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After Syria fall-out, Hamas ties with Iran restored: Hamas chief

Hamas Chief Ismail Haniyeh (R) and Hamas Gaza leader Yehya Al-Sinwar (L) attend a news conference as the wife of slain senior Hamas militant Mazen Fuqaha gestures, in Gaza City May 11, 2017.

By Nidal al-Mughrabi

GAZA (Reuters) – Hamas and Iran have patched up relations, the Palestinian militant group’s new leader in Gaza said on Monday, and Tehran is again its biggest backer after years of tension over the civil war in Syria.

“Relations with Iran are excellent and Iran is the largest supporter of the Izz el-Deen al-Qassam Brigades with money and arms,” Yehya al-Sinwar, referring to Hamas’s armed wing, told reporters.

Neither Hamas nor Iran have disclosed the full scale of Tehran’s backing. But regional diplomats have said Iran’s financial aid for the Islamist movement was dramatically reduced in recent years and directed to the Qassam Brigades rather than to Hamas’s political institutions.

Hamas angered Iran by refusing to support Iran’s ally Syrian President Bashar al-Assad in the six-year-old civil war.

“The relationship today is developing and returning to what it was in the old days,” Sinwar, who was elected in February, said in his first briefing session with reporters.

“This will be reflected in the resistance (against Israel) and in (Hamas’s) agenda to achieve the liberation,” he said.

Hamas seeks Israel’s destruction. It has fought three wars with Israel since seizing the Gaza Strip from forces loyal to Western-backed Palestinian President Mahmoud Abbas in 2007.

Sinwar, a former Hamas security chief who had spent 20 years in Israeli jails, said the group is always preparing for a possible war with Israel. But he said such a conflict was not in Hamas’s strategic interests at the moment.

“We are not interested in a war, we do not want war and we want to push it backward as much as we could so that our people will relax and take their breath and in the same time we are building our power,” he said. “We do not fear war and we are fully ready for it.”

Hamas and Abbas’s Palestinian Authority (PA), which exercises limited self-rule in the Israeli-occupied West Bank, are locked in political dispute over the issue of Palestinian unity.

Abbas’s slashing of PA funding for Israeli-supplied electricity to Gaza has led to prolonged daily blackouts in the coastal enclave.

Sinwar, in his remarks, invited Abbas’s Fatah movement for talks on forming a new national unity government to administer both the Gaza Strip and the West Bank.

There was no immediate response from PA officials. Abbas has called on Hamas to first relinqish control of Gaza before he removes economic sanctions and to prepare for the formation of a new unity government that will be tasked with holding presidential and parliament elections.

 

 

 

 

(Editing by Jeffrey Heller and Richard Balmforth)

 

North Korea hacking increasingly focused on making money more than espionage: South Korea study

A projection of cyber code on a hooded man is pictured in this illustration picture taken on May 13, 2017. REUTERS/Kacper Pempel/Illustration

By Christine Kim

SEOUL (Reuters) – North Korea is behind an increasingly orchestrated effort at hacking into computers of financial institutions in South Korea and around the world to steal cash for the impoverished country, a South Korean state-backed agency said in a report.

In the past, suspected hacking attempts by North Korea appeared intended to cause social disruption or steal classified military or government data, but the focus seems to have shifted in recent years to raising foreign currency, the South’s Financial Security Institute (FSI) said.

The isolated regime is suspected to be behind a hacking group called Lazarus, which global cybersecurity firms have linked to last year’s $81 million cyber heist at the Bangladesh central bank and the 2014 attack on Sony’s Hollywood studio.

The U.S. government has blamed North Korea for the Sony hack and some U.S. officials have said prosecutors are building a case against Pyongyang in the Bangladesh Bank theft.

In April, Russian cybersecurity firm Kaspersky Lab also identified a hacking group called Bluenoroff, a spin off of Lazarus, as focused on attacking mostly foreign financial institutions.

The new report, which analyzed suspected cyber attacks between 2015 and 2017 on South Korean government and commercial institutions, identified another Lazarus spinoff named Andariel.

“Bluenoroff and Andariel share their common root, but they have different targets and motives,” the report said. “Andariel focuses on attacking South Korean businesses and government agencies using methods tailored for the country.”

Pyongyang has been stepping up its online hacking capabilities as one way of earning hard currency under the chokehold of international sanctions imposed to stop the development of its nuclear weapons program.

Cyber security researchers have also said they have found technical evidence that could link North Korea with the global WannaCry “ransomware” cyber attack that infected more than 300,000 computers in 150 countries in May.

“We’ve seen an increasing trend of North Korea using its cyber espionage capabilities for financial gain. With the pressure from sanctions and the price growth in cryptocurrencies like Bitcoin and Ethereum – these exchanges likely present an attractive target,” said Luke McNamara, senior analyst at FireEye, a cybersecurity company.

North Korea has routinely denied involvement in cyber attacks against other countries. The North Korean mission to the United Nations was not immediately available for comment.

ATM, ONLINE POKER

The report said the North Korean hacking group Andariel has been spotted attempting to steal bank card information by hacking into automated teller machines, and then using it to withdraw cash or sell the bank information on the black market. It also created malware to hack into online poker and other gambling sites and steal cash.

“South Korea prefers to use local ATM vendors and these attackers managed to analyze and compromise SK ATMs from at least two vendors earlier this year,” said Vitaly Kamluk, director of the APAC research center at Kaspersky.

“We believe this subgroup (Andariel) has been active since at least May 2016.”

The latest report lined up eight different hacking instances spotted within the South in the last few years, which North Korea was suspected to be behind, by tracking down the same code patterns within the malware used for the attacks.

One case spotted last September was an attack on the personal computer of South Korea’s defense minister as well as the ministry’s intranet to extract military operations intelligence.

North Korean hackers used IP addresses in Shenyang, China to access the defense ministry’s server, the report said.

Established in 2015, the FSI was launched by the South Korean government in order to boost information management and protection in the country’s financial sector following attacks on major South Korean banks in previous years.

The report said some of the content has not been proven fully and is not an official view of the government.

(Additional reporting by Jeremy Wagstaff in SINGAPORE; Editing by Soyoung Kim and Michael Perry)

Seattle employers cut hours after latest minimum wage rise, study finds

FILE PHOTO: Protest signs are pictured in SeaTac, Washington just before a march from SeaTac to Seattle aimed at the fast food industry and raising the federal minimum wage and Seattle's minimum wage to $15 an hour December 5, 2013. REUTERS/David Ryder/File Photo

By Alex Dobuzinskis

(Reuters) – A Seattle law that requires many businesses to pay a minimum wage of at least $13 an hour has left low-wage workers with less money in their pockets because some employers cut working hours, a study released on Monday said.

Low-wage workers on average now clock 9 percent fewer hours and earn $125 less each month than before the Pacific Northwest city set one of the highest minimum wages in the nation, the University of Washington research paper said.

Even so, overall employment at city restaurants, where a large percentage of low-wage earners work, held steady.

Seattle, which has a booming economy and a strong technology sector, is midway through an initiative to increase its minimum wage for all employers to $15 an hour. The city is at the forefront of a nationwide push by Democratic elected officials and organized labor in targeting $15 for all workers.

“Most people will tell you there is a level of minimum wage that is too high,” Jacob Vigdor, a professor of public policy at the University of Washington and director of the team studying the increase, said in a phone interview. “There is a sense that as you raise it too high, then you get to a point where employers will really start cutting back.”

Many companies reached that point after Seattle, a city of nearly 700,000 residents, raised the minimum to $13 an hour for large employers beginning Jan. 1, 2016, according to the study.

Seattle’s labor market held steady when the minimum rose to $11 from $9.47 on April 1, 2015, the university found in a study released last year.

“Raising the minimum wage helps ensure more people who live and work in Seattle can share in our city’s success, and helps fight income inequality,” Seattle Mayor Ed Murray said in a statement in response to the study, which the city commissioned.

The federal minimum wage has stayed at $7.25 an hour since 2009, and the Republican-controlled U.S. Congress has opposed an increase.

Critics of minimum wage increases say they lead to layoffs and force some companies out of business.

The latest research from the University of Washington found no major reduction in hours or jobs at Seattle restaurants, in keeping with a finding in a study conducted by University of California, Berkeley, that was released last week.

Lawmakers in California, the nation’s most populous state, voted last year to increase the minimum wage to $15 an hour by 2022. Elected officials in several states, including New York and Oregon, and large cities such as Chicago have in the last two years approved their own minimum pay hikes.

(Reporting by Alex Dobuzinskis in Los Angeles; Editing by Leslie Adler)

Trump states Saudis not paying fair share for U.S. defense

U.S. President Donald Trump and Saudi Deputy Crown Prince and Minister of Defense Mohammed bin Salman enter the State Dining Room of the White House in Washington, U.S., March 14, 2017. REUTERS/Kevin Lamarque

By Stephen J. Adler, Jeff Mason and Steve Holland

WASHINGTON (Reuters) – President Donald Trump complained on Thursday that U.S. ally Saudi Arabia was not treating the United States fairly and Washington was losing a “tremendous amount of money” defending the kingdom.

In an interview with Reuters, Trump confirmed his administration was in talks about possible visits to Saudi Arabia and Israel in the second half of May. He is due to make his first trip abroad as president for a May 25 NATO summit in Brussels and could add other stops.

“Frankly, Saudi Arabia has not treated us fairly, because we are losing a tremendous amount of money in defending Saudi Arabia,” he said.

Trump’s criticism of Riyadh was a return to his 2016 election campaign rhetoric when he accused the kingdom of not pulling its weight in paying for the U.S. security umbrella.

“Nobody’s going to mess with Saudi Arabia because we’re watching them,” Trump told a campaign rally in Wisconsin a year ago. “They’re not paying us a fair price. We’re losing our shirt.”

The United States is the main supplier for most Saudi military needs, from F-15 fighters to control and command systems worth tens of billions of dollars in recent years, while American contractors win major energy deals.

The world’s top oil exporter and its biggest consumer have enjoyed close economic ties for decades, with U.S. firms building much of the infrastructure of the modern Saudi state after its oil boom in the 1970s.

Saudi officials could not immediately be reached for comment on Trump’s latest comments.

But Foreign Minister Adel al-Jubeir rejected similar comments from Trump during his election campaign, telling CNN during a visit to Washington last July that the Islamic kingdom “carries its own weight” as an ally.

Saudi Arabia’s powerful deputy crown prince Mohammed bin Salman met with Trump last month in a meeting that was hailed by a senior Saudi adviser as a “historical turning point” in relations. The talks appeared to signal a meeting of minds on many issues, including their shared view that Iran posed a regional security threat.

Riyadh and other Gulf allies see in Trump a strong president who will shore up Washington’s role as their main strategic partner and help contain Riyadh’s adversary Iran in a region central to U.S. security and energy interests, regional analysts said.

ISLAMIC STATE “HUMILIATION”

Asked about the fight against Islamic State, which Saudi Arabia and other U.S. allies are confronting as a coalition, Trump said the militant group had to be defeated.

“I have to say, there is an end. And it has to be humiliation,” Trump said, when asked about what the endgame was for defeating Islamist violent extremism.

“There is an end. Otherwise it’s really tough. But there is an end,” without detailing a strategy.

A visit to Israel would reciprocate a White House visit in February by Israeli Prime Minister Benjamin Netanyahu. Palestinian President Mahmoud Abbas is due to meet Trump next Wednesday in Washington.

Trump has set a more positive tone with Israel than his Democratic predecessor, Barack Obama, who often clashed with the right-wing Israeli leader, and has raised concerns among Palestinians that their leaders may not get equal treatment.

Trump has also asked Israel to put unspecified limits on its building of Jewish settlements on land the Palestinians want for a state, and has promised to seek a Middle East peace deal that eluded his predecessors. However, he has offered no new diplomatic prescriptions.

“I want to see peace with Israel and the Palestinians,” he said. “There is no reason there’s not peace between Israel and the Palestinians – none whatsoever.”

Trump brushed aside a question of whether he might use a possible trip to Israel to declare U.S. recognition of the entire city of Jerusalem as Israel’s capital, a reversal of longstanding U.S. foreign policy likely to draw international condemnation.

“Ask me in a month on that,” he said, without elaborating.

If Trump ties an Israel visit to next month’s Brussels trip, it would be around the time Israelis are celebrating the 50th anniversary of the reunification of Jerusalem, when Israel captured Arab East Jerusalem in the 1967 Middle East war.

Successive U.S. administrations as well as the international community have not recognized Israel’s annexation of the eastern part of the city, and the future status of Jerusalem remains one of the thorniest issues in the Israeli-Palestinian dispute.

Israel claims all of Jerusalem, which contains sites sacred to the Jewish, Muslim and Christian faiths, as its capital. Palestinians want East Jerusalem as the capital of a future state of their own.

(Additional reporting by David Brunnstrom; Writing by Yara Bayoumy and Matt Spetalnick; Editing by Howard Goller)

Frugal U.S. consumers seen holding back first-quarter GDP

People shop at The Grove mall in Los Angeles November 26, 2013. REUTERS/Lucy Nicholson

By Lucia Mutikani

WASHINGTON (Reuters) – The U.S. economy likely hit a soft patch in the first quarter as an unseasonably warm winter and rising inflation weighed on consumer spending, in a potential setback to President Donald Trump’s promise to boost growth.

Reduced business investment in inventories and government spending cuts also crimped gross domestic product growth. A Reuters survey of economists conducted last week forecast GDP rising at a 1.2 percent annual rate, but many economists lowered their estimates after the government on Thursday released advance reports on the goods trade deficit and inventories in March.

The Atlanta Federal Reserve is forecasting the economy growing at only a 0.2 percent rate in the first quarter, which would be the weakest performance in three years.

The economy grew at a 2.1 percent pace in the fourth quarter. The government will publish its advance first-quarter GDP estimate on Friday at 8:30 a.m. The expected sluggish first-quarter growth pace, however, is not a true picture of the economy’s health.

The labor market is near full employment and consumer confidence is near multi-year highs, suggesting that the mostly weather-induced slowdown in consumer spending is probably temporary. First-quarter GDP tends to underperform because of difficulties with the calculation of data that the government has acknowledged and is working to rectify.

“The weakness is not a reflection of the underlying health of the economy, part of it is residual seasonality,” said Ryan Sweet, a senior economist at Moody’s Analytics in West Chester, Pennsylvania. “It has become more understood over the past few years, that’s why people often discount first-quarter GDP.”

Even without the seasonal quirk and temporary restraints, economists say it would be difficult for Trump to fulfill his pledge to raise annual GDP growth to 4 percent, without increases in productivity.

Trump is targeting infrastructure spending, tax cuts and deregulation to achieve his goal of faster economic growth.

On Wednesday, the Trump administration proposed a tax plan that includes cutting the corporate income tax rate to 15 percent from 35 percent, but offered no details.

ANEMIC CONSUMER SPENDING

Economists estimate that growth in consumer spending, which accounts for more than two-thirds of U.S. economic activity, braked to below a 1.0 percent rate in the first quarter. That would be the slowest pace in nearly four years and follows the fourth quarter’s robust 3.5 percent growth rate.

The expected weakness in consumer spending is blamed on a mild winter, which undermined demand for heating and utilities production. Higher inflation, which saw the consumer price index averaging 2.5 percent in the first quarter, also hurt spending.

Government delays issuing income tax refunds to combat fraud also weighed on consumer spending. Economists said Federal Reserve officials were likely to view both the anemic consumer spending and GDP growth as temporary when they meet next week. The Fed is not expected to raise interest rates.

“The good news is that the Fed in recent years has distanced itself from the GDP numbers,” said Lou Crandall, chief economist at Wrightson ICAP in Jersey City, New Jersey. “A weak first-quarter GDP print should not affect the policy debate.”

After contributing to GDP growth for two straight quarters, inventory investment was likely a drag in the first quarter. JPMorgan is forecasting inventories chopping off one percentage point from GDP growth. Trade was likely neutral after being a huge drag in the fourth quarter.

But some good news is expected. Business investment likely rose further, with spending on equipment seen accelerating thanks to rising gas and oil well drilling as oil prices continue their recovery from multi-year lows.

Investment in home building is also expected to have gained momentum in the first quarter.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

China’s choices narrowing as it burns through FX reserves to support yuan

100 yuan and 100 dollars

By Nichola Saminather

SINGAPORE (Reuters) – As China’s foreign exchange reserves threaten to tumble below the critical $3 trillion mark, the biggest fear for investors is not whether Beijing can continue to defend the yuan but whether it will set off a vicious cycle of more outflows and currency depreciation.

Data this week is expected to show China’s forex reserves precariously perched just above $3 trillion at end-December, the lowest level since February 2011, according to a Reuters poll.

While the world’s second-largest economy still has the largest stash of forex reserves by far, it has been churning through them rapidly since August 2015, when it stunned global investors by devaluing the yuan <CNY=CFXS> and moving to what it promised would be a slightly freer and more transparent currency regime.

Since then, authorities have repeatedly intervened to support the yuan when it weakened too sharply, burning through half a trillion dollars of reserves and prompting them to sell some of their massive holdings of U.S. government bonds.

They also have put a tightening regulatory chokehold on individuals and businesses who want to move money out of the country, while denying they were imposing new capital controls.

Concerns over the speed with which China is depleting its ammunition are swirling, with some analysts estimating it needs to retain a minimum of $2.6 trillion to $2.8 trillion under the International Monetary Fund’s adequacy measures.

“There has been quite a bit of anxiety and speculation because the way many people in China talk about it is ‘will the government defend the 7-per-dollar level or the 3 trillion dollars’,” said Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong.

China stepped into both its onshore and offshore yuan markets this week to shore up the yuan as it neared the 7 level, sparking speculation that it wants to regain a firm grip ahead of the Jan. 20 inauguration of U.S. President-elect Donald Trump, who has threatened to brand Beijing a currency manipulator.

But if forex reserves continue to be depleted at a fast pace and capital flight continues, some strategists believe China’s leaders may have little choice but to sanction another big “one-off” devaluation.

That could set off competitive currency devaluations by other struggling emerging economies, even as the world braces for greater trade protectionism under Trump.

MORE CONTROLS

To slow the yuan’s decline without depleting reserves at an ever faster pace, analysts and economists expect authorities to turn to even tighter regulatory measures, including more scrutiny of outbound investments, overseas lending and export revenues, and closing loopholes in existing capital controls.

But as fast as authorities jump to control one exit ramp, others may open up unless Beijing can reverse the market’s mind-set that the yuan is on a one-way depreciation path.

“It doesn’t matter if there’s actually enough reserves or not,” said Joey Chew, Asia foreign exchange strategist at HSBC, who believes China doesn’t need a buffer of more than $2 trillion.

“If people think there won’t be enough they’ll try to get out and it becomes a self-fulfilling mechanism.

“The authorities are already aware that trying to run down reserves will be counterproductive, which is why they’re relying on regulatory controls,” she added.

As recently as last week, authorities introduced requirements for financial institutions to report all single domestic and overseas cash transactions of more than 50,000 yuan ($7,212.72) from July onwards, down from 200,000 yuan previously.

The authorities also stepped up scrutiny on individual foreign currency purchases, although they kept the $50,000 annual individual quota in place.

“Previously, capital controls had been relatively loose and authorities had turned a blind eye to individual forex purchases because of abundant foreign exchange reserves,” said Jerry Hu, an economist at Shanghai Securities.

“But they are now strengthening supervision in order to change expectations.”

With regulators also pledging to increase scrutiny of major outbound deals, “it’s not impossible to see that we’ll see further moves in that area,” Kuijs said.

China could also encourage its domestic exporters to convert more of their earnings into yuan, HSBC’s Chew said.

Chew believes new capital controls are unlikely.

“There are a lot of controls already,” she said. “They were maybe not as strictly enforced, so they’ll focus on improving that. But the tweaks may not be enough. We still expect capital outflows and we still expect RMB depreciation.”

Dwyfor Evans, head of Asia-Pacific macro strategy at State Street Global Markets, also feared authorities may be limited in how they respond.

“Chinese officials have few policy options,” he said.

“If they allow faster depreciation, this will only spur pressures for greater outflows. And a one-off devaluation risks a repeat of the market turbulence evidenced twice in the past 18 months.”

(Additional reporting by Kevin Yao in BEIJING; Editing by Vidya Ranganathan and Kim Coghill)

Cyber fraudsters take money out of 20,000 Tesco Bank accounts

A Tesco supermarket is seen, in west London

By Estelle Shirbon

LONDON (Reuters) – The banking arm of Britain’s biggest retailer Tesco was scrambling on Monday to deal with an online attack over the weekend on 40,000 customers’ accounts, 20,000 of which had money removed.

The hack is the first on a British bank known to have resulted in customers losing money, adding to growing concerns about the British financial sector’s vulnerabilities to cyber attacks, which have jumped in frequency over the past two years.

Tesco Bank, which manages 136,000 current accounts, stopped all online transactions while it worked to resume normal service, although customers could still use their bank cards in shops and to withdraw money from cash machines.

“Any financial loss that results from this fraudulent activity will be borne by the bank,” Tesco Bank Chief Executive Benny Higgins told BBC radio. “Customers are not at financial risk.”

“We think it would be relatively small amounts that have come out but we’re still working on that,” he said, adding that he expected the cost of refunding customers would be “a big number but not a huge number”.

Shares in supermarket chain Tesco, which wholly owns Tesco Bank, were down 1.2 percent at 200.20 pence by 1030 GMT.

The bank is a minnow in Britain’s retail banking market, with about 2 percent of current accounts, and represents only a small part of Tesco’s overall business.

It contributed 503 million pounds ($623.4 million) to the group’s revenue of 24.4 billion pounds in the first half of its 2016-17 financial year.

But while the financial hit to the group may be limited, Tesco Bank risks serious reputational damage from an attack that affected 29 percent of its customer current accounts.

Other British banks have been targeted by cyber attacks in recent years, but the Financial Conduct Authority (FCA) which regulates the sector said it was not aware of any previous incident in which customers had lost money.

Reported attacks on financial institutions in Britain have risen from just five in 2014 to over 75 so far this year, according to FCA data, but bank executives and providers of security systems say there are many more unreported attacks.

HSBC issued a series of apologies to customers earlier this year after its UK personal banking websites were shut down by a “denial of service” attack, but no customer funds were at threat during that breach.

Cliff Moyce, global head of financial services at DataArt, a network of technology consulting and software services firms, said reduced staffing levels over the weekend were likely to have been one of the reasons for the impact of the hack.

“The clever part was doing it over the weekend when banks are typically understaffed, and will respond more slowly,” he said in a comment emailed to media.

“Automated fraud detection systems appear to have worked well, but a lack of people at desks will not have helped.”

Other well-known British brands hit by significant cyber attacks over the past year include telecoms firms TalkTalk and Vodafone, business software provider Sage and electronic goods retailer Dixons Carphone.

(Additional reporting by Michael Holden, James Davey and Huw Jones; Editing by Greg Mahlich)

Exclusive: Russia may borrow in yuan this year for first time

100 Yuan Note

By Yelena Orekhova and Andrey Ostroukh

MOSCOW (Reuters) – Russia may borrow Chinese yuan for the first time ever by the end of 2016, a Russian finance ministry official said, a step towards Moscow’s ambition of using Asian credit markets to compensate for its limited access to Western funding.

Russia needs new sources of cash as low crude oil prices lead to widening shortfalls in the budget. Its access to Western capital markets is restricted by Western sanctions imposed on it over the conflict in Ukraine.

One option the finance ministry may choose is selling treasury bonds, known as OFZs, denominated in the Chinese currency, later this year, Konstantin Vyshkovsky, head of the state debt department at the finance ministry, told Reuters.

Moscow may raise the equivalent of $1 billion in yuan through the OFZs, money that the finance ministry would convert into rubles, Vyshkovsky said.

Russia has drawn closer to China, painting it as its close partner, after Moscow’s relations with the West were soured by its annexation of Crimea from Ukraine in 2014 and its support of the conflict in Eastern Ukraine.

But Moscow’s pivot towards Asia has not gone smoothly, in part because Asian credit markets are much shallower than the Western debt markets that Russia has turned to in the past when it needed to borrow.

Russia raised $3 billion through a dollar-denominated Eurobond this year, but the issue was complicated by the fact that many major financial institutions were wary of taking part because of sanctions risk.

Under a plan set by the finance ministry, Russia will not raise any more foreign debt this year, so the yuan-denominated OFZs, which are considered domestic borrowing, would be a timely supplement for the budget.

The money raised may help avoid a greater budget deficit, which this year will exceed the ceiling of three percent of gross domestic product that had been initially set by President Vladimir Putin.

Russia’s Reserve Fund is running out and low prices for crude oil, its key export, are putting pressure on the budget. The finance ministry had said it will respond by increasing borrowing and will also try to proceed with selling state stakes in major Russia companies.

The OFZ bonds would be issued as part of additional borrowing worth 200 billion rubles ($3.21 billion), Vyshkovsky said.

The extra borrowing program for the fourth quarter was approved in September after Russia had nearly reached its full-year borrowing limit of 300 billion rubles in the domestic market in the first three quarters.

Sovereign rouble bonds enjoyed strong demand this year thanks to high yields linked to the central bank interest rates . The central bank has been reluctant to cut rates quickly, given risks that inflation won’t slow to its ambitious target an all-time low of 4 percent in 2017.

($1 = 62.2255 rubles)

(Reporting by Yelena Orekhova, writing by Andrey Ostroukh, editing by Christian Lowe, Larry King)

Baby traffickers thriving in Nigeria as recession bites

baby grasps hand

By Anamesere Igboeroteonwu and Tom Esslemont

ENUGU, Nigeria/LONDON (Thomson Reuters Foundation) – As 16-year-old Maria strained under the anguish of labor in southeastern Nigeria, a midwife repeatedly slapped her across the face – but the real ordeal began minutes after birth.

“The nurse took my child away to be washed. She never brought her back,” the teenager said, gazing down at her feet.

Maria said she learned her newborn daughter had been given up for adoption for which she received 20,000 naira ($65.79) – the same price as a 50 kilogram bag of rice.

And Maria is far from alone.

A Thomson Reuters Foundation investigative team spoke to more than 10 Nigerian women duped into giving up their newborns to strangers in houses known as “baby factories” in the past two years or offered babies whose origins were unknown.

Five women did not want to be interviewed, despite the guarantee of anonymity, fearing for their own safety with criminal gangs involved in the baby trade, while two men spoke of being paid to act as “studs” to get women pregnant.

Although statistics are hard to come by, campaigners say the sale of newborns is widespread – and they fear the illegal trade is becoming more prevalent with Nigeria heading into recession this year amid ongoing political turbulence.

“The government is too overstretched by other issues to focus on baby trafficking,” said Arinze Orakwue, head of public enlightenment at the National Agency for the Prohibition of Trafficking in Persons (NAPTIP).

Record numbers of baby factories were raided or closed down in the southeastern states of Abia, Anambra, Ebonyi, Enugu and Imo this year, NAPTIP said.

A total of 14 were discovered in the first nine months of 2016, up from six in 2015 and 10 in 2014, the data showed.

But despite the growing number of raids, the scam exploiting couples desperate for a baby and young, pregnant, single women continues with newborns sold for up to $5,000 in Africa’s most populous nation where most people live on less than $2 a day.

Cultural barriers are also a factor in the West African nation, with teenage girls fearing they will be publicly shamed by strict fathers or partners over unwanted pregnancies if they do not give up their children, experts say.

“In southeastern Nigeria a woman is deemed a failure if she fails to conceive. But it is also taboo for a teenager to fall pregnant out of wedlock,” said Orakwue.

Maria said in the home in Imo state where she gave birth pregnant teenagers were welcomed by a maternal nurse who liked to be called “mama” but went on to sell the babies they delivered.

“(After I gave birth) somebody told me that mama collected big money from people before giving them other people’s babies,” Maria told the Thomson Reuters Foundation in the grounds of a school compound in her village.

“I do not know where my baby is now,” said Maria, using a false name for her own protection.

A lot of the trade is carried out in Nigeria but authorities suspect babies are also sold to people from Europe and the United States because many foreigners continue to seek infants there despite the controversy around Nigerian adoptions.

HIDDEN PROBLEM

The U.S. Department of State alerted prospective adoptive parents to the issue of child buying from Nigeria in June 2014 after Nigerian media warned that people were posing as owners of orphanages or homes for unwed mothers to make money.

“The State Department is aware of a growing number of adoption scams,” an alert on its website read.

Over 1,600 children have been adopted from Nigeria by U.S. citizens since 1999, according to the State Department website, about a third of them aged between one and two years old.

A U.S. official said the State Department facilitates contact between foreign officials and U.S. authorities when foreign governments raise any concerns regarding the welfare of an adopted child.

“To date, we are not aware of any concerns regarding the welfare of a child adopted from Nigeria,” a State Department official told the Thomson Reuters Foundation in a statement.

In Britain a couple was found by the High Court to have “fallen under the spell” of an elaborate fraud after paying 4,500 pounds ($5,600) for herbal treatment in Nigeria that caused the woman’s stomach to swell, media reported in 2014.

The couple only realized they had been duped nine months later when presented with a baby in Nigeria that actually was not theirs, the Daily Mail newspaper reported.

Babies, whose biological parents or backgrounds are unknown, are offered to women who have not been able to conceive naturally, according to NAPTIP and interviews with three women.

The British government said it was committed to stamping out what it calls the “miracle babies” phenomenon.

“Specially-trained teams are working at the UK border to identify and safeguard babies and children who may be at risk of trafficking,” said a spokesman for the Home Office (UK interior ministry) in a statement.

Denmark suspended adoptions from Nigeria in 2014 citing concerns over forgery, corruption and lack of control by the authorities.

Apart from the illicit trade in babies, Nigeria also faces the problem of domestic and international trafficking in women and children.

Human trafficking, including selling children, is illegal in Nigeria, but almost 10 years ago a UNESCO report identified the industry as the country’s third most common crime after financial fraud and drug trafficking – and the situation appears to be getting worse, according to campaigners.

The Nigerian government has not ratified an internationally recognized set of rules known as the Hague Adoption Convention which meant the laws governing adoptions remain murky and complicated, campaigners said.

“There is corruption in the adoption process and that is the individual (Nigerian) states’ responsibility,” said NAPTIP’s Orakwue in a phone interview

“But central government should step up its funding to NAPTIP so we can increase support to victims,” Orakwue said.

HERBAL TREATMENT

Sophie, who was not able to conceive, told the Thomson Reuters Foundation she started to develop the symptoms of pregnancy after visiting a herbalist in Enugu state in 2014.

However the traditional doctor told Sophie her swollen stomach contained gas resulting from the herbal treatment rather than a fetus – but she could arrange to buy a baby.

“(The herbalist) said that she would bring me a newborn baby, girl or boy, depending on which one I wanted,” she said in the grimy sitting room of her apartment in southeastern Nigeria.

The woman said a girl would cost 380,000 naira ($1,250) while a boy would cost 500,000 naira ($1,645), said Sophie who opted for a girl.

But a sense of obligation to the woman who brought her a child prevented her from reporting the crime, she told the Thomson Reuters Foundation.

“I considered everything and thought to myself ‘why should I report (the herbalist) to the police?’ She had helped me,” she said.

NAPTIP does not have data on the number of domestic adoptions that have taken place, a figure it says is not held by central government.

“In the southeastern states, the sale of babies is unarguably very prevalent as recorded by the agency,” said Cordelia Ebiringa, NAPTIP’s commander in Enugu state.

DEADLY GAME

Men are also involved in the process of illicit baby trafficking, with sperm donors impregnating surrogate mothers who then sell their babies, according to two Nigerian men.

Surrogacy is illegal in Nigeria.

Jonathan, 33, said he was paid 25,000 naira ($82) by his boss or “madam” every time he helped a client to become pregnant.

“I don’t see it as somebody exploiting me. The madams pay me for my work,” said Jonathan, who withheld his full name.

Jonathan said he did not know whether the women gave their babies away or went on to sell them although he was concerned what he was doing could be illegal.

“I often think ‘what if the police catch me?'”

Nigeria’s anti-human trafficking agency said it did not have data or information on the role of sperm donors, but many women they spoke to did not want to reveal how they fell pregnant.

“NAPTIP has no records of studs that impregnate the women at the baby factories as most of the pregnant women rescued and interviewed in such cases claimed unplanned pregnancies,” said Ebiringa.

Little information was made available by the Nigerian police or authorities in southeastern states about the number or identity of the people who run the “baby factories”.

No data was provided on the number of arrests by police in southern states of Enugu and Abia on baby trafficking offences despite repeated requests by the Thomson Reuters Foundation.

But the dangers involved, both from the law and from trafficking gangs, are palpable, according to Jonathan, who estimates he has fathered about 15 children as a “stud”.

“These (baby traffickers) can be dangerous,” said Jonathan, who was once threatened by a group of thugs who found out what he was doing. “They are ready to kill anybody if you stand in their way.”

($1 = 304.00 naira)($1 = 0.8042 pounds)

(Reporting By Tom Esslemont and Anamesere Igboeroteonwu, Editing by Belinda Goldsmith; Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, women’s rights, corruption and climate change. Visit news.trust.org)

U.S. states stung by tumble in April of Income tax revenue

A car passes a sign advertising tax return services in Falls Church, Virginia

By Karen Pierog

CHICAGO (Reuters) – U.S. state personal income taxes tumbled in the key revenue month of April due to lower investment returns from weaker equities and energy prices in 2015, a Reuters analysis of state data found.

This April, personal income tax (PIT) revenue fell by an average of 9.88 percent compared to the same month last year in the 32 U.S. states and Puerto Rico for which Reuters has data.

Taxes on wages and investment income are a top revenue source for the 43 states that collect it. April is the most important revenue month because it contains the tax filing deadline and the tendency of taxpayers who owe money to wait until the last minute to pay.

Personal income taxes make up slightly more than a third of states’ total general fund revenue, and sales taxes comprise roughly another third.

Collections have been volatile in recent years, including 2013’s “April Surprise,” which delivered unexpectedly high revenues to states as taxpayers sold investments to dodge an increase in federal taxes.

Collections plunged in April 2014 then rebounded last year with the help of a robust stock market.

In 2015, the U.S. benchmark S&amp;P 500 stock index lost 0.7 percent compared with a 11.4 percent gain in 2014.

“The kinds of income that are kind of driving this are particularly capital gains related to the stock market. If you had to find a No. 1 culprit, that’s it,” said Don Boyd, Director of Fiscal Studies at the Rockefeller Institute of Government in Albany, New York.

News of falling revenue comes as most states are nearing the end of fiscal 2016 and the beginning of fiscal 2017, leading some to turn to temporary measures to plug budget holes, Boyd said.

John Hicks, executive director of the National Association of State Budget Officers in Washington, said the 20 percent growth rate in the tax in April 2015 from a year earlier set “an extremely high bar.”

He said that PIT withholding has been more stable for states than capital gains-related tax revenue.

“The underlying personal income information – even while we’ve been bouncing for the last few years – has still been on a slow, but increasing trend,” Hicks added.

MOST STATES SEE COLLECTIONS DECREASE

Louisiana had the most dramatic drop at 81.5 percent. The plunge was due to a change in the way Louisiana issues refunds as well as a fall in withholding collections because the last day of April fell on a Saturday.

This resulted in some revenue payments being deposited in May, according to Kizzy Payton, press secretary for the Louisiana Department of Revenue.

Louisiana – like North Dakota, where PIT collections fell 34.7 percent – is also feeling the sting from the struggling energy sector. Oklahoma, another key energy producing state, experienced an 18 percent drop in revenue in April.

New Jersey’s PIT revenue was down 14.8 percent, largely due to a decline in taxpayers’ investment income and the state’s tax structure, which relies on wealthy residents.

Oregon’s receipts came in a third lower than last year, mainly because excess state revenue during the previous year led to a surplus income tax credit on 2015 returns, said Bob Estabrook, spokesperson for the Oregon Department of Revenue.

Lower income tax rates led to revenue drops in Illinois, down 28.8 percent, and in Ohio, down 41.3 percent. But in Kansas, which slashed rates in 2013, revenue was up 23 percent.

Seven states – Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming – collect no income tax, and two – New Hampshire and Tennessee – only levy taxes on dividend and interest income, but not wages.

(Reporting by Karen Pierog; additional reporting by Hilary Russ, Robin Respaut, Rory Carroll and Edward Krudy; editing by Daniel Bases and G Crosse)