Naked appeal of Ireland's tax laws:Old Fr Cox must be spinning in his African grave. What would the founder of the eponymous law firm – who packed it all in at 70 to become a missionary priest in what is now Zambia – make of Arthur Cox adding one of the world’s biggest pornographers to its client list.
Yes, Manwin – owner of such wholesome sites as YouPorn and Juicy Boys – has joined the ranks of Bank of Ireland, the Irish Government and the National Asset Management Agency.
Manwin is no petty outfit, its owner Fabian Thylmann is credited with revolutionising pornography by bringing the sort of advertising technology more normally associated with mainstream sites such as Google to the world of online porn. Having sold his technology company for millions, he then went on acquire his current stable of sites, reported to generate billions of visits each year.
All has not been plain sailing for Cox’s latest meal ticket, however; the 34-year-old German computer programmer was arrested in December and is currently being investigated by the tax authorities in his native country.
Given the similarities between his empire and more mainstream internet businesses, it’s not surprising that Manwin should end up in Ireland with its very attractive mix of intellectual property and tax laws and thus have reason to call on the services of Irish lawyers Arthur Cox and also A&L Goodbody.
Following the purchase last year of RK Netmedia – which has for its part brought the world milfhunter.comand captainstabbin.com, among other treasures – Manwin used the two law firms to set up a complex legal structure by which a Miami-based company gives a Dublin-based company the rights to thousands of porn movies.
Of course both Cox and A&L Goodbody could claim that they were asked to act in the transactions by foreign law firms. This in theory makes the foreign law firms and not Manwin and RK Netmedia their clients. It’s a distinction that the jesuitical Cox might have appreciated but would hardly have approved of.
In any case there is no getting around the point that the ultimate beneficiaries of their work is a pornographer and the fees they received were paid with money extracted from visitors to porn sites.
It is equally obvious that both firms could have declined to take the work and the money on the basis that pornography was not compatible with the values they like to trumpet on their own corporate websites.
More reporting changes on way for banks:
While the suggested deal on bankers’ bonuses agreed this week has received extensive media coverage, a further element of the proposed changes that may be of even great impact was the idea that banks should have to report their profits and taxes on a country-by-country basis.
The idea is one that has been the focus on a lengthy campaign by development groups and others who believe profit-shifting around the globe is a hindrance to the development of poorer countries – as well as being an affront to those businesses and people who are unable or unwilling to engage in such tax avoidance schemes.
The new scheme requiring country-by-country reporting is to come into being from 2015, as long as the extra transparency is not judged by the European Commission as an impediment to inward investment. Stiff opposition is expected from the industry and from the UK government. The position of the Irish Government, which is susceptible to lobbying from our own IFSC, is as yet unclear.
The proposed measure, which originated in the European Parliament, could be of particular interest to Ireland as it may well be the case that international banks with significant units in the IFSC, organise their affairs so that a lot of their profits are booked here rather than in, say, France or Germany, not to mention Mozambique or Nigeria. We shall see.
Christian Aid, which has been campaigning for such reporting rules for years, not just for banks but for all multinationals, has called on Minister for Finance Michael Noonan to resist the lobbying from the industry.
“The agreement on bankers’ bonuses brokered by the Irish presidency has received lots of attention but its decision to make banks reveal more about their finances will have a far bigger and better impact on people around the world,” said the Head of Advocacy and Policy at Christian Aid Ireland, Sorley McCaughey.
Mr Noonan will be presenting the proposals to European finance ministers for endorsement on Tuesday.
The Irish presidency need to use its influence to defend the agreement struck between the parliament, commission and council, which is entirely consistent with what the EU has said about tackling aggressive tax avoidance and corruption, according to McCaughey.
Governments and NGOs are hoping the measure will expose instances where banks are shifting profits from one location to another to avoid tax. The media, NGOs, and those governments that feel they are losing out, will no doubt point out any apparent dodginess that emerges if the measure is in fact imposed. And of course, given that it is the banks, we can be sure they won’t let us down.
Quinn portfolio events continue to unfold
The family of Seán Quinn has told the High Court it is going to mount a constitutional challenge to the law that provided for the liquidation of the Irish Bank Resolution Corporation. Meanwhile events concerning their international property portfolio continue to unfold.
It is well over a year since Ukrainian businessman Rostyslav Levinzon was appointed by the bank’s interests as the official administrator of the Kiev company, Univermag, that runs the €60 million Ukrainia shopping centre in central Kiev. However, his efforts to take over from the former operator, Larisa Yanez Puga, were foiled when mall security guards refused to grant him access to the offices. The initial, ridiculous stand-off, over a number of days, featured on Ukrainian TV.
Last week Levinzon finally got access to the offices in the mall. Local sources say Levinzon is in the process of assuming control over the Univermag finances. The company, among other matters, has control of the rent roll, thought to be in the region of €8 million a year. Transfers from accounts associated with the company have featured in the Quinn family contempt hearings, and it is possible material relevant to that issue could be unearthed by Levinzon. A counterpart who managed to get control of a similar property management company in Russia found when he entered its offices the computers on the premises had been smashed. Yet he managed to retrieve material that became important to the contempt issue.
Last last year the rumour in Kiev was that parties associated with Univermag had contacts at the highest political levels in Ukraine. At the same time IBRC was in the process of discussing a deal with the huge Russian Alfa group, which is known to be well got with the Kremlin. Alfa, and its asset recovery arm, A1, have offices in Ukraine and any failure on its part to seize the IBRC assets would be viewed locally as a commercially damaging loss of face.
How the Alfa/A1 deal stands following the appointment of the liquidators is not clear. It was expected to be finalised by the end of January. Watch this space.
Quote of the day:
It would be legally and politically a most complicated and impractical affair. Just think of a divorce after 40 years of marriage - Herman Van Rompuy warns on a vote by Britian to leave the EU
Number of the day:
$1.49The pound dropped below €1.50 yesterday for the first time in more than two and a half years