Week in Review

August 27, 2018

Global Roundup

U.K. warns of red tape, card charges in ‘no-deal’ Brexit. Brexit Secretary Dominic Raab presented the first of a series of technical notices telling businesses and citizens how to prepare for a no-deal exit from the EU. The daily lives of British people would see major changes. (DW)

U.S.-China trade war hits $100 billion in goods. As of Aug. 23, the United States is charging 25% import duties on an additional $16 billion in Chinese products, bringing the total to over 1,000 items valued at about $50 billion in trade a year. (HSN)

Scott Morrison is new Australian PM as Malcolm Turnbull ousted. Scott Morrison has become Australia's new prime minister after Malcolm Turnbull was forced out by party rivals in a bruising leadership contest. (BBC)

Mexico says pushing for NAFTA deal, autos still a sticking point. Mexico’s economy minister said on Aug. 23 that he was pushing for a quick deal with U.S. officials in the renegotiation of the North American Free Trade Agreement (NAFTA), with a breakthrough on new rules for auto production still elusive. (Reuters)

Turkey: European banks can manage impact, but Lira ‘not out of woods yet.’ The Turkish currency crisis, amid a worsening dispute with the U.S. and the lira tumbling 40% against the dollar to date this year, is sending shockwaves across western markets. On Aug. 24, both Standard & Poor’s and Moody’s downgraded Turkey’s credit rating, with a fear of contagion gripping European banks, particularly the Spanish, that also have a stronghold in Latin America. (Financial Mirror)

Defying US sanctions, EU unveils a €18 million aid package to Iran. The European Commission approved a €18 million support package to Iran on Aug. 23, sending an important signal to both Teheran and Washington that Brussels will not back down on its efforts to preserve the nuclear deal despite U.S. sanctions. (EurActiv)

Zimbabwe court set to rule on presidential election petition. Zimbabwe’s top court will decide on Aug. 24 whether President Emmerson Mnangagwa’s disputed July 30 election victory should stand against complaints by his main rival that it was rigged. (Reuters)

Foreign minister: Canada needs to agree to any conclusions on NAFTA ‘rules of origin.’ Canada’s foreign minister said on Aug. 23 that Canada would need to agree to any final conclusion on ‘rules of origin’ reached in bilateral talks between the U.S. and Mexico as part of the modernization of the North American Free Trade Agreement (NAFTA). (Reuters)

Nigeria’s Horrors and Hopes. It’s easy to argue that Nigeria’s squandered the opportunities that come with having Africa’s biggest population and oil reserves. Under successive governments, it’s become a byword for corruption and inefficiency. Meeting the needs of the country’s population of almost 200 million will only get tougher if, as the United Nations expects, the number doubles by mid-century. (Bloomberg)

India, other major countries casualties of booming American economy. With the rise in the dollar and interest rates already squeezing emerging economies just as President Donald Trump’s trade war threatens China, the U.S. is set to be the only Group of Seven nation to see economic growth accelerate this year as Trump’s tax cuts kick in. (HSN)

The Advent of New Cross-Border Payments Systems. Cross-border payments are often burdensome for corporate treasury. The main pain points include slow speed, high cost, uncertainty and potential for lost remittance information. But now, that arduous process may be changing. (AFP)

Venezuela unveils new currency to fight inflation. Banks in Venezuela spent Aug. 20 preparing to release the new currency: the “sovereign bolivar.” Maduro’s government says it will raise gasoline prices in late September to curtail rampant smuggling across borders. The dramatically higher minimum wage will go into effect Sept. 1. Economists say the package of measures is likely to accelerate hyperinflation rather than address its core economic troubles. (Business Mirror)

Sweden Faces New Issues

The Swedish model has been held up as one of the most humane and sociologically conscious in the world. It is routinely listed as one of the happiest states in the world—at least as measured by what Swedes value the most. It is described as a democratic socialist state and by some as welfare-state capitalism. Social services are vast and complete and taxes are high to pay for all them. In past elections, the contest between competing parties has been almost exclusively over economic issues, but the differences between the parties has been minor. There were only some tweaks suggested as far as the social policies were concerned and some reduction in taxes, but not to the point that these programs would be drastically changed. This year’s election is quite different. The issue at the top of voter’s mind is crime and, by extension, the immigration policies of the country over the last few decades.

As compared to the majority of American cities, there is no crime in Sweden. There are no cities that have anything close to the murder rate of Chicago or any other major U.S. community. There is strict gun control and there are very few crimes committed with a gun. However, that number has been rising every year as it seems that those wanting a gun can find ways to obtain one. The country has changed dramatically, according to the police. They report that there is considerable gang activity and that was not the case even a few years ago. Recently, there were waves of violence that struck most of the major cities and involved everything from shootings to throwing hand grenades and Molotov cocktails. Hundreds of cars were torched, along with homes, stores and government buildings. The riots involved hundreds of people and took days to disperse.

The reasons for the outbreak of violence are a matter of deep controversy and there have been no shortage of theories—most of which reveal more about the bias of the theorist than anything else. At the top of the list as far as the political campaign is the immigration policy pursued by the country for decades. The approach has been relatively open and Sweden has traditionally welcomed refugees and migrants from all over the world. In recent years, the numbers have swelled to a point that Swedish tolerance has been tested. The majority of the violence has taken place in neighborhoods with large immigrant populations. Those who support the far-right Swedish Democrats assert this is due to the violent nature of these immigrant cultures, while others point out that Sweden has not done much to assimilate or welcome the new arrivals. They can’t find jobs and they find their cultural norms clash with those of the Swedes.

This year’s campaign has hinged on the issue of immigration. The party most likely to win the majority of the votes is the center-left Social Democrats and are currently in power with Stefan Lofven as prime minister. The Moderate Party, led by Ulf Kristersson, has been running ahead in the polls. It is highly unlikely that either party will win enough seats in parliament to rule alone, so they will need to form a coalition. The party that will have considerable influence on this coalition will the very nationalistic and anti-immigrant Swedish Democrats who are a close third, with almost a quarter of voters favoring them. Neither the center-left or center-right wish to ally with them, so that may force some kind of “grand coalition” between the left and right. Either way, the immigration issue will loom very large.

FCIB Survey: Europe Sees Decline in Credit Extended

The extension of credit is lessening across parts of Europe, according to the latest International Credit & Collections survey by FCIB. The most recent survey for August covers Greece, the Netherlands, Poland and Spain, all of which saw the percentage of respondents who extend credit to customers in the specific country decline.

All but Spain had a double-digit percentage drop in the category. The Netherlands fell the sharpest, down 18%, while Poland (-13%) and Greece (-11%) each staggered. The Netherlands also had a roughly five-day lengthening of its average days beyond terms; however, it was not the worst. Spain was the longest at more than 26 days, with Greece not far behind at under 24 days. Respondents said Poland had the best average at 14 days.

The Netherlands, Poland and Spain all reported having payment terms increase in the 0–30-day category, but Greece only declined by a percent. Members said all countries saw a decline in 31–60-day terms, yet Poland was the only one to have a decline in 61–90-day terms, possibly due to its increase in payment terms beyond 90 days. Greece was the only country with a decrease in 90-plus-day terms compared to the previous survey cycle last summer, while the Netherlands remained at 4%.

Not much can be said regarding payment delays, which remained fairly consistent with previous surveys, as far as increases and decreases. The biggest movement was found in the no change and no payment delays categories. More members are reporting no change in delays in all countries surveyed, and Poland was the only country to have an increase in the no payment delays response.

Causes for payment delays ranged from central banking issues to foreign exchange rates to cash flow issues. As with most of the surveys, “know your customer” was a consistent tip among members. Research, such as reviewing credit references, was also mentioned by respondents.

For more information about the countries surveyed, visit FCIB’s Knowledge Center. The newest Credit & Collections survey for Southeast Asia, which covers Indonesia, Malaysia, the Philippines and Vietnam, is now open. Click here to take the survey.

Phishers Target Amex, NAB Clients

PYMNTS.com

Customers of National Australia Bank (NAB) and American Express became the targets of a recent phishing scam spree in Australia, according to MailGuard reports last week.

The business cybersecurity company issued a notice on its blog on Tuesday, Aug. 21, that clients of NAB and American Express are the targets of a phishing scam. Attackers send an email to customers using NAB and Amex logos warning that their payment cards are “now locked,” and directs them to a link to a fake online banking portal. The false login page prompts victims to enter their user ID and password, enabling attackers to steal credentials and bank card details.

NAB is advising customers to contact the bank if they recently responded to any suspicious texts or email messages.

Reports in Smart Company said that in both phishing scams, attackers send the messages from what are clearly non-official email addresses. Attacks using financial service providers’ logos are common. NAB has reportedly issued five warnings about phishing scams using its logo in August alone, reports said.

The publication noted that the Australian Competition and Consumer Commission (ACCC) revealed that $3.45 million was stolen from Australian businesses last year via phishing scams, a 23 percent increase from 2016.

“Scammers don’t discriminate and businesses have what scammers want: money,” ACCC Deputy Chair Michael Schaper said in a notice in May. “They’ll use a variety of cons to swindle busy workers, and it can be very devastating to a business’ bottom line.”

In an interview with the publication, Combo Founder David Markus advises individuals not to share sensitive information when they receive suspicious inquiries.

“If someone sends you something that you click on and it wants you to enter your password, don’t,” he said. “Go via the company’s homepage or however you would usually check your account. Never follow any links in emails that ask for your username or password.”

Week in Review Editorial Team:

Diana Mota, Associate Editor and David Anderson, Member Relations