US government monitoring its oversea citizens by Foreign Account Tax Compliance Act (FATCA)

Malaysia to ink pact in line with FATCA

KUALA LUMPUR: All local financial institutions will be required to declare their American customers to the United States Internal Revenue Service (IRS) under a new agreement to catch its tax evaders who hide their money overseas.

Malaysia will be entering into an inter-governmental agreement with the US in line with the implementation of its Foreign Account Tax Compliance Act (Fatca).

Inland Revenue Board (IRB) chief executive officer Tan Sri Dr Mohd Shukor Mahfar said Malaysia would fully enforce all the requirements of Fatca by September next year.

“Fatca is a very interesting move by the US to monitor its citizens who have income outside of the country. The rest of the world is required to abide by Fatca or the US government will impose a withholding tax of 30%.

“So, IRB, as the tax authority for Malaysia, along with Bank Negara, will be signing the agreement,” he said at the National Tax Conference 2014 here yesterday.

The tax is imposed by withholding earnings on the funds in the account of the US citizen and paid to its government.

Under the Act, all foreign financial institutions must declare the financial holdings of any US citizen or cough up a 30% withholding tax on their own.

The US imposes income tax on its citizens, regardless of which country they reside in.

Many countries, including Switzerland which was previously considered a haven for those who sought to keep money overseas in secrecy, have signed the agreement.

Other countries listed by the US Treasury website are Britain, Australia and France while Indonesia, Thailand, Singapore and China are those which have consented to entering the agreement.

Earlier, Second Finance Minister Datuk Seri Ahmad Husni Hanadzlah said the proposed amendment to Inland Revenue Board of Malaysia Act would be tabled at the Dewan Rakyat sitting in October.

Previously, a controversy had erupted when it was alleged that the amendments would transform the tax agency into a firm that invested taxes collected on behalf of the Government.

The Finance Ministry later denied this, adding that all direct taxes collected by the board would be channelled to the Federal Consolidated Fund.

By P. Aruna The Star/Asian News Network

IRS Notes:

Foreign Account Tax Compliance Act

FATCA Current Alerts and Other News
The provisions commonly known as the Foreign Account Tax Compliance Act (FATCA) became law in March 2010.
FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts
FATCA focuses on reporting:
	By U.S. taxpayers about certain foreign financial accounts and offshore assets
	By foreign financial institutions about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest
The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not reporting.

Individuals		Financial Institutions		Governments
U.S. individual taxpayers must report information about certain foreign financial accounts and offshore assets on Form 8938 and attach it to their income tax return, if the total asset value exceeds the appropriate reporting threshold. Form 8938 reporting is in addition to FBAR reporting. > Learn More ...		Foreign To avoid being withheld upon, a foreign financial institution may register with the IRS, obtain a Global Intermediary Identification Number (GIIN) and report certain information on U.S. accounts to the IRS. > Learn More... U.S. U.S. financial institutions and other U.S withholding agents must both withhold 30% on certain payments to foreign entities that do not document their FATCA status and report information about certain non-financial foreign entities. > Learn More...		If a jurisdiction enters into an Intergovernmental Agreement (IGA) to implement FATCA, the reporting and other compliance burdens on the financial institutions in the jurisdiction may be simplified. Such financial institutions will not be subject to withholding under FATCA. > Learn More ...

Do not let USA stoke South China Sea disputes; Round one of Asia pivot ends with tie

FM: China, ASEAN able to safeguard S. China Sea´s peace, stability

Dismissing the so-called tense situation advertised by the US over the South China Sea, Chinese Fore...



Do not let US stoke disputes 

South China Sea issues and thoughtless moves of some countries should not hinder ASEAN's continued exchanges with Beijing

The annual Association of Southeast Asian Nations Regional Forum Foreign Ministers' Meeting was held recently in Nay Pyi Taw, Myanmar, with the disputes and situation in the South China Sea on the agenda.

This is not the first time that the ARF has touched upon the South China Sea disputes. In July 2010, at the ARF Foreign Ministers' Meeting in Hanoi, then-US Secretary of State Hillary Clinton said the disputes were concerned with the United States' national interests and solving them in line with international laws would be the key to regional stability. Her speech was considered to mark a new twist of US policy line vis-à-vis the South China Sea disputes.

The disputes have since then become a key part of the implementation of the US' "pivot to Asia" policy, as well as an increasingly thorny issue in China-US exchanges. Especially so since China operated an oil rig near the Xisha Islands in April, which many US observers believed was part of China's speeding up of its "salami slicing" strategy and called for a response to it.

Before the current ARF Foreign Ministers' Meeting, the US and its allies made multiple moves. In July, US Assistant Secretary of State Daniel Russel advised a "freeze" on actions aggravating disputes in the South China Sea, namely that related parties stop occupying more islands or reefs and establishing outposts, avoid changing landforms and do not take unilateral actions against any other country. While on the surface this initiative might reasonably opt for peace, but in the eyes of Beijing at least, it would actually legalize certain nations' illegal occupying of islands and reefs in the South China Sea in past decades, as well as bestow on the US the status of "arbiter".

The Philippines echoed the US' initiative by claiming it would propose a three-step process to the ARF, namely suspending all actions, setting up a code of conduct among involved parties and solving disputes through international arbitration. Both initiatives seemed to gain support from several nations, and, as Washington and Manila expected, China would face the most coordinated pressure at the ARF.

The US is also trying to improve the binding effect and enforcement mechanism of international arbitration. For example, whether a nation accepts arbitration of the International Tribunal for the Law of the Sea can be taken as the prerequisite of participating in multinational military exercises or the Arctic Council. The US can also consider strengthening economic pressure on the involved Chinese SOEs like China National Offshore Oil Corp, which is reported to build floating liquefied natural gas carriers and explore underwater gas.

Meanwhile, the Philippines has been strengthening its maritime force. Since Benigno Aquino took office in 2010, the Philippine government has already invested 40 billion PHP ($910 million) on purchasing frigates, anti-submarine helicopters and long-range patrol aircraft, with a further plan to install advanced radar and a coastal warning system in the disputed sea area. Japan and Vietnam signed an agreement in early August, according to which Japan will give six ships to Vietnam to empower its maritime police. The Vietnamese government issued an order that all vessels of its Fishery Resources Supervision Department be equipped with weapons like pistols and machine guns as of Sept 15.

On July 11, Nguyen Phuoc Tuong, a former adviser to two Vietnamese prime ministers, said Vietnam must form an alliance with the US "to defeat the new Chinese expansionism" in an op-ed on The New York Times. Japan is preparing for the first Japan-ASEAN Defense Ministers' meeting in November, which many believe is to counterbalance China's emerging maritime power.

All the heated disputes about the South China Sea make the ARF Foreign Ministers' Meeting especially important. On Saturday, Chinese Foreign Minister Wang Yi said that China supports and advocates a "dual-track" approach to solving the South China Sea disputes, namely that disputes should be addressed by the concerned countries peacefully through friendly negotiations, while peace and stability in the South China Sea should be jointly maintained by China and ASEAN countries. That means China is willing to embrace a multilateralism spirit in pacifying the situation and willing to negotiate with the parties involved in the disputes in a rule-based manner, though it will not accept any new trouble caused by certain nations.

 

 ("Countries outside the region can express reasonable concerns, but we are opposed to 'bossy gestures'", Foreign Minister Wang Yi , adding: "China and ASEAN are totally able to safeguard well the peace and stability of South China Sea.")

To some extent, China and the US are competing over South China Sea issues and such competition is on proposing initiatives and rules that can attract more international support with a firmer legal and moral basis.

It should be noted, specifically, that China as a committed supporter of ASEAN and related mechanisms should clarify that it is not seeking to divide ASEAN. Over the years, China has hosted about one-third of the cooperation programs within the ARF framework; in 2015 it will co-host six programs together with ASEAN nations, which cover disaster-relief, maritime security, preventive diplomacy and cybersecurity.

These are good opportunities for ASEAN and China to improve their relations. Both sides need to prevent the maritime disputes from poisoning mutual relations. They cannot afford to be strategically misguided.

 By Zhao Minghao (China Daily)/Asia News Network

The author is a research fellow with the Charhar Institute and adjunct fellow with the Center for International and Strategic Studies, Peking University.

Round one of Asia pivot ends with tie 

The latest ASEAN Foreign Ministers' Meeting wrapped up on Sunday with a joint statement, in which quite an emphasis was given to the South China Sea crisis. Washington has shown its approval for the result, and some US analysts believe US backing has inspired ASEAN countries to be more united in facing China. But there are also other voices claiming that the US was cold-shouldered in the meeting as China was not mentioned in the statement and Washington's call for a South China Sea "freeze" was also missing from discussions.

Perhaps a more convincing conclusion would be that China and the US reached a tie in this engagement in the South China Sea issue.

It was quite a surprise to China when the Obama administration pitched the "pivot to Asia" strategy in 2009. Washington has kept pushing so the dormant controversies in the East China Sea and South China Sea have become more explicit. Countries like Japan, the Philippines and Vietnam keep posing challenges to China's geopolitics.

But in these years, China's neighborhood has become more controllable, as some principles have become a consensus. For example, in the Diaoyu Islands dispute, both China and Japan have expressed their determination to avoid military confrontation, although squabbles and spats never cease about the East China Sea. In the South China Sea, China is taking more initiatives to check the recklessness of the Philippines and Vietnam.

The first wave of force sent by Washington's "rebalancing to Asia" strategy has died down. The US has achieved some of its goals effortlessly, but China has exerted some strength to deal with it. Both sides drew in the first round, as neither side can push their strategies without limitations.

Washington boasts military strength and the support of allies, but China's economic influence in this region gives it leverage to win over many friends. In this case, the US parry has been fended off by China's shield. If we must make these East and Southeast Asian countries pick sides between China and the US, the result would be unpredictable. This is because standing on neutral ground benefits them the most.

Washington will find it more difficult to inflict problems on China after the first round. It will face more resistance. If conflicts surrounding the South China Sea escalated, it would be an unfolding and resource-consuming disaster for both sides.

China has clear goals in its neighborhood policy, which is to safeguard its sovereignty and development environment. But as for the US, a rebalancing to Asia strategy to maintain its dominance in this area is not where its core interests lie. China is more determined than the US. Washington should become more level-headed and stop making calculations. There won't be a united front going against China in this area, and this truth also applies for China, as it is unable to drive off the presence of US as well.

- Source:Global Times Published: 2014-8-12 0:43:02  

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Why is the US going in hard in the South China Sea disputes?

The South China Sea is a critical strategic point.As the mid-term presidential elections in the US approach, Obama wants to show a hard-line attitude. 

US should stop trying to make waves

By confusing right and wrong and throwing its weight behind countries such as the Philippines, Washington's real intention is to contain China's rise in the region and expand its own interests here.

Philippines' plan destined to fail

The Philippines has developed a "three-step" solution plan for the South China Sea dispute with Chin[Read it]

Philippines’ three-pronged plan for South China Sea doomed to fail

Obama whining a result of US decline
Where those responsibilities lie is not decided by Washington. What the US desires does not equal the welfare of all humankind.

Hang on to the roof over your head

Purchasing a property while the prices and mortgage rates are within reach becomes a secure way of protecting your finances against the battering of rising inflation - Both primary and secondary markets are worth considering

The ever changing economic condition and unpredictable spending behaviours make it even more challenging to find the real equilibrium in interest rate.

Bank Negara’s recent move to raise the benchmark overnight policy rate (OPR) from 3% to 3.25% was expected since the last OPR adjustment was three years ago in May 2011.

An OPR increase is always associated with an increase in interest rate.

Bank Negara has taken a bold step to address the economic challenge and became the first country in South-East Asia to increase the benchmark rate in an improved economic environment.

It is a prudent move by the authority in view of the upward pressure on inflation rate and the high household debt at 86.8% of gross domestic product in 2013.

So, how does this increase in interest rate affect us, the public?

Most people generally only relate an interest rate hike to financing cost which includes mortgage and personal loan rates.

In effect, it has a far more profound impact.

Changes in OPR directly affect the overall Base Lending Rate (BLR) which in turn, affects the spending behaviours of businesses and consumers as well as the dynamics of the overall economy.

On one hand, it is used to curb rising household debt and control spending.

On the other, higher interest rate would help to generate a neutral real rate of return for normal savings which is comparatively higher than fixed deposit rate.

However, what does this mean to us in the long run when interest rate is on the rising trend?

This is an interesting question in terms of personal spending and investment planning as it relates to interest rate movement.

Prof Dr Jeremy Siegel, of the Wharton School of Business and best selling author of Stocks for the Long Run, used to say when inflation kicked in, stock prices would go down in the short-term, due to concerns of reduced profits.

Eventually, however, stock prices would rise again in the medium and longer term, when investors realised that stocks could be used as a tool to hedge against inflation, as businesses would past higher costs through to their customers.

It is also interesting to see people sell and buy stocks for the same reason at different times with different considerations.

Similar movements may be observed in other types of investments when people take a longer term view of better ways to navigate through the challenges of inflation.

Prudent spending is always encouraged regardless of good and bad times.

With it, comes prudent planning and investment.

When inflation rate is on an upward trend and value of currencies continues to drop due to the massive quantitative easing (printing of money) measures around the world, using investments to hedge against inflation is one of the strategies to secure our financial future.

One of the investment assets that warrants deeper consideration and provides longer term investment protection is property.

Real estate works well as a hedging tool for a couple of reasons.

Investing early in real estate protects investors against rising land prices, and increasing construction costs during inflation.

Properties purchased before the onset of inflation will still have the protection of the continuous demand to meet the housing needs of a growing population in Malaysia.

An advice that I have continuously heard since my schools days till today is “Hang on to the roof over your head. It will help to keep you financially strong.”

This advice has remained valid over the years. It is not enough to just keep enough cash for rainy days.

Purchasing a property while the prices and mortgage rates are within reach becomes a secure way of protecting your finances against the battering of rising inflation.

This is especially true for those who have yet to own one.

Both primary and secondary markets are worth looking at, as there is surely be something out there that will meet your financial requirement.

“Hang on to the roof over your head” is a time-tested wisdom that will protect you in more ways than one for the future.

FIABCI Asia-Pacific regional secretariat chairman Datuk Alan Tong has over 50 years of experience in property development. He is also the group chairman of Bukit Kiara Properties. For feedback, please email feedback@fiabci-asiapacific.com.

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Migrant wives kept like slaves by Aussies

By GLENDA KWEK

 

Looking out for them: Case worker and former child bride Eman Sharobeem says victims are reluctant to pursue justice through legal means. - AFP

Unhappily married - In Australia, migrant wives in abusive marriages are all the more vulnerable as they are dependent on their husbands. 

KANYA thought she was starting a new life in Australia after arriving from India to marry her husband, but it quickly turned into a nightmare.

She was barred from going out on her own, forced to cook and clean for her partner’s family, and made to sleep outdoors if she did not complete her tasks.

The fate of the 18-year-old, whose name has been changed to protect her identity, mirrors that of others in “slave-like” relationships that Salvation Army worker Jenny Stanger has taken in at a Sydney refuge for trafficked people in recent years.

The women came to Australia under the promise of a happy marriage, only to be exploited by their partners.

“It’s an absolute deception on the part of the perpetrator,” said Stanger of a problem involving nearly a quarter of her safehouse’s residents. Immigration figures show women in such situations come from China, India, the Philippines and Vietnam among others.

“Marriage was the tool that was used to exploit the women for profit, gain or personal advantage.”

“In a typical case, the migrant wife would face extreme isolation, extreme denial of their basic rights around freedom of movement, possibly an exploitation of their labour ... and being denied money,” she said.

Getting a sense of how many marriage visas under Australia’s partner migration programme are used to bring women in for exploitation is difficult. Social workers say victims are often deliberately isolated and threatened if they seek help.

Researcher Samantha Lyneham, co-author of the first Australian study looking into the exploitation of women through migrant relationships beyond forced marriages, said the reluctance of victims to report crimes was a problem – such is their dependence on their abusers.

Lyneham said the fear of being deported, which stemmed from the “precarious immigration status” the women faced, was a key barrier, along with language and also mistrust of police after bad experiences in their home countries.

An inaugural Global Slavery Index published by the Walk Free Foundation in October said roughly 30 million people were living in modern-day slavery, of whom up to 3,300 were in Australia.

Lyneham’s new Australian Institute of Criminology report recorded the experiences of eight female victims – including Kanya – aged 18 to 49, mostly from South-East Asia, but also the Pacific, the Middle East and Eastern Europe.

They found that while some women moved to Australia on marriage visas in search of economic opportunities, others did so for love and to start a family.

All the women had consented to their marriages, having met their spouses through arranged situations, family links, online dating sites and chance encounters. Seven of the women said they married their husbands outside Australia.

Case workers said the husbands – half of whom were from the same countries of origin as the women – were most likely to be dual-citizens.

One woman told of how her husband would lock her out of the house at night. “I would have to stay in the tree overnight,” she said.

Others told of sexual violence and coerced pregnancies, according to the report. The women said their passports were taken and they were blocked from using telephones or having access to money.

Clandestine crime

Lyneham said although the interviews showed cases had been “happening for some time”, it was also clear when she raised the issue with authorities that some were not aware of it.

“It’s a clandestine type of crime that people mistake for domestic violence,” Lyneham said.

The use of domestic violence laws to address cases highlights the difficulties in identifying and prosecuting such crimes, which cut across legislation separately targeting human trafficking, slavery and domestic abuse.

Official Australian data between July 2001 and June 2011 showed 337,127 people were granted partner migration visas, with Britain, China and India the most common countries of origin.

Between July 2006 and Dec 2011, 3,654 people on the visas obtained protection under the Family Violence Provision.

This allows them to apply for permanent residency if they or a family member are subjected to violence. About 12% came from China, 10% from the Philippines and 8% from Vietnam. Others came from India, Britain, Thailand and Fiji.

Lyneham said while the numbers appeared low, previous research showed under-reporting, particularly in migrant communities.

Prime Minister Tony Abbott in June announced more than A$100mil (RM298mil) to fight domestic violence, and vowed a “particular focus” on women from culturally diverse and indigenous backgrounds.

Forced marriages were criminalised and laws against forced labour were strengthened in 2013.

Case worker Eman Sharobeem, a former child bride who was abused during her marriage, said some women who approached her for help were not comfortable pursuing their husbands through the legal system.

While she worked with politicians to help formulate the 2013 laws, what “we are really interested in is educating the community more than just having a law to guide them”.

Her views are echoed by Salvation Army worker Stanger, who praised the legislation but added: “They (victims) are looking for a way out, so ... the more doors we can open, the more likely someone is going to step through that door.” – AFP

Unhappily Married



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A love story like a fairy tale

Happy together: Li gazing lovingly at Gan as she admires Li's gift to her for Valentine's Day. LI Kangyu has not left his house ...

A love story like a fairy tale

Happy together: Li gazing lovingly at Gan as she admires Li's gift to her for Valentine's Day.

A Chinese man meets a Malaysian woman online, and romance begins to bloom in a special way.

LI Kangyu has not left his house for 30 years. Diagnosed with rheumatoid arthritis, he has been paralysed and bedridden since he was seven.

But his life took an unexpected turn for the better when he met a Malaysian woman Gan Suh Eng by chance on QQ, an online instant messaging platform, three years ago.

Despite being physically miles apart, they were drawn to each other.

“She has opened the windows of my soul,” Li, 39, said.

A year ago today, they exchanged wedding vows and began their life together at Li’s hometown, a village in Tangshan, Hebei province.

Li described their love story, which has attracted widespread media attention, as a fairy tale.

To him, Gan is an angel sent from heaven.

Her presence in his life has opened many doors for him.

Lying on a customised wheelchair given by a Good Samaritan, he can now enjoy the sunshine outside his house with Gan by his side.

Together they have travelled to Shanghai and Suzhou, among other cities, where Li has been invited to give motivational talks.

“A Shanghainese enterprise has shown interest in training me to become a motivational speaker.

“A book on my life story, to be penned by a writer, is also in the pipeline,” he said during The Star’s visit to his house, about 45 minutes by car from the city centre of Tangshan.

It is obvious that the love between the inseparable couple is going strong.

For the Chinese Valentine’s Day, qixi, which was celebrated last Saturday, Li presented Gan with a novelty ring that had a hidden clock face, while she surprised him with a blue striped tie.

Wearing a pink top that he had bought on online shopping site Taobao specially for the occasion, Li was delighted when told that the patterns printed on the shirt were that of Malaysia’s national flower, the hibiscus.

“It was a happy coincidence,” he said.

As Li recounted their first year together as husband and wife, Gan sat next to him, stroking his head affectionately.

They were more than happy to oblige when Gan was asked to give a peck on Li’s cheek.

“In the blink of an eye, a year has passed. We are both tolerant of and accommodating to each other’s shortcomings. Our love has grown deeper,” Li said.

Gan, 36, who hails from Selayang, was smitten by Li’s romantic and caring nature.

“Sometimes he will insist on helping me blow-dry my hair,” the former employee of a Malaysian Christian NGO said.

The couple leads a simple life in the village, surviving mostly on Li’s financial assistance from the government.

Although it is a meagre sum, Gan said the cost of living in the village is low, so they are doing fine.

Family members on both sides, who originally objected to their marriage, have now accepted them.

“My mum now cares about Li more than she cares about me,” Gan protested in jest. “She will ask to speak to him every time we talk on the phone, reminding him to take good care of himself and rest more.”

A local reporter who has been following their story since last year noted that Li appeared rosier and more cheerful.

“I am about 5kg heavier now and I have gained more muscle on my thigh,” Li said.

Their bright and neat space, a room in the house of Li’s third sister, is furnished with a double bed and sofa. Adorning the walls are their wedding photos.

A small wooden table sits on the bed for Li to use his laptop. As he cannot move his joints, he operates the laptop with a mouse placed near his right hip.

Looking ahead, Li dreams of having their own house and raising a child.

“We also want to start a charitable foundation to help the less fortunate. It looks like a far-fetched goal but I believe it will come to fruition one day,” he said.

Check In China by Tho Sin Yi The Star Columnists/Asia News Network

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