Saturday,22 September, 2018
Current issue | Issue 1233, (12 - 18 February 2015)
Saturday,22 September, 2018
Issue 1233, (12 - 18 February 2015)

Ahram Weekly


Al-Ahram Weekly

Egyptian names on HSBC-leaked list

According to leaked documents, individuals close to former Egyptian president Hosni Mubarak used accounts in Switzerland to deposit money. These include the former president’s sons and a daughter-in-law, as well as a number of Mubarak-era businessmen and officials.

In recent days, the leaked account information of tens of thousands of customers in Switzerland of the British bank HSBC made front-page news around the world.

The bank is accused of concealing the identities of international account holders in Switzerland worth more than $100 billion. The documents, dating back to 2007, were obtained and analyzed by the International Consortium of Investigative Journalists (ICIJ) and distributed to around 50 media outlets around the world.

The list includes weapons dealers, former and current politicians and celebrities. It is believed that they may have concealed their accounts to hide from national tax authorities or for money-laundering purposes. According to ICIJ, HSBC served those close to the former Egyptian president, former Tunisian president Ben Ali and current Syrian ruler Bashar Al-Assad.

HSBC is accused of repeatedly reassuring clients that their information would remain confidential.

Holding an HSBC private bank account in Switzerland is in itself not illegal. However, the country’s laws, which protect the secrecy of bank account holders, have made it a popular destination for money laundering and tax fraud.

In a statement provided to ICIJ, HSBC said that the bank has undergone a “radical transformation in recent years,” which made it more difficult to hide and launder money.

“We acknowledge that the compliance culture and standards of due diligence in HSBC’s Swiss private bank, as well as the industry in general, were significantly lower than they are today,” the statement said.

The bank is now being investigated in the US, France, Belgium and Argentina.

Protecting Egyptian shoes

The government has taken steps to stop the evasion of customs duties by importers of leather goods. According to the Federation of Egyptian Industries, importers have been evading tax by grossly understating the value of their imported leather goods.

For example, in 2013, importers claimed to have imported leather goods worth only LE368 million, while the government put the actual value of the leather imports at LE2.8 billion.

The new move is the last in a series of steps taken to support the local leather industry. The Federation of Egyptian Industries (FEI) praised the decision, as it will help protect the domestic leather industry, increase investments in the sector and provide more job opportunities.

The decision was taken after the FEI complained that the industry is being hurt by the dumping of imported products. The FEI statement said that leather factories, 90 per cent of which are considered small- and medium sized enterprises, have been forced to lower their production capacity by 80 per cent.

In recent years, some 5,000 factories were shut down, leading to the loss of 180,000 jobs. Egypt currently has some 17,000 leather factories, compared to 23,000 in 2006. These factories employ 270,000 workers, compared to 450,000 in 2006.

Real estate-friendly regulations

A set of new regulations promises to boost investments in Egypt’s real-estate sector. Moustafa Madbouly, minister of housing, utilities and urban communities, said this week that a new real-estate charter regulating transactions between the New Urban Communities Authority (NUCA) and investors will soon be issued. “The government wants to achieve development. It neither wants to be a real-estate broker, nor is it looking to cut a profit,” said Madbouly. He was speaking at a panel discussion organised in preparation for the Cityscape Egypt real-estate exhibition scheduled for September 2015.

The new charter, which aims to organise the real-estate investment market, stipulates, among other things, creation of an arbitration and mediation committee to look into disputes between the government and the private sector. “This is aimed at resolving disputes in a friendly manner,” the minister said.

Following the 2011 Revolution, several disputes between the government and real-estate investors broke out over land deals concluded before the revolution. Recently, several of these disputes were settled and the minister said other settlements will be announced before the end of the month. “This should send positive signals to the market,” he said.

Madbouly also promised to make available new plots of land by the end of the month to developers and individuals. Developers have been complaining that no new plots are available, preventing them from launching new projects. NUCA’s investment budget, according to Madbouly, has more than doubled in fiscal year 2014-2015 to LE14 billion and will double again next year to LE28 billion, in order to put in place the means to offer new plots of land to investors.

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