Court: US Can Seize New York Tower Linked to Iran

A New York jury ruled Thursday in federal court that a skyscraper with apparent ties to the Iranian government can be seized by the U.S. government, in what prosecutors are calling the single largest terrorism-related civil forfeiture case in American history.

The jury found that the Alavi Foundation, which owns about 60 percent of the 36-floor building, funneled money to the Assa Corporation, a shell company for Iran’s state-controlled bank that owned the remaining 40 percent of the building.

The defense argued that the Alavi Foundation, founded as a charity by the shah of Iran in the 1970s, had been tricked into believing that Assa had been sold to private investors after the 1995 implementation of U.S. sanctions on Iran.

“It’s really difficult to understand why you can be held accountable for the knowledge that you were trying to get, but you were lied to about,” defense attorney John Gleeson said during closing arguments, according to The New York Times.

Prosecutors asserted that officials from the Alavi Foundation lied, hiding and shredding documents in an attempt to erase guilt.

“The owners of 650 Fifth Avenue gave the Iranian government a critical foothold in the very heart of Manhattan through which Iran successfully circumvented U.S. economic sanctions,” Joon H. Kim, a lawyer from the prosecutor’s office, told French news agency AFP.

Situated on New York City’s posh Fifth Avenue, the building is valued at between $500 million and $1 billion. The court has decided to distribute the proceeds from its sale to the victims of Iran-sponsored terrorist attacks.

In particular, victims of the 1983 Beirut Marine barracks attack and of the 1996 Khobar Towers bombing in Saudi Arabia will receive benefits. Tehran has consistently denied involvement in either of the attacks.

In 2013, a lower court decided the case in the U.S. government’s favor, but the decision was stayed on appeal.



Thailand, China to Sign $5 Billion Rail Infrastructure Agreement

In a major boost to Thailand’s transportation infrastructure, the military government is set to sign a more than $5 billion agreement with China for a high-speed rail network.

The first stage of the rail, the 252 kilometers from Bangkok to Nakhon Ratchasima, is a key step in a line that, once complete, will stretch more than 1,260 kilometers to Kunming, in China’s Yunnan province. The next stages will reach the Thai border with Laos. 

Analysts see the rail line as an extension of China’s One Belt, One Road initiative, expanding regional trade and investment. The project also highlights China’s growing regional influence.

The agreement, expected to be signed in July, follows almost two years of delays in negotiations, with final details of the contract still to be made public.

The deal has also raised widespread criticism of the government’s use of powerful clauses in an interim charter.

Economic boost for Thailand

Economists say investment in Thailand’s rail infrastructure needs to be a priority.

Pavida Pananond, an associate professor of business studies at Thammasat University, said general improvements to Thailand’s transportation network are welcome.

Several other countries, including Japan and South Korea, have put forward transportation plans and proposals for rail systems in recent years.

“It’s good for Thailand and it’s good for Thai business. I would say a clear ‘yes’ because Thailand is in dire need of better infrastructure, especially with regard to transport,” Pavida said.

Thailand, she said, faces high transportation logistics costs due to a reliance on roads.

Talks surrounding the Sino-Thai rail agreement have been bogged down for over two years due to disputes over land access to China, debate over interest charges on loans from Chinese banks, and the eligibility of Chinese engineers and architects to work on the project.

Professor of economics Somphob Manarangsan said the rail project offers the region significant economic potential and a boost in Chinese foreign direct investment.

He said Thailand is also looking to China to invest in the government-backed Eastern Economic Corridor (EEC) that is targeting regional foreign investment.

“Thailand wants them [China] to move their regional supply chain outside of China to the mainland of ASEAN [Association of South East Asian Nations] area, which has Thailand at the hub, connecting to CLMV [Cambodia, Laos, Myanmar, Vietnam],” he told VOA.

The rail network includes a 410-kilometer section through Laos, in which China is contributing 70 percent of the total $5.8 billion cost. Laos sees the rail line as vital to enable it to export goods to the Thai seaport of Laem Chabang, near Bangkok.

Special powers raise concern

But the project has come under increasing criticism in Thailand after the military government, in power since May 2014, insisted on using powers under Section 44 of the interim charter that give the government absolute authority in policy application.

The government claims the use of the special power was to ensure Chinese investment, expertise, technology and equipment.

Former army chief and Thai Prime Minister Prayut Chan-o-cha told local media the use of the charter powers was to clear legal hurdles in the Thai-Sino rail project, “not a special favor to China but to Thailand’s benefit.”

But the use of the laws was challenged by organizations of Thai professional engineers and architects who said Chinese engineers were not registered to work in Thailand.

Thitinan Pongsudhirak, a political scientist at Chulalongkorn University, in a commentary, said Thailand should press for open bidding on the project to ensure the country ended up with the “best bid with the best value.”

“Instead, opting for the Chinese plan is poised to violate a slew of Thai laws and undermine the government’s own good governance agenda,” Thitinan said.

Besides exemptions to Chinese engineers and architects working on the project, the charter articles also exempt state procurement laws and environmental regulations covering forest reserves, which will be set aside for the line’s construction.

Thammasat University’s Pavida said other concerns include levels of transparency on the agreement.

“People don’t know the details. People haven’t seen much information on the potential benefit, and partly, this is because the feasibility study has been done by the Chinese,” she said.

“So, if you look at that and the Chinese try to sell their technology and then we let them do the feasibility study, so they would say, ‘yes, it is feasible.’ So that’s one of the reasons why people do not have trust in the rush into this,” she said.

Analysts said the government’s push to sign an agreement comes as Thai’s Prayut is due to visit China in September to attend meetings of the BRICS — Brazil, Russia, India, China and South Africa — forum in Xiamen.



India to Rollout Momentous Tax Reform, But Many Fear Rocky Transition

India is set to rollout a momentous tax reform at midnight Friday that will transform the country of 1.3 billion people into a single market.

The Goods and Services Tax (GST) will replace an entanglement of more than a dozen confusing levies with a single tax and bring down barriers between states.

But the transition is bringing upheaval. The new tax has sparked strikes, protests and concerns it could disrupt many businesses unprepared for a leap into the digital economy.

In markets across the country, confusion and chaos prevail among millions of small shopkeepers and traders, who have for decades maintained records in dusty ledgers and issued paper receipts to customers. Some are hurriedly investing in computers as new rules require all but the smallest businesses to submit online taxes every month.

Calculator to computer

Suresh Kumar, who runs a family owned store in a bustling neighborhood market in New Delhi, has never operated a computer and does not have an Internet connection in his shop. His customers mostly pay in cash and a calculator on his counter is the only modern gadget he has used since he opened this shop 47 years ago.

“How will I pay the salary of an accountant? I can barely cover the costs of these three men who help me,” Kumar said, pointing out that stores like his run on wafer-thin profit margins to stay in business.

The archaic accounting systems that were the method of operation of thousands of shops and traders also kept them out of the formal economy.

But as GST draws them into the tax net, government revenues are expected to get a huge boost in a country where tax compliance has been very low.

​Growing pains

The government agrees there will be growing pains due to the scale of the task ahead but points to long-term advantages. Over time, the new tax is expected to add about 2 percent to gross domestic output and vastly improve business efficiencies in the world’s fastest growing economy.

Economists say the GST will be a benefit for manufacturers, because it will free up domestic trade by cutting through a gigantic bureaucracy that involved a myriad of tax inspectors and checkpoints at state borders.

At the moment, trucks transporting goods lose an estimated 60 percent of transit time as they wait at state borders. Paying bribes was a fact of life accepted by businesses.

The tax will also make India’s $2 trillion economy more attractive to investors as it makes the economy more transparent.

More time needed

But in recent weeks many businesses have called for a postponement of the July 1 rollout, saying they did not get enough time to prepare.

K.E. Raghunathan, president of the All India Manufacturers Organization, said businesses need more time to adjust.

“The way it is being implemented, it is bound to create lots of chaotic conditions,” he said.

Underlining concerns of millions of small and medium manufacturers, he said, “they neither have the wherewithal to understand the sudden implementation and if they approach chartered accountants or consultants, it costs lots of money.”

A big concern is that the GST being rolled out by India is far more complex than that introduced by other countries where a single rate prevails. There will be four layers of taxation with rates of 5, 12, 18 and 28 percent.

Manufacturers and traders complain the different levels are creating confusion.

More than 50,000 textile traders went on strike this week. Thousands of other traders shut businesses Friday.

Many big and small retailers worried about the switchover have been offering massive discount sales across the country to get rid of their inventories.

Government pushes ahead

But the government has brushed aside concerns about businesses not being prepared for the switchover. 

“If he is still not ready, then I am afraid he does not want to be ready,” said Finance Minister Arun Jaitley recently as he rejected calls for a delay of the rollout.

Businesses say the tax rollout is the second disruption they have faced, coming months after Prime Minister Narendra Modi’s radical move to scrap 86 percent of the country’s currency, which slowed the economy.

As customers pour into his shop to buy stationery and other items, New Delhi shopkeeper Vimal Jain wonders whether he will handle customers or enter transactions in a computer starting Saturday. 

“Now this is another headache,” he said. “We had barely begun to recover from demonetization and now this sword hangs over our head.”

The tax will be ushered in at a grand midnight ceremony in parliament, but even that has become contentious. Calling it a “publicity stunt,” the main opposition Congress Party and several other parties have said they will boycott the special session.



US Growth in First Quarter Better Than Expected, Global Outlook Improves

U.S. economic growth in the first quarter of 2017 was better than expected but not by much. The Commerce Department says U.S. GDP, the broadest measure of goods and services produced in the country, grew 1.4 percent from January to March, 0.2 percent faster than the previous estimate. But many analysts believe U.S. growth will improve in the second quarter. And growth prospects for the global economy are the best they’ve been in six years. Mil Arcega has more.



Kenya’s Nomads Work Together to Reduce Conflicts and Poverty

It looked like a hostage swap, only the currency was livestock and the mission was to end decades of deadly clashes.

More than 50 sheep, goats and cows stood in the scorching heat of a desolate no-man’s land in arid northern Kenya, as Maasai and Samburu herders negotiated their handover.

Lipan Kitonga cast a critical eye over his emaciated herd, which 10 gun-toting Samburu had stolen from his home in Isiolo County, 300 kilometres (186 miles) north of Kenya’s capital.

“I was not around at the time,” said Kitonga, a community-based police officer, known as a police reservist, dressed in camouflage fatigues with a G3 rifle in hand. “Otherwise it would have been a different matter,” he said, his voice still tight with anger nine days after the animal theft.

Drought and violence

Nomadic herders in remote northern Kenya, which is awash with illegal arms, frequently raid cattle from each other and fight over scarce pasture and water, especially during droughts.

A wave of violence has hit Isiolo’s neighboring Laikipia region in recent months as armed herders searching for grazing have driven tens of thousands of cattle onto private farms and ranches from denuded communal land.

The livestock exchange was organized by the Northern Rangelands Trust (NRT), a charity set up in 2004 with support from donors and conservationists to reduce conflict and poverty among nomads by helping them better manage their land.

Almost 300,000 people are members of NRT’s 33 conservancies, which are community organizations focused on conservation, owning nearly 6 million acres (2.4 million hectares) of land across Kenya’s north and coast.

Nomads no more

Drought has hit millions this year in northern Kenya, where most people live off their livestock. As Kenya’s population has doubled in 25 years, nomads can no longer freely follow the rains, turning some overgrazed common lands to dust.

“You have got more people, with more livestock, on less and less productive rangeland and it’s a really explosive situation,” said Mike Harrison, chief executive of NRT, funded by the U.S. Agency for International Development (USAID). “The only answer to this is that everybody has to invest in improving their land.”

NRT promotes rotational grazing with a sustainable number of livestock, which allows land to rest, and the reseeding of degraded areas. Zones are set aside for wildlife, people and livestock, with limited access during drought for nomadic animals from other communities.

It also helps develop new businesses — tourism, bead-making and livestock markets — so nomads are less dependent on herding.

Tourism is the real money-spinner.

The most successful conservancies earn about $500,000 a year from visitors paying daily entry fees of $50-$80, Harrison said.

These earnings go into a community fund with 40 percent spent on operations, such as rangers’ salaries, and 60 percent on community projects, such as education and health, NRT says.


One of NRT’s main achievements has been to reduce conflict, cattle rustling and poaching by funding more than 500 rangers, trained by Kenya Wildlife Service, to patrol members’ land.

Many are police reservists, like Kitonga, issued rifles by the government to back up the overstretched police.

In Nasuulu, just north of Isiolo town, the Samburu, Turkana, Somali and Borana — who have traditionally fought each other — have come together to form one conservancy, an NRT member.

“They never used to talk to each other before, but they are now working together,” said Omar Godana, Nasuulu’s chairman.


Wildlife protected, too

Elephant poaching has stopped on 35,000 hectare (86,487 acre) Nasuulu since 12 NRT-funded scouts were deployed, he said.

NRT’s mobile security teams work with the police and wildlife service and receive aircraft and tracker-dog backup from a nearby wildlife conservancy, Lewa.

With increased security and strict controls on grazing, shootouts between armed herders and rangers are inevitable.

“It’s a killer squad,” said John Leparsanti, a Samburu herder in Laikipia who sees the crackdown on illegal grazing on NRT conservancies as a threat to his traditional way of life. “When there is a biting drought we cannot graze.”

Herding is key to the identity and culture of Kenya’s nomads, whose young men are initiated as warriors in colorful ceremonies where each kills a cow and drinks its blood. Their role as ‘morans’ is to guard the community and its animals.

Livestock provide nomads with a ready income because they can be sold quickly for cash. Pastoralists often do not have bank accounts and have high illiteracy rates because they roam over vast terrains with their cattle from a young age.

“We are not ready to do business like other tribes because we believe in cows,” said Samburu politician Mathew Lempurkel. “What are we going to replace them with?”

Harrison says less than 1 percent of NRT members’ land is set aside exclusively for wildlife.

Livestock is life

In remote, insecure lands, with poor roads and patchy mobile phone networks, there are no obvious alternative ways of life.

“If we went to say: ‘Look, you’ve all got to cut your livestock numbers in half, we would be laughed out the door,” Harrison said. “It’s a long slow process of rethinking what the incentives might be, trying different options.”

The authority of elders who used to control shared grazing land has been eroded by centralized government rule and modern education, experts say.

As climate change has brought increasingly frequent and prolonged drought and less grass, herders are keeping more goats as they can browse on shrubs and young shoots, unlike cattle.

The goats rip out the grass roots, further degrading the rangeland and reinforcing the vicious downwards cycle.

Some northern counties have formalized traditional land management customs in local bylaws, with the aim of giving power back to elders, in contrast to NRT’s approach of supporting decision-making by conservancy boards of directors.

“When you have the elders managing, there is enhanced ownership and the feeling of exclusion is not there,” said George Wamwere-Njoroge, an expert with the International Livestock Research Institute, which supports such initiatives.

ILRI is also encouraging herders to keep fewer, healthier animals, which fetch a better price at local markets, instead of trucking their cattle for 24 hours to the capital, Nairobi, where cartels control sales, he said.

Status cows

One solution, rarely discussed by politicians, would be to reduce the number of livestock owned by wealthy, urban elites, who keep vast herds on northern lands as a status symbol.

Unlike in the past, when droughts would naturally have reduced livestock numbers, the elites ship in hay and water to keep their animals alive.

“A lot of destitute pastoralists have dropped out and moved to the small trading centers and depend on relief and petty trade,” said Wamwere-Njoroge. “But the elite pastoralist animals keep on going.”



The Next Silicon Valley? Head to France  

France is known worldwide for its wine, food and culture, but under its new president, the French are aiming to be the new global hub for tech startups.

President Emmanuel Macron has said he wants to build a version of Silicon Valley in France. His administration has launched pro-business initiatives that are loosening government restrictions and encouraging entrepreneurs to launch their startups in the country.

“The tradition has been in Europe and in France to invest in big, traditional companies and not specifically [in] tech startups. So we will dedicate a €10 billion fund to the investment in tech startups in France,” said Mounir Mahjoubi, France’s Secretary of State for Digital Affairs.

Both public and private investments will factor into Macron’s vision of France as a “country of unicorns” — the term popularly used for tech startups valued at $1 billion or more, said Mahjoubi, who recently was in New York City for “La French Touch” conference, where he discussed France’s strategy for attracting the tech world’s best and brightest.

In the French tech world, all eyes are on the privately financed Station F, which is set to open this summer in Paris. Billed as the world’s biggest startup campus, the 34,000-square-meter space already has major tech companies like Microsoft, Facebook and Ubisoft signed on. The companies will develop their products, as well as host and mentor startup founders in incubator programs. One thousand individual startups are expected to set up shop at Station F.

Seeking global appeal

Silicon Valley has attracted tech talent from all over the world. Now France hopes to do the same for those beyond its borders. Initiatives like the “French Tech Ticket” and more recent “French Tech Visa” are designed to bring startup founders, employees and investors to the country through a combination of mentorships, grants and subsidized work spaces. The French Tech Visa fast-tracks a process for participants to obtain a renewable, four-year residence permit.

Not to be left out are the locals in France’s poorer, outer suburbs, the banlieue. The new administration is aiming for social diversity through inclusion initiatives that foster entrepreneurship, said Mahjoubi.

“We decided to create hubs in the private area[s] of France,” said Mahjoubi. “There might be entrepreneurs over there that believe that it’s not for them, because they couldn’t afford to not having a salary for a year of entrepreneurship … we created the condition so they could receive money from the state, to have a salary during these 12 months [to] push their project to the highest level they can.”

Unemployment at 9.5 percent

The encouragement of entrepreneurship is a novel sentiment in a country where traditional attitudes and strict labor laws have long dominated work culture. With a national unemployment rate of 9.5 percent, venturing out on one’s own to start a business can seem too risky.

But with the success of French unicorns like ride-sharing service BlaBlaCar and network provider Sigfox, attitudes appear to be shifting; 68 percent of French people aged 18 to 25 aspire to run their own business one day, according to a 2015 Ernst & Young survey.

“I think the ecosystem, the government, have done a very good job to do some marketing about entrepreneurship and I think it’s very important because when we compare our situation to the U.S., in the U.S. there is a lot of storytelling, everyone is super enthusiast[ic] and it brings a momentum that is super beneficial,” said François Wyss, co-founder of French startup DataBerries.

Funding available

Wyss and his co-founders recently secured $16 million in their first round of funding for his digital marketing startup.

“There is a lot of funding now in France, so it’s great. We have the chance to have world-class engineers, which are far cheaper than in the U.S. So a lot of companies are developing their core product and R&D in France before exporting it overseas,” said Wyss.

“French tech is all about having roots in France and having a vision for the world,” said Mahjoubi. “The French tech startup scene is an international startup scene.”