corporate

ALBANY, N.Y. — Gov. Mario Cuomo vetoed a bill today that would have given New York companies powerful new defenses against corporate raiders, saying the measure was too far-reaching and might be unconstitutional.

Assemblyman G. Oliver Kopell, a chief sponsor of the legislation, said he would make no effort to round up a two-thirds majority in the Assembly to override the governor’s veto. The corporate takeover bill was designed to cover companies incorporated in New York with at least 15% of their stock owned by New Yorkers and with significant ties to New York.

In the wake of Washington’s January 3 military attack and then problematic détente with Caracas, corporate media suggest a meaningful shift in Venezuela policy, implying relief for a country long subjected to economic coercion. However, far from dismantling the sanctions regime, the US has merely adjusted its application through licensing mechanisms, leaving the core structure of coercive measures fully intact.

Reuters reported “US lifts some Venezuela sanctions,” followed by news of sanctions being further “eased.” Both NBC News and ABC News likewise reported sanctions “eased,” while the Financial Times wrote that Washington “relaxes sanctions.” Reuters later found that “US waives many of the sanctions,” and the Los Angeles Times noted “targeted relief from sanctions.” The Washington Office on Latin America (WOLA) described a “huge easing of sanctions.”

Not a single sanction has been rescinded

In fact, there is no evidence of any revocation of executive orders, removal of Venezuela-related sanctions authorities, and certainly no formal termination or suspension of Washington’s sanctions regime.

At a February 21 meeting I attended in Venezuela, Anti-Blockade Vice Minister William Castillo described sanctions as a “policy of extermination.” These measures, “the most cruel aggression against our people,” had been renewed the day before by Trump. To do so, he had to certify the original mistruth first fabricated by Barack Obama in 2015: that Venezuela poses an “extraordinary threat” to US national security.

Castillo cited 1,087 measures imposed by the US and another 916 by its echo, the European Union. These unilateral coercive measures have a corrosive effect on popular support for the government, which is precisely the purpose of this form of collective punishment, illegal under international law.

In 2023, Castillo described Washington’s economic aggression as a means to destroy Venezuela without having to invade. The Bolivarian Revolution’s successful resistance, including positive GDP growth while under siege, suggests why the US felt compelled to escalate with a military incursion on January 3, killing over 100 and kidnapping the country’s lawful head of state and his wife.

In Castillo’s words, the US escalated from “a war without gunpowder…against the civilian population” to an actual one. As grave as the direct US military aggression has been – including 157 fatalities since last September in alleged drug interdictions of small craft in the Caribbean and eastern Pacific – the body count from the coercive economic measures has been far higher. Former UN Special Rapporteur Alfred de Zayas estimated that sanctions have caused over 100,000 excess deaths.

There is even a literal playbook on how to apply sanctions to inflict “pain” on civilians for “maximum effectiveness.” The author of The Art of Sanctions is Richard Nephew, a former US State Department senior official in the Biden administration who was responsible for implementing such policies.

Licenses vs. sanctions

What has happened in practice is a much more limited form of relief under the sanctions regime. The Treasury’s Office of Foreign Asset Control (OFAC) has issued broad licenses allowing certain dealings primarily with Venezuela’s state oil (PDVSA) and gold (Minerven) sectors.

OFAC licenses carve out limited exceptions principally benefitting US and other foreign corporations, not necessarily the Venezuelan people. Activities are authorized that would otherwise be illegal under US law, even though such activities are lawful under international law. They come with conditions, limits, and reporting requirements and can be revoked at any time.

In practical terms, sanctions remain in place, although certain transactions are temporarily allowed under strict licensing rules. “The result is a hybrid scheme in which formal sanctions and operational licenses coexist, enabling limited flows of economic activity,” according to Misión Verdad.

This flexible arrangement of sanctions combined with licenses allows US and other foreign corporations to make a profit off of the coercive system. Under sanctions alone, the targeted people overwhelmingly suffer but, secondarily, US and other corporations are shut out. Under this hybrid system, control is maintained and money is made.

However, most foreign investors are reluctant to make important investment decisions when there is uncertainty, especially given Mr. Trump’s mercurial reputation. A temporary license does not provide the security that corporations normally require. Recuperating the Venezuelan oil industry would necessitate “a gigantic investment.” Such investments will be unlikely if Venezuela is sanctioned, the licenses notwithstanding.

Media framing and blaming

Meanwhile, Venezuelan President Nicolás Maduro and “First Combatant” Cilia Flores remain in a New York City jail, reportedly in solitary confinement.

Regarding what happened on January 3, corporate media sources overwhelmingly use relatively anodyne terms such as “downfall,” “removal,” or “ouster,” rather than the more pointed “kidnapping” or “abduction.” When the legality of this clearly illegal act of war is questioned by either the media or by the Democrats, it is mainly confined to whether President Trump required congressional approval.

Likewise, application of international law regarding the illegality of unilateral coercive measures is largely absent from media coverage. Where legal issues appear, they tend to address mechanics (e.g., the US-controlled fund arrangement), rather than whether sanctions themselves violate international law.

When media outlets express concern about Washington’s restrictions, it is often that easing them would “reward Maduro loyalists.” While the plight of the Venezuelan people may be acknowledged, the blame is mainly attributed to corruption and economic mismanagement, with little if any opprobrium for sanctions.

As former political science professor at the Universidad de Oriente Steve Ellner (pers. comm.), notes, corruption and mismanagement do exist. But the overwhelming factor has been the sanctions regime. The blockade targeted Venezuela’s oil industry – at one point accounting for 99% of foreign-exchange earnings – forcing the country out of normal dollar-denominated markets and into black markets to survive.

What Alfred de Zayas dubs the “human rights industry” similarly exhibits a convenient blind spot regarding sanctions. WOLA, for example, advocates “addressing the complex humanitarian emergency.” Yet the NGO strongly opposes sanctions relief for the people, because the coercive measures are such an effective “pressure” tool on the leadership.

Former WOLA staffer David Smilde is preoccupied with “restoring” American-style democracy by imposing pressure on the “regime.” He argues: “The democratic transition in Venezuela…requires the support of international organizations.”

In contrast, acting President Delcy Rodríguez views ending interference by foreign actors in Venezuela’s internal affairs as a precondition for credible elections. In particular, she calls for the US “blockade and sanctions against Venezuela [to] cease.” With sanctions still in place, the US remains the biggest obstacle to free and fair elections in Venezuela.

Roger D. Harris is with the Venezuela Solidarity Network, Task Force on the Americas, and the US Peace Council. He recently visited Venezuela.

The views expressed in this article are the author’s own and do not necessarily reflect those of the Venezuelanalysis editorial staff.

March 22 (Asia Today) — South Korea’s four largest banks are tightening corporate payment guarantees as exporters face mounting pressure from U.S. tariffs and a prolonged period of high exchange rates.

The combined value of guarantees issued by KB Kookmin Bank, Shinhan Bank, Hana Bank and Woori Bank reached 79.2 trillion won (about $59 billion) at the end of last year, up 3.9% from a year earlier, according to financial industry data.

The increase marks a sharp slowdown compared with double-digit growth in previous years, reflecting a more cautious approach by banks amid rising economic uncertainty.

Banks have scaled back new guarantees as U.S. tariff policies weigh on export profitability and a weaker won raises costs for companies. The won-dollar exchange rate has hovered around 1,500 won, adding further pressure on corporate balance sheets.

Payment guarantees, commonly used by exporters, allow companies to secure financing or complete trade transactions by relying on a bank’s credit backing. If a company defaults, the bank assumes the repayment obligation.

Industry data show that firm guarantees – where the amount is fixed and the bank assumes the debt – rose 8.5% to 60.9 trillion won (about $45 billion), while contingent guarantees fell 8.8% to 18.3 trillion won (about $13.7 billion).

Analysts said banks are favoring lower-risk transactions and reducing exposure to more complex contingent guarantees, which are harder to manage.

The slowdown also reflects weaker demand. Large exporters, which drove much of last year’s trade growth, often do not require bank guarantees, while rising delinquency risks have prompted lenders to focus on balance sheet stability.

Looking ahead, growth in guarantees is expected to remain subdued as geopolitical tensions in the Middle East and global logistics disruptions continue to weigh on trade.

A prolonged period of high exchange rates could further increase risks, as most guarantees are denominated in foreign currencies, meaning their value rises in won terms even without new issuance.

Experts say stabilizing the foreign exchange market and expanding trade finance support will be key to preventing broader financial strain on companies.

— Reported by Asia Today; translated by UPI

© Asia Today. Unauthorized reproduction or redistribution prohibited.

Original Korean report: https://www.asiatoday.co.kr/kn/view.php?key=20260323010006560

Eighteen days into the war in Iran, and the scorecard for global equity markets makes for uncomfortable reading.

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European benchmark indices have shed around 7% since hostilities began — the Euro STOXX 50 down 6.5%, Germany’s DAX off 7%, France’s CAC 40 down 7.2%, and Italy’s FTSE MIB lower by 6.4% — dwarfing the more modest 2.5% decline in the US S&P 500, which benefits from America’s status as the world’s largest oil producer and its relative insulation from the energy shock.

Yet the headline numbers tell only half the story.

Beneath the surface, an extraordinary divide has opened up — between European companies that thrive on expensive energy, and those being crushed by it.

The energy shock reshaping the continent

The conflict’s most immediate economic consequence has been a seismic repricing of energy.

Iran’s effective closure of the Strait of Hormuz — through which 20% of the world’s petroleum flows — caused Brent crude to surge from around $70 to nearly $120 per barrel within days.

As of Tuesday, Brent sits at approximately $105, a 42% rally from pre-war levels.

In an attempt to cap the oil price surge, the International Energy Agency coordinated a historic intervention.

More than 30 nations in Europe, North America, and northeast Asia agreed to release a combined 400 million barrels of oil from emergency reserves — the largest such action in the IEA’s 50-year history.

Yet the oil market has sent a clear signal that even this enormous release is nowhere near enough to address the unprecedented supply disruption, with crude prices surging more than 17% since the announcement.

Natural gas has been hit even harder. The Dutch TTF benchmark — Europe’s most important gas price reference — has surged 60% to €52 per megawatt-hour.

In a note this week, Goldman Sachs energy analyst Samantha Dart warned this week that approximately 80 million tonnes per annum of LNG supply — 19% of the global total — is currently offline following the Strait’s disruption and the shutdown of Qatar’s LNG production facilities.

Her team maintains a TTF forecast of €63/MWh for the second quarter of 2026, warning that tightening European physical balances could push prices into the gas-to-oil switching range before the conflict resolves.

The winners: Energy, renewables and fertilizer

The clearest beneficiaries have been European oil and gas producers, whose revenues move in lockstep with the commodity the war has repriced so dramatically.

Norwegian energy giant Equinor has surged 23.7% since the start of the month, as investors pile into one of the continent’s largest oil and gas producers with substantial assets well outside the conflict zone.

Fellow Norwegian producer Vår Energi is up 19.9%, while Aker BP has gained 17.1%. Italy’s Eni is up 14.7%, and Portugal’s Galp Energia has added 13.6%.

The most striking gains, however, have come from an unexpected corner: biofuels.

German renewable fuels producer Verbio SE has shot up 30.4%, and Finland’s Neste Oyj — the world’s largest producer of renewable diesel — has gained 28.1%.

As conventional fossil fuels become more expensive and supply chains more precarious, energy alternatives become dramatically more attractive to both buyers and investors.

German gas utility Uniper SE, which has spent recent years diversifying away from Russian supply, has rallied 19.1%.

The fertiliser sector has also attracted significant gains, with K+S rising 15.3% and Yara International rising 15.0%.

The moves reflect a commodity supply crisis hiding in plain sight: around one third of global seaborne fertiliser trade — roughly 16 million tonnes — passes through the Strait of Hormuz, including 43% of seaborne urea exports, 44% of sulphur, and over a quarter of traded ammonia.

The losers: Steel, airlines and construction

On the other side of the ledger, the losses have been equally dramatic. Energy-intensive industries and businesses exposed to higher costs with little pricing power have been savaged.

Airlines have taken some of the heaviest punishment. Wizz Air — the Budapest-based low-cost carrier with heavy exposure to Central and Eastern European routes — has collapsed 31.2%.

Air France-KLM has lost 22.1% and easyJet has dropped 21.8%. All three face the same brutal arithmetic: jet fuel costs have surged, hedging programmes offer only partial and temporary protection, and there is limited ability to pass costs on to passengers quickly enough to protect earnings.

Steel producers have been hit with similar force. Salzgitter has fallen 27.9%, thyssenkrupp is down 27.3%, and ArcelorMittal has shed 19.1%, joined by stainless steel specialist Aperam, which has dropped 24.5%.

Steel production ranks among the most energy-intensive industrial processes on earth, and mills operating on thin margins face an immediate profitability crisis when gas prices surge 60% in such a short period.

Spanish engineering contractor Técnicas Reunidas has dropped 23.7%, a casualty of its deep exposure to Middle Eastern energy infrastructure projects now thrown into uncertainty by the conflict.

Construction group Webuild has fallen 26.6%, reflecting broader fears that an energy-driven slowdown will freeze infrastructure investment across Europe’s most exposed economies.

Mining company Hochschild rounds out the list, down 21%, rising energy costs compress margins and risk appetite for smaller extractive names evaporates.

Europe enters this crisis in a structurally vulnerable position.

Despite having dramatically reduced its dependence on Russian pipeline gas since the invasion of Ukraine, the continent remains acutely sensitive to energy supply disruptions — and gas storage levels heading into 2026 offer less of a buffer than in prior years.

SACRAMENTO — A corporate tax policy that costs California billions in lost tax revenue each year could be coming to an end as the state struggles to backfill federal cuts and resolve a looming budget deficit.

The proposed legislation, Assembly Bill 1790, would repeal the so-called “water’s edge” tax break, a filing option that allows multinational corporations to exclude the income of their foreign subsidiaries from state taxation.

“The tax bills of the wealthiest, most powerful corporations in the world are at all-time lows,” Assemblymember Damon Connolly (D-San Rafael), one of the primary sponsors of the bill, told The Times. “Meanwhile, we’re struggling to fund programs that feed children — I think everyone understands that now is the time for long-term budget solutions.”

Republican Sen. Roger Niello, vice chair of the Senate Budget and Fiscal Review Committee, said the bill to repeal water’s edge won’t receive support from GOP lawmakers. He said the legislation would lead to double taxation, meaning the same income would be taxed twice by different countries, and compared taxing corporations’ foreign profits to enacting tariffs.

“California already has the reputation of being not particularly business friendly,” said Niello (R-Fair Oaks). “This would really just compound that.”

A spokesperson for Gov. Gavin Newsom did not respond to a request for comment about the governor’s views on the proposal. Newsom, however, has largely shunned new tax increase proposals.

Legislation to increase taxes requires a two-thirds approval vote instead of a simple majority. Democrats in California hold a supermajority in both the Assembly and Senate, meaning the bill could still pass without Republican support, but it would require backing from the progressive and moderate wings of the party.

Kayla Kitson, a senior analyst at the California Budget and Policy Center, said the measure has a decent chance of winning support among moderate Democrats due to the state’s budgetary woes.

“The stakes are really high this year,” she said. “With any tax policy, it’s certainly hard to get folks beyond the progressive community on board, but there are a lot of discussions happening behind closed doors given the challenges that the state knows it’s going to have to deal with in the next few years.”

When filing taxes, a multinational corporation in the United States can currently choose between two methods. Worldwide reporting takes into account all of the corporation’s global profits or losses, while the water’s edge option allows the U.S.-based parent company to exclude the income of foreign subsidiaries. This can help corporations that own profitable foreign companies pay less taxes in the United States.

California is scrambling for solutions as the state is facing an estimated $18-billion budget deficit and fallout from federal cuts that slashed healthcare. A Republican-backed tax and spending bill signed last year by President Trump shifted federal funding away from safety net programs and toward tax cuts and immigration enforcement.

Carl Davis, a research director for the Institute on Taxation and Economic Policy, said the idea is picking up momentum nationwide, with states like Maryland, Minnesota and New Hampshire also considering a repeal in recent years, due to a growing awareness about profit shifting — a loophole in the water’s edge tax break that some corporations use to reduce their tax burdens by shifting profits made in a high-tax country into tax havens.

“Folks are outraged when they hear that these companies are pretending that they are earning their profits in the Caymans or in Switzerland and are skipping out on paying U.S. taxes as a result,” he said. “That feels insulting to a lot of people who are paying the taxes they owe every day.”

During an informational hearing at the Legislature last month, Rowan Isaaks, an economist with the nonpartisan Legislative Analyst’s Office, said the state does not know the extent to which corporations use profit shifting, which makes it impossible to determine exactly how much revenue California would gain by eliminating the water’s edge tax exemption. But he estimated it would bring in “single digit billions” for the state each year.

“While there would be revenue gains, the Legislature also faces a trade-off between broadening the tax base but also managing additional uncertainty,” said Isaaks, explaining it could increase budget volatility because foreign income is more sensitive to global economic conditions.

Issaks added that the Legislative Analyst’s Office has found no strong evidence that companies would flee California if the water’s edge tax break was repealed.

Jennifer Barton, director of the legislative services bureau for the California Franchise Tax Board, told legislators that mandating worldwide reporting wouldn’t be difficult for the state from an administrative standpoint, only requiring some additional outreach or educational efforts.

California Tax Foundation visiting fellow Jared Walczak said that the water’s edge option exists for a reason and that it would be unfair to mandate worldwide reporting. “The vast majority of the activity abroad is true economic activity abroad,” he told lawmakers. “Companies don’t just exist in the United States; they have sales, they have manufacturing, they do things abroad.”

A survey last year from the nonpartisan Pew Research Center found 63% of adult Americans believe large corporations or businesses should pay more in taxes, while 19% want corporate taxes to be lower and 17% believe corporate tax policy should remain the same.

Tech companies appear to be particularly aggressive with profit shifting. Six U.S. multinational corporations — Apple, Cisco, EBay, Facebook, Google and Microsoft — may have underpaid their U.S. corporate income taxes by $277 billion over varying periods from 2009 through 2022, according to a report from the Center on Budget and Policy Priorities.

Repealing the water’s edge tax break isn’t the only tax-related proposal being considered as the state seeks to increase revenue. The Billionaire Tax Act is a controversial proposed state ballot initiative that would levy a one-time, 5% tax on the state’s billionaires to help offset federal cuts. Newsom is among its critics.

Davis believes it will continue to be a hot topic regardless of the bill’s outcome this year.

“There is very good reason to think this [repeal] is going to happen at some point,” he said. “This is a debate that is certainly not going away.”