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Wednesday, March 29, 2017
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Author: Brian Sanchez
SEC to 200 lending firms: Secure license or be penalized
AROUND 200 companies engaged in lending activities in Central and Eastern Visayas are advised to secure a license to operate from the Securities and Exchange Commission (SEC) on or before April 30, 2017 or they will be sanctioned.
Lawyer Lindeza Gavino, SEC Cebu extension office director, said it is illegal for any person, partnership, or entity to engage in the lending business without a certificate of authority from her office.
“We have already written letters to those who are not registered with the office yet,” Gavino said during a news forum on Tuesday.
Where they are
Around 140 of these companies are in Cebu, more than 40 are in Bohol, while the rest are based in other parts of Regions 7 and 8.
Many of those who have been sent letters already assured the SEC of their compliance, but only three have actually complied so far.
Under Section 12 of RA 9474, violators may be fined P10,000 to P50,000 or face imprisonment of six months to 10 years or both, at the discretion of the court.
Gavino said that if these companies fail to meet the deadline, the SEC will have to impose penalties.
Prior to the enactment of Republic Act 9747 or the Lending Company Regulation Act of 2007, individuals and partnerships were allowed to operate a lending business even without these requirements.
At present, however, under the law, lending companies are required to convert themselves into corporations as well as to secure authority from the commission.
Gavino said reaching out to unregistered lending companies have long been part of the agency’s drive, but has been magnified ever since President Rodrigo Duterte announced that he will put an end to the “five-six lending scheme.”
“Five-six,” Gavino explained, was a term used to describe illegal or informal lending, infamous for offering interest rates of 20 percent or more.
“It’s called such because when you borrow five, you have to pay back six,” shesaid.
Evelyn Garso, officer-in-charge for registration of lending and financing companies at SEC, said they had already issued certificates of authority to 434 corporations in Regions 7 and 8 as of March 27 this year.
US law…
WASHINGTON: President Donald Trump supports a bill that proposes a massive hike in the minimum salary for those employed on H-1B visas, an influential American lawmaker has said while alleging that Indian companies have “gamed” the “flawed” US immigration system.
Congressman Darrell Issa, who recently introduced the legislation, insisted that his move would bring the best talents to the US and help fix the flaws in the existing H-1B system.
“The president supports (the bill). I think we will have strong support in the Senate,” he told a Washington audience at an event hosted by Atlantic Council at the Capitol Visitor Center.
He alleged that Indian companies have “gamed the system” and made the “best use of this flawed immigration system”.
“You can’t have 75 per cent of a programme going to an Indian-owner, Indian operated, Indian employee visas and not say that this is distortion,” Issa said, adding it’s common sense to hire the best and not the other way around.
“It would be interesting that India would be concerned that a relatively simple change (in H-1B visas) that does not target India, somehow happens to be accommodation for India,” he said.
“Today 75 per cent of all H-1Bs are coming in about $60-65,000, which is pretty absurd considering these are high-skilled visas… If they were told to write $100,000 and you will get your H-1B, they will write that cheque,” he said.
The lawmaker from California called for fixing the system and removing the country-based caps. He also said increasing the salary would raise the quality of people coming to the US.
“An auction system is not a bad way to go,” he said.
“A graduate with a STEM (science, technology, engineering and mathematics) degree from a US university is not going to take a job with $60,000 salary. And that’s the reality,” said the Congressman.
The H1B visa is a non-immigrant visa that allows American firms to employ foreign workers in occupations that require theoretical or technical expertise. The technology companies depend on it to hire tens of thousands of employees each year.
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‘Smart’ law firms lauded for adopting tech solutions
SINGAPORE — A legal document-management software that helped a court hearing go almost paperless was what allowed Via Law Corporation, then a two-men team, to take on a landmark dispute in 2014 between its client Global Yellow Pages, a directory publisher, and its rival Promedia Directories.
The cloud-based service, dubbed Magnum, allowed parties in a case such as witnesses and the judge to access court documents online, and this helped the firm’s director Wang Yingyu to shave the number of printed sheets from 252,000 to about 3,000 pages. Lawyers could also annotate and collaborate on relevant material using the platform.
The firm, now named Taylor Vinters Via following its partnership with a UK law firm last month, was one of 10 small- and medium-sized legal practices here recognised yesterday at the launch of the SmartLaw scheme.
Launched by the Law Society (LawSoc), it recognises such “smart” firms for using technology to improve their work processes. These include adopting a practice management or accounting software; having an online knowledge-management database; and having an online presence.
These firms will be allowed to display a logo to help give clients more confidence about their efficiency.
Taylor Vinters Via, for instance, enhances its online presence through the Asia Law Network, an online portal that helps prospective clients find suitable lawyers and to ask for “quick” quotations.
Ms Wang said: “Time is money … Technology has freed up our lawyers’ time for other matters, and our time savings translate to cost savings for our clients.”
Agreeing, Mr Michael Chia from MSC Law Corporation — also one of the pioneer SmartLaw firms named yesterday — said that relying on old-fashioned, “ad-hoc” methods to keep track of cases sometimes land lawyers into conflicting situations, such as when they unknowingly take on a case against previous clients.
Mr Chia, who has been a lawyer for almost two decades and started his own practice one-and-a-half years ago, said: “For smaller firms, you may know all your clients, but firms that want to (expand operations) need to have reliable management systems that can quickly search and pull up past records … to avoid awkward and potentially conflicting situations.”
A third awardee, Clifford Law LLP, which has seven lawyers and invests about S$3,000 a month in tech solutions, aims to go “completely paperless” in the near future and is looking at developing a software that would give clients direct access to certain documents.
The other seven firms awarded the SmartLaw accreditation include Fortis Law Corporation, Colin Ng & Partners LLP, Covenant Chambers LLC, Eden Law Corporation, Mathew Chew & Chelliah, Chan Neo LLP and fsLAW LLC.
The move follows a study of industry needs among small- and medium-sized law practices, which found that legal research platforms could cut the time lawyers take to visit the library by up to 20 per cent. It also found that firms could reap up to a 66 per cent reduction in operating costs if they run a virtual office.
However, the findings showed that fewer than one in 10 such firms use any kind of tech productivity software, with most citing cost as a barrier.
To help small- and medium-sized law firms defray costs when adopting tech solutions that improve productivity, a S$2.8 million grant scheme called Tech Start for Law was launched last month that will pay up to 70 per cent of the firm’s costs for selected tech products in the first year.
Britain reopens privacy debate after attack, presses tech firms
| LONDON
British officials have demanded tech firms do much more to give police access to smartphone communications following last week’s Westminster attack, just months after new laws gave security services broader powers.
However, they have yet to spell out clearly whether the government wants them to weaken encrypted services such as WhatsApp or are simply asking for ways to gain access to phones in their possession to recover suspects’ communications.
British media have reported that shortly before launching the attack last Wednesday, Khalid Masood used encrypted messaging via WhatsApp which investigators cannot read.
Police have been trying to determine whether Masood – who killed four people including a policeman near parliament in London before being shot dead – acted alone.
Neil Basu, a top counter-terrorism policeman, said his communications on the day of the attack are the main line of inquiry and said he had a clear interest in jihadist armed struggle.
A spokesman for Prime Minister Theresa May said on Monday she wanted tech firms such as Facebook, Apple and Google to find ways to give security services access to messages on phones, but was leaving it up to companies to sort out how.
British officials plan to meet U.S. tech executives on Thursday to insist they do more to crack down on extremist content on websites such as Google’s YouTube, following a revolt over the issue by major advertisers, including British government agencies. (reut.rs/2nnzv98)
They also plan to press Silicon Valley leaders to help monitor communications by potential attackers.
“If there are circumstances where law enforcement agencies need to be able to access the contents, they should be able to do so. How that is achieved, I think, is a matter for the talks later in the week,” May’s spokesman said.
The criticisms are the latest moves by European countries to rein in U.S. tech giants, pressing them do more to stop hate speech and extremist activities online. Germany is planning a new law calling for social networks like Facebook and Twitter to remove hate speech quickly or face fines of up to 50 million euros ($54 million). (reut.rs/2nnpPv6)
POLITICS, OR SOMETHING NEW?
The government has so far stopped short of seeking fresh laws that would make tech firms create back doors to privacy protections enabled by encryption.
Instead, the Investigatory Powers Act, which came into force in November, forced tech firms to help law enforcement agencies bypass encryption, when possible, and keep records of sites their customers visit, updating decades-old surveillance laws.
On Sunday Home Secretary (interior minister) Amber Rudd called for the tech companies to give security services access to encrypted messaging systems, then later qualified her stronger statements, saying she supported user privacy.
“We need to make sure that organizations like WhatsApp – and there are plenty of others like that – don’t provide a secret place for terrorists to communicate with each other,” Rudd first told BBC TV.
Later, when speaking to Sky News, she appeared to pull back on calling on tech firms to undermine encryption protections and focused instead on demanding lawful access to phones.
“You can have a system whereby they can build it so we can have access to it when it is absolutely necessary,” Rudd said. “But I want to draw a very clear distinction here – I support end-to-end encryption as part of cyber security, for families, for banking, for businesses,” she said.
A Home Office spokeswoman reinforced Rudd’s comments on Monday, saying it is “irresponsible to give terrorists a way to plot online which cannot be intercepted by the police”.
A spokeswoman for WhatsApp, a unit of Silicon Valley social media giant Facebook, said the company was horrified by the attack and cooperating with law enforcement agencies in their inquiries. WhatsApp introduced end-to-end encryptions by default a year ago this month for its 1.2 billion users worldwide, joining other services such as Signal and Apple’s iMessage.
Facebook is likely to comply with a subpoena for data on what numbers Masood called, and when, using WhatsApp, based on how it has responded in prior cases. Alternately, police may demand help in unlocking his phone, which raises thornier issues, depending on what device he was using.
Britain could also press Facebook and other internet services to provide a way to monitor or record encrypted conversations – akin to wiretapping traditional voice calls – which would move the debate into uncharted legal territory.
One former top British military official said forcing tech companies to weaken encryption would simply make the problem mutate and lead extremists to find other ways to communicate.
“There is a lot of politics at play here,” Major General Jonathan Shaw, who was in charge of cyber security at the Ministry of Defence, told BBC Radio 4 on Monday.
“What they (the government) are trying to do is use this moment to nudge the debate more in their line,” said Shaw, who retired from the army in 2012 as assistant chief of the defense staff.
(Additional reporting by Michael Holden and Elizabeth Piper; editing by David Stamp)
U.K. Puts Pressure on Tech Firms
British officials have demanded tech firms do much more to give police access to smartphone communications following last week’s Westminster attack, just months after new laws gave security services broader powers.
However, they have yet to spell out clearly whether the government wants them to weaken encrypted services such as WhatsApp or are simply asking for ways to gain access to phones in their possession to recover suspects’ communications.
British media have reported that shortly before launching the attack last Wednesday, Khalid Masood used encrypted messaging via WhatsApp which investigators cannot read.
Police have been trying to determine whether Masood—who killed four people including a policeman near parliament in London before being shot dead—acted alone.
Neil Basu, a top counter-terrorism policeman, said his communications on the day of the attack are the main line of inquiry and said he had a clear interest in jihadist armed struggle.
A spokesman for Prime Minister Theresa May said on Monday she wanted tech firms such as Facebook, Apple, and Google (googl) to find ways to give security services access to messages on phones, but was leaving it up to companies to sort out how.
British officials plan to meet U.S. tech executives on Thursday to insist they do more to crack down on extremist content on websites such as Google’s YouTube, following a revolt over the issue by major advertisers, including British government agencies.
They also plan to press Silicon Valley leaders to help monitor communications by potential attackers.
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“If there are circumstances where law enforcement agencies need to be able to access the contents, they should be able to do so. How that is achieved, I think, is a matter for the talks later in the week,” May’s spokesman said.
The criticisms are the latest moves by European countries to rein in U.S. tech giants, pressing them do more to stop hate speech and extremist activities online. Germany is planning a new law calling for social networks like Facebook and Twitter (twtr) to remove hate speech quickly or face fines of up to 50 million euros ($54 million).
POLITICS, OR SOMETHING NEW?
The government has so far stopped short of seeking fresh laws that would make tech firms create back doors to privacy protections enabled by encryption.
Instead, the Investigatory Powers Act, which came into force in November, forced tech firms to help law enforcement agencies bypass encryption, when possible, and keep records of sites their customers visit, updating decades-old surveillance laws.
On Sunday Home Secretary (interior minister) Amber Rudd called for the tech companies to give security services access to encrypted messaging systems, then later qualified her stronger statements, saying she supported user privacy.
“We need to make sure that organizations like WhatsApp—and there are plenty of others like that—don’t provide a secret place for terrorists to communicate with each other,” Rudd first told BBC TV.
Later, when speaking to Sky News, she appeared to pull back on calling on tech firms to undermine encryption protections and focused instead on demanding lawful access to phones.
“You can have a system whereby they can build it so we can have access to it when it is absolutely necessary,” Rudd said. “But I want to draw a very clear distinction here—I support end-to-end encryption as part of cyber security, for families, for banking, for businesses,” she said.
A Home Office spokeswoman reinforced Rudd’s comments on Monday, saying it is “irresponsible to give terrorists a way to plot online which cannot be intercepted by the police.”
A spokeswoman for WhatsApp, a unit of Silicon Valley social media giant Facebook (fb), said the company was horrified by the attack and cooperating with law enforcement agencies in their inquiries. WhatsApp introduced end-to-end encryptions by default a year ago this month for its 1.2 billion users worldwide, joining other services such as Signal and Apple’s iMessage (aapl).
Facebook is likely to comply with a subpoena for data on what numbers Masood called, and when, using WhatsApp, based on how it has responded in prior cases. Alternately, police may demand help in unlocking his phone, which raises thornier issues, depending on what device he was using.
Britain could also press Facebook and other internet services to provide a way to monitor or record encrypted conversations—akin to wiretapping traditional voice calls—which would move the debate into uncharted legal territory.
One former top British military official said forcing tech companies to weaken encryption would simply make the problem mutate and lead extremists to find other ways to communicate.
“There is a lot of politics at play here,” Major General Jonathan Shaw, who was in charge of cyber security at the Ministry of Defense, told BBC Radio 4 on Monday.
“What they (the government) are trying to do is use this moment to nudge the debate more in their line,” said Shaw, who retired from the army in 2012 as assistant chief of the defense staff.
Price tag of North Carolina's LGBT law: $3.76B
RALEIGH, N.C. (AP) — Despite Republican assurances that North Carolina’s “bathroom bill” isn’t hurting the economy, the law limiting LGBT protections will cost the state more than $3.76 billion in lost business over a dozen years, according to an Associated Press analysis.
Over the past year, North Carolina has suffered financial hits ranging from scuttled plans for a PayPal facility that would have added an estimated $2.66 billion to the state’s economy to a canceled Ringo Starr concert that deprived a town’s amphitheater of about $33,000 in revenue. The blows have landed in the state’s biggest cities as well as towns surrounding its flagship university, and from the mountains to the coast.
North Carolina could lose hundreds of millions more because the NCAA is avoiding the state, usually a favored host. The group is set to announce sites for various championships through 2022, and North Carolina won’t be among them as long as the law is on the books. The NAACP also has initiated a national economic boycott.
The AP analysis (http://apne.ws/2n9GSjE ) — compiled through interviews and public records requests — represents the largest reckoning yet of how much the law, passed one year ago, could cost the state. The law excludes gender identity and sexual orientation from statewide antidiscrimination protections, and requires transgender people to use restrooms corresponding to the sex on their birth certificates in many public buildings.
Still, AP’s tally ( http://bit.ly/2o9Dzdd ) is likely an underestimation of the law’s true costs. The count includes only data obtained from businesses and state or local officials regarding projects that canceled or relocated because of HB2. A business project was counted only if AP determined through public records or interviews that HB2 was why it pulled out.
Some projects that left, such as a Lionsgate television production that backed out of plans in Charlotte, weren’t included because of a lack of data on their economic impact.
The AP also tallied the losses of dozens of conventions, sporting events and concerts through figures from local officials. The AP didn’t attempt to quantify anecdotal reports that lacked hard numbers, or to forecast the loss of future conventions.
Bank of America CEO Brian Moynihan — who leads the largest company based in North Carolina — said he’s spoken privately to business leaders who went elsewhere with projects or events because of the controversy, and he fears more decisions like that are being made quietly.
“Companies are moving to other places because they don’t face an issue that they face here,” he told a World Affairs Council of Charlotte luncheon last month. “What’s going on that you don’t know about? What convention decided to take you off the list? What location for a distribution facility took you off the list? What corporate headquarters consideration for a foreign company — there’s a lot of them out there — just took you off the list because they just didn’t want to be bothered with the controversy? That’s what eats you up.”
Other measures show the country’s ninth most populous state has a healthy economy. By quarterly gross domestic product, the federal government said, North Carolina had the nation’s 10th fastest-growing economy six months after the law passed. The vast majority of large companies with existing operations in the state — such as American Airlines, with its second-largest hub in Charlotte — made no public moves to financially penalize North Carolina.
Shortly after he signed the law, Republican then-Gov. Pat McCrory issued a statement assuring residents it wouldn’t affect North Carolina’s status as “one of the top states to do business in the country.”
HB2 supporters say its costs have been tiny compared with an economy estimated at more than $500 billion a year, roughly the size of Sweden’s. They say they’re willing to absorb those costs if the law prevents sexual predators posing as transgender people from entering private spaces to molest women and girls — acts the law’s detractors say are imagined.
Republican Lt. Gov. Dan Forest issued a statement Monday accusing the AP of “another attempt to mislead and confuse the public through a bogus headline.” Forest questioned the tally and said even if true, it would represent only a sliver of the state’s economy.
Forest, who declined an interview request to discuss AP’s analysis before its publication, recently told Texas legislators considering a similar law: “Our economy is doing well. Don’t be fooled by the media.”
He has said that a global equestrian competition coming to North Carolina in 2018 despite HB2 is projected to have an economic impact bigger than the sporting events that have canceled. The Swiss-based group behind the event estimated its spending poured about $250 million into the French region of Normandy the last time it was held — 2014. The organization said the figure came from a study by consulting and accounting firm Deloitte, but the Federation Equestre Internationale declined to release the report.
Meanwhile, the state’s governor — Democrat Roy Cooper, who has long opposed HB2 — responded to AP’s story by saying: “We now know that, based on conservative estimates, North Carolina’s economy stands to lose nearly $4 billion because of House Bill 2. That means fewer jobs and less money in the pockets of middle class families. We need to fix this now.”
And AP’s analysis shows the economy could be growing faster if not for projects that have canceled.
Those include PayPal canceling a 400-job project in Charlotte, CoStar backing out of negotiations to bring 700-plus jobs to the same area, and Deutsche Bank scuttling a plan for 250 jobs in the Raleigh area. Other companies that backed out include Adidas, which is building its first U.S. sports shoe factory employing 160 near Atlanta rather than a High Point site, and Voxpro, which opted to hire hundreds of customer support workers in Athens, Georgia, rather than the Raleigh area.
“We couldn’t set up operations in a state that was discriminating against LGBT” people, Dan Kiely, Voxpro founder and CEO, said in an interview.
All told, the state has missed out on more than 2,900 direct jobs that went elsewhere.
Supporters are hard-pressed to point to economic benefits from the law, said James Kleckley, of East Carolina University’s business college.
“I don’t know of any examples where somebody located here because of HB2,” he said. “If you look at a law, whether or not you agree with it or don’t agree with it, there are going to be positive effects and negative effects. Virtually everything we know about (HB2) are the negative effects. Even anecdotally I don’t know any positive effects.”
An analysis by the state Commerce Department shortly before HB2 was enacted shows state officials expected the PayPal expansion to contribute more than $200 million annually to North Carolina’s gross domestic product — an overall measure of the economy. By the end of 2028, the state expected PayPal to have added $2.66 billion to the state economy.
The same analysis of the Deutsche Bank project estimated a total impact of about $543 million by the end of 2027. The economic model has been used for more than a decade — with some updates along the way — when the state offers major discretionary tax breaks to attract jobs.
State officials said they didn’t run the same financial analysis for CoStar, Voxpro and Adidas, so losses attributed to them were calculated using payroll numbers and other figures from the companies or state documents.
Meanwhile, canceled conventions, concerts and sporting events ranging from the NBA All-Star Game to a Bruce Springsteen show have deprived the state of more than $196 million. The number was compiled through email exchanges and interviews with local tourism officials.
All told, the state will have missed out on more than $3.76 billion by the end of 2028. The losses are based on projects that already went elsewhere — so the money won’t be recouped even if the law is struck down in court or repealed.
By the end of 2017 alone, the lost business will total more than $525 million.
Tourism officials in several cities say the numbers they report represent only a fraction of the damage the law has done. They typically track large conventions but don’t have firm numbers for when groups or tourists cancel smaller deals — or rule out North Carolina before booking.
“The biggest impact is how many times our phones are not ringing now,” said Shelly Green, CEO of the Durham Convention & Visitors Bureau.
When Green’s bureau sought to tally cancellations, it was able to count several large sporting events and conventions that backed out, depriving the city of more than $11 million, she said. But officials found hotels and meeting planners were tight-lipped about other events.
“There are a lot more meetings that have canceled, but we don’t have data on them,” she said.
Elsewhere, tourism setbacks range from an estimated $100 million lost when the 2017 NBA All-Star Game moved out of Charlotte to $36,000 in spending taken elsewhere when the Lutheran Financial Managers Convention backed out of Fayetteville. Seven hundred part-time workers at Raleigh’s PNC Arena lost at least $130,000 in wages because of cancellations by Pearl Jam, Cirque Du Soleil and others.
Other financial signals of disapproval have been more symbolic than clearly harmful.
More than two dozen cities and states, from Honolulu to Vermont, have banned taxpayer-funded visits to North Carolina because of HB2. Most said they couldn’t estimate the money not spent on business travel. But in Providence, Rhode Island, officials refused to spend even the remaining $495 to send three city employees to a Charlotte conference after sponsors picked up most of the costs, city spokesman Victor Morente said in an email.
Dozens of investment firms have urged North Carolina to repeal HB2, but most of those contacted in recent weeks, such as John Hancock and Morgan Stanley, wouldn’t discuss any financial measures they took to penalize the state. Trillium Asset Management, which manages more than $2 billion for wealthy families and foundations, had dozens of clients request that their holdings exclude bonds issued by North Carolina state or municipal governments, Chief Executive Officer Matt Patsky said in an interview.
What impact did selling off several million dollars of municipal bonds have? Impossible to measure, Patsky said.
In September, despite the law, Asheville’s Chamber of Commerce announced that biotech company Avadim was adding 550 jobs. Local officials call it the biggest single job creator in area history.
But HB2 jeopardized another project of similar size for the left-leaning mountain city. Chamber CEO Kit Cramer said last year that another company considering bringing 500 technology jobs was balking because of HB2, adding: “That’s a loss that would be incredibly hard to swallow.” Cramer said in an email in March that the company hasn’t made a decision. She didn’t give further details; that potential loss wasn’t included in AP’s count.
Charlotte, North Carolina’s largest city, has lost projects totaling 2,000 jobs because of HB2, Chamber of Commerce research director Chuck McShane said via email. According to separate documents obtained through public records requests, the majority were in the PayPal and CoStar projects.
CoStar, a real-estate research firm, was entering final negotiations to bring 732 jobs to Charlotte in September when its board backed out because of negative publicity over HB2, according to an email between a chamber executive and a city official. When the company picked Virginia, the reversal cost North Carolina at least $250 million in economic impact over the next six years, according to figures from both states.
“I fear this will be an epidemic outcome for many projects we are still in the running for at this time,” Jeffrey Edge of the Charlotte Chamber wrote in the September email exchange first reported by The Charlotte Observer.
Economic losses also hit smaller towns, such as those surrounding the University of North Carolina. When the San Francisco Symphony pulled out of two concerts scheduled for April 2017, the move had a ripple effect totaling about $325,000, according to Patty Griffin, of the Chapel Hill/Orange County Visitors Bureau.
“Memorial Hall will be empty those two nights and see no revenue for tickets or concessions, and no employees will work,” she said via email. “The attendees for most of them who have dinner, drinks and desserts either before or after the performance will not come out, which impacts local restaurants.”
Green, the Durham tourism official, said, “When you think about it, this whole thing is just such a Dumpster fire, and nobody wants to go near it.”
Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
© 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Price tag of North Carolina's LGBT law: $3.76B
Updated Mar. 27, 2017 at 2:34 p.m.
AP Exclusive: Price tag of North Carolina’s LGBT law: $3.76B
HB2 debate
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Raleigh, N.C. — Despite Republican assurances that North Carolina’s “bathroom bill” isn’t hurting the economy, the law limiting LGBT protections will cost the state more than $3.76 billion in lost business over a dozen years, according to an Associated Press analysis.
Over the past year, North Carolina has suffered financial hits ranging from scuttled plans for a PayPal facility that would have added an estimated $2.66 billion to the state’s economy to a canceled Ringo Starr concert that deprived a town’s amphitheater of about $33,000 in revenue. The blows have landed in the state’s biggest cities as well as towns surrounding its flagship university, and from the mountains to the coast.
North Carolina could lose hundreds of millions more because the NCAA is avoiding the state, usually a favored host. The group is set to announce sites for various championships through 2022, and North Carolina won’t be among them as long as the law is on the books. The NAACP also has initiated a national economic boycott.
The AP analysis — compiled through interviews and public records requests — represents the largest reckoning yet of how much the law, passed one year ago, could cost the state. The law excludes gender identity and sexual orientation from statewide antidiscrimination protections, and requires transgender people to use restrooms corresponding to the sex on their birth certificates in many public buildings.
Still, AP’s tally is likely an underestimation of the law’s true costs. The count includes only data obtained from businesses and state or local officials regarding projects that canceled or relocated because of HB2. A business project was counted only if AP determined through public records or interviews that HB2 was why it pulled out.
Some projects that left, such as a Lionsgate television production that backed out of plans in Charlotte, weren’t included because of a lack of data on their economic impact.
The AP also tallied the losses of dozens of conventions, sporting events and concerts through figures from local officials. The AP didn’t attempt to quantify anecdotal reports that lacked hard numbers, or to forecast the loss of future conventions.
Bank of America CEO Brian Moynihan — who leads the largest company based in North Carolina — said he’s spoken privately to business leaders who went elsewhere with projects or events because of the controversy, and he fears more decisions like that are being made quietly.
“Companies are moving to other places because they don’t face an issue that they face here,” he told a World Affairs Council of Charlotte luncheon last month. “What’s going on that you don’t know about? What convention decided to take you off the list? What location for a distribution facility took you off the list? What corporate headquarters consideration for a foreign company — there’s a lot of them out there — just took you off the list because they just didn’t want to be bothered with the controversy? That’s what eats you up.”
Other measures show the country’s ninth most populous state has a healthy economy. By quarterly gross domestic product, the federal government said, North Carolina had the nation’s 10th fastest-growing economy six months after the law passed. The vast majority of large companies with existing operations in the state — such as American Airlines, with its second-largest hub in Charlotte — made no public moves to financially penalize North Carolina.
Shortly after he signed the law, Republican then-Gov. Pat McCrory issued a statement assuring residents it wouldn’t affect North Carolina’s status as “one of the top states to do business in the country.”
HB2 supporters say its costs have been tiny compared with an economy estimated at more than $500 billion a year, roughly the size of Sweden’s. They say they’re willing to absorb those costs if the law prevents sexual predators posing as transgender people from entering private spaces to molest women and girls — acts the law’s detractors say are imagined.
Lt. Gov. Dan Forest, one of the strongest supporters, accused news organizations of creating a false picture of economic upheaval. A global equestrian competition that’s coming to North Carolina in 2018 despite HB2 is projected to have an economic impact bigger than the sporting events that have canceled, Forest said. The Swiss-based group behind the event estimated its spending poured about $250 million into the French region of Normandy the last time it was held — 2014. The organization said the figure came from a study by consulting and accounting firm Deloitte, but the Federation Equestre Internationale declined to release the report.
Forest declined a request for an interview based on AP’s analysis.
“The effect is minimal to the state,” Forest told Texas legislators considering a similar law. “Our economy is doing well. Don’t be fooled by the media. This issue is not about the economy. This issue is about privacy, safety and security in the most vulnerable places we go.”
But AP’s analysis shows the economy could be growing faster if not for projects that have already canceled.
Those include PayPal canceling a 400-job project in Charlotte, CoStar backing out of negotiations to bring 700-plus jobs to the same area, and Deutsche Bank scuttling a plan for 250 jobs in the Raleigh area. Other companies that backed out include Adidas, which is building its first U.S. sports shoe factory employing 160 near Atlanta rather than a High Point site, and Voxpro, which opted to hire hundreds of customer support workers in Athens, Georgia, rather than the Raleigh area.
“We couldn’t set up operations in a state that was discriminating against LGBT” people, Dan Kiely, Voxpro founder and CEO, said in an interview.
All told, the state has missed out on more than 2,900 direct jobs that went elsewhere.
Supporters are hard-pressed to point to economic benefits from the law, said James Kleckley, of East Carolina University’s business college.
“I don’t know of any examples where somebody located here because of HB2,” he said. “If you look at a law, whether or not you agree with it or don’t agree with it, there are going to be positive effects and negative effects. Virtually everything we know about (HB2) are the negative effects. Even anecdotally I don’t know any positive effects.”
An analysis by the state Commerce Department shortly before HB2 was enacted shows state officials expected the PayPal expansion to contribute more than $200 million annually to North Carolina’s gross domestic product — an overall measure of the economy. By the end of 2028, the state expected PayPal to have added $2.66 billion to the state economy.
The same analysis of the Deutsche Bank project estimated a total impact of about $543 million by the end of 2027. The economic model has been used for more than a decade — with some updates along the way — when the state offers major discretionary tax breaks to attract jobs.
State officials said they didn’t run the same financial analysis for CoStar, Voxpro and Adidas, so losses attributed to them were calculated using payroll numbers and other figures from the companies or state documents.
Meanwhile, canceled conventions, concerts and sporting events ranging from the NBA All-Star Game to a Bruce Springsteen show have deprived the state of more than $196 million. The number was compiled through email exchanges and interviews with local tourism officials.
All told, the state will have missed out on more than $3.76 billion by the end of 2028. The losses are based on projects that already went elsewhere — so the money won’t be recouped even if the law is struck down in court or repealed.
By the end of 2017 alone, the lost business will total more than $525 million.
Tourism officials in several cities say the numbers they report represent only a fraction of the damage the law has done. They typically track large conventions but don’t have firm numbers for when groups or tourists cancel smaller deals — or rule out North Carolina before booking.
“The biggest impact is how many times our phones are not ringing now,” said Shelly Green, CEO of the Durham Convention & Visitors Bureau.
When Green’s bureau sought to tally cancellations, it was able to count several large sporting events and conventions that backed out, depriving the city of more than $11 million, she said. But officials found hotels and meeting planners were tight-lipped about other events.
“There are a lot more meetings that have canceled, but we don’t have data on them,” she said.
Elsewhere, tourism setbacks range from an estimated $100 million lost when the 2017 NBA All-Star Game moved out of Charlotte to $36,000 in spending taken elsewhere when the Lutheran Financial Managers Convention backed out of Fayetteville. Seven hundred part-time workers at Raleigh’s PNC Arena lost at least $130,000 in wages because of cancellations by Pearl Jam, Cirque Du Soleil and others.
Other financial signals of disapproval have been more symbolic than clearly harmful.
More than two dozen cities and states, from Honolulu to Vermont, have banned taxpayer-funded visits to North Carolina because of HB2. Most said they couldn’t estimate the money not spent on business travel. But in Providence, Rhode Island, officials refused to spend even the remaining $495 to send three city employees to a Charlotte conference after sponsors picked up most of the costs, city spokesman Victor Morente said in an email.
Dozens of investment firms have urged North Carolina to repeal HB2, but most of those contacted in recent weeks, such as John Hancock and Morgan Stanley, wouldn’t discuss any financial measures they took to penalize the state. Trillium Asset Management, which manages more than $2 billion for wealthy families and foundations, had dozens of clients request that their holdings exclude bonds issued by North Carolina state or municipal governments, Chief Executive Officer Matt Patsky said in an interview.
What impact did selling off several million dollars of municipal bonds have? Impossible to measure, Patsky said.
In September, despite the law, Asheville’s Chamber of Commerce announced that biotech company Avadim was adding 550 jobs. Local officials call it the biggest single job creator in area history.
But HB2 jeopardized another project of similar size for the left-leaning mountain city. Chamber CEO Kit Cramer said last year that another company considering bringing 500 technology jobs was balking because of HB2, adding: “That’s a loss that would be incredibly hard to swallow.” Cramer said in an email in March that the company hasn’t made a decision. She didn’t give further details; that potential loss wasn’t included in AP’s count.
Charlotte, North Carolina’s largest city, has lost projects totaling 2,000 jobs because of HB2, Chamber of Commerce research director Chuck McShane said via email. According to separate documents obtained through public records requests, the majority were in the PayPal and CoStar projects.
CoStar, a real-estate research firm, was entering final negotiations to bring 732 jobs to Charlotte in September when its board backed out because of negative publicity over HB2, according to an email between a chamber executive and a city official. When the company picked Virginia, the reversal cost North Carolina at least $250 million in economic impact over the next six years, according to figures from both states.
“I fear this will be an epidemic outcome for many projects we are still in the running for at this time,” Jeffrey Edge of the Charlotte Chamber wrote in the September email exchange first reported by The Charlotte Observer.
Economic losses also hit smaller towns, such as those surrounding the University of North Carolina. When the San Francisco Symphony pulled out of two concerts scheduled for April 2017, the move had a ripple effect totaling about $325,000, according to Patty Griffin, of the Chapel Hill/Orange County Visitors Bureau.
“Memorial Hall will be empty those two nights and see no revenue for tickets or concessions, and no employees will work,” she said via email. “The attendees for most of them who have dinner, drinks and desserts either before or after the performance will not come out, which impacts local restaurants.”
Green, the Durham tourism official, said, “When you think about it, this whole thing is just such a Dumpster fire, and nobody wants to go near it.”
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Gaming Firms Flee Poland's Gambling Tax
by Ulrika Lomas, Tax-News.com, Brussels
27 March 2017
UK-based bookmaker William Hill has become the latest company in
the gambling sector to withdraw from the Polish market ahead of the introduction
of a new regulatory and tax regime for the industry.
William Hill has reportedly informed customers and affiliates that it will
cease offering gambling services in Poland on April 1, 2017, when Poland’s new
gambling legislation is introduced.
Several other firms offering online gambling and gaming services in Poland
have also signaled plans to withdraw from the Polish market when the new law
takes effect, including Pinnacle, EnergyBet, and Olympic Entertainment Group.
Under the incoming law, gambling operators will be required to pay a 12 percent
tax on their sports betting turnover.
The legislation has been the subject of heavy criticism from the gambling industry,
with the Remote Gambling Association (RGA) having described the new tax regime
as “not workable.”
The RGA has called on the Government to base the tax on gross profits, rather
than turnover.
“We have advised the Polish authorities that their fiscal framework is
not workable,” the Association said last year. “Until it is changed,
few operators will take up licenses in Poland. This will continue to stifle
competition, value, and choice for consumers.”
How changes to consumer privacy law might impact marketers and martech
TVs are “spying” on us, and so are sex toys. The Senate also just reversed an Obama-FCC rule that imposed limits on what ISPs and carriers could do with consumer data without consent.
The new administration and Republican control of Congress could bring massive change in regulatory policy and consumer protection. Indeed, many of Trump’s cabinet appointees have pledged to scale back or dismantle the regulatory frameworks of their respective agencies.
The new political environment has led people to question the future of consumer protection and privacy enforcement under the federal government. And it makes it much less likely that there will be any new consumer privacy legislation in this vastly more pro-business Congress.
Might this turn out to be a boon for digital marketers, who could face less scrutiny of their use of consumer data for targeting, tracking or attribution? Or could it have unintended consequences and make digital platforms and publishers’ lives more complicated?
The Future of Privacy Forum’s Stacey Gray thinks that if the government generates no new consumer privacy legislation or limits the ability of regulatory bodies to protect consumer privacy, we are likely to see state legislatures and Attorneys General step in. She says California, and several other states that have strong consumer privacy laws, may seek to fill the void and regulate digital marketing.
There could also be more private litigation seeking to protect and enforce consumer privacy.
Gray also argues that the platforms (e.g., Apple) will move to fill perceived gaps in consumer protection. For example, in iOS 10, the iPhone’s IDFA is “zeroed out” for users who limit ad tracking. That means data collection for targeting or attribution becomes much more challenging to obtain.
The recent enforcement action against TV maker VIZIO is a potential model of what may come. The company was forced to pay a $2.2 million penalty based on the improper collection of consumer viewing habits and data without consent. The company was also forced to submit to ongoing third-party privacy and compliance assessments. The FTC and New Jersey Attorney General were partners in the action. But it could have been brought by New Jersey alone.
So-called “smart vibrator” maker We-Vibe paid nearly $4 million after it was found that the company collected individual-level usage data without consent. The payment came in the form of a settled consumer class-action lawsuit.
Should the FTC and the federal government drop out of consumer privacy enforcement for the duration of this administration, states have the authority to take its place. But the unintended consequence might be enforcement of differing privacy and consumer protection standards and laws by multiple states.
(In addition, US firms will need to comply with the EU’s General Data Protection Regulation.)
The rational response for marketing technology companies will be to adopt the strictest state rules as a standard and adhere to those across all 50 states. Regardless, in the coming months and years, we’re very likely to see a number of states and their Attorneys General eager to compensate for the absence of federal leadership on consumer protection and privacy.
Although it may appear more business-friendly, the new anti-regulation climate in Washington could result in new unintended consequences and challenges for martech companies and digital marketers.
