A television in a Tokyo street shows news of North Korea firing a ballistic missile on Friday. EPA
A television in a Tokyo street shows news of North Korea firing a ballistic missile on Friday. EPA
A television in a Tokyo street shows news of North Korea firing a ballistic missile on Friday. EPA
A television in a Tokyo street shows news of North Korea firing a ballistic missile on Friday. EPA

North Korea's missiles could reach the US, Japan says


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A North Korean missile test on Friday shows its warheads could reach the continental US, Japan's defence minister has said.

North Korea launched what is believed to be an intercontinental ballistic missile, which landed inside Japan's exclusive economic zone, about 200km west of Oshima-Oshima island off Hokkaido on Friday.

Japanese Defence Minister Yasukazu Hamada told reporters that the ICBM flew 1,000km at a maximum altitude of about 6,000km. He said the altitude suggests its was launched at a high angle.

He said that, depending on the weight of a warhead to be placed on the missile, the weapon has a range exceeding 15,000km, “in which case it could cover the entire mainland United States”.

The US's National Security Council said the country strongly condemned North Korea for its test of a long-range ballistic missile.

Spokeswoman Adrienne Watson said: “This launch is a brazen violation of multiple UN Security Council resolutions and needlessly raises tensions and risks destabilising the security situation in the region.

“This action demonstrates that the DPRK [North Korea] continues to prioritise its unlawful weapons of mass destruction and ballistic missile programmes over the well-being of its people. We urge all countries to condemn these violations and call on the DPRK to come to the table for serious negotiations. The door has not closed on diplomacy, but Pyongyang must immediately cease its destabilising actions and instead choose diplomatic engagement.

“The United States will take all necessary measures to ensure the security of the American homeland and Republic of Korea and Japanese allies.”

The launch was the second such major weapons test this month that shows its determination to perfect weapons systems targeting the US mainland. It was the latest in a barrage of weapons tests that North Korea has conducted in recent months in response to what it calls US hostility.

  • Air raid sirens sounded across South Korea as North Korea tested its missile systems on Wednesday, including one that fell close to South Korean waters. Here, travellers at a railway station in Seoul watch a news broadcast. AFP
    Air raid sirens sounded across South Korea as North Korea tested its missile systems on Wednesday, including one that fell close to South Korean waters. Here, travellers at a railway station in Seoul watch a news broadcast. AFP
  • North Korean leader Kim Jong Un delivers a speech at the Central Academy of the Workers' Party of Korea in Pyongyang on October 18. AFP
    North Korean leader Kim Jong Un delivers a speech at the Central Academy of the Workers' Party of Korea in Pyongyang on October 18. AFP
  • In Tokyo, Japanese Prime Minister Fumio Kishida speaks to reporters about North Korea's ballistic missile test on Wednesday. Reuters
    In Tokyo, Japanese Prime Minister Fumio Kishida speaks to reporters about North Korea's ballistic missile test on Wednesday. Reuters
  • South Korea's President Yoon Suk-yeol, centre, attends a meeting of the National Security Council in Seoul, South Korea, on Wednesday. AP
    South Korea's President Yoon Suk-yeol, centre, attends a meeting of the National Security Council in Seoul, South Korea, on Wednesday. AP
  • Travellers at Seoul Railway Station watch a TV news report on North Korea's missile tests. AP
    Travellers at Seoul Railway Station watch a TV news report on North Korea's missile tests. AP
  • A soldier at Seoul Railway Station watches a TV news report about North Korea's missile tests. EPA
    A soldier at Seoul Railway Station watches a TV news report about North Korea's missile tests. EPA
  • Television news in South Korea reports news of North Korea's missile tests. On Wednesday, Seoul told residents on the island of Ulleungdo off its east coast to evacuate to bunkers after North Korea fired three short range ballistic missiles. AFP
    Television news in South Korea reports news of North Korea's missile tests. On Wednesday, Seoul told residents on the island of Ulleungdo off its east coast to evacuate to bunkers after North Korea fired three short range ballistic missiles. AFP
  • At a railway station in Seoul on Wednesday, a man watches a television broadcast showing a news broadcast with file footage of a North Korean missile test. AFP
    At a railway station in Seoul on Wednesday, a man watches a television broadcast showing a news broadcast with file footage of a North Korean missile test. AFP

Some experts say the North is able to perform such a spree of weapons tests partly because China and Russia have opposed US moves to toughen sanctions on North Korea.

The South’s Joint Chiefs of Staff said they had detected the suspected ICBM launch from the region of North Korea’s capital at 10.15am and the weapon flew towards the North’s eastern coast across the country. The statement said South Korea’s military had bolstered its surveillance of North Korea and maintains readiness in close co-ordination with the US.

The Japanese Defence Ministry also initially identified the weapon as an ICBM-class ballistic missile. Japanese Prime Minister Fumio Kishida, visiting Bangkok to attend a regional summit, told reporters it was believed to have landed at sea inside Japan’s exclusive economic zone west of Hokkaido, Japan’s main northern island.

If confirmed, it would be North Korea’s first ICBM launch in about two weeks. Experts said an ICBM launched by North Korea on November 3 failed to reach its intended flight and fell into the ocean after a stage separation.

The test was believed to have involved a developmental ICBM called Hwasong-17. North Korea has two other types of ICBM — Hwasong-14 and Hwasong-15 — and their test-launches in 2017 proved they could reach parts of the US homeland.

The Hwasong-17 has a longer potential range than the others and its huge size suggests it’s designed to carry multiple nuclear warheads to defeat missile defence systems. Some experts say the November 3 test showed some technological progress in the development of the Hwasong-17, given that in its earlier test in March, the missile exploded soon after lift-off.

“North Korea has been repeatedly firing missiles this year at an unprecedented frequency and is significantly escalating tensions on the Korean Peninsula,” Mr Hamada told reporters.

South Korea’s presidential office said it convened an emergency security meeting to discuss the North Korean launch.

North Korea had halted weapons launches for about a week before it fired a short-range ballistic missile on Thursday.

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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In Full Flight: A Story of Africa and Atonement
John Heminway, Knopff

The Bio

Name: Lynn Davison

Profession: History teacher at Al Yasmina Academy, Abu Dhabi

Children: She has one son, Casey, 28

Hometown: Pontefract, West Yorkshire in the UK

Favourite book: The Alchemist by Paulo Coelho

Favourite Author: CJ Sansom

Favourite holiday destination: Bali

Favourite food: A Sunday roast

Milestones on the road to union

1970

October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar. 

December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.

1971

March 1:  Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.

July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.

July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.

August 6:  The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.

August 15: Bahrain becomes independent.

September 3: Qatar becomes independent.

November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.

November 29:  At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.

November 30: Despite  a power sharing agreement, Tehran takes full control of Abu Musa. 

November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties

December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.

December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.

December 9: UAE joins the United Nations.

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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