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ITF: Panama a Tax Haven as FOC Flag Country

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  • U.K. Prime Minister, David Cameron Admits profiting on Shares of Trust Mentioned in Panama Papers

Revelations of tax avoidance and related activities, mentioned in the leaked Panama Papers this week, could lead to a change in the current climate of tacit approval for this kind of “socially damaging behaviour”, the International Transport Workers’ Federation (ITF) said.

An example of such tax evasions is flag of convenience (FOC) shipping, which states that a vessel owned in one country can be flagged in another, and according to ITF General Secretary, Stephen Cotton, “as an FOC flag – the largest in the world – Panama is essentially a tax haven like many of the UK territories that have been mentioned in these papers.”

“And who pays the price? Seafarers, who are subject to poor conditions and lower wages because they’re at the mercy of a system that allows for minimal regulation and the acquisition of cheap labour,” he said.

Cotton also said that ITF believed that there should be a ‘genuine link’ between the real owner of a vessel and the flag the vessel flies, in accordance with the United Nations Convention on the Law of the Sea (UNCLOS).

“FOC registries make it more difficult for unions, industry stakeholders and the public to hold ship owners to account. In many cases, the registries themselves are not even run from the country of the flag,” Cotton said.

“Some FOC shipping registers are franchised out to foreign companies and are also corporate registers. The Liberian Registry, the second largest in the world, is administered by the Liberian International Ship and Corporate Registry (LISCR), a wholly US owned and operated company,” Cotton added.

“The ITF’s campaign, compelling owners of FOC flagged vessels to sign agreements which guarantee certain terms and working conditions for crew and policing these through a network of inspectors, is the only thing that goes some way to redress the balance of the FOC tax avoidance scheme, and to recognise the human cost it has.”

Now that these incidents are being taken up more widely in a public arena, they can be properly investigated according to ITF President, Paddy Crumlin. He further added that ITF expects “to see action taken against those who have disregarded their responsibilities in the name of profit.”

In the meantime, British Prime Minister David Cameron said Thursday he made a profit on shares of a Panamanian trust set up by his father and which was named in the “Panama Papers” document leak this week.

In an exclusive interview with ITV, NBC News’ British partner, Cameron said he sold the shares in 2010. The fund set up by Cameron’s father, Ian, was included in leaked documents detailing offshore accounts of leaders around the world.

“It has been a difficult few days, reading criticisms of my father and his business practices — my dad, a man I love and admire and miss every day,” Cameron told ITV political editor Robert Peston.

But Cameron denied that Blairmore, the company set up in the Bahamas and Panama, was established to avoid taxes. He said anyone could have bought into it, and “it was subject to full U.K. taxation.”

“I think a lot of the criticisms are based on a fundamental misconception, which is that Blairmore, a unit trust, was set up with the idea of avoiding tax,” Cameron said. “It wasn’t. It was set up after exchange controls went so that people who wanted to invest in dollar-denominated companies could do so.”

The so-called Panama Papers involved a massive cache of 11.5 million documents that detail a network of banks and law firms that help many of the world’s most powerful people hide money in offshore accounts, according to the International Consortium of Investigative Journalists (ICIJ) which coordinated their release.

Cameron told ITV that he and his wife owned 5,000 shares of Blairmore and sold them for around 30,000 pounds (around $42,100 USD) in 2010.

“I paid income tax on the dividends. There was a profit on it but it was less than the capital gains tax allowance so I didn’t pay capital gains tax. But it was subject to all the UK taxes in all the normal way,” Cameron said.

“So I want to be as clear as I can about the past, present and future. Because frankly I don’t have anything to hide,” he said.

The data released originated with a law firm based in Panama called Mossack Fonseca. Mossack Fonseca co-founder Ramon Fonseca told Panama’s Channel 2 television network that the documents had been stolen in a hacking attack, and said the firm did not engage in wrongdoing

The group of journalists that released the documents said it had also tied the movement of $2 billion by associates of Russian President Vladimir Putin.

Putin on Thursday accused the leaks of being part of a U.S.-led plot to weaken Russia. The U.S. State Department denied the claim.

“I would reject the premise or the assertion that we’re in any way involved in the actual leak of these documents,” said State Department deputy spokesperson Mark Toner said Thursday.

At issue is the Organized Crime and Corruption Reporting project, an investigative journalism group that receives some of its funding by USAID and produced one of the root stories on the Russia related documents.

The OCCRP is a part of the International Consortium of Investigative Journalists which received the documents.

“Obviously, these are the kind of organizations that USAID has and continues to fund. But not specifically to go after any particular government,” Toner said. “We have no editorial control over their reporting. You know, they’re allowed to and permitted to cover whatever they want.”

World Maritime News with additional report from BBC

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WAIVER CESSATION: Igbokwe urges NIMASA to evolve stronger collaboration with Ships owners

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…Stresses the need for timely disbursement of N44.6billion CVFF***

Highly revered Nigerian Maritime Lawyer, and Senior Advocate of Nigeria (SAN), Mike Igbokwe has urged the Nigeria Maritime Administration and safety Agency (NIMASA) to partner with ship owners and relevant association in the industry to evolving a more vibrant merchant shipping and cabotage trade regime.

Igbokwe gave the counsel during his paper presentation at the just concluded two-day stakeholders’ meeting on Cabotage waiver restrictions, organized by NIMASA.

“NIMASA and shipowners should develop merchant shipping including cabotage trade. A good start is to partner with the relevant associations in this field, such as the Nigeria Indigenous Shipowners Association (NISA), Shipowners Association of Nigeria (SOAN), Oil Trade Group & Maritime Trade Group of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

“A cursory look at their vision, mission and objectives, show that they are willing to improve the maritime sector, not just for their members but for stakeholders in the maritime economy and the country”.

Adding that it is of utmost importance for NIMASA to have a through briefing and regular consultation with ships owners, in other to have insight on the challenges facing the ship owners.

“It is of utmost importance for NIMASA to have a thorough briefing and regular consultations with shipowners, to receive insight on the challenges they face, and how the Agency can assist in solving them and encouraging them to invest and participate in the maritime sector, for its development. 

“NIMASA should see them as partners in progress because, if they do not invest in buying ships and registering them in Nigeria, there would be no Nigerian-owned ships in its Register and NIMASA would be unable to discharge its main objective.

The Maritime lawyer also urged NIMASA  to disburse the Cabotage Vessel Financing Fund (CVFF)that currently stands at about N44.6 billion.

“Lest it be forgotten, what is on the lips of almost every shipowner, is the need to disburse the Cabotage Vessel Financing Fund (the CVFF’), which was established by the Coastal and Inland Shipping Act, 2003. It was established to promote the development of indigenous ship acquisition capacity, by providing financial assistance to Nigerian citizens and shipping companies wholly owned by Nigerian operating in the domestic coastal shipping, to purchase and maintain vessels and build shipping capacity. 

“Research shows that this fund has grown to about N44.6billion; and that due to its non-disbursement, financial institutions have repossessed some vessels, resulting in a 43% reduction of the number of operational indigenous shipping companies in Nigeria, in the past few years. 

“Without beating around the bush, to promote indigenous maritime development, prompt action must be taken by NIMASA to commence the disbursement of this Fund to qualified shipowners pursuant to the extant Cabotage Vessel Financing Fund (“CVFF”) Regulations.

Mike Igbokwe (SAN)

“Indeed, as part of its statutory functions, NIMASA is to enforce and administer the provisions of the Cabotage Act 2003 and develop and implement policies and programmes which will facilitate the growth of local capacity in ownership, manning and construction of ships and other maritime infrastructure. Disbursing the CVFF is one of the ways NIMASA can fulfill this mandate.

“To assist in this task, there must be collaboration between NIMASA, financial institutions, the Minister of Transportation, as contained in the CVFF Regulations that are yet to be implemented”, the legal guru highlighted further. 

He urged the agency to create the right environment for its stakeholders to build on and engender the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders.

“Lastly, which is the main reason why we are all here, cessation of ministerial waivers on some cabotage requirements, which I believe is worth applause in favour of NIMASA. 

“This is because it appears that the readiness to obtain/grant waivers had made some of the vessels and their owners engaged in cabotage trade, to become complacent and indifferent in quickly ensuring that they updated their capacities, so as not to require the waivers. 

“The cessation of waivers is a way of forcing the relevant stakeholders of the maritime sector, to find workable solutions within, for maritime development and fill the gaps in the local capacities in 100% Nigerian crewing, ship ownership, and ship building, that had necessitated the existence of the waivers since about 15 years ago, when the Cabotage Act came into being. 

“However, NIMASA must ensure that the right environment is provided for its stakeholders to build and possess the needed capacities to fill the gaps; and ensure that steps are being taken to solve the challenges being faced by stakeholders. Or better still, that they are solved within the next 5 years of its intention to stop granting waivers”, he further explained. 

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Breaking News: The Funeral Rites of Matriarch C. Ogbeifun is Live

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The Burial Ceremony of Engr. Greg Ogbeifun’s mother is live. Watch on the website: www.maritimefirstnewspaper.com and on Youtube: Maritimefirst Newspaper.

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Wind Farm Vessel Collision Leaves 15 Injured

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…As Valles Steamship Orders 112,000 dwt Tanker from South Korea***

A wind farm supply vessel and a cargo ship collided in the Baltic Sea on Tuesday leaving 15 injured.

The Cyprus-flagged 80-meter general cargo ship Raba collided with Denmark-flagged 31-meter wind farm supply vessel World Bora near Rügen Island, about three nautical miles off the coast of Hamburg. 

Many of those injured were service engineers on the wind farm vessel, and 10 were seriously hurt. 

They were headed to Iberdrola’s 350MW Wikinger wind farm. Nine of the people on board the World Bora were employees of Siemens Gamesa, two were employees of Iberdrola and four were crew.

The cause of the incident is not yet known, and no pollution has been reported.

After the collision, the two ships were able to proceed to Rügen under their own power, and the injured were then taken to hospital. 

Lifeboat crews from the German Maritime Search and Rescue Service tended to them prior to their transport to hospital via ambulance and helicopter.

“Iberdrola wishes to thank the rescue services for their diligence and professionalism,” the company said in a statement.

In the meantime, the Hong Kong-based shipowner Valles Steamship has ordered a new 112,000 dwt crude oil tanker from South Korea’s Sumitomo Heavy Industries Marine & Engineering.

Sumitomo is to deliver the Aframax to Valles Steamship by the end of 2020, according to data provided by Asiasis.

The newbuild Aframax will join seven other Aframaxes in Valles Steamship’s fleet. Other ships operated by the company include Panamax bulkers and medium and long range product tankers.

The company’s most-recently delivered unit is the 114,426 dwt Aframax tanker Seagalaxy. The naming and delivery of the tanker took place in February 2019, at Namura Shipbuilding’s yard in Japan.

Maritime Executive with additional report from World Maritime News

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