WASHINGTON // European anger at reports that the US has conducted surveillance of allies’ telephone calls and emails glosses over a basic truth, former intelligence officials say: everyone does it.
“All governments collect information on nearly all governments,” said John McLaughlin, a former acting director of the US Central Intelligence Agency, said. “The posture of most governments is, ‘We want to collect as much info as we can, so we can be as fluent as we can when we make decisions.’ It’s just what governments do.”
US president Barack Obama’s administration has been dogged this week by a series of disclosures detailing allegations of US surveillance of German Chancellor Angela Merkel’s private mobile phone, of former Mexican President Felipe Calderon’s email while in office, and of the collection of data on ordinary French citizens.
The leaks, all traced to documents stolen by fugitive security contractor Edward Snowden, led Mr Obama to call Mr Merkel yesterday to assure her the US government “is not monitoring and will not monitor the communications of the chancellor”, White House press secretary Jay Carney said at a briefing in Washington.
Complaints from Europe and Mexico about surveillance echo those from Brazil. Last month, Brazilian President Dilma Rousseff cancelled a state visit to Washington after revelations that the National Security Agency had monitored her email and telephone exchanges with top aides.
Government surveillance has a sinister resonance in Europe and news about US spying may have economic ramifications, Fran Burwell, a vice president at the Atlantic Council, a Washington policy group, said. It may complicate pending talks about a trans-Atlantic trade pact and has exacerbated long-standing tensions between the US and the European Union over privacy, she said.
A European Parliament committee this week backed draft rules intended to toughen a 1995 privacy-protection law and impose penalties on domestic and foreign companies that violate it. The proposal would require companies such as Mountain View, California-based Google Inc. to let users fully erase their personal data and subject violators to fines of as much as the greater of 100 million euros ($138 million) or 5 per cent of annual sales for violations.
“That legislation is now moving much more quickly than it probably would have without that continual flow of revelations,” Ms Fran Burwell Burwell said.
US Director of National Intelligence James Clapper said this week that the US collected more than 70 million “recordings of French citizens’ telephone data” were false.
“While we are not going to discuss the details of our activities, we have repeatedly made it clear that the United States gathers intelligence of the type gathered by all nations,” Mr Clapper said.
He could have added that intelligence gathering has occurred throughout history. The ancient Hebrews used spies to capture the city of Jericho, Chinese strategist Sun Tzu extolled using subterfuge, while the Aztecs sent people in local dress to infiltrate the enemy before battle. In 1970s Moscow, the Soviet Union bugged 16 of the US Embassy’s IBM Selectric typewriters that were tracked by engineers at listening posts nearby.
“I work on assumption that 6+ countries tap my phone,” Tom Fletcher, the UK ambassador to Lebanon, said on Twitter. “Increasingly rare that diplomats say anything sensitive on calls.”
Even so, for Europe and particularly Germany, the prospect of government surveillance has dark echoes. The Nazis deployed spies and, after World War II, the East German Stasi, or secret police, created massive networks that had friends, families and spouses watch and inform on each other.
“This has very bad resonance,” Ms Burwell said. “When Angela Merkel speaks about this, she grew up with the Stasi.”
Der Spiegel magazine reported that US intelligence may have been monitoring Merkel’s private mobile phone for years. German authorities conducted an investigation and gathered enough information to confront the US with the findings suggesting that Merkel’s phone had been monitored, Spiegel said.
Bloomberg News
Electric scooters: some rules to remember
- Riders must be 14-years-old or over
- Wear a protective helmet
- Park the electric scooter in designated parking lots (if any)
- Do not leave electric scooter in locations that obstruct traffic or pedestrians
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Tonight's Chat on The National
Tonight's Chat is a series of online conversations on The National. The series features a diverse range of celebrities, politicians and business leaders from around the Arab world.
Tonight’s Chat host Ricardo Karam is a renowned author and broadcaster with a decades-long career in TV. He has previously interviewed Bill Gates, Carlos Ghosn, Andre Agassi and the late Zaha Hadid, among others. Karam is also the founder of Takreem.
Intellectually curious and thought-provoking, Tonight’s Chat moves the conversation forward.
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Mohammed bin Zayed Majlis
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Will the pound fall to parity with the dollar?
The idea of pound parity now seems less far-fetched as the risk grows that Britain may split away from the European Union without a deal.
Rupert Harrison, a fund manager at BlackRock, sees the risk of it falling to trade level with the dollar on a no-deal Brexit. The view echoes Morgan Stanley’s recent forecast that the currency can plunge toward $1 (Dh3.67) on such an outcome. That isn’t the majority view yet – a Bloomberg survey this month estimated the pound will slide to $1.10 should the UK exit the bloc without an agreement.
New Prime Minister Boris Johnson has repeatedly said that Britain will leave the EU on the October 31 deadline with or without an agreement, fuelling concern the nation is headed for a disorderly departure and fanning pessimism toward the pound. Sterling has fallen more than 7 per cent in the past three months, the worst performance among major developed-market currencies.
“The pound is at a much lower level now but I still think a no-deal exit would lead to significant volatility and we could be testing parity on a really bad outcome,” said Mr Harrison, who manages more than $10 billion in assets at BlackRock. “We will see this game of chicken continue through August and that’s likely negative for sterling,” he said about the deadlocked Brexit talks.
The pound fell 0.8 per cent to $1.2033 on Friday, its weakest closing level since the 1980s, after a report on the second quarter showed the UK economy shrank for the first time in six years. The data means it is likely the Bank of England will cut interest rates, according to Mizuho Bank.
The BOE said in November that the currency could fall even below $1 in an analysis on possible worst-case Brexit scenarios. Options-based calculations showed around a 6.4 per cent chance of pound-dollar parity in the next one year, markedly higher than 0.2 per cent in early March when prospects of a no-deal outcome were seemingly off the table.
Bloomberg
if you go
Ten tax points to be aware of in 2026
1. Domestic VAT refund amendments: request your refund within five years
If a business does not apply for the refund on time, they lose their credit.
2. E-invoicing in the UAE
Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption.
3. More tax audits
Tax authorities are increasingly using data already available across multiple filings to identify audit risks.
4. More beneficial VAT and excise tax penalty regime
Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.
5. Greater emphasis on statutory audit
There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.
6. Further transfer pricing enforcement
Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes.
7. Limited time periods for audits
Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion.
8. Pillar 2 implementation
Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.
9. Reduced compliance obligations for imported goods and services
Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations.
10. Substance and CbC reporting focus
Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity.
Contributed by Thomas Vanhee and Hend Rashwan, Aurifer
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