Tuesday, December 12, 2017

Europe doesn't like Trump administration's tax plans - CNN Money

Europe doesn't like Trump administration's tax plans
by Ivana Kottasová @ivanakottasova
December 11, 2017: 4:48 PM ET
Tax cuts are a big gift to business. But will workers win too?
Europe's five biggest economies have warned the Trump administration that its tax plan may violate international trade rules.
Germany, France, Britain, Spain and Italy have written to Treasury Sec. Steven Mnuchin, arguing that tax bills passed by the House and Senate run afoul of treaties and could distort international trade.
"It is important that the U.S. government's rights over domestic tax policy be exercised in a way that adheres with international obligations to which it has signed-up," the letter states. It was signed by the countries' finance ministers.
The letter argues that proposed changes to the U.S. tax code could give American companies an advantage over foreign rivals.
The ministers objected specifically to a new 20% tax on payments from U.S.-based multinationals to their foreign affiliates, saying the measure in the House bill could "discriminate in a manner that would be at odds with international rules."
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They said the provision could also tax the profits of foreign businesses that do not have a permanent base in the U.S.
A second measure also drew objections. It would subject cross-border transfers within banks and finance companies to a 10% tax.
"These two ... present [World Trade Organization] problems, said Rebecca Kysar, a professor at Fordham University. She said the measures could be considered to be discriminatory.
The finance ministers said they opposed another measure in the Senate bill that could benefit American companies by subsidizing their exports.
Kysar said the more income a U.S. company makes from exports, the greater the share of its income will be taxed at 12.5% instead of the general corporate rate of 20%.
Related: 4 red flags in the GOP tax bills
The letter comes at a crucial stage in the legislative process.
The House and Senate have passed competing versions of the tax bill. Their task now is to reconcile major differences between the two measures.
Congressional Republicans are hoping to get the final agreement to President Trump before Christmas.
Trump is expected to deliver remarks on tax reform at the Treasury Department on Wednesday.

North Korea developing bio-warfare weapons at factory producing 'microbes by the tonne', US officials warn - Washington Post

12/12/2017
North Korea developing bio-warfare weapons at factory producing 'microbes by the tonne', US officials warn
Alarm initially raised in 2006 when Pyongyang's investment in smallpox and anthrax labs dismissed as 'rudimentary'
Joby Warrick
North Korean soldiers attend a mass rally Getty
Five months before North Korea's first nuclear test in 2006, US intelligence officials sent a report to Congress warning that secret work also was underway on a biological weapon. The communist regime, which had long ago acquired the pathogens that cause smallpox and anthrax, had assembled teams of scientists but seemed to be lacking in certain technical skills, the report said.
“Pyongyang's resources presently include a rudimentary biotechnology infrastructure,” the report by the director of national intelligence explained.
A decade later, the technical hurdles appear to be falling away. North Korea is moving steadily to acquire the essential machinery that could potentially be used for an advanced bioweapons programme, from factories that can produce microbes by the tonne, to laboratories specialising in genetic modification, according to US and Asian intelligence officials and weapons experts. Meanwhile, leader Kim Jong-un's government also is dispatching its scientists abroad to seek advanced degrees in microbiology, while offering to sell biotechnology services to the developing world.
Nobel Peace Prize winners urge US and North Korea to negotiate
The gains have alarmed US analysts, who say North Korea - which has doggedly pursued weapons of mass destruction of every other variety - could quickly surge into industrial-scale production of biological pathogens if it chooses to do so. Such a move could give the regime yet another fearsome weapon with which to threaten neighbours or US troops in a future conflict, officials and analysts say.
Current and former US officials with access to classified files say they have seen no hard evidence so far that Kim has ordered production of actual weapons, beyond samples and prototypes. And they can only speculate about the reasons.
“That the North Koreans have [biological] agents is known, by various means,” said one knowledgeable US official who, like several others interviewed, spoke on the condition of anonymity regarding sensitive military assessments. “The lingering question is, why have they acquired the materials and developed the science, but not yet produced weapons?”
But the official, like others interviewed, also acknowledged that spy agencies might not detect a change in North Korea's programme, since the new capabilities are imbedded within civilian factories ostensibly engaged in making agricultural and pharmaceutical products.
“If it started tomorrow we might not know it,” the official said, “unless we're lucky enough to have an informant who happens to be in just the right place.”
In a country that is famously secretive, it is perhaps the most carefully guarded secret of all. North Korea consistently denies having a biological warfare programme of any kind, and it has worked diligently to keep all evidence of weapons research hidden from sight.
Yet, in 2015, the country's leader took it upon himself to partially roll back the curtain. On 6 June of that year, Kim commandeered a crew of North Korean cameramen for a visit to the newly named Pyongyang Biotechnical Institute, a sprawling, two-story facility on the grounds of what used to a vitamin factory.
State-run news media described the institute as a factory for making biological pesticides - mainly, live bacteria that can kill the worms and caterpillars that threaten North Korea's cabbage crop. But to US analysts studying the video, the images provided an unexpected jolt: On display inside the military-run facility were rooms jammed with expensive equipment, including industrial-scale fermenters used for growing bulk quantities of live microbes, and large dryers designed to turn billions of bacterial spores into a fine powder for easy dispersal.
Many of the machines were banned from sale to North Korea under international sanctions because of their possible use in a bioweapons programme. But Kim, wearing a white lab coat and trailed by a phalanx of scientists and military officers, appeared almost gleeful in showing them off, striking the same rapt pose as when he visits the country's installations for nuclear weapons and long-range missiles.
It was the first public confirmation of the existence of such machines in North Korea, and some US and Asian experts saw their presence as deeply ominous.
“It is hard to avoid the conclusion that the institute is intended to produce military-size batches of anthrax,” Melissa Hanham, a North Korea specialist at the James Martin Center for Nonproliferation Studies in Monterey, California, wrote in a blog posting after the video was shown. “Regardless of whether the equipment is being used to produce anthrax today, it could be in the near future.”
US analysts now believe the timing of the visit was deliberate: The previous week, on 28 May, the Pentagon had publicly acknowledged that live samples of US-made anthrax bacteria had been accidentally shipped to a South Korean military base because of a lab mix-up. North Korea lodged a formal complaint with the United Nations on 4 June, calling the incident proof of American “biological warfare schemes” against its citizens.
Kim's trip to the biotechnology institute came just two days later, and was clearly intended to send a message, Hanham said in an interview.
“Responding by showing their own capability could be taken as a threat,” she said.
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Some weapons experts were sceptical, noting the absence of biohazard suits and protective gear typically found in laboratories that work with deadly pathogens. But since the release of the images, subsequent examinations have poked holes in the official story about the factory's purpose. For one thing, some of the machines shown in the video were not visibly connected to any pipes, vents or ductwork. Experts also have questioned why North Korea would buy expensive industrial equipment at black-market rates, just to make a pesticide that can be purchased legally, at vastly cheaper rates, from China.
“The real takeaway is that [North Korea] had the dual-use equipment necessary for bioweapons production,” said Andrew Weber, a former assistant secretary of defence for nuclear, chemical and biological defence programmes. “What the photos show is a modern bio-production capability.”
That North Korea possesses the basic components for biological weapons is all but settled doctrine within US and Asian military and intelligence establishments, and has been for years.
Although overshadowed by Pyongyang's nuclear and chemical weapons, the threat of biological attack from the North is regarded as sufficiently serious that the Pentagon routinely vaccinates all Korea-bound troops for exposure to anthrax and smallpox.
“It's a presumption that they have it and will use it,” said a retired military officer who oversaw troops on the peninsula. “We've had to spend a lot of time figuring out how to deal with some of the WMD.”
But determining North Korea's precise capabilities - and the regime's intentions for using such weapons - have been among the toughest intelligence challenges for US analysts. Official assessments by US and South Korean intelligence agencies have generally concluded that Pyongyang has experimented with a handful of bacterial strains, including the microbes that cause anthrax, cholera and plague. US analysts also have believed since at least the mid-1990s that North Korea possesses the smallpox virus, a conclusion based in part on the discovery of antibodies in the bloodstreams of North Korean soldiers who escaped to the South in the 1980s and 1990s.
That assessment, while controversial, is buttressed by senior North Korean government and military defectors as well as foreign governments with special insight into the regime's military secrets. In 1993, the head of the Russian intelligence agency's foreign branch revealed in a report that North Korea was performing “applied military-biological research” on four pathogens, including microbes that cause anthrax and smallpox.
But more recently, questions about North Korea's capability have taken on a new urgency, as military planners prepare for the possibility that tensions with Pyongyang could lead to war. While U.S. and South Korean aircraft would seek to knock out suspected chemical and biological facilities from the air, the newest plans include a presumption that infantry divisions would have to face an array of chemical and biological hazards on the battlefield - hazards that may be invisible to fast-moving ground troops, current and former US officials say.
But germs as military weapons also have distinct disadvantages, as they are difficult to control and can take hours or days to kill or disable. A consensus view among military planners is that Kim is choosing to hold his bioweapons card in reserve for now, while his scientists build up a capacity to manufacture large quantities of pathogens quickly. Now that the North is equipped with state-of-the-art factories and teams of trained specialists, that shift could conceivably happen in weeks or even days, said the senior official familiar with military preparations for a biological attack.
“The capabilities - the science and technology - all of that now exists,” the official said. “Kim has chosen not to deploy at this time. But ultimately it comes down to a political decision.”
In the waning years of the Cold War, Soviet weapons scientists laboured in secret to build new super-germs more dangerous than those found in nature. With mixed success, using techniques still novel in the 1980s, they spliced together bits of DNA to increase virulence - so that microbes would kill more quickly - or to introduce stealthy features that would make them harder to detect.
There is no known evidence that Pyongyang is working to engineer designer bugs, US analysts say. But there are signs that North Korea is attempting to catapult itself into the 21st century worlds of genetic research and biomedical science.
In 2015, as North Korea's new microbe-producing factory was coming online, North Korean scientists were teaming up with Chinese counterparts on a research project to identify previously unknown bacterial species discovered in the glacial ice in Svalbard, the Norway-owned island chain far north of the Arctic Circle. In a rare instance in which North Koreans took the lead on a peer-reviewed scientific paper, the scientists described using DNA sequencing techniques to isolate the novel strains.
The project was the most dramatic example of what private researchers describe as a surge of interest by North Koreans in genetic engineering and other biotech disciplines. Earlier this year, the Welsh artificial intelligence firm Amplyfi conducted a search of the “deep Web” - the parts of the Internet invisible to the public - for evidence of North Korean interest in bio-defence topics. The company's DataVoyant search tool produced hundreds of thousands of hits and showed a spike in interest in such terms as “gene expression” and “nucleic acid sequence,” beginning two years ago.
A preliminary analysis suggested a pattern of behaviour that US and Asian officials have independently confirmed: a broad North Korean effort to obtain outside expertise from private companies, academic institutions and even non-profits, company officials said. North Korea is believed to have used technical designs from a British agricultural nonprofit in building its microbe-producing Pyongyang Biotechnology Center, and it has sought to enrol promising microbiology students in top research universities across Europe and Asia. In recent years, the North Koreans also have sought to sell medical services to the developing world, in one instance building and staffing an entire hospital in Zambia.
“Every continent is represented,” Amplyfi co-founder Chris Ganje said in a phone interview from the company's headquarters in Cardiff, Wales. He said the search turned up “worrying indicators of unintended support,” adding: “It is obvious that the international community and larger institutions need to be cautious in providing seemingly benign academic scientific education and training to North Korea.”
A harder challenge is separating legitimate efforts to improve North Korea's medical infrastructure with more sinister attempts to a create new varieties of killing machines, officials and experts acknowledge. Joseph DeTrani, a retired CIA veteran who oversaw intelligence collection for North Korea in the 2000s, noted that ambiguity has been a built-in feature of North Korean weapons programmes for decades.
“They talk openly about their 'nuclear deterrent,' but with chemical and biological weapons, it's different,” DeTrani said. “They've always played it close to the vest. For them, it's a real option. But they want to preserve the possibility of deniability.”
The Washington Post

Turkey snubs NATO allies and buys missile systems from Russia - NBC News


DEC 12 2017, 4:58 AM ET
Turkey snubs NATO allies and buys missile systems from Russia
ANKARA, Turkey — Turkey aims to finalize a deal to purchase S-400 surface-to-air missile systems from Russia in the coming week, Turkish President Recep Tayyip Erdogan said on Monday.
Turkey has been negotiating with Russia to buy the system for more than a year. Washington and some of its NATO allies see the decision as a snub because the weapons cannot be integrated into the alliance's defenses.
Turkey expects to receive its first such system in 2019, Defense Minister Nurettin Canikli said last month.
"Our officials will come together in the coming week to finalize the S-400 issue," Erdogan said during a joint news conference with his Russian counterpart Vladimir Putin.
NATO member Turkey has the alliance's second-largest military.
However, Ankara has been working to develop its own defense systems and equipment and has lined up several projects for the coming years including combat helicopters, tanks, drones and more.
During their news conference, Erdogan said it was their eighth meeting this year and repeatedly referred to Putin as "my dear friend." Putin also addressed Erdogan as a friend.
Relations between the two countries were tense after Turkey shot down a Russian warplane on the border with Syria in November 2015, but they have restored ties and developed a close rapport on the conflict in Syria.
Erdogan also said Turkey and Russia were on the same page regarding the Trump administration's official recognition of Jerusalem as Israel's capital, a decision which upended decades of U.S. policy.
Putin said Trump's move "destabilizes the already difficult situation in the region" and might "finish prospects for the Palestinian-Israeli peace process."
In joint press conference, Presidents Putin and Erdogan condemn U.S. position on Jerusalem 1:02
Earlier Monday, Putin declared "victory" in Syria during a surprise visit Monday to a military base there and announced a partial troop withdrawal from the country.
Putin celebrated Moscow's deepening ties with Syria, Egypt and Turkey during his whirlwind visits to the three regional powers.
Russia's growing footprint in the Middle East extends beyond Syria and Egypt. King Salman of Saudi Arabia visited Putin in October as the two countries shook off decades of enmity and mutual suspicion.
During the Cold War, the Saudis helped arm Afghan rebels fighting the Soviet invasion. More recently, tensions ran high over Russia's military help for Syrian President Bashar al-Assad, whom Riyadh insists must go as part of any settlement in the Syria's civil war. The Saudis have since softened their opposition to Russia's role in Syria.

Bitcoin rally continues as futures forecast even higher prices - CNN Money

Bitcoin rally continues as futures forecast even higher prices
by Chris Isidore and Jackie Wattles @CNNMoneyInvest
December 11, 2017: 6:04 PM ET
The bitcoin rally continued Monday, and investors are betting it will go even higher.
Bitcoin (XBT) was trading at more than $16,000 early Monday morning, up about 8%. And bitcoin futures, which started trading Sunday on the CBOE, showed that investors are betting the cryptocurrency will continue to climb in the coming months.
The January futures price was about $17,800, or about $1,500 above Monday's spot price -- or what people are paying to purchase bitcoin immediately, rather than contracts on its future price. The futures price for February and March were even higher, around $18,000 for each. As bullish as those prices are, they are down from Sunday's price for February and March contracts, which had topped $19,000.
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Futures are contracts that let investors buy or sell something at a specific price in the future. These futures are unusual in that, unlike traditional commodities such as oil or agricultural products, bitcoins aren't physical assets. And unlike traditional currencies, there isn't a central bank that backs bitcoin. They are created on computers using complex algorithms and recorded in a digital ledger.
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Offering futures contracts for bitcoin allows investors to speculate on the digital currency's price without actually owning any bitcoin. It also gives investors who believe that the run-up in price has produced a bitcoin "bubble" a chance to place a bet that bitcoin will soon fall in value.
There have been a few sharp dips along the way, but bitcoin's rise has been stunning, having doubled in price over the last three weeks. It is up more than 400% in the just the last two months, and up about 2,000% in the last year, according to CoinDesk. It had traded for less than $1 briefly in 2011.
CNNMoney (New York)

Global arms sales rise for the first time in 5 years - CNN

Global arms sales rise for the first time in 5 years
by Ivana Kottasová @ivanakottasova
December 10, 2017: 7:31 PM ET
Global arms sales increased for the first time in five years in 2016 as rising geopolitical tensions fueled defense spending.
Sales by the world's 100 biggest arms producers increased 1.9% from the previous year to reach $374.8 billion, according to the Stockholm International Peace Research Institute (SIPRI).
"The growth in arms sales was expected and was driven by the implementation of new national major weapon programs, ongoing military operations in several countries and persistent regional tensions that are leading to an increased demand for weapons," the group said in its report.
Arms producers in South Korea, which increasingly supply the country's military, saw the largest percentage increase among developed countries.
The spending splurge reflects fears of a potential conflict with North Korea. Sales by South Korean firms increased by over 20% in 2016, to $8.4 billion.
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While consumer purchases are included in the sales figures, national governments are by far the largest purchasers of arms and weapons systems.
American firms remained at the top of the industry in 2016, with sales increasing by 4% to more than $217 billion. That was 58% of the global total.
American defense firm Lockheed Martin -- the world's largest producer -- saw sales surge 11% in 2016, thanks to increased deliveries of its F-35 fighter and its acquisition of helicopter producer Sikorsky.
Aude Fleurant, director of the Arms and Military Expenditure Program at SIPRI, said that U.S. growth was likely to continue. President Trump wants to boost the Pentagon's budget and refurbish the U.S. nuclear arsenal.
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Sales by Russian firms increased 3.8% to $26.6 billion, a slower expansion than in recent years.
Moscow has boosted spending in order to overhaul its military capabilities, but procurement has slowed recently because of the country's strained finances.
"It's a money issue," said Fleurant. "They have been hit very severely by the drop in oil and gas prices."
Related: The Russian government is giving up control of Kalashnikov
Fleurant pointed to regional disputes, such as the standoff over islands in the South China Sea, as a major source of increased arms sales.
The area is home to crucial shipping lanes, and it's rich in oil and gas reserves. China, Taiwan, Vietnam, the Philippines, Malaysia and Brunei have all made territorial claims to islands in the area.
Tensions have grown since 2014 as China has turned sandbars into islands, equipping them with airfields, ports and weapons systems and warned U.S. warships and aircraft to stay away from them.
"Countries like Vietnam order submarines and maritime patrol aircraft, because of what they consider China's assertiveness in these territorial disputes," said Fleurant.

Vladimir Putin announces Russian withdrawal from Syria during visit to airbase - Telegraph


Vladimir Putin announces Russian withdrawal from Syria during visit to airbase
Alec Luhn, moscow
11 DECEMBER 2017 • 1:08PM
Vladimir Putin has said Russia will withdraw the bulk of its forces from Syria following the "successful intervention" in the conflict there.
The announcement comes after the defence ministry said last week that Russia had “completely liberated” Syria from the Islamic State of Iraq and the Levant (Isil), despite reports that the terrorist group still controls some remote territory there.
Speaking to soldiers at Russia's Khmeimim airbase during his first trip to Syria, where he was welcomed by Syrian president Bashar al-Assad, Mr Putin said he was ordering the defence minister and head of the general staff to begin withdrawing Russian forces to their home bases.
“In two-and-a-half years, Russia's military along with the Syrian army have defeated the most battle-worthy gang of international terrorists,” Mr Putin said. “In connection with this, I've made the decision that a significant part of the Russian military contingent located in the Syrian Arab Republic will return home to Russia.”
Moscow will continue to operate the Khmeimim airbase as well as its naval base in Tartus and will crush any further terrorist activities in Syria, he said.
“If the terrorists raise their head again, we will hit them with such strikes as they have never seen,” Mr Putin said. “We will never forget the casualties and losses that we suffered in the fight with terrorism here in Syria as well as at home in Russia.”
Vladimir Putin with Bashar al-Assad during his visit at Hmeymim base
The president told his troops they were “returning with victory” to their homeland and loved ones.
Mr Putin's triumphant visit to Syria comes days after he said he would run for re-election in March, a vote that is expected to keep him in power until 2024, nearly as long as Joseph Stalin. He is expected to make Russia's more aggressive foreign policy and defiance of the West a centerpiece of his campaign.
Russian President Vladimir Putin is welcomed by Syrian President Bashar al-Assad at Russia's Khmeimim airbase, Syria
Assad welcomes Putin
Video grab showing Putin and Assad
The leaders embrace on the tarmac
Mr Putin also met with president Abdel Fattah al-Sisi in Egypt on Monday and was traveling on to Turkey to speak with president Recep Tayyip Erdogan as part of a strengthening of ties and the two countries.
During the sit-down, Mr al-Sisi called for the Syria de-escalation zones established by Iran, Russia and Turkey to be expanded. Mr Putin said Russia was ready to resume flights to Egypt, which were suspended after the bombing of a Russian airliner on Halloween 2015.
Russia has also been drafting an agreement to deploy warplanes to Egypt, further increasing its presence in the Middle East.
Kremlin spokesman Dmitry Peskov said the Russian and Turkish leaders would discuss a political solution to the Syrian war. Mr Putin has met Mr Erdogan, who he once denounced as a backstabber after Turkey shot down a Russian plane in 2015, four times in the past two months.
Russian President Vladimir Putin, left, and Egyptian President Abdel-Fattah El-Sissi, arrive to their talks in Cairo, Egypt, Monday, Dec. 11
Russia's casualties have been mounting in Syria as its ground presence grew from advisers and military contractors to include special forces this fall, although the exact number of deaths remains secret.
In September, Russia's top military adviser was killed by a mortar strike, and two Russians who were reportedly working for a Russian private contractor were captured by Isil and executed in September.
Mr Putin announced an air campaign in September 2015 to support his ally, an intervention that has turned the tide of the war and positioned Russia as one of the most influential voices in talks to deterine Syria's future. Russia, Turkey and Iran have been holding rival negotiations to the Western-backed talks in Geneva.
Al-Assad visited Sochi last month, hugging his Russian counterpart and thanking him for “Russia's efforts to save our country”. Mr Putin returned the gesture and hugged al-Assad when he disembarked his presidential plane in Syria on Monday.