A great Luxembourg artist shames the Musée d’ Orsay to the naked Truth.

My Orchids. Phalaneopsis" Olympia". Photo ET

A great Luxembourg artist shames the Musée d’ Orsay into the naked Truth.

Indecent exposure: artist arrested for nude pose in Paris museum

She did it again, and yet for those philistines in Paris, her art is still not accessible. Hopefully the encounter with the judge tomorrow will finally recognize her talent.

The true art world is of course upset. She didn’t do anything else as what Olympia did. She just lay there, impersonating a modern Olympia, and recorded the pubic, errh, the public’s reaction with a handheld camera. A living piece of art in progress. 

Those interested in Luxembourg cultural delicacies certainly will enjoy a poem in original Luxembourgish in honor of Deborah's first performance in the Summer of 2014 at the same Musée d’ Orsay. Her fans note with awe and great satisfaction that her performance has boldly moved into the Winter. True creation always is sacrifice.

Luxembourg Parliament Speaker Highlights Iran’s Key Regional Role

My Orchids. Paphiopedilum "Sheherazade". Photo ET

Luxembourg Parliament Speaker Highlights Iran’s KeyRegional Role

News ID: 972777 Service: Politics

 January, 16, 2016 - 16:33

TEHRAN (Tasnim) – The President of Luxembourg’s Chamber of Deputies highlighted Iran’s constructive role in the region and in the battle against terrorism, stressing that confronting the phenomenon requires all-out international cooperation.

Tasmin News Agency

Luxembourg Parliament Speaker Highlights Iran’s Key Regional Role

News ID: 972777 Service: Politics

 January, 16, 2016 - 16:33

TEHRAN (Tasnim) – The President of Luxembourg’s Chamber of Deputies highlighted Iran’s constructive role in the region and in the battle against terrorism, stressing that confronting the phenomenon requires all-out international cooperation.

Luxembourg is ready to cooperate with the Islamic Republic on fighting terrorism, Mars Di Bartolomeo said Saturday during a joint press conference with his Iranian counterpart Ali Larijani in Tehran.

Stressing that terrorism is a global issue and that Iran cannot uproot it single-handedly, he called for all-out cooperation against it at the international level.

He also hailed last year’s nuclear deal between Iran and six world powers, saying “this opportunity ought to be seized” and efforts should be made in line with restoring peace and security across the globe.

His visit to Iran came a couple of months after the European country’s Foreign Minister Jean Asselborn made a trip to Tran in late November 2015, during which he met senior Iranian officials including his counterpart Mohammad Javad Zarif and President Hassan Rouhani.

Luxembourg, officially the Grand Duchy of Luxembourg, is a landlocked country in Western Europe. It is bordered by Belgium to the west and north, Germany to the east, and France to the south.

The European state was one of the countries that played host to the nuclear talks between Iran and the Group 5+1 (Russia, China, the US, Britain, France, and Germany), which ended in a comprehensive nuclear deal back in July 2015.

Iran and the Group 5+1 (also known as E3+3 and P5+1) on July 14 reached a conclusion on a 159-page nuclear agreement that would terminate all sanctions imposed on Tehran over its nuclear energy program after coming into force.

Afterwards, the 15-memebr United Nations Security Council passed a resolution that endorsed the JCPOA.

According to the UNSC Resolution 2231, all previous UNSC sanctions imposed on Iran over its nuclear program will be terminated when the JCPOA takes effect.

Antoine Deltour, the Edward Snowden of Luxleaks to meet his judges in Luxembourg.

My Orchids.
Dendrobium "Transparency". Photo ET

Antoine Deltour, the Edward Snowden of Luxleaks to meet his judges in Luxembourg.

This will be a great show! For five days, from April 26, 2016, Antoine Deltour, the hard copier of PwC’s secret tax ruling documents, will be before his judges in Luxembourg. Edouard Perrin, a journalist for France 2 who first published these documents will also be there with a third man whom we know is 38 years old. It is one anecdote in the twists of the Luxembourg tortuous justice system to find out why and when the name of an accused is released.

 It is already certain that this dramatic event will go live on many TV channels worldwide, and an army of journalists will cover it. While Luxleaks was virtually swept under the rug by now, including at the European Parliament’s investigation, it is Luxembourg that revives the story again in an ill-timed show trial, and even dragging in a journalist. Luxembourg thus continues its public self-flagellation with a lawsuit where we know already that one of the outcomes is a guaranteed further loss of reputation for the country. After the tax haven reputation, it consolidates its reputation as a judicial haven. Is this nation-branding in a little perverse way perhaps?

Of course, justice needs to be done. Clearly, laws were violated, though very specific laws that are protecting the secrecy and confidentiality of the Luxembourg financial center. Internationally, there will be no sympathy for the Luxembourg side. Antoine Deltour will be a hero whistleblower, as became Edward Snowden, and Edouard Perrin will be the poster child of Luxembourg’s abuse of the freedom of press. Even on those issues where Luxembourg may be right, it will be wrong in world opinion. 

This short-sighted rush to action by the Luxembourg judiciary is a bit surprising, as Luxembourg is known as a haven, where criminals enjoy very long delays in the delivery of justice, if they are ever sentenced at all.  Because indeed Luxembourg is a notorious judicial haven, well camouflaged certainly, because the majority of people never have to live through it. But those who do, know. One has to live through it to believe it. I’m one of those veterans to have experienced the slowness of justice in a criminal case that I had brought against two fraudsters. The judicial haven is for criminals. It is a hell for their victims. The case I brought is over 10 years old, and is still not resolved. Such delays can only be explained by political interference. Because incompetence cannot, hopefully, span 3 consecutive governments. Indeed, the burden of proof that it did not interfere falls on the government.

Having thus established that this type of interference is the operating mode practiced in this small judicial haven, where everyone knows everyone, I do not understand why Antoine Deltour’s case, instead of the usual delays was instead rushed through the system. Political interference again, but atypical as this time it isn’t about delaying but rushing to justice. That fact, the rush, is also the ultimate proof that delays and rushes must result from interference, not just incompetence. Though in one absurd way it is also proof of political incompetence, because the case will become a political boomerang. The government should have used its long arms to provide a little bit of judicial haven to the accused, by delaying in exchange for a little umbrella against international ridicule. But why the rush? Ah, it depends on the plaintiff!

The “Raison d’état” plays mad even more, by pressing criminal charges against the journalist Edouard Perrin. As a veteran critic of the judicial haven, I'm not only completely disoriented by so much "transparency" and the rush to justice without delay, or even speedy if not even summary justice as measured against Luxembourg’s usual proceedings. For once it is regrettable that the accused cannot enjoy at least the usual indulgence that real criminals usually enjoy. According to the former Attorney General Robert Biever, especially when it comes to financial crimes and money laundering (including terrorist financing), 1,500 cases were shelved after reaching the statute of limitations due to a "lack of resources" from 1990-2011. That’s an average of 75 crimes per year that went unpunished! Since then we have stopped counting. Someone takes the gauntlet to investigate who makes or made the decisions on which cases to drop and why?

So, in summary, the Luxembourg justice, which is not really independent, opens a Pandora's Box. In doing so it does not act without the government’s green light. It might even act because of its long arm. And it is more than likely that the initiative enjoys the support of a broad consensus in the financial center.

Out of the Pandora's Box will reappear other skeletons, as the shelved law on Freedom of information (FOI), buried unadorned, the law on whistleblowers, and all the shameful practices that have survived the onslaught of FATCA and the official end of the tax haven.

Press communication by the Luxembourg General Attorney’s office (Freely translated from French)

I hereby inform you that the trial said "LuxLeaks" will begin on Tuesday, April 26, 2016 at the Luxembourg District Court. Three people were referred to the criminal court.

Following the order of the “Chambre du Conseil”  of the Luxembourg District Court of 25 November 2015, Mr. Antoine Deltour must answer for the acts committed by him as a perpetrator of domestic theft, fraudulent access or maintenance in a computer system, disclosure of trade secrets, breach of professional secrecy and laundering-holding the stolen documents.

A second former PwC employee is accused of the same offenses, namely domestic theft, fraudulent access or maintenance in a computer system, disclosure of trade secrets, breach of professional secrecy and laundering-holding the stolen documents, but for different facts committed after those committed by Antoine Deltour.

Mr. Edouard Perrin, meanwhile, must answer as co-author or accomplice to the violations of disclosing business secrets, breach of professional secrecy and, as perpetrator of the holding-laundering offense for documents only removed by the second employee .

So you can make arrangements, I note that the trial is expected to last five hearings.

The exact hearing dates are:

- Tuesday, April 26, 2016 at 9:00 am

- Wednesday, April 27, 2016 at 15:00

- Thursday, April 28, 2016 at 9:00 am

- Tuesday, May 3, 2016 at 9:00 am

- Wednesday, May 4, 2016 at 15:00

All hearings will be held in room 1.10 TL at the Luxembourg District Court. The case will be handled by the 12th Criminal Chamber of the same court.

Fitch Affirms Luxembourg at 'AAA'; Outlook Stable

My Orchids. Phalaneopsis "AAA". Photo ET

Fitch Affirms Luxembourg at 'AAA'; Outlook Stable

A couple of excerpts:

.....with a five-year average general government surplus of 0.6% of GDP, and a low gross general government debt/GDP ratio of 23.4% at end-2015 ....

....we estimate the 2015 general government surplus at 0.4% of GDP due to lower expenditure from postponements in investment projects and moderated public wages.....

Now put those two quotes together, and consider the recent opinion polls that are disastrous for the coalition government. Those are good news finally. Because an international agency says that public wages are moderated, and we have a very low debt/GDP ratio. Rejoice, we can borrow (cheaply because of the AAA) us out of the political down and raise public wages just in time in 2017 before the 2018 elections. A done deal!

My Orchids. "Luxleaks". Photo ET

Luxembourg Trial Over Tax Ruling Theft, Leaks, to Start April 26

http://www.bloomberg.com/news/articles/2016-01-08/luxembourg-trial-over-tax-ruling-theft-leaks-to-start-april-26

New York State Department of Financial Services - New BSA/AML Certification Requirement Milestone

My Orchids. Dendrobium. Photo ET

New York State Department of Financial Services - New BSA/AML Certification Requirement Milestone

The New York New York State Department of Financial Services is one of the regulators of the world’s most important financial center. The new proposed regulations are in line with 2 expectations. They criminalize offenses that so far usually were costly settlements by financial institutions, but sheltered management from any criminal investigation. That’s about to change. They also introduce a concept of how trustworthy and efficient the technologies in place are.

As so often, with the global influence as a financial center that New York has, the new expectation is that the changes introduce a de-facto new world standard. 

Here is the official communication:

GOVERNOR CUOMO ANNOUNCES ANTI-TERRORISM REGULATION REQUIRING SENIOR FINANCIAL EXECUTIVES TO CERTIFY EFFECTIVENESS OF ANTI-MONEY LAUNDERING SYSTEMS

Governor Andrew M. Cuomo today announced that his Administration is proposing a new anti-terrorism and anti-money laundering regulation that includes -- among other important provisions -- a requirement modeled on Sarbanes-Oxley that senior financial executive certify that their institutions has sufficient systems in place to detect, weed out, and prevent illicit transactions.

"Money is the fuel that feeds the fire of international terrorism," said Governor Cuomo. "Global terrorist networks simply cannot thrive without moving significant amounts of money throughout the world. At a time of heightened global security concerns, it is especially vital that banks and regulators do everything they can to stop that flow of illicit funds."

Over the last four years, the New York State Department of Financial Services (NYDFS) has conducted a series of investigations into terrorist financing, sanctions violations, and anti-money laundering compliance at financial institutions. As a result of these investigations, the Department has uncovered (among other issues) serious shortcomings in the transaction monitoring and filtering programs of these institutions and that a lack of robust governance, oversight, and accountability at senior levels of these institutions has contributed to these shortcomings.

The key requirements of the new anti-terrorism and anti-money laundering regulation that NYDFS is proposing, – which will be subject to a 45-day notice and public comment period before final issuance – include the following:

• Maintain a Transaction Monitoring Program. Each regulated institution will maintain for the purpose of monitoring transactions after their execution for potential BSA/AML violations and Suspicious Activity Reporting, which system may be manual or automated, and which shall, at a minimum include the following attributes:

• Be based on the Risk Assessment of the institution.
• Reflect all current BSA/AML laws, regulations and alerts, as well as any relevant information available from the institution’s related programs and initiatives, such as "know your customer due diligence", "enhanced customer due diligence" or other relevant areas, such as security, investigations and fraud prevention.
• Map BSA/AML risks to the institution’s businesses, products, services, and customers/counterparties.
• Utilize BSA/AML detection scenarios that are based on the institution’s Risk Assessment with threshold values and amounts set to detect potential money laundering or other suspicious activities.
• Include an end-to-end, pre-and post-implementation testing of the Transaction Monitoring Program, including governance, data mapping, transaction coding, detection scenario logic, model validation, data input and Program output, as well as periodic testing.
• Include easily understandable documentation that articulates the institution’s current detection scenarios and the underlying assumptions, parameters, and thresholds.
• Include investigative protocols detailing how alerts generated by the Transaction Monitoring Program will be investigated, the process for deciding which alerts will result in a filing or other action, who is responsible for making such a decision, and how investigative and decision-making process will be documented; and
• Be subject to an on-going analysis to assess the continued relevancy of the detection scenarios, the underlying rules, threshold values, parameters, and assumptions.
• Maintain a Watch List Filtering Program. Each regulated institution will maintain for the purpose of interdicting transactions, before their execution, that are prohibited by applicable sanctions, including OFAC and other sanctions lists, politically exposed persons lists, and internal watch lists, which system may be manual or automated, and which shall, at a minimum, include the following attributes:
• Be based on the risk assessment of the institution.
• Be based on technology or tools for matching names and accounts , in each case based on the institution’s particular risks, transaction and product profiles.
• Include an end-to-end, pre- and post-implementation testing of the Watch List Filtering Program, including data mapping, an evaluation of whether the watch lists and threshold settings map to the risks of the institution, the logic of matching technology or tools, model validation, and data input and Watch List Filtering Program output.
• Utilizes watch lists that reflect current legal or regulatory requirements.
• Be subject to on-going analysis to assess the logic and performance of the technology or tools for matching names and accounts, as well as the watch lists and the threshold settings to see if they continue to map to the risks of the institution.
• Include easily understandable documentation that articulates the intent and the design of the Program tools or technology.
• Additional Requirements. Each Transaction Monitoring and Filtering Program shall, at a minimum, require the following:
• Identification of all data sources that contain relevant data.
• Validation of the integrity, accuracy and quality of data to ensure that accurate and complete data flows through the Transaction Monitoring and Filtering Program.
• Data extraction and loading processes to ensure a complete and accurate transfer of data from its source to automated monitoring and filtering systems, if automated systems are used.
• Governance and management oversight, including policies and procedures governing changes to the Transaction Monitoring and Filtering Program to ensure that changes are defined, managed, controlled, reported, and audited.
• Vendor selection process if a third party vendor is used to acquire, install, implement, or test the Transaction Monitoring and Filtering Program or any aspect of it.
• Funding to design, implement and maintain a Transaction Monitoring and Filtering Program that complies with the requirements of this Part.
• Qualified personnel or outside consultant responsible for the design, planning, implementation, operation, testing, validation, and on-going analysis, of the Transaction Monitoring and Filtering Program, including automated systems if applicable, as well as case management, review and decision making with respect to generated alerts and potential filing.
• Periodic training of all stakeholders with respect to the Transaction Monitoring and Filtering Program.
• No regulated institution may make changes or alterations to the Transaction Monitoring and Filtering Program to avoid or minimize filing suspicious activity reports, or because the institution does not have the resources to review the number of alerts, or to otherwise avoid complying with regulatory requirements.

Annual Certification

To ensure compliance with the requirements, each institution shall submit to the Department by April 15 of each year certifications duly executed by its chief compliance officer or functional equivalent.

To view a copy of the proposed Transaction Monitoring and Filtering Program regulation, please click here. The regulation will published in an upcoming edition of the New York State Register, commencing a 45-day notice and comment period.

Divide and Conquer at Cargolux

My Orchids. Oncidium Bifolium. Photo ET

Divide and Conquer at Cargolux

Last year was the year when Cargolux as a company was still in visual flight mode through bad weather. The CWA negotiations provided for some interesting if not entertaining maneuvering. Though earnings might be OK. Also, some of the past strategic issues, such as a new Chinese shareholder or the future of Cargolux Italia were addressed in a more or less satisfactory way and are facts now that one has to live with. So it was the CWA negotiation that was top on the agenda, and provided for some drama. It was a classic Battle of Interior Lines between management and the unions, though participants might not have been aware that they engaged in  classical military tactics.

In a Battle of Interior Lines, one side, usually the one on the defensive, tries to isolate components of the opposite side into separate smaller parts, and beats them one after the other. It goes back to the Punic Wars, and was used for the last time by Moshe Dayan of Israel in the Six-Day War, beating Arab adversaries one by one at a time. The manoeuver in the Cargolux case was successful because the opponents to Management, OGBL and LCGB were not coordinated, which split them into those two smaller opponents that could be dealt with one at a time. It happened because both had different agendas, were unable to bid a united front, and so they were divided and conquered, or sort of. The situation however was a bit more complex, because there are three winners: Management of course, but mostly OGBL and unexpectedly all employees through the new leverage that the OGBL deal provided.

Management of course took advantage of the divisions to settle with OGBL first. However that settlement was very costly, and that’s why all employees are most likely the winners. The future will show that the negotiated clause about profit sharing is loaded with power for the employees. Indeed there cannot be a profit sharing agreement for employees without granting extensive rights to their representatives to look into who is cooking the books, and whether the corporate and employees’ interests are aligned and safeguarded in corporate decisions. Congratulations to the new partners at the decision table.

LCGB took a hard line, and had initiated a strike of sorts, that left aircraft grounded, about the “call-in sick” issue. But could LCGB even afford a strike? Whereas the union representing mostly pilots became engaged in a rhetoric spinning the willingness to strike, the company threatened with claiming damages of Euros 3 million for the harm made to the company by the earlier strike. And the union was happy to catch a way out of the cul de sac.

LCGB’s action was less about CWA than about the security issues they claim management ignored. Indeed many pilots have that concern, and it is amazing why management would take the risk to treat the security questions with benign neglect. That safety argument would have had a lot of leverage, unless you bring it up with no deep conviction. On the CWA side, insiders know that management treated itself well, as it appears that over the last two years their compensation went up by about 30% each year, with top compensations close or beyond Euros 1 million a year. That argument would have had some leverage too in the CWA domain. Yet LCGB blinked, leaving the battleground with nothing else than a vague settlement a promise by Management to drop claims for damages in a lawsuit that wasn’t even yet brought. And yes, there will be a Commission to deal with the unresolved questions. You cannot talk this into a success. CV Management clearly won this one. The underlying lack of unity among unions is of course the competition for dominance. It will really be played out at the next elections when employees choose their new union leaders.

In the meantime the employees are winners with the OGBL agreement: the profit sharing and the right to be informed that comes with it goes beyond what people expect it to be today. It is a milestone. The ones hurt however are those pilots who now are on the black list of what the company may call illegal strikers. Are they left out there in the rain? Unless LCGB had the wisdom to demand that any mention of their participation in the “strike” be expunged from their personal files.

Now we have Cargolux flying under smooth skies for a while. Unless Minister Bausch, who is in China talking about Cargolux and Cargolux China messes something up. Though he cannot really talk in the name of Cargolux, because as you know, he couldn’t do so before either, Cargolux is a “private company”.