied by widespread pessimism. There’s the bear of the story – and the current one’s a right Grizzly. The reality of the investment world is that most markets are fickle and cyclical and investing is a long-term race. That’s where the tortoise comes in. We all know the fable about the tortoise and the hare, where the supposedly swift and speedy hare brags about being the fastest animal around and sure to win any race. Challenged by the tortoise to a race the hare stops, snoozes and falls asleep – while the tortoise plods on and wins the race with slow and steady progress. That sums up the rare stamp market; uncorrelated with other mainstream, more volatile asset classes, but showing relentless, steady growth over decades. Even in the turmoil of the recent crash, the stamp market remained healthy and in fact the GB30 Rarities Index, the Bloomberg-listed index of rare GB stamps has shown a compound growth of just short of 11% for the past 40 years. In the last few weeks, two rare stamps from Mauritius realised over £1m (each) at auction in London. That’s the sort of impressive investment performance unheard of in many other asset classes. But don’t just rely on Stanley Gibbons to tell you that. An academic, completely

independent study by Elroy Dimson & Spaenjers in 2009, ‘The Investment Performance of Collectible Stamps (1900-2008)’, concluded that stamps had: “… an annualized return of 7.0% in nominal terms, or 2.9% in real terms… higher than those on bonds but below those on equities. Stamp returns are impacted by movements in the equity market, but the systematic risk of stamps remains low. Stamps partially hedge against unanticipated inﬂation. Estimates of average after-cost returns for individual investors show that stamps may rival equities in terms of realized performance.” In essence: British stamps showed a steady annualised return of 2.9% from 1900 to 2008 with little volatility or risk; stamps are a good hedge against inflation; and, although the annualised return for equities was at 5% over the same period, once the transaction charges are taken into account, the gap narrows considerably. You can rely on the tortoise. You can rely on our expertise; as the Times wrote, Stanley Gibbons has: “... an unblemished reputation for expertise and honest dealing.” Trust in your investments is critical in today’s febrile climate. We have a 155-year track record of identifying and dealing in rare stamps; we have philatelic experts who have worked for the business for years and are renowned worldwide as being the ‘experts’ expert’ in their field; we are the name on almost everyone’s lips when rare stamps are mentioned, and for good reason. You can rely on us to guarantee your capital to remove your risk; we researched and listened to our customers and to the market, to investors’ concerns about losing the wealth you’ve worked so hard to accumulate. Some have seen savings stagnate, many have lost money on the stock market, and some have even seen the value of their homes fall.

however, if as we expect, the stamp market continues to grow, you benefit from the growth. We won’t promise you excitement. We certainly won’t promise you ‘get rich quick’ schemes. But we may give you a very good chance of securing an investment that is very compelling and rewarding over the distance. On the basis of prolonged historical performance, you are unlikely to encounter any ‘bears’ in the wood with a rare stamp investment; and if you’re looking for ‘bulls’, the closest we get is probably an investment in Chinese stamps or our newest diversification option, rare coins. However, if you’re looking for a secure option for five-ten years, why not consider backing a tortoise? And one more thing that might attract you the pieces of paper you’ll own if you invest with us are not share certificates, giving you a virtual slice of a business whose fortunes you have no influence on. With Stanley Gibbons, the moment you invest with us, each piece of paper you will then own is a little piece of history, a tangible, heritage asset with a true value, whether it’s a rare Victorian or Edwardian stamp or a signed manuscript. If you want a chance of winning the longterm race, then all you have to do is contact us to discuss your options and investment aspirations. So next time you’re wooed by the thought of a quick return, beware the promise of lightning pace, for slow and steady won the race!

That’s why we created the Capital Protected Growth Plan - an investment wrapper that guarantees your capital 100% but allows you to benefit from all the potential growth in the rare stamp market. In the unlikely event that the stamp market declines, we guarantee to return your invested sum;

jersey@stanleygibbons.com Portfolio Manager team: 01534 766 711 18 Hill Street, St Helier, JE2 4UA

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December 2011 • GBM • 59

HoW to Plan for your retirement

How to plan for your retirement. tHe fiVe steP Guide

At the age of 25, a retirement plan is of no importance to you, unless you have a foolproof get rich quick plan that actually works. Something along the lines of winning a huge fortune on the lottery would be ideal “one can only dream” you have to actually play the lottery to win it! As much as we would all love an early retirement, in reality most of us have to work until we reach the age of at the least 65. So how do you secure a financially stable retirement fund? The answer is simple follow the five step guide on “how to plan for your retirement”. Please keep in mind this is just a guide to help you understand and plan retirement.

1 2

steP one

steP tWo

START YOUNG, The best time to start planning for your retirement would be at the age of 25; here`s why? By the time we have reached 25 most of us will have gained a certain maturity in terms of our financial responsibilities, Retirement plans should be a part of these responsibilities. There will be a significant difference in the amount of pension you will receive when you start at a young age, opposed to that if you were to start a decade later. A retirement plan can be set up at any age.

HOW MUCH? Before you can determine how much money you will need to set aside each month, an assessment of what your living expenses might be when you reach your retirement age is essential. The best way to do this would be to devise a budget plan, do not include mortgage payments because you should not have any by the time you reach retirement. Do include the cost of any hobbies you may want to take on or extra holidays of trips. To give you a general idea of what should be included in your budget plan, some of the basics have been mentioned for your convenience; starting with the necessities’ the first thing on your budget plan should be the cost of your weekly or monthly food shop. Be sure to include an allowance for eating out if this is something you already do on a regular basis or would like to do when you have retired. Utility bills need to be added, you may have managed to reduce you power usage over the years so keep in mind they could be a lot less than what you are currently paying. Set aside a budget for other basic items like new clothes or trips to the salon/barbers. Not many of us keep a watch on how much we spend and what we spend our money on and sometimes an assessment of our finances can be somewhat surprising. After you have budgeted for life’s little essentials, you can then think about what you see yourself doing once retired. Maybe you fancy travelling the world, moving to a nice quiet village in a different country, perhaps you see yourself playing rummy for matchsticks in a cosy little retirement home. Try to set out your

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budget plan on an annual basis; this will give you a better idea of what you need to save. To sum it up it all depends on how you want to spend your retirement years.

steP tHree

PENSIONS AND INVESTMENTS. You may be eligible to claim a state pension, which will pay a set amount of money each week to cover living expenses. You can contact your local government or benefits department for more information about how it all works. To gain a more comfortable lifestyle it is advised to save or invest some of your hard-earned cash, there are several options to go with. CPS (Company pension schemes) Are a good and profitable way of investing in your retirement, a percentage of your salary is added to a fund that will invest your money in shares of some sort. Most companies will match your contributions up to 7% annually, you do not need to know much about or get involved with the investing, as a professional will do the work for you. ISA`S This type of investment is more hands on; it requires a good or basic knowledge of the stock market and keeping a keen eye on the action. You control where your money goes, so you can move it if the market falls. Unfortunately, employers are not inclined to add any contributions to an investment fund of this nature, so it is all up to you. SIPP`S (Self-invested personal pensions) Are very much similar to ISA`S when it comes to deciding where your money is to be invested. Unlike any other pension, this type of investment allows you much more control over your cash. If you would prefer to invest in a particular company or product only, this is perfect. PSP (Personal stakeholder pensions) Are more for those who do not have the time or simply are not that concerned with what they have invested in. Professional advisors will do all the work for you; however, they do charge a fee how this fee is paid will depend on the individual advisor. Savings accounts Are another way of securing money for your retirement as most bank`s or building society`s will pay as small percentage

of the amount you have saved annually, usually around 2% (estimation only). You have the peace of mind knowing your money is safe with a savings account; on the down side, you will not have the opportunity to gain a small fortune.

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Premium bonds and investment bonds should also be considered, as they can give a small fortune in return.

AGE AND PERCENTAGES It is impossible to predict how long we live for, and so it is impossible to predict how much money will be enough to live on once we “hang up our hat” so to speak. So how do we determine how much to put aside? If you calculate, how much you would need to survive on over a 30-year period, it will be a lot easier to figure out how much you should put aside. For example: If you start saving in your twenty`s and you set a minimum of 10/15 percent without making any cut backs up to retirement, this will give you a very sizeable amount to live a comfortable and healthy retirement. To start in your thirty`s and have the same comfort you would need to set aside between 15/25 percent of your income. To begin in your forty`s you would have to save huge 25/30 percent of your income to gain financial security in retirement.

an insight of what you should be doing for retirement.

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CHECK AND RELAX! Now you know what you should be doing for your future and your retirement plan is complete. The last and most important steps to take are as follows; before you sign any sort of agreements or contracts be sure that the company you are dealing with is a reputable one as well as a legitimate one. As much as we hate reading the small print, it is highly recommended that you read it thoroughly and completely understand what you are agreeing to. If for any reason you are not entirely happy or do not fully understand what you are getting involved with please seek help from the advisor or take it along to another expert for a second opinion. After all this is your future in their hands, do not give it away to fraudsters. Once you are happy with your choices and you have signed the on the dotted line the only thing you have to do is sit back and relax, “well not completely” you still have to continue your career and other such life duties.

The reason for the increased percentages the older you are when you start saving for your retirement, this is obvious; however, for those who are not quite sure here is a short explanation. The younger you are the longer you have to save, the older you start the less time you have to save, so to avoid having to make some cutbacks on what you want to spend money on when you do retire the increases are necessary. These percentages are only a guideline to give you

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Cartel reGulations EUROPEAN UNION The fight against cartels is the priority in competition enforcement in the EU The fight against cartels is a central tenet of European competition policy. Cartels raise prices, restrict competition and deter new market entrants. They impose significant costs on consumers and businesses alike and have harmful effects on productivity and economic growth. In the current economic climate, it is all the more imperative to promote competition and encourage new business ventures, and the European Commission has devoted considerable resources to the detection and prosecution of cartels.

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In 2010, the European Commission adopted seven cartel decisions, imposing total fines of close to €3bn. A further three cartel decisions were adopted up to November 2011, with fines approaching an additional half billion Euros. The cartels were discovered in very different sectors of the economy, including air cargo, memory-chip manufacturers, animal feed additives, steel, washing powder and banana imports. Some of these cartels had a direct effect on final consumers; in other cases, the primary victims were other businesses. The size of the companies involved was highly diverse, ranging from small companies with a total turnover of a few million Euros to major global companies. This demonstrates that no industry and no type of company are immune from breaking the law. The malign influence of cartels touches many sectors of the European economy. Given the scale of fines that are imposed on colluding companies, it is in a firm’s own interest to ensure that it does not enter into cartels in the first place. It is first and foremost a company’s responsibility to ensure that it respects the rules. An effective tool can be the establishment of a compliance programme. The European Commission is currently supporting the adoption of compliance programmes through various different channels. It disseminates comprehensive information on EU competition rules and their implementation through the web and other means. It is also in constant dialogue with business people and other stakeholders to refine other sources of information that will enable companies to establish internal programmes and advice for employees. Businesses should also be aware that it is no excuse to claim that infringements have been carried out by ‘rogue’ employees, and that they have a responsibility to monitor behaviour as well as providing guidance. Companies acquiring other businesses should undertake a thorough due diligence and cease and report any involvement in cartels. A successful compliance programme brings its own reward, which is not getting involved in unlawful behaviour. However, if companies decide to break the law, whether actively or through negligence, it is the European Commission’s responsibility to detect and sanction them. In order to facilitate the detection of cartels, the European Commission has also invested resources into market monitoring and will start cases on its own initiative whenever it believes that collusive behaviour is taking place. The Commission also receives information from current or former employees or customers of cartels. They know and trust that the Commission can fully protect their identity and they are encouraged to come forward with information that will help to identify infringers. The fight against cartels has also benefitted enormously from the European Commission’s leniency programme, one of the major successes of competition policy in recent years. An effective leniency policy destabilises cartels and greatly increases the possibility of detection. The European Commission will therefore aim to achieve the right balance between the desire to facilitate private enforcement and the importance of protecting the leniency process. This may include legislative proposals in order to render the existing legal framework more robust and to ensure the effective operation of the leniency programme. Effective means of deterring companies from entering into cartels require, together with a sufficiently high risk of being caught, sanctions that exceed the gain that companies expect to derive from their illegal conduct. The Commission sets fines at levels designed to punish those that have broken the law and to deter others from engaging in anti-competitive behaviour. The fines reflect a number of factors, including the turnover of the collusive company in the relevant market, as well as the gravity and duration of the infringement. The Commission’s

Fining Guidelines have recently been upheld by the European Court in the Sodium chlorate and International removers cases. The Guidelines ensure that, while rigorous, the Commission’s sanctioning policy is transparent and predictable. The fine on a company cannot exceed 10% of its total turnover. This prevents fines from being disproportionate in relation to the size of the undertaking concerned. In addition, there are further safeguards provided by the Commission’s policy on inability to pay. In those cases in which a company argues that it is unable to pay the fine, the Commission undertakes a detailed analysis of its financial position in order to avoid that the Commission’s fines drive financially distressed companies out of the market and lead to adverse social and economic consequences. Nevertheless, the Commission will continue to set fines that represent an effective deterrence to anti-competitive behaviour. The benefits of antitrust enforcement do not depend on the state of the economy and, if anything, are even more important in difficult economic times when companies have an increased incentive to collude with their competitors and the effect on struggling consumers and suppliers is particularly damaging. In addition, the European Commission has been working on a simplification of its procedure by introducing settlements. This will allow the Commission to deal more quickly with cartel cases, thereby freeing up resources to open new investigations and further reinforce deterrence. In 2010, the first decision under the settlement procedure was adopted in the DRAMS case. Three further settlement decisions have demonstrated that the settlement route is efficient and becoming increasingly common. However, settlements are not an investigative shortcut. A thorough initial investigation is necessary before the settlement process can begin. The European Commission rewards the parties’ co-operation to attain procedural economies with a 10% discount of the fine, but it does not bargain on the evidence gathered or on its objections. This procedure will also not give companies the possibility to negotiate with the European Commission the appropriate sanction. Once again, it is in a company’s primary interest to make sure that it does not become involved in anti-competitive behaviour. The purpose of EU competition law is to promote fair and undistorted competition on the market. Cartels weaken competition and harm European businesses and consumers. They restrict current output and undermine long-term growth and structural change. Sufficient deterrence and effective procedural tools are essential in the fight against cartels. Ideally, these should prevent businesses from initiating anti-competitive behaviour. If companies persist in entering into cartels, then the Commission will make every effort to detect and prosecute them.

Eric Van Ginderachter European Commission Directorate General for Competition Director of the Cartels Directorate

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TURKEY Overview of cartel regulation in Turkey The statutory basis for cartel prohibition is the Law on Protection of Competition No. 4054, dated 13 December 1994 (Competition Law). The applicable provision for cartelspecific cases is article 4 of the Competition Law, which lays down the basic principles of cartel regulation. It prohibits all agreements between undertakings, decisions by associations of undertakings and concerted practices that have (or may have) as their object or effect the prevention, restriction or distortion of competition within a Turkish product or services market or a part thereof. Similar to article 101 (1) of the EC Treaty, the provision does not bring a definition of ‘cartel’. Rather it prohibits all forms of restrictive agreements, which would include any form of cartel agreement. Therefore, the scope of application of the prohibition extends beyond cartel activity. Unlike the EC Treaty, however, article 4 does not refer to “appreciable effect” or “substantial part of a market” and thereby excludes any de minimis exception as of yet. Therefore, for an infringement to exist, the restrictive effect need not be “appreciable” or “affecting a substantial part of a market”. Article 4 also prohibits any form of agreements that has the “potential” to prevent, restrict or distort competition. Again, this is a specific feature of the Turkish cartel regulation system, recognising a broad discretionary power to the Competition Board (CB). Another important material issue specific to Turkey is the very low proof standards adopted by the CB. The participation of an undertaking in cartel activity requires proof: that there was such a cartel activity, or in the case of multilateral discussions or co-operation; and, that the particular

undertaking was a participant. The Competition Law brings a “presumption of concerted practice”, which enables the CB to engage in an article 4 enforcement in cases where price changes in the market, supplydemand equilibrium, or fields of activity of enterprises bear a resemblance to those in the markets where competition is obstructed, disrupted or restricted.

secrets; and, procedures of the oral hearings before the CB. Communiqué No 2010/3 on the Regulation of Right to Access to File and Protection of Commercial Secrets was enacted on 18 April 2010. It regulates the conditions under which investigated undertakings may have access to the investigation case file and lays down the principles and conditions of confidentiality with respect to trade secrets.

In the case of a proven cartel activity, the companies concerned shall be separately subject to fines of up to 10% of their Turkish turnover generated in the financial year preceding the date of the fining decision (if this is not calculable, the turnover generated in the financial year nearest to the date of the fining decision will be taken into account). Employees and/or managers of the undertakings/association of undertakings that had a determining effect on the creation of the violation are also fined up to 5% of the fine imposed on the undertaking/association of undertaking.

Communiqué No 2010/2 on Oral Hearings before the CB was enacted on 24 April 2010. It regulates the procedures under which oral hearings are held before the CB.

The leniency programme is available for cartel members. The Regulation on Active Cooperation for Discovery of Cartels (the Regulation on Leniency) does not apply to other forms of antitrust infringement. Depending on the application order, there may be total immunity from, or reduction of, a fine. As for the highest monetary fines imposed by the CB on a single company as a result of a cartel investigation was 68,844,704.73 TL (approximately €27,537,881.892). The highest monetary fine imposed by the CB for an entire case (ie, total fine on all companies covered by the cartel conduct) as a result of a cartel investigation was TL 277.4 million (approximately €110,960,000) for various companies in automotive sector. In addition to the monetary sanction, the CB is authorised to take all necessary measures to terminate the restrictive agreement, to remove all de facto and legal consequences of every action that has been taken unlawfully, and to take all other necessary measures in order to restore the level of competition and status as before the infringement.

ELIG, Attorneys-at-Law Gönenç Gürkaynak Partner Tel: +90 212 327 1724 gonenc.gurkaynak@elig.com www.elig.com

The final decisions of the CB, including its decisions on interim measures and fines, can also be submitted to judicial review before the High State Council by filing an appeal case within 60 days upon receipt by the parties of the justified (reasoned) decision of the CB. The most recent change with respect to the Turkish cartel regime in 2010 was the enactment of secondary legislations on: right of access to case files and protection of trade

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ELIG represents corporations, business associations, investment banks, partnerships and individuals in a wide variety of competition law matters. In addition to an unparalleled experience in merger control issues, ELIG has a vast experience in defending companies before the CB in all phases of an antitrust investigation. We have in-depth knowledge of representing defendants and complainants in complex antitrust investigations concerning all forms of abuse of dominant position allegations and all other forms of restrictive horizontal and vertical arrangements, including pricefixing, retail price maintenance, refusal to supply, territorial restrictions and concerted practice allegations. Furthermore, in addition to a significant antitrust litigation expertise, our firm has considerable expertise in administrative law, and is therefore well equipped to represent clients before the High State Council, both on the merits of a case, and also for injunctive relief.

UNITED KINGDOM International Cartel Regulation Anti-cartel enforcement is a key plank of competition policy and seeks to minimise the adverse effects of cartels on economic welfare. Effective regulation involves a wide range of bodies from governments, competition authorities and criminal prosecutors globally. Nicole Kar, a specialist in relation to EC and UK cartel enforcement and co-chair of Linklaters LLPs’ Global Cartels Practice discusses cartel regulation in the United Kingdom below. Linklaters’ global cartels practice Linklaters’ competition law expertise covers cartels and dawn raids, market and sector investigations, merger control, and competition litigation, abuse of dominance, state aid, public procurement and utilities regulation. Our market leading global cartel practice is full service, assisting clients through the entire investigatory life cycle from compliance programmes and audits, whistle blowing and leniency, dawn raids, the administrative or criminal investigation and follow on litigation. The Linklaters competition team has unparalleled experience in dealing with global cartel investigations and follow on litigation claims. We have represented clients in three of the four cartel cases closed by the European Commission over the last 12 months. In addition, we have represented clients in the largest cartel case ever brought by the Office of Fair Trading (OFT) in the construction industry. We represented the whistleblower in the marine hose case that resulted in the first ever (and only to date successful) criminal cartel prosecution by the OFT and in which we secured global immunity from fines and jail time for our client and its employees. We have also assisted major banking players on a number of investigations launched in the financial services sector and sponsor clients in relation to portfolio company involvement in cartel investigations. We are able to draw upon

the expertise of our top ranked lawyers across the globe, offering a high quality and integrated legal service to our clients. Seamless global co-ordination based on market leading experience allows us to support clients through the many issues that arise in cartel investigations before the European Commission, the US Department of Justice, the OFT and other competition authorities globally. Our practice also benefits from the unique expertise of Sir Christopher Bellamy QC, former president of the UK Competition Appeal Tribunal and judge of the Court of First Instance and one of the most influential competition lawyers in Europe.

Linklaters LLP Nicole Kar Partner Tel: (+44 20) 7456 4382 nicole.kar@linklaters.com www.linklaters.com

Cartel regulation in the UK The Competition Act 1998 (Competition Act) and the Enterprise Act 2002 (Enterprise Act) are the two principal pieces of UK anti-cartel legislation. In addition, Council Regulation 1/2003 allows the competition authorities and courts in the UK to apply and enforce article 101 of the Treaty on the Functioning of the European Union (TFEU), which prohibits cartel conduct. The Competition Act, like article 101 of the TFEU, prohibits agreements between undertakings, decisions by associates of undertakings or concerted practices that may affect trade within the UK (between member states in the case of article 101) or have as their object or effect the prevention, restriction or distortion of competition within the UK. Prohibited conduct includes: price fixing (including resale price maintenance), market sharing, bid rigging (collusive tendering) and output restrictions/quotas. The consequences of breaching the Competition Act can include civil fines for corporates of up to 10% of global group turnover, director disqualification of up to 15 years, follow on private damages claims and reputational damage. UK competition law also provides for criminal sanctions in relation to cartel conduct. The Enterprise Act provides that it is a criminal offence if an individual dishonestly agrees with one or more persons to make or implement or cause to be made or implemented, arrangements relating to at least two undertakings and involving prohibited cartel activities. Any individual found guilty of committing the criminal cartel offence may be imprisoned for up to six months and receive a fine of up to £5,000 if tried and convicted in a magistrates

court and up to five years, and receive an unlimited fine if tried and convicted in the Crown Court. The Court may also impose confiscation of criminal proceeds orders and director disqualification orders. The first and to date only criminal convictions for the cartel offence occurred in the marine hoses case. Three executives (who plead guilty to the offence) were sentenced to terms of between 20 and 30 months (reduced on appeal to between 2.5 and three years); disqualified as directors for between five and seven years, and had criminal confiscation orders made against them (for between £366,000 and £469,000). Risky industries According to an economic study ‘Predicting Cartels’ prepared for the OFT in 2005 (and based on European and US data and ‘scoring’ based on economic analysis), the industries in which cartels are most likely to occur are construction/civil engineering, telecommunications and transport. Broadly, industries characterised by a small number of players, homogenous products, high barriers to entry, stable demand, the absence of large and powerful buyers and excess capacity are more likely to be susceptible to collusion. Having said that, the OFT has conducted cartel investigations into diverse sectors including construction and construction recruitment, independent schools, toys, replica football kit, supermarkets, financial services, air transport and has launched criminal cartel investigations (some of which have been terminated) in relation to airline fuel surcharges, commercial vehicles, automotive spare parts and agricultural bale wrap.

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NETHERLANDS The Netherlands: Crisis or no crisis – Cartels remain an enforcement priority able to take enforcement action under either law depending on the economic impact of the cartel; however, for larger cross-border cartels, it will usually fall to the European Commission to investigate and sanction any illegal behaviour. CLIFFORD CHANCE LLP Helen Gornall Senior associate - antitrust Droogbak 1A 1013GE Amsterdam T: +31 20 711 9248 helen.gornall@cliffordchance.com www.cliffordchance.com

In these tough economic times, many businesses are struggling to make ends meet; competition for market share is fierce, and for some, joining forces with competitors may seem like the perfect solution. Why not divide up customers, stabilise prices or mutually reduce capacity until the economy gets back on its feet? Beware: The price paid for illegal cartel agreements is higher than you think As with the whole of the EU, enforcement of the cartel prohibition in the Netherlands is on the increase. The Dutch Competition Authority (Nederlandse Mededingingsautoriteit or NMa) is committed to enforcing fair competition in the Dutch market and is serious about cracking down on cartels. In 2010 alone, it imposed fines for antitrust violations totalling €137.1m, with the highest fine for a single company being €22.8m. And it’s not just businesses that are being brought to heel; in 2009, two former general managers were fined €150,000 each for failing to cooperate with a cartel investigation. A bill is also being prepared for parliament that would introduce prison sentences for individuals who participate in cartels. The message is clear: cartels don’t pay. Legal framework The legal framework relevant to Dutch cartels is both national and European. The Dutch Competition Act (the Act) prohibits cartels that affect the Dutch market or any part of it. In contrast, article 101 of the Treaty on the Functioning of the European Union (TFEU) prohibits cartels that have an effect on trade between member states. The NMa is

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The Act mirrors article 101 TFEU, prohibiting any agreement, decision or concerted practice that has as its object or effect the prevention, restriction or distortion of competition, and applies to the Dutch market or any part thereof. The prohibition is wide and governs many types of agreement, some of which qualify for exemption. However, cartels involving competitors materially fixing prices, allocating markets or customers, bidrigging or regulating production output will be classed as per se violations and will almost never quality for exemption. The cartel prohibition under the Act applies to all types of undertakings and associations of undertakings, including: public and private companies, individuals running unincorporated businesses, nonprofit organisations and trade associations. It is immaterial where an undertaking is incorporated or established; the key factor is whether an agreement has an effect on competition on any part of the Dutch market. Agreements concluded by companies within the same economic group will not fall under the prohibition. The definition of “agreement, decision or concerted practice” is similarly broad. Oral agreements, even silent acquiescence to a common strategy, can fall under the Act. Cheating on a cartel arrangement won’t let you off the hook either. Enforcement procedure There are various ways in which the NMa can initiate an investigation into an alleged cartel; it can decide to do so on its own volition (often following leads uncovered during other investigations) or on information received from a third party, such as a customer who suspects fowl-play. Cartels are also often uncovered through a ‘whistleblower’; a member of the cartel who chooses to offer information to the regulator in exchange for leniency from fines and other sanctions. Under Dutch law, a leniency applicant who provides sufficient evidence to allow the NMa to initiate an investigation will be entitled to total immunity from fines. Reductions in fines are also available to other types of leniency applicant. Dawn raids In order to gain evidence of a cartel’s activities, the NMa may decide to carry

out dawn raids at the premises of alleged participants. The NMa has wide powers of investigation and can carry out searches at a place of work, in a vehicle or even (where a warrant permits) in a private home. The NMa can take copies of a wide range of documents, including emails, contacts, agendas and memos. It can interview current and former employees and managers; a failure to cooperate will be classed as a separate offence and can lead to fines being imposed on an individual and/or undertaking (of up to €450,000 or 1% of company turnover, plus periodic penalty payments). In 2009, the NMa fined two former general managers of a company €150,000 each for such an offence. In contrast to current directors and employees, their status as former employees of alleged cartel participants did not allow them the right to remain silent. While this decision is currently being appealed, a fine imposed for similar non-cooperation in 2007 has been upheld by the Dutch Courts. The NMa is also able to impose fines (of up to €450,000 or 1% of company turnover) where a seal (blocking access to certain areas/documents) is broken during a dawn raid procedure; in 2008, a fine of €269,000 was imposed for this offence. SanctionsA range of sanctions are available both to the NMa and third parties for antitrust violations. The NMa can impose administrative fines on companies, including parent companies (of up to €450,000 or 10% of turnover, whichever is higher) and on individuals (up to €400,000). Fines can be increased for repeat offenders, ringleaders and failure to cooperate. A bill is currently being prepared to introduce criminal sanctions, including prison sentences and director disqualifications for individual cartelists. The cartel prohibition can also be relied on directly by third parties affected by a cartel to bring civil claims for injunctive relief and/or actual damages. Several law firms and economists are specialising in bringing these types of claims. In short, the financial and reputational harm caused by cartels can be huge. As Steven Verschuur, Counsel at Clifford Chance, points out: “Cartels harm competition and, through enforcement, harm the participants themselves. No one wins. Companies should focus on damage limitation and effective deterrence, through internal compliance initiatives.”

URUGUAY Uruguayan Antitrust Regulation: Law and Practice Brief overview of the Uruguayan antitrust regulation on cartels Law No 18,159, enacted in August 2007 (Antitrust Act) introduced the antitrust regime currently in force in Uruguay. The main purpose of the Antitrust Act is to ensure a market unburdened by distortion and governed by free market principles, to foster the wellbeing of users and consumers. The Antitrust Act prohibits two main practices: abuse of dominant position; and, any practice, behaviour or recommendation (both individually or concerted) that has the effect or object of distorting, restricting, limiting, hindering or preventing present or future competition in the relevant market. To determine the existence of banned practices, the enforcement agency (the Commission for the Promotion and Protection of Competition (the Commission) created by the Antitrust Act) may take into account whether such practices, behaviour or recommendations generate economic efficiency gains for the individuals and companies involved, the possibility of obtaining them through alternative means and the benefit transferred or to be transferred to consumers. This means that anticompetitive behaviour is weighed against the ‘rule of reason’. Prohibited conducts, sanctions, leniency Among others, the following practices and behaviour are expressly prohibited: to

directly or indirectly concert or impose the purchase or sale prices or other conditions for transactions on an abusive basis; to limit, restrict or concert on an unjustified basis the production, distribution and technological development of goods, services or production factors, in detriment of competitors or consumers; to coordinate participation or lack thereof at public bids or tenders; and, to deny without justification the sale of goods or rendering of services. After the correspondent administrative proceedings are duly carried out, if the Commission concludes that an anticompetitive practice has taken place, it may impose (separately or jointly) the following sanctions: admonition; admonition with publication of the resolution, at the expense of the breaching party, in two national newspapers; and/or, a fine between a minimum amount of 100,000 Indexed Units (approximately US$11,500) and a maximum amount equivalent to the higher of the following: 20,000,000 Indexed Units (approximately US$2,300,000); the equivalent of 10% annual turnover of the breaching party; or, the equivalent to three times the damage caused by the anti-competitive practice, if it can be determined. Despite the growing amount of countries that have criminalised cartel behaviour, it is not considered a crime under Uruguayan Law. It is noteworthy that the above mentioned sanctions are applicable to anti-competitive practices and behaviour committed both individually or in a concerted manner; thus cartelisation is not specifically addressed by the Uruguayan antitrust regulation. The existence of collusion, however, may be taken into account by the Commission when ascertaining the sanction to be applied to the involved parties. To encourage a member of a cartel or party to any other concerted agreement, to report the existence of such cartel or agreement, the Antitrust Act has included the concept of ‘leniency’. As a result, the member who reports and provides sufficient evidence pertaining an anticompetitive conduct may be subject to less stringent sanctions. Such mitigating circumstances are not applicable to those who masterminded or initiated agreements with other competitors. As of today, we are not aware that these leniency provisions have been applied.

Recently, we successfully defended a local company accused of participating in collusive agreements (cartelisation) for market allocation; the very first case of ‘cartelisation’ discussed in Uruguay. The defendants were accused of colluding to refrain from participating at public bids. One of the companies (assisted by Guyer & Regules) was able to prove to the Commission’s satisfaction the following: the lack of grounds of the accusation, and, that its conduct was reasonable and justified on commercial grounds mainly because it owed to the high costs and implied risks of partaking in the bid. To sum up, the Commission agreed that the conduct of the defendants (even if collusive in appearance) was reasonable and justified in the context of the commercial analysis. Consequently, in application of the ‘rule of reason’ principle the Commission dismissed the claim. The most groundbreaking aspect of this precedent is, in our opinion, that the Commission sets a high standard when analysing cases involving collusion and has analysed such cases in the light of the ‘rule of reason’. The ‘rule of reason’ has been further applied by the Commission and the Administrative High Court (Tribunal de lo Contencioso Administrativo) in several cases. See, for example,; Sociedad Televisora Larrañaga S.A. c/ Poder Ejecutivo - Acción de Nulidad; Lumary S.A. (Colonia Express) c/ Tarjetas de Crédito) and it is safe to say that now we have enough precedents to conclude that this principle is being applied without hesitation.

Guyer & Regules Juan Manuel Mercant and Yael Ribco Partner and associate respectively Tel: +598 29021515 ext. 171/310 jmercant@guyer.com.uy yribco@guyer.com.uy www.guyer.com.uy

Relevant cases

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LATVIA Cartel regulation in Latvia 2011 Latvian competition laws contain principles prohibiting undertakings to engage in agreements that restrict or distort competition very similar to article 101 of the EU Treaty. Thus, article 11 of the Latvian Competition Law also prohibits undertakings to agree on price fixing, market sharing, collusive tendering and other types of cartel activity. In case a competition infringement of the Latvian or EU competition laws has been detected, the Competition Council (Latvia’s national competition authority (LCA)) is entitled to impose commitments and fines that do not exceed 10% of turnover. As competition principles provided by law are very similar, the insight into the cartel regulation in Latvia will be illustrated by recent practice of LCA and judgments of the Latvian Supreme Court Senate (the Supreme Court) on several appealed LCA’s decisions. At the beginning of 2011, LCA finalised an investigation concerning the banking sector. Almost all banks providing banking services in Latvia had entered into a contract fixing multilateral interchange fee for cash withdrawals from ATMs, cash withdrawals in banks, card transactions at POS terminals and on the Internet with some VISA and MasterCard issued cards. LCA stated that, although application of a national multilateral interchange fee for card transactions at POS terminals does not of itself violate competition law, the agreement that has existed without altering and modifying the fee (sometimes higher than those set by the international payment card organisations) for eight years has substantially restricted competition among banks. The majority of banks appealed the decision, and now it will be examined in court. In 2011, the Supreme Court completed judicial review in a number of competition

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cases where LCA’s decision had been appealed. In one case, two road construction and renovation undertakings had agreed to claim the cost increase within their procurement contracts that had been concluded two years earlier with a municipality undertaking. During informal communication, the undertakings found that their actual costs had increased since contracts were signed. Additionally, to verify their considerations, it was agreed that one would send its latest cost calculation via e-mail. The important aspect of the case was that the undertakings did not carry out the initial intention because the contracts provided application of inflation index for contract price recalculation due to inflation increase. The court agreed with LCA view that such practice by undertakings is contrary to the obligation to independently determine the conduct in the market. Another judgement concerned an earlier investigation by LCA into regular exchange of information among the biggest paper wholesalers in Latvia regarding their sales volumes for previous quarters. Initially, the exchange was carried out directly, namely, each undertaking sent their individual data to other undertakings involved in the information exchange. Later undertakings exchanged the data through a market research company. The Supreme Court considered that it was sufficient to establish an infringement, because the paper wholesale market was deemed oligopolistic and the information was compiled for the sales of paper products in 11 product groups and broken down depending on the type of delivery to customers (direct from manufacturer, from warehouse, etc). The Supreme Court held that such information was sufficiently detailed to enable undertakings to draw conclusions about rivals’ business strategy (although the judgment itself was more opaque on this point). In the period when the information exchange was provided through the market research company, in certain paper categories the undertakings could easily establish realised volumes of paper categories where only one or two wholesalers had been active. The case is also notable for the

fact that the Supreme Court supported LCA’s formalistic approach using limited economic assessment for establishing oligopolistic features of the market. Finally, the Samsung cartel case should be mentioned as the last one. Samsung Electronics Baltics (Samsung) and its wholesalers in Latvia, which have also been acting as the biggest merchants in retail market, had engaged in market sharing and resale price maintenance particularly affecting online shops in the markets for distribution and reselling of electronic household appliances, especially Samsung LCD TV sets. This was the most visible case as the fine imposed on Samsung was the highest in LCA practice so far. Notably, during the judicial proceedings Samsung and one wholesaler settled the case with LCA, by admitting the violations and therefore receiving reduction of the initial fine (the fine on Samsung was decreased by about 60%). These cases highlight the fact that currently LCA and the Supreme Court have a quite strict position on communication and information exchange among competitors in Latvia. Another feature of the Latvian jurisdiction is that so far LCA has not taken any decision on basis of a leniency application. Therefore, LCA actively uses dawn raids as means of acquiring evidence and focuses strongly on investigating seized electronic evidence. SORAINEN is the leading regional business law firm with fully integrated offices in Estonia, Latvia, Lithuania and Belarus. Established in 1995, today SORAINEN numbers more than 120 lawyers and tax consultants advising international and local organisations on all business law and tax issues involving the Baltic States and Belarus.

SORAINEN Rūdolfs Eņģelis, Ringla Vīksne Partner (Mr Eņģelis) Associate (Ms Vīksne) Tel: +371 67 365 000 rudolfs.engelis@sorainen.com www.sorainen.com

US TAX

precision amidst complexity For over 25 years, US Tax & Financial Services has provided US and UK tax compliance and consultancy advice and services for US / UK individuals, corporations, partnerships and trusts throughout Europe. Meet us in our London, Zurich and Geneva offices for expert advice on multi-national tax issues.

ZURICH US Tax and Financial Services Sàrl US Tax and Financial Services Sàrl PO Box 1367 Löwenstrasse 28 CH-8021 Zurich Switzerland T: +41 (0) 44 387 80 70 F: +41 (0) 44 387 80 79 GENEVA US Tax and Financial Services Sàrl Boulevard Helvétique 36 (entrance Rue Petit-Senn 2) CH-1207 Geneva Switzerland T: +41 (0) 22 700 25 00 F: +41 (0) 22 700 25 26 LONDON US Tax and Financial Services Ltd Magdalen House 136 Tooley Street London SE1 2TU United Kingdom T: +44 (0) 20 7357 8220 F: +44 (0) 20 7357 8225

ustaxonline.com enquiries@ustaxonline.com

international trade laW

Trade Law compromises of the rules and customs for handling trade between jurisdictions.

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GERMANY, EUROPEAN UNION

Customs Compliance Program: has your organization thought about that? Customs compliance program: a grey area? Most organizations have effective compliance programs in place that ensure meeting the requirements of different legal and regulatory areas, such as environmental rules, anti-corruption laws, financial reporting regulations, etc. Whether “customs compliance” has been covered and addressed within those organizations is a question that management has been challenged to answer quite often over the past few years. Although it is not new for any company engaged with import / export transactions that it must handle in conformity with legal requirements – that is nothing more than “being compliant” – the need to have a program that puts in place consistent policies and documented procedures reflecting compliant customs processes is sometimes still a “grey area”. Cornerstones: “risk management” and “authorized economic operator” The term “compliance” and the need to establish a “compliance program” in the area of customs can be seen to a certain extent as quite recent developments in the customs legislation of the European Union (EU). When the Common Market was established in 1968 the primary objective was to introduce an area where goods could free circulate, without being subject to customs formalities and payment of duties. With the accession of new countries to the EU it became critical to harmonize customs rules and procedures between all Member States. In this context, in 1994 the Community Customs Code (CCC) entered into force followed by its Implementing Regulation. As a result, the EU was no longer governed by fragmented customs legislation. The evolution goes on over the years keeping up with the changes to international trade at global level. In 2005 with the publication of the “Security and Safety Amendment” to the CCC a decisive step towards the definition of the new role of Customs in the EU was taken. The mentioned amendment is

based on standards adopted at the level of the World Customs Organization (WCO), as an answer of the international trade community to the terrorist’s attacks in the USA (often referred to as “9/11”). The new landscape of international trade after 9/11 has required Customs to focus on trade security (put more controls in place). Nevertheless, in a scenario where international trade experiences continuous growth, smooth flow of legitimate trade could not be disregarded. In this respect, with the Security and Safety Amendment the EU introduced new concepts to its legislation aiming to maintain a proper balance between customs control and facilitation. Two of those new concepts can be considered the cornerstone of the need to have a customs compliance program in place: “risk management” and “authorized economic operator (AEO)”. Realizing the need Risk management is defined in the CCC as “the systematic identification of risk and implementation of all measures necessary for limiting exposure to risk (…)”. In the area of customs, “risk” means the likelihood of an event occurring in connection with an import, export or transit of merchandise which for instance prevent the application of EU measures or poses a threat to the security. In using risk management Customs consider the measures that companies engaged with customs activities have taken to prevent risks in their business processes. In order to be able to follow the risk management approach in a more efficient way, a partnership with the private sector was proposed whereby the status of AEO is granted to those that meet specific criteria. A company holding the AEO-Status is treated as reliable throughout the EU in what concerns its customs related operations. Consequently the risk profile of an AEO is set lower, considering it is positively distinguished from other operators. This facilitates the management by Customs and as a result the movement of merchandise.

For the purposes of proving whether the criteria required for getting the AEO-Status is met, the organization has to engage in a self-assessment process in order to ensure its internal policies and procedures do provide for comprehensive measures that assure compliance with customs legislation. At this point of time most organizations find themselves in that “grey area” previously spoken. Simple organizational questions such as “who within the company oversights customs activities?” become as much difficult to answer as those more technical one like “how is merchandise classified for customs purposes?” or “how is the origin of merchandise determined?”.

Baker & McKenzie Partnerschaft von Rechtsanwaelten, Wirtschaftspruefern, Steuerberatern und Solicitors Fernanda Maria Barcellos Herrmann; LL.M. Professional Support Lawyer Tel: +49 (0) 69 2 99 08 631 fernanda.m.b.herrmann@ bakermckenzie.com www.bakermckenzie.com

But it is not only about AEO… Establishing a customs compliance program goes however beyond of getting the – at present optional - AEOStatus. Simplifications under the customs rules in the EU also require the need to document compliant practices. In some countries – like Germany - the management can be held liable for non-compliance with its duty of supervision in case of an infringement of the customs rules, being not rarely the lack of a customs compliance program criticised by Customs as an evidence of the alleged offence. Yet non-compliance with customs regulations can be a very significant risk, leading for instance to undesired costs, bad reputation and disrupted supply chains. Fact is that Customs has changed, and with it the way companies must address their customs-related-activities. An effective customs compliance program enables pre-auditing gaps, having the activity under control and mitigating risks. Strategically conducted, this is not burdensome or costly. If your organization is crossing merchandise across international borders, it is time to be aware that customs must be part of the compliance program. Management commitment to customs compliance is not a “nice to have” practice; it is a key requirement for any international business.

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BELGIUM international trade laW

Untapped global supply chain savings: International trade and customs Never let a crisis go to waste Daniel Cannistra Crowell and Moring LLP 1001 Pennsylvania Avenue Washington, DC 20004 (202) 624-2902 dcannistra@crowell.com Elena Klonitskaya Crowell & Moring LLP 71 rue Royale B-1000 Brussels, Belgium EKlonitskaya@crowell.com

The economic crisis of 2008 had one common effect across all industries - it created a global crusade against waste and inefficiency. The new era is one of profitable sustainment where efficiency gains, rather than growth, drive profits. Supply chain management is no exception to the efficiency imperative. While many businesses have lowered supply chain costs by focusing on logistic costs and increasing speed to market, efficiency opportunities remain embedded in international trade laws and free trade agreements with a vast and increasing potential for supply chain savings. The magnitude of the untapped saving is outlined in a recent study conducted by the US International Trade Commission (ITC) concerning the ‘first sale rule’ (FSR), one of the longstanding saving opportunities in international trade law. Under the FSR, US importers reduce import duties by declaring the first export sales price as the customs value, before further resales in the export supply chain. By using the FSR programme, importers reduce import duties by between 2-50%. The ITC found that of the $1.6trn in total US imports, only 2% were imported using the FSR; most importers do not use the FSR on any imports; in the textile, apparel, and footwear industries (the industries that stands to save the most by employing the FSR), and only 5% of all goods are imported using the FSR. Usage rates are not any better on duty drawback, a program that allows exporters to recover import duties paid on imported inputs. US Customs estimates that approximately $2.5bn of duty drawback goes unclaimed annually. While drawback is recognised as the Custom’s most complex program, with 15 types of drawbacks and qualifying criteria, its complexities are not a significant barrier. Even the North American Free Trade Agreement (NAFTA), now 20 years old, is still a vast reservoir of untapped supply chain savings. In 2010, $217bn in goods were imported from

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Canada and Mexico without the certifications required for NAFTA’s import duty reduction benefits. As a result, nearly $5bn in NAFTA benefits were unclaimed last year. In Europe, EU importers pay more than €14bn in EU import duties each year, with few claims for duty reductions or exemptions. Many companies believe that duty reductions under NAFTA and other trade agreements are automatic - they are not. In fact, imports from Canada and Mexico are presumptively not eligible for NAFTA benefits unless an importer affirmatively declares NAFTA eligibility. Without confirmation via certification, imports from Canada and Mexico are treated for import duty purposes as if they were imported from outside the NAFTA region. In 2012, the potential for trade planning will increase significantly with the US approval of new trade agreements with South Korea, Peru and Colombia and the reinstatement of a number of trade promotion programmes. South Korea is the US’s seventhlargest trading partner, with $88bn in two-way trade, making the newly signed free trade agreement the largest enacted by the US since the passage of the NAFTA. The key benefits of the trade agreement is that 95% of bilateral trade in consumer and industrial products becomes duty-free within three years of the date of coming into force and most remaining tariffs will be eliminated within ten years. However, like NAFTA, these benefits will only be realised with affirmative confirmation from the importer. Absent confirmation on individual shipments, there is no duty elimination on trade between the US and South Korea. EU recently concluded the FTA negotiations with South Korea, Peru, Colombia and Central America, is in talks at an advanced stage with the Gulf countries, India, Canada and Singapore, reopened talks with MERCOSUR, is seeking to expand bilateral negotiations with ASEAN countries, beginning with Malaysia

and Vietnam. The EU-Korea Agreement requires exporters of consignments above minimal value to become “approved exporters” to be able to issue invoice type declarations and. Exporters, who do not comply with this requirement, can apply for the status of “approved exporter” a posteriori and for the repayment of import duties within three years. Going forward, a programme of aggressive compliance is the most effective strategy for reducing customs duties. Aggressive compliance is a strategy whereby the high duty spend products are identified, and then continuously reviewed for eligibility under a free trade and customs programmes. Certificates of eligibility are generated and reviewed on a pre-defined schedule for conformity with the applicable rules, even when the certificates of eligibility are only ‘recommended’ by the applicable customs authorities. Finally, reliance on those certificates is embedded in vendor agreements. While the rules of international trade and customs are complex, they are no more complex than income tax rules. With the same focus on compliance and opportunity identification, customs duties can be as effectively managed as income taxes and provide significant supply chain savings. Best practices Know your spend: Importers can’t manage what they don’t measure. Know your vendors: Coordinate closely with key vendors regarding eligibility criteria. Recognise that customs duties are a tax: Unclaimed customs duty exemptions should be perceived no differently that an unclaimed income tax deduction. Don’t skimp on compliance: Compliance programmes are critical to maintaining programme benefits and mitigating risks. Work retroactively: Most customs and international trade programmes provide for at least a one-year retroactive recovery.

CHILE

Importation of used or refurbished parts into Chile Over the past decade, Chile has adopted a more liberal trade policy and opened its markets to international trade, entering into a number of free trade agreements (FTAs) with almost every one of its commercial partners around the world, including the US, the EU, all Latin American countries, Canada, China, Japan, as well as most of Asia Pacific. This recent trade liberalisation has not only brought substantial increases in import and export activity in Chile, but has also brought about major changes and an added complexity to Chile’s foreign trade and customs laws. New areas, such as rules of origin, tariff classification, customs valuation, customs compliance and internal auditing and strategic planning, have become increasingly important and complex. One aspect that has suffered many changes over the past few years refers to the importation of used, remanufactured, reassembled or refurbished products, of particular importance for multinational companies that wish to honour their product warranties. Chilean customs legislation does not contain clear rules regarding the definition of ‘used’ or ‘refurbished’ products (except regarding automobiles and motor vehicles). The general understanding states that used goods are those that have evident signs of prior use that may be detected in a physical inspection and/or that have been declared as such by the manufacturer or importer in the import documents. However, the ambiguity of Chilean applicable rules allow the Chilean customs authorities broad discretion to characterise a given component that has formed part of another product imported into Chile and furnished to a client in the past, as ‘used’. As a general rule, there is no prohibition to import used or refurbished assets into Chile. Only certain assets (eg, used vehicles and tires) must be necessarily new. Further, there are no special customs provisions requiring to label or mark in any special way used or reassembled/

refurbished products. Importers must inform Chilean customs in their import declarations that the product is used. Under Regla General Complementaria N°3 of the Arancel Aduanero (Chilean Customs Tariff Act) the import of used assets is subject to the applicable tariff for the corresponding new asset, plus a 50% surcharge. In other words, as the general tariff currently in force in Chile is 6%, the import of used assets is subject to a 9% duty. However, such 50% surcharge does not apply in the following cases: capital assets qualified as such by the Ministry of Economy; assets contained in section 0 of the Arancel Aduanero that import complies with the conditions and the requirements set forth in each applicable customs position of such section 0; and, assets imported under operations with no commercial purpose, with a cap of CIF US$100. Also, under article 3.4: Used Goods, of the US-Chile FTA, Chile shall cease to apply the 50 % surcharge with respect to originating used goods from the US that benefit with the preferential tariff treatment of such FTA. Additionally, under article C-07 in connection with annex C-07 of the Canada-Chile FTA (most favoured nation (MFN) treatment), certain assets, regardless of their country of origin, are exempt of Chilean tariff payment in their import into Chile. Under Customs Classification Chile-Canada for automatic data processing equipment, most headings under HS 8471 are expressly contemplated under the MFN rule exemption. However, recent reinterpretations of this provision by the Chilean Customs has created significant legal uncertainty, as the authority has rejected numerous classifications declared by importers over technological products and their corresponding spare parts that were formerly classified under HS 8471 and are now being unilaterally reclassified under non exempt headings by customs, thus increasing the cost of importation of such products and exposing importers to

litigation with Chilean customs and, eventually, to fines and other penalties. Also important to keep in mind, section 14 of the Chilean Consumer Protection Law (CPL) provides that when used or refurbished products are delivered or when products are offered that were made or elaborated with used parts or pieces, such circumstances shall be expressly noticed to the consumer. Under article 1 of the CPL, consumers are defined as individuals or juridical entities that, acquire, utilise or enjoy assets or services as final users or consumers under any type of agreement in exchange for a price. Therefore, the provisions of the CPL do not apply to resellers who will not be the final or end user or consumer of such asset.

Baker & Mckenzie - Santiago Ignacio Garcia Partner Tel: + 56 2 367 7042 ignacio.garcia@bakermckenzie.com www.bakermckenzie.com

Regarding the formal process to allow a specific national or nationalised good to exit the country for repair or refurbishment, such goods may be authorised to exit the country for a limited period of time, which shall be determined by the NATO Codification System (NCS) and that may not exceed two years, without having to pay import duties and taxes upon their re-entry into Chile. The temporary exit may be converted into a regular export by formalising the corresponding export documentation and waiving the duty-free re-entry benefits granted by the NCS authorisation. A special temporary exit regime is also contemplated for ‘passive perfectioning’ (salida temporal para perfeccionamiento pasivo). This type of special programme is provided for the temporary exit of goods that need to be repaired or processed abroad. Said goods shall be subject, upon their re-entry into the country, to the payment of import duties and taxes only on the parts, pieces, spares or materials of any kind that have been added to the good during its temporary exit. Repair and processing services may also be considered by the NCS as part of the added value subject to import duties and taxes.

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UNITED STATES international trade laW

Sandler, Travis & Rosenberg, P.A. Tom Travis, Esq. Managing Partner 305-267-9200 Main 305-267-5155 Fax messages@strtrade.com www.strtrade.com

Sandler, Travis & Rosenberg, P.A. (ST&R) is an international trade and customs law firm concentrating its practice on providing governments, manufacturers, importers, exporters and retailers with the advice and counsel they require to meet the constantly changing demands of global trade. Our attorneys and professionals possess extensive industry and government experience in all aspects of the regulation and conduct of international trade. Sandler & Travis Trade Advisory Services, Inc. (STTAS) is an international trade and customs consulting firm that leverages the domain knowledge of its professionals with its proprietary technology-based applications to provide four service lines, which include management of global custom process for multinationals, trade consulting services, global customs modernisation and government service, and border security. Combined, we are currently the largest provider of customs and international trade services worldwide with a history of serving some of the world’s

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largest multinational companies and governments. Our success is based on a combination of unsurpassed domain expertise with over 560 global trade professionals in six countries, proprietary technology and business process best practices. Our professionals include: former deputy and assistant commissioners of US Customs; former chief information officer and chief financial officer of US Customs; former senior officers of the Department of Commerce, State Department, and Office of the US Trade Representative; former US Customs regulatory auditors, import specialists and other senior US Customs officials; attorneys; accountants; economists; trade analysts; over 70 licensed customs brokers; ocean freight forwarders; and, statisticians. To assist our clients, our firm publishes a free daily e-newsletter WorldTrade\ INTERACTIVETM (WTI) that has earned a reputation as one of the premier resources for in-depth information on global trade issues. With over 20,000 subscribers in over 90 countries,

WTI is a valuable resource for those who need to stay informed about how trade is impacted by US government decisions on trade and customs issues. WTI also includes direct links to important documents from government agencies, courts and Congress, updates on new and pending legislation, notices of upcoming congressional hearings, a searchable archive, and a calendar listing regulatory comment deadlines and effective dates, meeting and event schedules. We also publish ST&R-TAP, a weekly newsletter containing news, statistics and analysis, and insight into issues relating to the apparel market. We also host over 100 webinars and seminars of special interest to the footwear, apparel and retail sector. These nationally recognised seminars and webinars are important components of multinational and Fortune 500 companies’ education and training. To learn more about ST&R and STTAS, please visit our website at www.strtrade.com or email us at messages@strtrade.com.

doing Business in asia Business expanding: Asia Pacific on the horizon Global business leaders and academics met in October 2011 at the Asia Pacific Summit 2011, presented by the London Business School and sponsored by Telstra International. The Summit brought together a wide scope of experience and perspectives over two days and was aimed at examining the many potential challenges and pitfalls of doing business in Asia Pacific, as well as key strategies to overcome them. Despite the global downturn, which has severely impacted Western markets, economies across Asia Pacific have gone from strength-to-strength. Asia Pacific has become a true driver of the global economy. As international businesses look for expansion overseas, it is clear that Asia Pacific presents some of the best opportunities for growth. Asia Pacific also presents unique challenges: it is incredibly diverse, with wide cultural differences in each country and varying levels of political maturity, governmental regulation and technological infrastructure. The centre of the world economy is moving east, so global businesses need to shift strategies to take the opportunities this presents. An uncertain future As more businesses are looking to Asia Pacific as the key to future success and growth, they would also be aware that the future of Asia is not certain. It is a young economy and, although it is growing quickly, there are a number of different factors that affect its future success. First are the considerations of the demographic of each country. The population of Asia Pacific is divided between wealth and poverty; how this changes over coming years depends on a number of political and cultural factors, whether health or education, for example. Businesses looking to engage with communities in new markets in Asia Pacific must be aware of these factors, not just in understanding the market place, but also the ‘people factor’. The growth of the region needs to be

inclusive, addressing wealth and poverty - whether this disparity will be resolved is unclear. Another key to its success is technology and innovation. Many businesses view technology and the market’s underlying infrastructure as a barrier to entry or to expansion. This is also a success factor for Asian countries; they are more or less able to compete with lower cost economies because they are innovative and technologically advanced. What we are expecting to see is convergence between the developed and developing parts of Asia Pacific. There are two sets of economies in the region: very advanced economies, such as Australia, Japan, Singapore, Hong Kong, Taiwan and Korea, and also developing economies like Indonesia, Malaysia, Thailand and Philippines. That diversity presents a challenge to western businesses looking to operate in Asia Pacific, and Asia today needs to be seen as a discreet set of countries - they are not homogenous. Business success under diversity This diversity and uncertainty means that there are significant differences, opportunities and drawbacks for companies to be aware of when expanding into Asia Pacific. Global organisations must effectively adapt strategies to account for differences between the markets, accommodating the complex economic, political, cultural and geographical

challenges. Companies in Europe need to reach a better level of understanding of these factors in the Asia Pacific region in order to be successful. There are also more profound challenges around rule of law, business practices and cultures, which are not easy for a western company to comprehend. It’s a challenge from a managerial perspective, as businesses need to develop an Asian mindset, being aware of local necessities and challenges and relating those to business realities. As a result, new management strategies are emerging that present an alternative model of management where values like collective wisdom and engagement are becoming more important. Businesses should never approach the whole region as one because each market is unique and presents unique challenges; those operating successfully in Asia Pacific are doing so because they have gathered on the ground experience and an awareness of these factors. This can only be achieved by taking a practical approach to market entry and being prepared to be extremely flexible and adaptable. For example, if you operate a service business it has to be relevant to the market and adapt to the different ways of operating. Within Asia Pacific, there is also much diversity between the maturity of the economies - between a developed and developing market the cultural

Tarek Robbiati Group managing director Telstra International Group differences can be vast. For example, Vietnam is currently seen as having vast potential for growth, but its early growth stage can also present huge risks to businesses if there is a lack of practical knowledge. Japan on the other hand is highly developed. Governance and management models are slowly shifting to adapt to this diversity, applying global strategies regionally. Take corporate social responsibility (CSR) for example. One global CSR strategy cannot apply to the whole of APAC as it does in Europe - it must be optimised to accommodate communities and cultural trends and this has to be applied throughout the business. Global policies grown locally Organisations today have to look at the Asia Pacific region as a discreet set of countries - they are not homogenous, and there are significant differences between them in terms of economic growth, like culture and language, and many pitfalls that businesses need to be aware of. It’s important to get a clear picture of the nuances of these regions, either building from direct experience within those countries or leaning on the wisdom of trusted partners to ensure these approaches are well informed.

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sPotliGHt on CHile

CHILE SPOTLIGHT ON

Why Chile? Ten reasons to invest in our country As CORFO’s InvestChile, we are responsible for the promotion and attraction of direct foreign investment to Chile. In order to do so, we promote and communicate the competitive strengths of the country as a location for foreign investment and investment opportunities. We support and facilitate the process of assessment, decision and fulfilment of your company in the country, by providing specialised services and incentives to the investment.

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Since the beginning of its investment promotion in 2000, InvestChile has contributed to the materialisation of over US$2,400m in domestic and foreign investment, and the generation of over 40,000 new direct jobs. It is estimated that on average, the foreign investment represents 43% of this total and in the specific case of 2010, foreign investment was 40%, making up for a total of US$143m.

with 22 countries, among them Spain, the UK, France and Poland, to avoid double taxation. We are currently under negotiation for a treaty with the US. Likewise, in order to boost the investigation and development, our country has tax benefits for these activities, as well as the tax advantages and exemptions in certain regions of the country.

For this year, our goal is to contribute to the materialisation of US$155m in direct foreign investment, and the capture of new foreign projects that are evaluating Chile, with a committed investment value that we estimate at US$260m.

Six: We are one of the most transparent economies, we are number one in Latin America, according to the corruption perception index and in 21st place worldwide out of 178 country.

Our goals are high, and it’s because as a country, we know that there are very powerful reasons why those companies are evaluating to install their companies in Chile, and we have numbered these reasons from one to ten below.

Seven: As a country, we have the best investment environment and wide economic freedom, positioning ourselves in 10th place worldwide and number one in Latin America, according to the Economic Freedom Index 2010. Also, we are first place as the best environment to carry out business deals and in 15th place worldwide according to the Economist Intelligence Unit 2010.

One: Chile has a dynamic economy, with an annual growth percentage of 5.5%, the highest in Latin America. We are also one of the countries with the highest annual growth worldwide, and we are between the most dynamic economies in the world. Two: Chile is a highly competitive country, in fact, we are 30th out of 139 countries in the competitiveness ranking of the World Economic Forum and we are the most competitive economy in Latin America.

Chile also has an excellent quality of life; we are in 71st place out of 194 countries in the Quality of Life Index 2010. Eight: You can find highly qualified and competitive worldwide labour force in Chile - we are in the first place in the Latin America Talent Index Ranking in regards to availability of work force.

Three: We are integrated to the world, boasting more than 20 free trade agreements with 58 countries, which represent 90% of the world’s GDP. Likewise, we are the gateway to Latin America from Asia-Pacific and the first country member of the OECD in the region.

Nine: We have modern transportation infrastructure and connectivity integrated to the world, with state of the art telecommunications and logistic networks that enable business with a world class digital network. We also have 18 international airlines with 80 thousand operations per year, 37 airports and airfields and ports that move 90% of the commercial trade of the country.

Four: We have the lowest country risk, we have economic stability and a strong monetary discipline. We have been qualified as A+ by Standard & Poor’s 2010, with an A+ in the Fitch Ratings 2011 and Aa3 in Moody’s 2010.

Ten: With these advantages, we have all the conditions for those that see Latin America as their next stop, and specifically Chile, where we offer the features of a developed country, but at the cost of a developing nation.

Five: Chile has a friendly tax environment with a 17% tax rate regime. Exceptionally and due to the earthquake that occurred on February 2010, today this rate is at 20%. For the year 2012, it will decrease to 18.5% and will go back to 17% at the beginning of 2013. Also, we maintain active bilateral agreements

Juan Antonio Figueroa Executive director InvestChile Corfo Germany - Nordic Countries Arturo Puga apuga@corfo.cl Spain - Portugal Tomás Pablo tpablo@corfo.cl US Juan Pablo Etchegaray jetchegaray@corfo.cl France - UK Pablo Ugarte pugarte@corfo.cl Other markets InvestChile investchilecorfo@corfo.cl Head Office 921 Moneda Street, Santiago 8320250 Chile Phone +56 2 631 8573/ 6318539 / 631 8526 investchilecorfo@corfo.cl www.investchile.com

As CORFO’s InvestChile, we want to contribute to make Chile a regional pole for innovation and entrepreneurship. We also know that by taking on this task, we are a key piece in the competitive boost of our country and that is where we are headed.

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sPotliGHt on CHile

Business and investment opportunities in Chile Chile’s business environment is the result of its political, legal and economic stability and a policy-driven strategy that has focused on building sound macroeconomic fundamentals and strong institutions, promoting competition, international integration, and creating a more fair society in which all citizens benefit from economic development. Chile’s open and export-driven economy, combined with an active policy of bilateral, regional and multilateral trade agreements (there are currently more than 20 of such agreements with almost 60 other countries or blocs including the US, EU, Japan and China), has meant a steady increase of foreign trade in goods and services and in the country’s competitiveness. Economic growth has been accompanied by decreasing inflation, a sharp drop in public debt, stable external accounts and strong international reserves. This achievement is the result of Chile’s commitment to economic liberalisation and free-market policies, as well as its pledge to maintain sound and responsible economic management. As a result, over 4,000 companies from at least 60 countries currently have operations in Chile. Foreign investment and business entities Foreign investors in Chile can own up to 100% of a Chilean-based company, and there is no time limit on property rights. They also have access to all productive activities and sectors of the economy, except for minor restrictions in certain areas such as coastal trade, fishing, air transport and mass media. As a general rule, the Chilean Constitution affords foreign investors the same protection as local investors and explicitly prohibits any discrimination against foreigners. Any foreign individual or legal entity, as well as Chileans who reside abroad, can

invest according to Decree Law 600 (DL 600), provided that the investment involved is at least US$5m if it involves foreign currency or loans, or US$2.5m if it involves movable assets, technology or capitalisation of profits and credits. Under this regime, investors enter into a legally binding contract with the Chilean State, which cannot be modified unilaterally by the State or by subsequent changes in the law, unless they are indemnified. However, investors may, at any time, request the amendment of a contract to increase the investment, change its purpose or assign its rights to another foreign investor. Foreign investments rights may be transferred if an investment is transferred, by means of an amendment to the contract. The other alternative a foreign individual or legal entity may use for its investments in Chile is chapter XIV of the Foreign Exchange Regulations of the Chilean Central Bank (Central Bank). The foreign investor must apply this regime if no investment contract has been signed with the State of Chile. This regulation applies to international exchange transactions involving credits, deposits, investment and capital contributions from abroad, along with those regarding other liabilities with foreign entities, as long as the amount involved is not less than US$10,000. In essence, chapter XIV establishes information requirements that must be fulfilled by the investor vis-à-vis the Central Bank, when carrying out the said international exchange transactions. Companies and individuals may incorporate businesses in Chile as limited liability

companies (sociedades de responsabilidad limitada - LLC), stock corporations (sociedades anónimas - SA, and sociedades por acciones - SpA), contractual mining companies (sociedades contractuales mineras - SCM), branches of foreign corporations (agencias - branch), and representative offices (oficinas de representación - RO), among others. Limited liability company: The incorporation of an LLC does not require government approval. The liability of the partners of LLCs is limited to their capital contribution as established in the by-laws (estatutos). Interests may only be transferred with the consent of all the partners. There is significant flexibility in what can be included in the by-laws. Sociedades anónimas (SA): Stock corporations do not generally require government authorisation although those dedicated to banking, insurance, mutual funds and stock exchange are exceptions to this rule. Stock corporations can be open (listed) or closed. Open corporations are registered with the National Securities Registry and are overseen by the Chilean Securities and Insurance Supervisor (Superintendencia de Valores y Seguros). The capital of stock corporations is divided into shares, and the shares may be transferred without limitation. Shareholder liability is limited to the capital contributions made or committed to the corporation. Generally, there is no minimum capital stock requirement for corporations. There are some exceptions to this rule including, among others, banks, financial institutions, stockbrokers and insurance companies. Sociedades por acciones (SpA): An SpA is a limited liability corporation and may be held by a sole shareholder. Its capital is divided into shares and there is significant flexibility in the choice of management structure. Subsidiarily, SpAs are regulated by the same laws as those governing SAs. Foreign corporation branches: A branch of a foreign company is not a legal entity that is independent from the foreign corporation, thus the head office is liable for the acts of the branch. With the exception of branches of foreign banks, the creation and operation of a branch is not subject to the control of a government body. A foreign corporation must have an appointed representative in Chile with broad powers of attorney to manage the branch. Branches must have sufficient equity. Contractual mining company: No government body need approve or supervise

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contractual mining companies. Stakes are divided into shares. Shareholders can be two or more Chilean or foreign legal or natural persons and are liable for up to the amount of the contributions established in the bylaws. Nevertheless, shareholders may agree to be liable for the company’s obligations. A contractual mining company must own a mining concession. This type of company has significant flexibility for its management. Representative office (RO): A representative office is not a Chilean company or a separate legal entity from the main company. Instead, a representative office is an agent or office of the company. The only requirements to obtain a taxpayer number and initiate activities are executing a power of attorney for the representative and providing a copy of the company’s by-laws. The activities of this type of company are limited to promoting the main company’s business and maintaining and improving the client base. It may not directly close any business transactions or generate Chilean-source income. There are special regulations for representative offices of banks. Investment opportunities There are many projects in different industries that could be interesting for a foreign investor, but the main likely sectors for investment opportunities are infrastructure, energy, mining and tourism. Infrastructure: Chile has pioneered the development of tools to support the financing of concession contracts, including coverage against exchange-rate risk, a present-valueof-income mechanism that uses a flexible concession period to guarantee a known level of income, and infrastructure bond to facilitate the participation of private agents in long-term financing. To date, Chile has 47 concession contracts in operation under different programmes, representing a total investment of US$11,218m. Another 16 contracts, representing an investment of US$2,709m, are at the construction stage. The portfolio of projects for the period 2010-2014 foresees contracts for a total of US$8,000m while possible projects for a further US$ 3,730m are being evaluated in different regions and sectors, such as roads and highways, hospitals, ports and prisons. Energy: At present, Chile has an installed generating capacity of some 15,000 MW and a gross electricity output of more than 55,000 GWh. Forecasts for demand by 2020 indicate that 66 new power plants (3,695 MW) and 14 transmission projects (7,040 MW) will be needed. Chile’s objective is to diversify its sources of energy supply in the medium to long-term. In line with this strategy, between 2007 and 2010 at least 19 renewable energy projects were built. In order to eliminate barriers to the entry of new investment in this sector, a number of attractive financial incentives are being introduced

for geothermal, wind and solar projects. Current government guidelines suggest the development of seven geothermal projects and 20 wind projects by 2020. Mining: At the end of 2010, a new tax regime was approved for mining companies, consisting in a variable rate of between 4% and 9% in 2010 and 2011, depending on a company’s operating margin, in exchange for a six-year prolongation of the period of tax stability. Of the large mining companies, 94% opted to use the new system. In 2010, 23 applications for foreign investment in the mining sector under the DL 600 Foreign Investment Statute were approved, amounting to a total of almost US$11,000m. This represented 82.8% of the foreign direct investment entering the country. Tourism: The Chilean government is seeking to attract foreign investment in tourism. This strategy was recently confirmed by the Chilean Minister of Economics, Promotion and Tourism, Pablo Longueira, who said that Chile wishes to inject a major boost to tourism, because the tourism industry is fundamental to making a contribution to the development of Chile’s regions and to decentralisation, as well as to generating many associated benefits for auxiliary industries. Minister Longueira also said that the government has set the goal of transforming the tourism industry into the third most important sector in the country, increasing its contribution to GDP from the current 3% to 6% or 7% within the next ten years.

Philippi Yrarrázaval Pulido & Brunner Alberto Pulido Astoreca Partner Tel: +56 2 364 37 00 apulidoa@philippi.cl www.philippi.cl Uría Menéndez José María Albero Jové Head of Uría Menéndez’s office in Santiago de Chile Tel: +56 2 364 37 84 josemaria.albero@uria.com www.uria.com

The entire portfolio now available offers projects in: protected areas; real estate projects; roads and land connections; electricity transmission; civil works; hospitals; extraction and mining industry; port infrastructure; airport facilities; support mechanisms for investment in alternative renewable energy; geothermal exploration and exploitation; and, wind energy. Proﬁle Uría Menéndez is an independent law firm that currently has 16 offices based in Spain, Portugal, major cities in Europe, the Americas and Asia. Uría Menéndez specialises in providing legal advice to Spanish, Portuguese and European Community-based businesses. The firm also provides support to its clients through its network of offices and through its relationships with equally prestigious international law firms. In Chile, Uría Menéndez has a lawyer working with its associate firm, Philippi, Yrarrázaval, Pulido & Brunner, a full-service firm and one of the largest law offices in Chile, locally and internationally recognised for its leading reputation and excellence in legal practice. Both firms jointly provide comprehensive legal advice in all areas of law, both to investors in Chile and companies established there.

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sPotliGHt on CHile

Chile: A Great Place for Direct Investment, as long as you do your homework… Stephen Ruddell 555 Pedro De Valdivia Ave. +56 2 496 1038 Sruddell@Pso.Cl Www.Pso.Cl Puente Sur Outsourcing S.A. 555 Pedro De Valdivia Ave. Office 1101 Providencia, Santiago Chile

Chile stands out among Latin American countries for its institutional stability and open economy, and is the only South American OECD member. Those multinationals that need to form a subsidiary or branch in Chile, whether to serve the local market or to join the increasing number of platform companies choosing Chile as a regional hub, will find that doing business in this long and narrow country can be a rewarding experience. However, assuming the commercial and strategic fundamentals are sound, success is also dependant on understanding and managing the nuts and bolts of the country’s fairly strict bureaucratic requirements and a number of tax and labour-law issues. Puente Sur Outsourcing S.A. (“PSO”) provides a comprehensive range of bilingual start-up and back-office support services that ensure accounting and tax compliance. The firm manages the Chilean back office for the subsidiaries or branches of about 70 multinationals with investments in Chile surpassing USD 1 billion, and provides international support via our active affiliation with INAA. Based on the firm’s 15 years of experience, Stephen Ruddell, PSO’s Senior Relationship Manager, stresses the importance of reviewing a check list of points that every new company should review, some of which are summarized below: 1. Type of Company: when determining the right kind of company to form, it is important to understand the tax implications of your business model. For the foreign investor, key differences in the way that VAT is levied on transactions with the parent exist depending on whether or not the entity in Chile is a subsidiary or branch, as well as differences in how additional tax is levied on profit remitted abroad depending on whether or not the subsidiary is a closed corporation or an LLC.

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2. Exchange Rate Fluctuations can have a signiﬁcant tax impact: The Chilean peso has appreciated 30% against the USD since 2009. Not only does this impact companies that do business in both CLP and USD, but those companies in Chile that had USD loans on their balance sheets during this period have realized an extraordinary non-operating gain that directly impacts their taxable base. This is similar to many jurisdictions, but often overlooked. Companies should consider local CLP financing with guarantees abroad. 3. Tax Treaties: in addition to having FTA’s with 90% of the world’s GDP, Chile also has ratified 24 bilateral treaties to avoid double taxation (including 11 with European countries), with an additional three treaties with the U.S., Australia and Russia already signed and ready to ratify. Understanding the advantages of these treaties is key to good tax planning. 4. Additional Considerations: Transfer pricing is increasingly scrutinized, and so structuring the model with arm’s length transactions among related parties is crucial. Understanding the labour law environment is also a key to success, as hidden costs may surface down the road.

- Dynamic Economy - Highly Competitive - Globally Integrated - High Transparency - Tax-Friendly Economy

- Institutional and Financial Strenght and Low Country Risk - Great Business Environment and Economic Freedom - Outstading Quality of Life - Highly Skilled and Competitive Human Resources - Transport Infraestructure and Modern Connectivity Integrated to the World

lean

UK The Lean Enterprise Research Centre (LERC) info@leanenterprise.org.uk Tel 029 2064 7028

LERC and industrial partnerships The Lean Enterprise Research Centre (LERC), part of Cardiff Business School, has for the past 17 years actively assisted global manufacturing and service organisations to understand their demand and operational issues, improve their ability to respond to demand and build efficiency and flexibility into their production and value chains.

LERC is renowned for its award winning research, world-class business-orientated postgraduate courses and industry renowned short courses and training programmes. The MSc in Lean Operations was the world’s first lean masters programme and continues to educate some of the world’s most valued lean champions. Key to LERC’s success has been its close association with business listening to and responding to business needs and collaboratively investigating new solutions to business issues. What is ‘lean’? The term ‘lean’ was first popularised in the seminal book The Machine that Changed the World, which clearly illustrated, for the first time, the significant performance gap between the Japanese and western automotive industries. It described the key elements accounting for this superior performance as lean production - ‘lean’ because Japanese business methods used less of everything, human effort, capital investment, facilities, inventories and time - in manufacturing, product development, parts supply and customer relations. LERC promotes a holistic, ‘systems’ approach to lean improvement, acknowledging that lean is much more than simply improving processes through the application of tools and prescriptive principles. Successful lean organisations employ lean strategies, lean leadership and understand the need for an engaged, empowered workforce. World-class research LERC is the recipient of the coveted Shingo Research and Professional Publication Prize. The winning publication Staying Lean - Thriving, Not Just Surviving uses the Lean Iceberg Model, which, in addition to lean process management, offers a method of bringing about sustainable change. It addresses the often invisible and hard to emulate aspects of successful lean organisations,

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namely strategy and alignment, leadership and engagement. World-renowned teachers and thought leaders LERC has long been known for the quality of its teaching and research staff. They include John Bicheno, author of the Amazon bestseller The Lean Toolbox and John Darlington, a Flow Accounting expert. In addition, LERC draws on a select group of industry recognised associates who contribute to making LERC the leading lean learning destination in Europe. Leading the way in company hosted executive education The MSc in Lean Operations, LERC’s flagship course, offers a unique opportunity for masters level education. The first ever lean thinking degree for practising operations managers and change agents, the course has attracted students from leading global companies. One of the key features of the programme is that many of the sessions are taught in company locations, enabling a highly contextual and practical approach to learning to take place. This has often led to breakthroughs in process thinking, and ultimately, cost and efficiency savings. Initially developed in response to a need to develop lean experts that could drive through implementation programmes in manufacturing organisations and their supply chains, the course has proved highly successful and has been oversubscribed each year since its launch. A new stream - the service stream - was added in 2006 to service the growing need for lean learning in the service sector. Companies represented on the course have included Westinghouse, Ford, BAE Systems, GKN, GSK, MoD, Johnson & Johnson, Bombardier, Rolls Royce, NHS, Fujitsu, Royal Bank of Scotland, EDF and De Beers, to name but a few. Benefits to companies include: a 360° perspective on lean thinking, as opposed to the ‘one methodology fits all’ approach adopted by many consultancies and other training organisations; practical ‘real world’ opportunities to implement lean thinking; significant networking opportunities; the opportunity to develop lean champions at the highest level; and, the opportunity to host a course module and kaizen event, led by LERC staff. Bespoke and public short courses LERC has offered short public courses for nearly ten years. Its Principles of Lean Thinking course is now a recognised industry standard for the dissemination of key lean thinking concepts and has attracted global representation. Companies benefit from sending several lean change agents on this course on a rolling basis, often supported by a lean champion on the MSc Lean Operations. In addition, several companies add bespoke or supporting courses or opt for inhouse accreditation (see ‘Lean Competency System training’ below). LERC has also led the way in terms of Lean Leadership training, with courses attracting teams of change agents from all over the UK. This course can be run as a bespoke course in teams of eight or more.

Knowledge transfer partnerships LERC has developed strong partnerships with businesses in the UK through Knowledge Transfer Partnerships (KTPs). KTPs are government-backed programmes that link companies to academic partners. The company identifies a dedicated project associate to work on a specific issue, who is mentored by an academic partner. KTPs usually last around two to three years, during which significant gains can be made. Benefits for businesses are: access to qualified people to spearhead new projects; access to experts who can help take your business forward; the development of innovative solutions to help businesses grow; increasing competitive advantage; improving performance through improved business operations; and, increasing profitability. Business performance outputs vary considerably but on average, the business benefits that can be expected from a single KTP project (typical duration one-three years) are: an increase of over £220,000 in annual profits before tax; the creation of three genuine new jobs; and, an increase in the skills of existing staff. Lean Competency System accredited training The Lean Competency System (LCS) is an accreditation system, set up to accredit company in-house training systems. It aims to provide a structured lean qualifications system, offering a practical oriented hierarchy of lean qualifications around which employees can develop their lean thinking skills, or for an organisation to develop a lean competency strategy for its workforce. LERC is currently working with several companies to develop their lean training expertise in-house using LCS, examples of which include Mars Dubai, KPMG, Virgin Media, SAP, Unipart and various service organisations. Europe’s leading lean conference LERC offers an annual ‘Innovations in Lean Thinking conference’ in Cardiff in the last week of June each year. It invites the highest calibre speakers. Previous speakers have included Mike Rother, author of Toyota Kata and Learning to See; Steven Spear, author of Chasing the Rabbit and Wally Hopp, co-author of Factory Physics. The 2011 keynote is George Koenigsaecker, a principal investor in several Lean enterprises. He is a board member of the Shingo Prize, The Association of Manufacturing Excellence, Baird Capital Partners, Simpler Consulting and Watlow Electric Corporation. From 1992-1999, he led the Lean conversion of the HON Company, a $1.5bn office furniture manufacturer, his efforts led a tripling of volume and culminated in HON Industries being named by IndustryWeek magazine as one of the “World’s Best Managed Companies”. Prior to this, George was with the Danaher Corporation, where he was president of the Jacob’s Vehicle Equipment Company (whose Lean conversion is featured in the book Lean Thinking by Jim Womack and Dan Jones) and group president of the Tool Group, then the largest business unit of Danaher. He also developed and implemented the ‘Danaher Business System’, a comprehensive Lean enterprise model. Bookings for this and all our short courses can be made online at www.leanenterprise.org.uk December 2011 • GBM • 83

lean

UK Lean Enterprise Academy Limited Professor Daniel T Jones Chairman 01600 890590 danieltjones@leanuk.org www.leanuk.org

Lean thinking Lean thinking is a very specific set of interlocking practices, tools and behaviours derived from the Toyota business system. Lean grew out of years of practice and experimentation at Toyota and at companies in other sectors that have followed their example. Correctly understood, lean is a much more fundamental and comprehensive approach to solving business problems and creating value for customers. It is also a great deal more than engaging employees in continuous improvement and eliminating waste. One of the key things that distinguishes lean is its scope, which encompasses the whole value creation process, such as a global supply chain or an endto-end patient journey. Instead of developing new support systems, such as better forecasting or decision support systems, lean focuses on improving the flow of work that creates the value customers pay for, which lean thinkers call ‘value streams’. Lean brings many tools to bear so each valuecreating step can be performed right first time on time, and then links the steps together in a physical flow or through pull signals before levelling the workload and aligning capacity with demand. As the primary value creating work begins to flow, lean applies these tools to synchronise all the supporting activities that enable the primary value stream to flow and to combine all the elements a customer needs to solve their problem, such as the test results, medications and therapies for a hospital patient.

leverage this feedback that the core lean skills are not just the tools and techniques, but the use of the scientific method to define and diagnose a problem, understand the facts, try several countermeasures and check which of them solved the problem. Because solving problems can only be done by combining a detailed knowledge of the work with the context of the problem, these skills need to be learnt by every employee, not just a few experts. Developing these skills and using this experimental approach to constantly improve the performance of each value stream is learnt by doing rather than in a classroom. In order to enable value streams to flow across facilities, departments and organisations, someone has to take responsibility for creating the conditions for collaboration between all the actors involved. Lean chief engineers, project managers and value stream managers carry the responsibility for the performance of their product, project or value stream, while the authority over the resources needed to accomplish this remains with vertical department of function heads. The keys to making this work are agreeing the right metrics for tracking the operation and performance of the system as a whole and creating the right visual management context in which to gain agreement from all parties on the facts of the current situation and to commit to a jointly agreed plan going forward. The team then reviews deviations from the plan very frequently, unblocks any obstacles and captures any learning for the future. Lean thinkers use visual management everywhere precisely because it reinforces collaborative behaviours.

The other thing that distinguishes lean is its depth. The more activities are linked together and synchronised, and the physical or time buffers between them are removed, the more the operation of the whole systems depends on the skills, behaviours and direction of every employee.

Highly transparent and interdependent systems throw up literally thousands of possible things that could be improved across an organisation. The skill of a lean leader is to be able to set the direction and to focus everyone’s efforts on the vital few things that will make the biggest difference to the organisation, its customers, employees and shareholders. This means being able to translate organisational goals into measurable gaps that need to be closed and using strategy deployment to create a dialogue down the organisation to agree the actions that will contribute to closing these gaps, so these can be adequately resourced while others are deselected. It also means diagnosing and addressing the underlying causes of instability, such as the amplification of orders passed upstream or discharge delays causing queues for admission to a hospital. Finally, leaders must act to use the freed up capacity or cash to reduce costs and grow sales without requiring additional capital.

On the one hand, such an integrated system multiplies the probability of interruptions that must be responded to quickly. On the other hand, it provides extremely valuable feedback on the causes of these interruptions and other changes, which may otherwise be hidden or lost. It is precisely to

Daniel T Jones is the chairman of the Lean Enterprise Academy in the UK - www.leanuk.org, chairman of the Lean Global Network and author of the best-selling books The Machine that Changed the World, Lean Thinking, Lean Solutions and Seeing the Whole Value Stream.

The net result is a value creation system designed back from the customers’ definition of value and around the activities that create this value, more accurately and with far less wasted effort and cost. While most organisations cut their teeth leaning their existing activities, the true potential of lean comes from the opportunity to redesign the next generation products or services and the value streams that deliver them without the drag of existing assets. Manufacturers are, for instance, now looking to compress global supply chains and polyclinics are now offering services previously only available in big district hospitals.

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CorPorate litiGation

CorPorate litiGation PERMANENT COURT OF ARBITRATION

The Permanent Court of Arbitration: Serving the dispute resolution needs of the international community Created at the dawn of the 20th century in the name of international peace, the Permanent Court of Arbitration (PCA) has developed into a multi-faceted arbitral institution to serve the various dispute resolution needs of the international community. The PCA is an intergovernmental organisation with over 100 member states. Its governing instruments are the 1899 and 1907 Hague Conventions for the Pacific Settlement of International Disputes. The PCA was created with inter-state disputes in mind, but since the early 1930s has opened its doors to disputes involving non-state entities (eg, the case of Radio Corporation of America v China, concluded in 1935). It now provides services for the resolution of disputes involving various combinations of states, state entities, intergovernmental organisations and private parties.

to tribunals operating ad hoc or under the auspices of another institution. The broad caseload of the PCA encompasses territorial, maritime, treaty, and human rights disputes between states, as well as commercial and investment disputes, including disputes arising under bilateral and multilateral investment treaties. Hearings in PCA arbitrations may be conducted in any location agreed on by the parties, and the PCA has concluded a number of agreements with other international institutions for cooperation in the use of hearing facilities. PCA arbitration proceedings can be conducted in any language agreed on by the parties. The PCA’s two working languages are English and French. Procedural rules have been developed by the PCA and are available for parties to adopt or to tailor to the requirements of the specific case. For instance, the PCA Optional Rules for Arbitrating Disputes between Two States have been used in a number of inter-state arbitrations at the PCA, while the Abyei Arbitration (concluded in 2009) was conducted under the PCA Optional Rules for Arbitrating Disputes between Two Parties of Which Only One is a State.

The PCA is not a court in the traditional sense, but a permanent framework for arbitral tribunals constituted to resolve specific disputes. It has a three-part organisational structure consisting of an Administrative Council that oversees its policies and budgets, a panel of independent potential arbitrators known as the Members of the Court, and its Secretariat, known as the International Bureau, which is headed by the Secretary-General. As part of its environmental dispute resolution services, the PCA also maintains a list of arbitrators who specialise in disputes relating to the environment and natural resources, as well as a list of scientific and technical experts who may be appointed as expert witnesses under the PCA’s Environmental Rules.

Recent cases

Registry services Named as “Arbitration Institution of the Year 2010” by Global Arbitration Review, the PCA, through its International Bureau, provides full registry services and administrative support to tribunals and commissions. It offers hearing facilities at its premises in the Peace Palace, located in The Hague, and also provides ancillary administrative services 86 • GBM • December 2011

The Peace Palace, The Hague

Thanks to its unique role at the juncture of public and private international law, the caseload of the PCA is both varied and extensive. More than 50 cases are currently pending before the PCA, including two major public inter-state disputes (Bangladesh v India and Indus Waters/Kishenganga), 33 investor-state cases and 18 other disputes under agreements to which at least one party is a state, state entity or intergovernmental organisation. Further public information on pending cases is available on the PCA’s website.

The PCA’s experience in inter-state arbitration has extended to several cases under the United Nations Convention on the Law of the Sea, including Guyana v Suriname (concluded in 2007), Barbados v Trinidad and Tobago (concluded in 2006) and the pending case of Bangladesh v India. The PCA acted as Registry for the Eritrea-Ethiopia Boundary Commission, which was called upon to delimit and demarcate the land boundary between those countries, and the EritreaEthiopia Claims Commission, a mass claims tribunal established to deal with claims arising out of the armed conflict between those two countries. The PCA has also administered major environmental disputes such as the OSPAR (Ireland v UK) and Iron Rhine (Belgium/Netherlands) arbitrations (concluded in 2003 and 2005 respectively). Investor-state disputes recently administered by the International Bureau of the PCA include Chemtura Corporation v Government of Canada, Romak v Uzbekistan and Saluka Investments B.V. v Czech Republic, a case widely cited for its discussion of the “fair and equitable treatment” standard. Current investor-state disputes pending before the PCA include two claims under the North American Free Trade Agreement (Vito Gallo v Canada and Bilcon of Delaware et al v Canada) and several claims under bilateral investment treaties. Among other major disputes to which only one party was a state, the PCA administered the Eurotunnel arbitration between the operators of the Channel Tunnel on the one hand and the French and UK governments on the other (concluded in 2007) and the Abyei Arbitration between the government of Sudan on the one hand and the Sudan People’s Liberation Movement/Army on the other (concluded in 2009). The PCA has also provided registry services in several cases involving an intergovernmental organisation or agency as a party, including Polis Fondi v International Fund for Agricultural Development (concluded in 2010), a contractual dispute involving a specialised agency of the United Nations, and the Bank for International Settlements case (concluded in 2003), which concerned compensation claims in respect of privately-held shares recalled by the Bank for International Settlements in 2001. Concise summaries of all public awards and other decisions rendered under the auspices of the PCA up to August 2009 have been published in: P Hamilton et al, The Permanent Court of Arbitration: International Arbitration and Dispute Resolution: Summaries of Awards, Settlement Agreements and (Kluwer Law International, 1999) and B Macmahon and FC Smith, Permanent Court of Arbitration Summaries of Awards 1999-2009 (TMC Asser Press, 2010). The PCA makes all public awards, decisions and orders of PCA tribunals available on its website.

Appointing authority services The PCA can assist in the constitution of arbitral tribunal through its appointing

Hearings in the Abyei Arbitration, April 2009

authority services. Under the 1976 and the 2010 Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL), the PCA Secretary-General is charged with designating “appointing authorities” upon the request of a party to arbitral proceedings. The Secretary-General may designate an appointing authority for the appointment of an arbitrator to complete an incomplete arbitral tribunal and/or to decide challenges to arbitrators. The Secretary-General may also be called upon to designate or to act as an appointing authority by specific agreement of the parties to a dispute, and will act himself as the appointing authority if the parties expressly so agree. Access to justice Since 1994, the PCA has maintained a financial assistance fund that aims at helping developing countries meet part of the costs involved in international arbitration or other means of dispute settlement offered by the PCA. Requests for assistance made by qualifying states are decided upon by an independent board of trustees.

Site visit conducted by Members of the Court of Arbitration and Party Representatives, Indus Waters/Kishenganga Arbitration, June 2011

To make its dispute resolution services even more widely accessible, the PCA has also concluded a number of ‘host country agreements’ with PCA member states. The host country agreement allows parties in dispute to take full advantage of the flexibility and efficiency of PCA-administered proceedings in the territory of the host country. The PCA has signed host country agreements with the Argentine Republic, the Republic of Costa Rica, the Lebanese Republic, the Republic of Mauritius, the Republic of Singapore, the Republic of South Africa and the Republic of India. A forum for learning The PCA runs a fellowship programme that provides recent law graduates and young legal professionals with the opportunity to work as part of the International Bureau for one full year, as well as an internship programme that provides law students and graduates with the opportunity to participate in the functioning of the International Bureau for three months.

Recent PCA Publication Permanent Court of Arbitration Fedelma Claire Smith Legal Counsel Tel: +31 70 302 4165 fsmith@pca-cpa.org www.pca-cpa.org

PCA staff provide editorial services to the International Council for Commercial Arbitration (ICCA), including by editing the following publications: the Yearbook of Commercial Arbitration, the International Handbook on Commercial Arbitration and the ICCA Congress Series. The PCA also organises conferences and seminars, and compiles and edits scholarly works on current issues of international law and dispute resolution. Recently published titles include Multiple Party Actions in International Arbitration (Oxford University Press, 2009). December 2011 • GBM • 87

deal direCtory

deal directory Aegis Group PLC: Acquisition of Ad O’clock in Russia Aegis Group plc, one of the world’s leading media and digital marketing communications groups, announced on 4 November 2011 that it had acquired Ad O’clock LLC, a Russian full-service media agency based in Moscow. Ad O’clock is a strong and successful independent agency with a history of delivering sector-leading growth in one of the world fastest-growing advertising markets. Ad O’clock has forged its reputation based on a strong core of locally based clients that include a number of leading stateowned companies, such as Gazprom, and international clients including French retailer Castorama. Jerry Buhlmann, CE of Aegis Group said: “Ad O’clock is our second significant Russian acquisition this year - it is a substantial player in a fast-growing advertising market. As a full service media brand Ad O’clock strengthens our participation in the buoyant Russian market, injecting further impetus into our strategy of broadening our service offering, particularly in faster growing regions.”

Anglo American PLC: Acquisition of De Beers On 4 November 2011, Anglo American (AA) entered into an agreement with CHL and Centhold International Limited (CIL), together representing the Oppenheimer family interests (CHL Group), to acquire their 40% interest in DB Investments and De Beers sa (De Beers) for a total cash consideration of US$5.1bn, subject to adjustment as provided for in the agreement. Under the terms of the existing shareholders agreement between AA, CHL and the Government of the Republic of Botswana (GRB), the GRB has pre-emption rights in respect of the CHL Group’s interest in De Beers, enabling it to participate in the transaction and to increase its interest in De Beers, on a pro rata basis, to up to 25%. In the event that the GRB exercises its pre-emption rights in full, AA, under the proposed transaction, would acquire an incremental 30% interest in De Beers, taking its total interest to 75%, and the consideration payable by AA to the CHL Group would be

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reduced proportionately. AA has agreed to pay to CHL (or as it may direct) a break fee of US$75m in the event that the transaction does not close.

ARM Holdings PLC acquires Prolific, Inc. On 1 November 2011, ARM announced that it had acquired Prolific, Inc., which develops leading-edge IC design optimisation software tools that significantly reduce development time and improve the performance of cellbased designs. Prolific is a privately owned company based in Newark, California. This acquisition augments ARM’s strategy to provide innovative physical IP products that will enable the ARM partnership to continue to lead in the implementation of highly integrated, low-power system-on-chip solutions. “We have been successfully collaborating with Prolific for a number of years,” said Simon Segars, EVP and GM, Physical IP Division, ARM. “The technology and expertise that will come with this acquisition will expand our capabilities to accelerate ecosystem adoption of advanced process nodes at 20nm and below.”

Bunzl PLC: Acquisition Bunzl plc, the international distribution and outsourcing Group, announced on 7 November 2011 that it had acquired Danny Comércio Importação Exportação Ltda from Nielzer and Rita Sudré. Based near São Paulo, Danny is a leading supplier of personal protection equipment throughout Brazil, specialising in the sourcing and sale of gloves and safety glasses for a variety of industrial uses. Revenue in the year ended 31 December 2010 was R$55.6m and is expected to be approximately R$70m in 2011. The gross assets acquired are estimated to be R$30m. Michael Roney, CE of Bunzl, said: “Danny is our fourth acquisition in the Brazilian market since 2008 and follows the recent acquisition of Ideal in the cleaning and hygiene sector. It will complement our growing and successful personal protection equipment business and in particular will expand our range of own

brand products to both new and existing customers.”

Eurosic : Acquisition of an office portfolio On 14 October 2011, Eurosic completed the acquisition of a portfolio of 22 office buildings with a value of €340m including duties. This acquisition will enable Eurosic to further strengthen its portfolio of large, recent and high quality assets. The ten main assets represent 85% of this portfolio’s value and are located in the Paris Region, as well as other regions across France. The operation has been financed through equity for 50%, thanks to the company’s principal shareholders exercising their stock warrants. The rest of the acquisition has been financed with a bank loan from a pool of six banks - CA-CIB, BECM, BNP Paribas, Crédit Agricole IdF, HELABA and LCL. Eurosic is not only strengthening its cash flow, but also growing its portfolio by 23% to almost €1.8bn, while reinforcing its focus on offices, which make up nearly 85% of all the assets.

Experian acquires majority stake in Computec On 9 November 2011, Experian, the global information services company, announced that it had completed the acquisition of a 98% holding in Computec S.A. for the equivalent of US$380m. Computec is a leading Latin American credit services information provider based in Colombia. The acquisition of Computec further strengthens Experian’s Latin American presence, building on the leading market position Experian has established in Brazil. Computec is a unique asset, with the market leading credit bureau in Colombia. Don Robert, CEO, Experian, said: “This acquisition is another important step in our strategy to develop Experian’s presence in fast growing emerging consumer economies. The combination of our global expertise and Computecss market leadership means that we are well placed to accelerate our growth in Colombia.”

Globo plc: Taking 100% control of ReachFurther Communications On 11 November 2011, Globo plc, the international IT, S.a.a.S and mobile solutions group, announced that its subsidiary, Globo S.A., completed the acquisition of ReachFurther Communications (RFC), the Cyprus-based value added service provider and content aggregator. In January 2009, Globo acquired a 35% equity interest in RFC and management control of the business. Following the acquisition of the remaining 65% of the shares, RFC becomes a wholly owned subsidiary of Globo S.A. The consideration for the proposed acquisition, approximately £604,000, will be satisfied by the issue of 3,500,000 new ordinary 1p shares in Globo Plc to the vendor, Future Marketing Ltd. The vendor has entered into a lock-in agreement for six months in respect of half of the new ordinary shares to be issued.

HML Holdings PLC: Placing and acquisition of Scotts of Putney On 7 November 2011, HML Holdings Plc, a leading provider of property management, insurance and ancillary services to residential property blocks, announced that it had acquired the business and assets of Scotts of Putney for a total consideration of £1.9m. Scotts is an independent firm of managing agents and surveyors, established in 1976. The business specialises in residential lettings and block management with their associated professional property services. The consideration for the acquisition will be satisfied by £1.3m in cash and £0.2m in new ordinary shares of 1.5p in HML on completion. The remaining £0.4m of the consideration is deferred over three years and will be payable in cash, subject to certain performance conditions.

as competition law and the UK Bribery Act. The company is based in the UK and Belgium and its global client base includes E.ON AG, PricewaterhouseCoopers and Xstrata. An initial payment of €2m has been made on completion and a further €0.2m is payable one year after completion subject to the fulfilment of certain conditions. ID had revenues of €2.4m for the year ended 31 May 2011.

LSL Property ServPLC: Acquisition of Marsh & Parsons Limited On 4 November 2011, LSL Property Services plc, a leading provider of residential property services, announced the proposed acquisition of Marsh & Parsons, a leading London estate agency operating a premium brand in the mid-segment of the prime London property market, subject to shareholder approval. Roger Matthews, chairman LSL, commented: “I am delighted to announce the acquisition of Marsh & Parsons which has an excellent geographic and strategic fit with LSL. This is a unique opportunity for LSL to acquire a premium central London estate agency brand and to gain a high quality and experienced management team with a great track record. We look forward to working with Peter Rollings and his team to deliver the next stage of growth for Marsh & Parsons.”

Management Consulting Group PLC: Acquisition On 1 November 2011, Management Consulting Group PLC (MCG), the international professional services group, announced that it had acquired Vertical Retail Consulting Limited and Vertical Retail Consulting Hong Kong Limited. Cash consideration of US$2.25m was paid on completion of the transaction.

On 4 November 2011, IDOX plc, a leading independent supplier of software and services, acquired Interactive Dialogues Limited and Interactive Dialogues NV (ID).

The acquired business operates in Mainland China, providing management consulting services to clients operating in the retail and consumer goods sector and serving both well-known international brands already active in or in the process of entering the Chinese market, and local retailers expanding rapidly in terms of store and brand development.

ID is a leading supplier of e-learning and information solutions in Europe enabling organisations to conduct ‘dialogues’ with employees, customers and suppliers to achieve legislative compliance in areas such

Further consideration of up to US$1.5m in cash and 1,350,000 MCG ordinary shares may be payable to the vendors in the event that the acquired business achieves certain performance targets in the period up to 2014.

IDOX PLC: Acquisition

May Gurney acquires TransLinc On 9 November 2011, May Gurney, the support services company providing essential maintenance and enhancement services to the public and regulated sectors, acquired TransLinc, a market leader in the UK’s £730m per annum local authority specialist fleet services and £3bn local authority passenger services markets. Under the terms of the transaction, May Gurney paid a cash consideration of £34.9m for the equity and loan notes of the business. In addition, the Company will assume approximately £30.7m of customer contractbacked fleet financing obligations.

NewRiver Retail Ltd: Acquisition On 14 November 2011, NewRiver Retail Limited, the UK REIT specialising in value-creating retail property investment and active asset management, announced that it had completed the acquisition of the freehold interest of The Newland Shopping Centre in Witham, Essex. The property is being acquired for a total consideration of £5.0m in cash, reflecting a net initial yield of approximately 9.7% and a cash on equity return of approximately 15%. The Newlands Shopping Centre provides approximately 66,000 sqft of retailing and ancillary space anchored and benefits from direct links into adjoining Newlands Street and a 200-space car park. Management believe that this is an excellent fit with NewRiver’s investment strategy of targeting food and value anchored district centres, with low occupational costs, stable cashflows and identified development and value creating opportunities.

Oxford Instruments: Acquisition On 4 November 2011, Oxford Instruments plc, a leading provider of high technology tools and systems for industry and research, announced the acquisition of Platinum Medical Imaging LLC. Platinum is an established US company providing high quality parts and services for MRI (magnetic resonance imaging) and CT (computed tomography) medical imaging instruments. Platinum is being acquired for an initial debt-free, cash-free consideration of US$18m with a deferred element of up to US$37m payable over three years dependent on its performance over that period.

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deal direCtory

Pearson PLC: Acquisition

Solid State PLC: Acquisition

Pearson, the world’s leading learning company, announced on 17 October 2011 the acquisition of TQ Holdings Ltd (TQ), a private company based in Derbyshire, England.

On 17 October 2011, Solid State plc, the AIM listed supplier of battery power solutions, specialist electronic components and industrial/ruggedized computers, announced the acquisition of the trade and assets of Blazepoint Ltd for a consideration of £200,000. The consideration will be satisfied in cash financed from the Company’s existing resources.

TQ provides vocational and technical education and training services to governments, institutions and corporations around the world. A combination of Pearson’s scale and assets with TQ’s excellence in training delivery will support growth in this business both in the UK and internationally. TQ had gross assets of £23m at the end of September 2010. Pearson expects the acquisition to enhance adjusted earnings per share from 2012, its first full year after acquisition, and to generate a return on invested capital above Pearson’s weighted average cost of capital from 2013.

Quindell Portfolio: Acquisition of Maine Finance Limited On 1 November 2011, Quindell Portfolio Plc, a leading brand extension business, announced that it had acquired the entire issued share capital of Maine Finance Limited, an internet based financial services broking business, for a mutually agreed valuation of £2.1m to be satisfied by the issue of 70,000,000 Quindell shares. In the event that Maine Finance misses its target profit, the Group will receive compensation from the vendors in the form of cash equal to 7x the shortfall. In addition, the vendors have warranted that cash generated from Maine Finance will be equal to 75% of its profit after tax until 31 December 2012. In the event that Maine Finance misses this cash target, the Group will receive compensation from the vendors in the form of cash equal to 2x the shortfall. The maximum aggregate compensation that may be received by the Group is £2.1m.

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Blazepoint is an established supplier of ruggedized computer and hand held devices to the commercial and military markets worldwide, including an innovative range of ruggedized peripheral products. Gary Marsh, CE of Solid State, said: “The unification of our two businesses under the brand ‘Steatite Blazepoint’ creates the UK market leader in ruggedized computers and handheld devices and substantially strengthens Solid State’s presence in the transportation sector.”

Tawa completes acquisition of USbased LGIC Holdings LCC On 18 October 2011, Tawa plc, the quoted insurance investor, announced that following regulatory approvals from the Pennsylvania Department of Insurance, it had completed its acquisition of 51% of the issued shares of US holding company, LGIC Holdings LLC, as announced on 7 April 2011

Teliti International Ltd: Admission to AIM On 3 November 2011, Teliti International Ltd, the IT services business, announced its admission to AIM and dealings in its ordinary shares had begun. The directors consider admission to AIM to be an important step in Teliti’s development and one that will enhance its credibility and

stature in the industry, both in Malaysia and internationally, enabling the Company to implement its strategy of further market penetration in Malaysia and subsequently across Asia and the Middle East. Haji Mohamed Nasir, CE of Teliti, said: “We believe our listing on AIM will enhance our profile and visibility with customers and partners, particularly in our key growth markets in the ASEAN countries, and improve our ability to raise additional capital should this be required.”

Trafalgar New Homes: Re-Admission To PLUS and completion of acquisition On 11 November 2011, Trafalgar New Homes plc announced the re-admission of the Company’s entire issued ordinary share capital to trading on the PLUS-quoted market and the completion of the acquisition of Combe Bank Homes Limited. Combe Bank was incorporated in November 2006 to undertake residential development in new build, conversions and refurbishment. Further details regarding Combe Bank and the acquisition can be found in the Companyss Admission Document.

Yule Catto & Co: Acquisition On 17 October 2011, Yule Catto announced the acquisition of Quality Polymer Sdn Bhd, a Malaysian aqueous polymer producer, for a consideration of £10m (cash and debt free). This acquisition will allow Yule Catto to expand its South East Asian production and sales of acrylic and vinylic polymer dispersions for the adhesives, building products and coating sectors. Following the acquisition, QP will operate as a subsidiary of Yule Catto, directly owned by the Group’s 70% subsidiary, Revertex Malaysia SB.

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WE CaN’t prEDICt WHat WILL HappEN. But we can Be prepared. We don’t know when or where the next emergency will hit. All we know is that children will be the most vulnerable. In the past year, we’ve responded to over 40 emergencies including Haiti, Pakistan, Niger and Japan. Please give what you can so that more young lives can be saved.

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buy a hygiene kit £25 could to keep children healthy. buy 30 buckets to £50 could help families transport water.

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