Armed Libyans surround ministry demanding purge of Qaddafi's men


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Dozens of vehicles mounted with heavy weapons surrounded the ministry of foreign affairs in the Libyan capital yesterday, demanding the removal of officials who had worked under the late leader, Muammar Qaddafi.

Men who fought two years ago in the rebel brigades that dislodged the 42-year regime of Qaddafi blocked all streets close to the building, which is on Tripoli's Mediterranean waterfront in a upmarket part of town, according to the country's Libyan News Agency.

Pictures posted on Twitter showed guns mounted on the back of lorries surrounding the building, although witnesses and local news reports said no shots were fired.

The fighters, who the Libya Herald newspaper reported were from the anti-Qaddafi strongholds of Misurata, Souq Al Jumaa and Tajoura, were calling for the immediate implementation of a controversial piece of legislation called the political isolation law.

Under the law, which has been in the process of preparation for several months but has not yet been passed, anyone who held government office during the rule of Qaddafi would be prevented from holding office for the next 10 years.

Analysts have criticised the law as impractical and unfair: Libya has a small population, many of whom are employed as civil servants and government employees. Some contend that firing them would impede the work of government, as well as leave hundreds of people jobless, and that the vague wording could leave innocent people vulnerable to dismissal on inaccurate charges.

As well as surrounding the foreign affairs ministry , armed groups also tried unsuccessfully to storm the ministry of the interior and the state news agency on Sunday, the prime minister said. "These attacks will never get us down and we will not surrender," prime minister Ali Zaidan told a news conference yesterday.

The incident is the latest in a series of armed demonstrations calling for the implementation of the law. Amnesty International reported last month that a large group of unidentified men stormed Al Assema Television, a private channel, after it broadcast a debate about the law, and abducted four men, two of whom were still missing.

On March 5, the General National Congress - the interim body of parliamentarians whose primary job is to oversee the writing of a new constitution - was interrupted by hundreds of protesters who prevented the lawmakers from leaving the building. Some of them shot at the president, Mohammed Magarief.

"Libyan parliamentarians and media should be allowed to debate and report on public interest issues without any restrictions and in safety," said Hassiba Hadj Sahraoui, Amnesty's deputy Middle East and North Africa programme director.

Abdulrahman Swehli, a politician from Misurata, said he supported the message of the demonstrators - though not their method.

"The demands are very clear," he said. "For the ministry to be cleaned of the remnants of the Qaddafi people, it is very necessary."

The uprising against Qaddafi will not have achieved its goals, Mr Swehli said, until all the people who worked for him have been removed.

He particularly cited the continuing employment of Ali Al Aujali, who last month stepped down from his long-term post as the ambassador to the United States, as a cause for concern. He added that he did not believe it would be difficult to find people to fill the vacated positions, and that only two or three hundred people would be likely to be asked to leave.

"I expect this to spread to other ministries unless we do something about the political isolation law very quickly to calm the situation," he warned.

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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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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. 

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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. 

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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. 

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