Business

HONG KONG — The Hong Kong Monetary Authority (HKMA) fined the local arm of Singapore's DBS Bank HK$10 million ($1.3 million) for breaches of its anti-money laundering law, the banking regulator said on Friday.

The HKMA said the bank failed to "continuously monitor business relationships and conduct enhanced due diligence in high risk situations" over a seven-year period.

The "control deficiencies" found during a HKMA investigation also included failure to keep records for some of its customers stipulated by the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, the regulator said in a statement.

Parent group DBS, Southeast Asia's largest bank, was among lenders caught up in a billion-dollar money-laundering scandal in Singapore last year.

Banks are required to "put in place effective customer due diligence measures to combat money laundering and terrorist fiancing" and those measures should be regularly reviewed, said Raymond Chan, an executive director at HKMA. 

DBS Hong Kong said in a statement that it accepted the HKMA's decision and takes anti-money laundering obligations seriously.

"The issues at hand were sporadic and historical in nature, having occurred between April 2012 and April 2019," it said. 

DBS Hong Kong has been working with regulators to improve anti-money laundering controls and has implemented policies that "materially improved our capabilities to detect and mitigate money laundering risks", the bank said.

BANGKOK — China's electric vehi¬cle giant BYD opened a factory in Thailand on Thursday, continuing its international expansion despite a market slow¬down and hours before the European Union was due to impose swinge¬ing tariffs on Chinese EV firms. 

The plant in Rayong, an industrial area south¬east of Bangkok, will be able to build up to 150,000 vehicles a year, according to the compa¬ny, which dominates its domestic market. 

Wang Chuanfu, Shen¬zhen-based BYD's chief executive, said produc¬tion would initially fo¬cus on full electric vehi¬cles and later expand to include plug-in hybrids, which combine a con¬ventional engine with an electric motor. 

"BYD Thailand plant has an annual capacity of 150,000 vehicles, in¬cluding the four major processes of vehicle and parts production, and will create about 10,000 jobs," Wang said at an opening ceremony. 

The move comes as Thailand seeks to shift its longstanding auto sector away from con¬ventional vehicles and towards EV production. 

BYD overtook Elon Musk's Tesla in the fourth quarter of 2023 to become the world's top seller of electric vehicles. 

Tesla reclaimed top spot in the first quarter of this year, but BYD is bullish about its ex¬pansion, insisting last month it would press ahead with a second fac¬tory in the EU. 

The Chinese automak¬er recorded a record an¬nual profit of 30 billion yuan ($4.1 billion) last year, but in April report¬ed lower than expected revenue for the first quarter of 2024. 

BYD has faced a bit¬ter price war in China, where a staggering 129 EV brands are slugging it out — with only 20 achieving a domestic market share of one per cent or more, according to Bloomberg. 

China has led the global shift to electric vehicles, with almost one in three cars on its roads set to be electric by 2030, according to the International Energy Agency's annual Global EV Outlook. 

But European regu¬lators have raised con¬cerns about what they say is "overcapacity" created by excessive state subsidies. 

Seeking to protect Eu¬ropean manufacturers from cheaper Chinese imports, Brussels has proposed a provisional hike of tariffs on Chi¬nese manufacturers: 17.4 per cent for BYD, 20 per cent for Geely and 38.1 per cent for SAIC — in addition to the cur¬rent 10 per cent import duty. 

EU and Chinese trade chiefs held talks last weekend in a bid to avert a bitter trade war, but the tariffs are set to come into force on Thursday. 

But while they are high, the EU tariffs are significantly lower than the 100 per cent rate the United States imposed from last month on Chi¬nese electric cars.

BRUSSELS, Belgium — The EU on Wednesday announced its conditional approval for German airline Lufthansa's proposed stake in ITA Airways, a deal that Italy called a "big European success".

Lufthansa, one of Europe's largest carriers, last year agreed to pay 325 million euros ($350 million) for a 41 per cent stake in ITA, with the Italian finance ministry also contributing 250 million euros as part of the capital increase.

The German airline's presence in Italy will be bolstered by the deal and said it would give more options for travel to Africa, South America and the Middle East.

But it has faced a turbulent process to get regulators' approval after the European Commission opened an in-depth probe in January, fearing it could hurt competition.

The commission, the EU's antitrust regulator, has now given the green light after Lufthansa and the Italian government offered a package of commitments to assuage those fears.

"Despite the comprehensive and far-reaching concessions, the investment in ITA Airways strengthens the Lufthansa Group's position in global competition," Lufthansa CEO Carsten Spohr said in a statement.

"This positive conclusion is truly a success," Italian Economy Minister Giancarlo Giorgetti told a press conference in Rome.

"It has been a complicated, troubled, difficult path, but... it is a big Italian success, it is a big German success, it is a big European success," Giorgetti said.

But European consumers group BEUC raised concerns over the limited information about commitments offered by the players involved.

"The current lack of clarity leads us to fear that consumers could pay the price for this merger in terms of higher fares, less choice of routes and degraded services," said Agustin Reyna, chief at BEUC, which represents consumers in 31 countries.

Concessions for rivals 

The deal provided Lufthansa various options to increase its stake in ITA Airways — the successor to state-owned Alitalia — or acquire it outright at a later date.

The offered remedies that helped seal the deal include making it possible for one or two rival airlines to launch non-stop flights between Rome and Milan and central Europe, the commission said.

"These commitments fully address the competition concerns identified by the commission," it said. "The decision is conditional upon full compliance with the commitments."

Take-off and landing slots at Milan's Linate airport will also be transferred to competing airlines for short-haul routes.

Other commitments to fulfil include entering into agreements with rivals "to improve their competitiveness on the long-haul routes of concern", between Italy and the United States and Canada.

This could include slot swaps at airports or interlining agreements, which means airlines coordinate with each other on certain aspects of travel, such as ticketing.

"This will lead to increased frequencies of nonstop flights and/or improved connections for one-stop flights on each of the routes," the commission said.

'Lack of clarity' 

ITA Airways was created from the ashes of Alitalia, which was placed under public administration in 2017.

Alitalia had accumulated losses of 11.4 billion euros between 2000 and 2020. It was eventually shut down in October 2021 before a rebirth as ITA.

The EU wanted to make sure the Lufthansa deal did not lead to higher prices for consumers.

Brussels had been concerned that on a number of short-haul routes between Italy and central Europe as well as long-haul routes between the United States and Canada there would be limited competition, leading to a reduction in quality for passengers.

"At a time when consumers are facing increasingly higher prices for air travel, it is very important to preserve competition in the sector," said the EU's competition chief, Margrethe Vestager.

The remedies would ensure "a sufficient level of competitive pressure remains on all relevant routes", she added.

NEW YORK — Electric carmaker Tesla saw its shares surge on Tuesday after reporting auto deliveries that fell but topped analyst estimates, while General Motors logged modestly higher second-quarter US sales.

Tesla said it delivered around 444,000 vehicles worldwide in the April-June period, exceeding consensus estimates compiled by FactSet and sending its share price up around 9 per cent.

But deliveries were still 4.7 per cent down from a year ago.

Of the total figure, 422,405 involved Model 3 and Model Y vehicles. Tesla gave no detailed breakdown of the other autos delivered.

During the same period it produced 410,831 vehicles, including 386,576 Model 3 and Model Y autos.

"This was a huge comeback performance from Tesla and [Elon] Musk with the Street expecting a clear miss this quarter with EV demand still choppy globally," said Wedbush analysts in a note.

They expect "the worst is in the rear-view mirror for Tesla", helped by a "mini rebound" in China along with price stabilisation.

Tesla's robotaxi, to be unveiled on August 8, should also launch a new chapter for the automaker, the analysts noted.

Jessica Caldwell, head of insights at Edmunds, offered a more muted outlook on Musk's company.

"We've seen the automaker exhaust its bag of tricks by lowering prices and increasing incentives to spur demand without much success in the US market," she said.

She added that "times are tough for Tesla", noting that its sales techniques could have "long-term negative consequences".

Volatility 

Cox Automotive warned that volatility is expected in the second half of the year for the industry.

But vehicle supply is set to favor consumers, exerting "downward pressure on prices".

Charlie Chesbrough, senior economist at Cox Automotive, expects slower growth in the second half of 2024.

"Adding to the uncertainty in the market, many consumers likely believe things will be better, or at least more certain, after the November election, which adds to the hesitancy in buying," Chesbrough said.

GM said on Tuesday that it delivered 696,086 units in the United States, up 0.6 per cent on-year.

This was a markedly slower pace than last year's 19 per cent jump in the second quarter. However, GM said total sales were the best since the fourth quarter of 2020.

GM reported a 17 per cent rise in retail EV registrations, above the industry's 10 per cent gain.

Meanwhile, Toyota reported second quarter US sales of 621,549 vehicles, up 9.2 per cent. This includes 247,347 units of electrified vehicle sales.

Among start-ups, Rivian said on Tuesday it produced 9,612 vehicles and delivered 13,790 in the second quarter — levels in line with its forecasts.

The company saw a stock market boom after German automaker Volkswagen said in June that it was investing $5 billion — including $1 billion directly in Rivian this year and to create a joint venture producing technology used by both automakers.

Nikola, a start-up manufacturer of electric trucks, said it sold 72 hydrogen fuel cell trucks in the quarter, exceeding its guidance of 60.

AMMAN — The World Bank Group (WB) Monday approved two new programmes worth $700 million aimed to strengthen human capital in Jordan through targeted investments in the fields of education, health and social aid, as well as enhance Jordanian families' capacity to withstand shocks, Jordan News Agency, Petra, reported. 

The Human Capital Programme in Jordan, and the Modernising Education, Skills and Administrative Reforms (MASAR) Programme aims to advance sustainable and inclusive growth, enhance the quality of education, and provide youth with skills necessary for the future labour market, according to a statement by the WB on its website.

The WB noted that over the past years, Jordan’s capacity to withstand the increasing volatility in the region has been commendable and appreciated, but external shocks have affected economic growth and job creation, and limited the ability to address pressing social and economic challenges.

Given the fact that more than 66 per cent of Jordan's population is under the age of 30, the Kingdom has a unique opportunity to benefit from the demographic dividend to achieve development and growth, but there are still gaps in access to education, especially in the early childhood stage, and it is necessary to increase investments to improve the quality of education and promote and expand technical and vocational education and training, in order to enhance employment opportunities in the future, the statement said.

The high prevalence of risk factors, such as smoking and the increasing burden of non-communicable diseases, lead to increased morbidity, decreased productivity, and decreased participation in the labour market, it pointed out.

Despite the remarkable progress made by the Jordanian government in expanding the scope of social protection programmes across the Kingdom, especially government-supported programmes, such as the "Cash Transfer" programme, there are still wide gaps in the coverage of the social protection system, as one-third of Jordanian workers are not covered by the social security umbrella so far.

World Bank Country Director for the Middle East Department Jean-Christophe Carret stressed that for Jordan to achieve development ambitions, it must harness its greatest components, the human capital, especially youth and women, and that through increasing investment in education, health and social protection, the Kingdom can enhance the capacity of its economy to withstand shocks and include everyone. It also can empower young people, especially women and the most needy groups, to fully participate in advancing growth and development at the Kingdom level and benefit from them, he added.

The $300 million human capital programme in Jordan aims to support the governance and effectiveness of social sectors, to ensure better and more sustainable results for all Jordanians, and enhance resilience, including protecting families from the negative impact of climate change, the statement said.

This programme supports the delivery of results-oriented and cost-effective services, and focuses on continuing to strengthen governance and accountability in public spending across key sectors, namely: Education (the most important sector for providing Jordanian youth with the skills needed to achieve economic growth), and health (the sector responsible for a large proportion of arrears despite regular injections of funds), and social aid (as the cash transfer programme is among the most advanced and effective in reducing inequality and poverty rates).

The MASAR Programme of $400 million, including a $7 million grant from the "Global Concessional Financing Mechanism", aims to provide Jordanian children and youth with appropriate skills for the labour market and the ongoing economic transformation across the Kingdom.

The programme focuses on 3 main areas: Improve the transition from home to school, increase access to basic education, and enhance the transition from school to work, expand access to education and vocational and technical training that meets the needs of the labour market, as well as improve the efficiency of the education system and human resources management.

The MASAR programme includes a technical aid and capacity building component to support the government in its implementation, as well as the implementation of vital reforms, the statement added.

By 2029, the MASAR programme is expected to achieve major accomplishments, including enrolling an additional 25,000 students in the second grade of kindergarten, ensuring that 4,200 kindergarten school classrooms meet minimum quality standards, and enrolling 150,000 students in grades 1 to 3 In targeted programmes to improve basic skills, the statement said.

The MASAR programme also aims to graduate 50,000 students from accredited technical and vocational education and training programmes in priority sectors, and ensure that 70 per cent of teachers and school principals are appointed according to the civil service system through a new merit-based mechanism. The programme will also benefit refugees, and will contribute to the Jordanian response plan for the Syrian crisis 2024-2026, according to the World Bank statement.

The Human Capital and MASAR programmes in Jordan are fully consistent with the Kingdom’s reform priorities, as stated in the Economic Modernisation Vision and the Public Sector Modernisation Roadmap for the years 2023-2025, and give priority to human capital, in addition to supporting the implementation of the "Smart Jordan" programme, a very ambitious programmer, it said.

The MASAR programme is also consistent with the ongoing support provided by the World Bank to reform the education sector and the public sector in Jordan. The programme builds on previous achievements and aims to establish a more efficient, comprehensive and responsive educational system, it said.

BRUSSELS, Belgium — The EU on Friday demanded wildly popular shopping platforms Shein and Temu explain what action they are taking to protect consumers, including children.

The query was made under the EU's breakthrough law known as the Digital Services Act (DSA) that forces platforms to do more to tackle the sale of illegal and harmful goods.

The European Commission said it wants to know what action the Chinese-founded platforms have taken to make sure users can notify them about illegal products.

It also wants to know how Shein and Temu are complying with rules regarding online interfaces to avoid "dark patterns", the practice of tricking users into making unwanted purchases or opting-in to certain settings without their knowledge.

The commission added it wants more information about how they are guaranteeing the transparency of their recommender systems — algorithms used by platforms to push more personalised content — and the ease with which sellers can be traced.

Both companies must provide the information by July 12.

The commission said its request for information was also based on a complaint submitted by consumer organisations.

In May, Europe's BEUC umbrella consumer rights group filed a complaint against Temu with the European Commission, accusing the app of using "manipulative techniques".

Temu at the time said it was committed to complying with the rules.

Both platforms have a sizeable European user base.

Shein, a Chinese-founded company which is headquartered in Singapore, has said it has around 108 million monthly active users in the 27-nation EU.

Temu only arrived in Europe last year and has said it has on average around 75 million monthly active users in the bloc.

Shein and Temu also recently joined fellow marketplaces AliExpress, Amazon and Zalando on a list of 24 "very large online platforms" facing stricter safety rules under the DSA, which have more than 45 million monthly active users in the European Union.

PARIS — Global anti-money laundering watchdog the Financial Action Task Force (FATF) said recently it had added Monaco to a "grey list" of countries subject to increased monitoring.

The action comes despite Monaco having already taken a series of actions after being singled out by the Council of Europe's anti-money laundering body following a series of unverified claims against figures close to Prince Albert II.

The FATF, a Paris-based organisation which monitors efforts by more than 200 countries and jurisdictions to prevent money laundering and the financing of terrorism, added Monaco and Venezuela its grey list at a plenary meeting held in Singapore.

Grey list nations are considered to have "strategic deficiencies" in countering money laundering and terrorist financing, while however cooperating with the FATF to correct the problems.

Long known as a playground for the rich and famous, Monaco attracts moneyed residents due to an extremely favourable tax regime which include an absence of income and wealth taxes.

"Despite significant progress achieved since 2022, Monaco needs to address strategic deficiencies," said FATF President Raja Kumar.

Monaco's government said it is committed to getting off the grey list.

"The principality confirms its determination to implement the latest FATF recommendations set out in the declaration, in accordance with the planned deadlines," the government of the Mediterranean tax haven said.

The FATF found that Monaco had not taken enough efforts to stop laundering money from fraud committed abroad or moved aggressively enough to seize criminal assets.

It also judged money-laundering penalties to be insufficient and investigators lacked sufficient resources.

In January 2023 the Council of Europe's anti-money laundering body Moneyval urged Monaco to intensify its efforts in the investigation and prosecution of money laundering. It has since adopted nine laws to toughen its rules and boost its anti-money laundering body, the AMSF.

Local sources have said it has been difficult to apply the measures immediately due to a lack of qualified staff.

A 2023 census put the number of Monegasques at 9,720, which means that Monaco often needs to rely on foreign experts, which is not in conformity with FATF rules.

Monaco was briefly on a OECD blacklist of financial centres in 2009, which prompted it to undertake a series of transparency measures and put into place cooperation agreements to help crack down on tax evasion.

Monaco has been shaken since the end of 2021 by anonymous denunciations orchestrated by a website "Les Dossiers du Rocher" ("The Rock Files").

The site accused several figures close to Prince Albert of being in cahoots in a money laundering scheme based on corruption in property deals, and forced the ouster in 2023 of crown assets chief administrator Claude Palmero.

Turkey removed from grey list

The FATF on Friday also removed Jamaica and Turkey from the grey list after they eliminated the identified deficiencies in their efforts to prevent money laundering and the financing of terrorism.

"Thanks to the good measures we've adopted, Turkey has been removed from the grey list," the economy ministry said following the decision.

FATF had placed Turkey on the list in October 2021.

A total of 21 nations are on the grey list, including Mali, Vietnam and Yemen.

The FATF also has a "black list" of nations which are considered high-risk jurisdictions.

The body urged countries to apply countermeasures against Iran and North Korea and warned about the latter's "illicit activities related to the proliferation of weapons of mass destruction and its financing".

It urged countries to end all business with North Korean banks and limit business with Pyongyang entities.

The FATF also urged countries to apply countermeasures to Iran, which it noted had not ratified the Palermo and Terrorist Financing Conventions.