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European Edition
25th October 2021
 
THE HOT STORY
EU officials demand UK firms pay extra legal charges
The Telegraph says EU officials are hitting British companies with extra charges of up to £100,000 to take a case to EU court, sparking fears that small firms could be cut off from justice. The bloc is forcing UK businesses to pay so-called "security bonds" to courts in the EU in order to bring forward a claim after Brexit. Andreas Wietzke, a partner in the Munich office of City law firm Mathys & Squire, which specialises in intellectual property law, said Brexit has led to a huge change in the status of UK companies seeking to file claims in the EU. He said: “For British businesses, defending your intellectual property in the EU has become a much more costly affair since Brexit. This could have a chilling effect on actions by UK litigants in Europe, particularly for startups and SMEs with limited funding. For those in the UK with valuable patents or trademarks that are being infringed by businesses in Europe, the decision whether to pursue litigation is not quite so simple as it was before Brexit. Having to put up £50,000 or £100,000 to have your case heard in Germany, France or the Netherlands will give some of them pause for thought.”
HIRING
Young high-flyers offered huge salaries by City firms desperate to recruit
The Times reports on the rush by accountancy, financial services, technology and consulting companies in the UK to hire Generation Z and millennial high-fliers as the economy rebounds and people change their professional goals. Young professionals are being offered unprecedented starting salaries or massive wage increases to move due to the plummeting availability of candidates, according to a report by KPMG and the Recruitment and Employment Confederation. Experts say lawyers won’t move jobs for less than a 10%-20% pay rise, compared with 5%-10% before the pandemic. “People are feeling like they’re living with quite a bit of uncertainty at the personal level. If [they] earn 100 grand and someone wants to put 60 grand on that, that’s pretty compelling,” observes Marco Amitrano, the head of clients and markets at PwC.
LEGAL
New claims in Credit Suisse spying scandal
The former head of global security services at Credit Suisse is one of three people being targeted in a new probe launched by Swiss financial markets regulator FINMA following an espionage affair at the Zuirch-headquartered lender, lawyer Andreas Josephsohn has told Reuters, confirming his client was one of three individuals targeted by the proceedings. FINMA recently said that it had found "serious organisational shortcomings" around how Credit Suisse managed and controlled the observation of some of its top executives and former staff between 2016 and 2019 in its proceedings against the bank that have now concluded.
Deutsche Bank whistleblower gets $200m reward
The Commodity Futures Trading Commission (CFTC), the US derivatives regulator, has announced its largest whistleblower award of roughly $200m to an unidentified tipster at Deutsche Bank whose information helped the agency and other regulators investigate manipulation of global interest rate benchmarks by the German lender. The CFTC’s whistleblower program was created by the 2010 Dodd-Frank Act, and with this latest award, cases based on tips to the CFTC have resulted in more than $3bn in monetary sanctions.
Hedge fund trader is held in Germany amid tax fraud investigation
A hedge fund trader extradited from the UK to Germany as part of a wideranging cum-ex tax fraud investigation is being detained after Cologne prosecutors appealed a bail ruling. The trader is Vijay Sankar, according to a person familiar with the matter. He worked at hedge fund Duet Group and earlier this year lost his fight to stay in the UK after he was briefly arrested in connection with three alleged tax frauds. Sankar has not been charged with a crime. More than a thousand suspects, including traders, bankers and lawyers, are being investigated in Germany as part of the cum-ex probe.
Swiss vote to appoint judges by lot
Swissinfo reports on a people’s initiative in Switzerland that is calling for federal judges to be chosen by lot to ensure that they are apolitical. The situation at the moment is judges are members of political parties and are elected by the parliament. Swissinfo observes:  “What is forbidden in some countries is part of the system in Switzerland.” The proposal is due to be decided on November 28th.
CORPORATE
Just ten big EU banks short of capital
The European Commission has said fewer banks than expected will have to raise extra cash as a result of new rules aimed at avoiding a repeat of the 2008 financial crisis. The European Banking Authority (EBA) predicted last year that major European lenders would need to increase capital by €52bn, but the Commission now believes just 10 out of 99 banks will need to raise €27bn collectively. Meanwhile, Carolyn Rogers, secretary-general of the Basel Committee for Banking Supervision, said the new rules needed to be implemented “consistently and as soon as possible.” Her comments came after draft plans show that Brussels is suggesting giving European banks a two-year extension to an internationally agreed deadline.
TAX
US agrees to drop tariffs on nations that imposed digital services taxes
The United States has reached an agreement with Austria, France, Italy, Spain and Britain that will terminate the threat of American tariffs on certain goods from those countries in exchange for the eventual removal of digital services taxes (DST) that they had imposed on companies like Facebook, Amazon and Google. The five nations will be able to keep their digital taxes in place until a global tax agreement, known as Pillar 1, comes into force in 2023, under the plan jointly announced with Washington. Taxes that are collected from companies between now and then will be eligible for a credit. "We reached our agreement on DSTs in conjunction with the historic OECD global agreement that will help end the race to the bottom over multinational corporate taxation by leveling the corporate tax playing field," US Trade Representative Katherine Tai said in a statement. She added that the USTR and the US Treasury would work with the five governments "to ensure implementation of the agreement and rollback of existing DSTs."
INTERNATIONAL
Amazon employee group seeks worker vote on unionisation
An Amazon employee group formed by warehouse workers in Staten Island, New York, has announced its goal to vote on unionisation, becoming the latest labour-organising effort from workers at one of the nation’s largest employers. The independent group of Amazon employees, called the Amazon Labor Union, plans to file with the National Labor Relations Board (NLRB) on October 25th for an election. The organising involves more than 2,000 workers across four Amazon facilities in Staten Island who have signed on to the effort. The drive is led by Christian Smalls, a former employee at the warehouse who became the face of worker unrest at the company last year. Early in the pandemic, after Mr. Smalls organised a protest about safety conditions, Amazon fired him.  If the NLRB validates the request, it could bring the second unionisation vote at an Amazon warehouse in less than a year. In April, Amazon defeated a union election at its warehouse in Alabama. Amazon spokesperson Kelly Nantel said the firm does not think unions were the best answer for its employees. “Every day we empower people to find ways to improve their jobs, and when they do that we want to make those changes - quickly,” she said in a statement. “That type of continuous improvement is harder to do quickly and nimbly with unions in the middle”.
Pandemic leads to job switching in Japan
Japan's nursing homes and tech companies – two sectors which have experienced years of labour shortages – have been aided by job cuts at restaurants and hotels in the wake of the pandemic that have prompted workers to consider new careers. Such job mobility is novel in a country where traditional rigid labour practices have been partially blamed for a long-term decline in productivity, notes Reuters, which nevertheless says it is too soon to say whether the change will ultimately lead to rising pay for workers. OECD data put Japan's hourly labour productivity at $47.9, or about 60% of the United States' level, the worst among the Group of Seven (G7) advanced economies.
Abu Dhabi's tech hub sees surge of start-up interest
Abu Dhabi’s new technology hub, Hub71, which is backed by Abu Dhabi state fund Mubadala Investment, the SoftBank Vision Fund, and Microsoft, has accepted 100 start-ups since its launch in 2019 after a selection process that generated about 3,500 applications. Hub71 chief operating officer Jida Itani said: "Despite COVID and everything else, start-ups continue to apply. In fact we have seen a surge in particular sectors that [has] been accelerated by the pandemic like health tech, education tech and fintech." She said start-ups are enthusiastic about a base in the UAE following successes by local technology firms, including Anghami, a regional rival to Spotify that is anticipated to list on the Nasdaq exchange in New York. Companies were offered free office space, housing and insurance for all their employees, Itani said.
Egypt imposes a vaccine mandate for all government workers
Authorities in Egypt are to impose a broad vaccine mandate that includes teachers, government employees, university students and individuals seeking government services. An Egyptian cabinet spokesperson said that from November 15th, civil servants will not be allowed to access their workplaces unless they can show that they have received at least one vaccine dose, or can provide proof of a negative PCR test each week.

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