US businesses versus Trump

Donald Trump may be starting to find out that what may seem simple clampdowns on travel for ‘security’ reasons can have wide ranging effects that the new White House strategists may not have foreseen.

Trump now has more than a few judges opposing his travel restrictions, he now has many large US businesses challenging him legally.

The companies include Google, Microsoft, Apple, Facebook,Twitter, Intel, eBay, Netflix, Uber, Amazon and Expedia.

RNZ: Apple, Google, Facebook among 100 firms opposing Trump’s travel ban

Apple, Google and Microsoft have joined a legal brief opposing US President Donald Trump’s temporary travel ban, arguing it “inflicts significant harm on American business.”

The brief was signed by nearly 100 companies including Facebook, Twitter, Intel , eBay, Netflix and Uber, as well as non-tech companies such as Levi Strauss and Chobani.

The document is an amicus brief, which allows parties not directly involved in a case but who feel they are affected by it, to give their view.

Mr Trump’s executive order, the most contentious policy move of his first two weeks in office, faces crucial legal hurdles. It had temporarily barred entry to the United States by people from seven mostly Muslim countries, as well as suspending the US refugee programme.

A federal judge in Seattle on Friday blocked the move, and the Trump administration has a deadline on Monday (6pm Tuesday NZT) to justify the action.

“The order represents a significant departure from the principles of fairness and predictability that have governed the immigration system of the United States for more than fifty years,” the brief from the companies stated.

“The order inflicts significant harm on American business, innovation, and growth as a result,” it added.

“Immigrants or their children founded more than 200 of the companies on the Fortune 500 list.”

Immigrants and especially the next generation are often cited as a major terrorism risk, with scant evidence beyond a few isolated examples.

On the other hand, in reality land, immigrants and their families have been a huge part of American success for a long time.

US tech companies, which employ many foreign-born nationals, have been among the most vocal groups in speaking out against Mr Trump’s travel order.

Amazon.com and Expedia, both based in Washington state, supported the Seattle lawsuit, asserting that the travel restrictions harmed their businesses.

It’s not just those who are directly restricted that cause problems. The uncertainties about entry to the US and about immigration is likely to cause many more people to reconsider the US as a destination.

Unforeseen effects and unintended consequences may end up becoming big issues for a very inexperienced White House.

And Trump’s habit of shooting from the hip at anyone who criticises him or opposes what he is trying to do may lead to mayhem, including a significant loss of business confidence in the US.

Tax paid by multinational companies

The issue of tax paid (or lack or tax paid) by multinational companies came up in Parliament’s Question Time yesterday.

7. FLETCHER TABUTEAU (NZ First) to the Minister of Finance: Does he think it is acceptable that 20 multinational companies paid just $1.8 million in income tax in 2014, despite recording nearly $10 billion in annual sales in New Zealand?

That sounds like dramatic underpayment of tax but it lacks a lot of detail. In many cases much of the cost of sales from multinational companies is incurred overseas and the sales are recorded overseas.

Hon BILL ENGLISH (Minister of Finance): As I think the member is aware, we do not tax turnover in New Zealand, so it is a bit hard to know. It is possible that the levels of tax are lower than they should be. We expect multinationals to pay their fair share of tax and be good corporate citizens. Most companies play by the rules, but the Government is continuing to tighten up the rules around transfer pricing and interest deductibility. New Zealand continues—most importantly, in my view—to work with other OECD countries to strengthen international tax settings, because, in some respects, what is most concerning about some multinationals is that they do not appear to pay much tax anywhere. We need to work with other countries to make sure that they pay their fair share as appropriate to each country’s rules.

That’s standard waffle from English, and his following responses didn’t add much. But Tabuteau came up with two examples.

Fletcher Tabuteau: Given that he just stated that he believes in a fair and equitable tax system, does he think it right that MasterCard New Zealand declared revenue in New Zealand of just $4.5 million, and paid tax of only $71,000 in its latest figures, despite sharing evenly in $40 billion of annual credit card billings?

That seems interesting but it is misleading, as his next question shows.

Fletcher Tabuteau: Given his answer, does he think it right that Visa New Zealand shared in the same pool of credit card billings of $40 billion, and it declared only $3.2 million of revenue and paid only $185,000 in tax in its latest figures?

So Mastercard and Visa together shared in “the same pool of credit card billings of $40 billion”. And that is not their sales, it is the sales of many companies who use credit card services so people can pay for goods and services.

It doesn’t separate domestic versus international sales.

Credit card charges are only a small part of overall sales, a few percent at most. If you pay Inland Revenue by credit card the fee paid to Westpac is 1.42%, if you pay the Police the fee is 1.9%.

It is obvious from this that some of the $40b are not sales but are payments with no revenue or tax involved.

One percent of $40b is $400 million, still a substantial amount. But there will be significant costs involved in providing the service and providing the finance – banks provide finance free of interest for up a month and a half.

So the detail Tabuteau is insufficient to have any ideas how outraged to be about how little revenue Mastercard and Visa report and how little tax they pay.

I don’t know how things are structured between the banks and the credit card companies. It looks like the banks incur most of the costs and will get most of the sales value from transactions.

Fletcher Tabuteau: How will the Minister help many New Zealand companies, which have said that they have missed out on investments here at home because overseas competitors are abusing the tax system here in New Zealand, giving them an unfair advantage over Kiwi firms?

That’s little more than a vague assertion of abuse. Without details Tabuteau has embellished his claims and made a very weak argument.

New Zealander with no serious convictions being deported from WA

The West Australian reports that a New Zealander without serious convictions is being deported.

New Zealand-born Joel Royston Makaea, 34, was arrested and taken into immigration detention in Perth on Monday after the Immigration Minister revoked his visa on “character” grounds.

Under changes to the Migration Act introduced in December, the minister has the power to cancel the visa of anyone involved in an organisation or gang that was reasonably suspected of being involved in criminal activity.

The person targeted for deportation does not have to be convicted of a serious offence, or even charged with one.

It is understood he has only a limited criminal history during his time in Australia, with his most recent charges relating to disorderly conduct and driving under the influence of drugs.

Is this going to be another controversial vase?

Mr Makaea, who is believed to be a father of six, is the sergeant-at-arms of the Rebels’ Bentley-based chapter and has lived in Perth since March 2005.

So he moved to WA when he was about 24.

His fellow Rebels gang members do have form, including the current and former presidents of the Bentley chapter, who are both awaiting trial on drug trafficking charges.

According to Australian Visa cancellations under section 501 “association with persons suspected of engaging in criminal conduct” is sufficient grounds for cancelation of a visa.

Immigration and Border Protection Minister Peter Dutton would not comment on the specifics of Mr Makaea’s case yesterday.

He made no apologies for the hard line taken by his Government, saying the involvement of bikies in serious and organised crime was well documented and community safety had to come first.

“Criminal bikie groups sell and distribute ice and are involved in other serious crime,” he said.

“On that basis, through a provision within the Migration Act, I can decide that their visas will be cancelled and they will be going back to their country of birth.

“Coming to Australia and remaining here on a visa is a privilege — not a right.

“If that privilege is abused, then they should expect to have their visa cancelled and be sent packing from our country.”

That’s the new tough Australian approach to visas.

Mr Makaea does have the right to appeal against the decision but would need to demonstrate that he was not a person of bad character.

Assumptiions shouldn’t be made from appearances but he may need to do more than present his photo.

WA bikie faces deportation

Australian Visa cancellations under section 501

The Australian Human Rights Commission explains how visas can be cancelled under section 501 of Australia’s Migration Act.

The five broad categories under which visas can be refused or cancelled:

  • substantial criminal record
  • conviction for immigration detention offences
  • association with persons suspected of engaging in criminal conduct
  • past and present criminal or general conduct
  • significant risk of particular types of future conduct.

So it is not just a criminal record with more than one year imprisonment.

Association with a gang suspected of being involved in criminal conduct is one that may address War hero with no criminal record held in Australian prison

Lawyer Michael Pena-Rees told Fairfax that Mr Rutene had “exceptional good character” and no criminal record in New Zealand or Australia.

Mr Pena-Rees said police used tasers on Mr Rutene, who moved to Australia three years ago and lived with his partner and her son.

He was forcibly detained and forced into solitary confinement for four days, because of his connection with the Rebels motorcycle gang, Mr Pena-Rees said.

“The Rebels OMC is not a criminal organisation in Western Australia,” Mr Pena-Rees told Fairfax.

“To be a risk to national security because of his connection to an outlaw motorcycle club is an abhorrent and ill-conceived decision in light of the fact that Ko is a decorated ex-soldier, who, as part of the ANZAC spirit, served overseas for the same reasons as Australia and its soldiers.”

Note that Rutene only moved to Australia three years ago. He obviously has significant links to New Zealand.

His detention may be draconian but Australia has chosen to decline visas for people they deem at risk of criminal involvement.

I doubt many New Zealanders would be happy with Australians coming here and joining the Mongrel Mob or Black Power.

Details of visa cancellation criteria:

Background paper: Human rights issues raised by visa refusal or cancellation under section 501 of the Migration Act

2 When can a visa be refused or cancelled under section 501?

2.1 A two stage decision-making process

There are two stages of the decision-making process under section 501. At the first stage, the Minister or the delegate must consider whether the person passes the character test (referred to as the ‘threshold test for refusal or cancellation’ in the sections below). The character test is set out in subsection 501(6), and is discussed in section 2.3 below.

If the Minister or the delegate is satisfied that the threshold test under subsection 501(1), (2), or (3) for refusal or cancellation has been met, this triggers the second stage of the decision-making process under section 501. At this stage, the Minister or the delegate must decide whether to exercise their discretion to refuse or cancel the person’s visa.

2.2 Stage 1: The threshold test for refusal or cancellation

(a) Refusal or cancellation by the Minister or a delegate under subsections 501(1) or (2)

The Minister may refuse to grant a visa to a person under section 501(1) if the person does not satisfy the Minister that he or she passes the character test.

A person’s visa may be cancelled under section 501(2) of the Migration Act if:

  • the Minister reasonably suspects that the person does not pass the character test, and
  • the person does not satisfy the Minister that they pass the character test.

The power in subsections 501(1) and 501(2) can be exercised by the Minister personally, or by a delegate of the Minister. In practice, certain DIAC officers usually act as the Minister’s delegates in making such decisions.

(b) Refusal or cancellation by the Minister under subsection 501(3)

The Minister may refuse to grant a visa or may cancel a person’s visa under subsection 501(3) of the Migration Act if:

  • the Minister reasonably suspects that the person does not pass the character test and
  • the Minister is satisfied that the refusal or cancellation is in the national interest.

This power can only be exercised by the Minister personally. ‘National interest’ is not defined – it is a matter for the Minister to determine what constitutes the national interest in making a decision about whether to refuse or cancel a person’s visa.

It is also important to note the Minister’s personal powers under sections 501A and 501B of the Migration Act. These powers enable the Minister to set aside an initial decision by a delegate or the Administrative Appeals Tribunal in relation to refusal or cancellation under section 501, and substitute it with his or her own decision to refuse or cancel the visa on character grounds. These personal powers are discussed in section 5.3 below.

2.3 The character test

(a) Introduction

Section 501 of the Migration Act provides that a person does not pass the character test if they fall within any of the grounds specified in subsections 501(6)(a) to (d). These grounds can be grouped into five broad categories:

  • substantial criminal record
  • conviction for immigration detention offences
  • association with persons suspected of engaging in criminal conduct
  • past and present criminal or general conduct
  • significant risk of particular types of future conduct.

Further guidance on the interpretation and application of these grounds is contained in Direction No. 55. Each of these categories is discussed briefly below.

(b) Substantial criminal record

A person will not pass the character test if they have a ‘substantial criminal record’, as defined in subsection 501(7). For the purposes of the character test, a person has a ‘substantial criminal record’ if they have been:

  • sentenced to death or to imprisonment for life
  • sentenced to imprisonment for 12 months or more
  • sentenced to two or more terms of imprisonment where the total of these terms is two years or more
  • acquitted of an offence on the grounds of unsoundness of mind or insanity, and as a result they have been detained in a facility or institution.

A person who has a ‘substantial criminal record’ will automatically fail the character test, regardless of any mitigating factors which attended their offending. However, mitigating factors may be taken into account at the second stage under section 501, when the decision-maker is considering whether to exercise the discretion to refuse or cancel the person’s visa (discussed in section 2.4 below).

(c) Conviction for immigration detention offences

In 2011 the character test in section 501 was amended to include additional grounds upon which the Minister or a delegate may decide to refuse to grant, or to cancel, a person’s visa. These amendments to the character test were introduced following disturbances in the Christmas Island and Villawood Immigration Detention Centres in March and April 2011. Due to these amendments, a person will fail the character test if that person has been convicted of any offence which was committed while the person was in immigration detention, or during or after an escape from immigration detention, before being re-detained. Also, an escape from immigration detention is itself an offence which will result in the person failing the character test under section 501.

The effect of these amendments is that if a person commits an offence while in (or while escaping from) immigration detention, pursuant to subsection 501(6)(aa) or (ab) their criminal behavior will trigger the power in section 501 to refuse or cancel their visa, even if the offence is not serious enough to warrant a sentence of 12 months’ imprisonment (or any period of imprisonment). Under subsection 501(6)(aa) or (ab) therefore, a lower level of criminality may cause a person to fail the character test, because of the context in which their offence was committed, as compared to the criminality required for a ‘substantial criminal record’ for the purposes of subsection 501(6)(a).

Also, unlike under the ground of ‘past and present criminal or general conduct’ in subsection 501(6)(c) (discussed below), under subsections 501(6)(aa) and (ab) there is no consideration of the severity (or lack thereof) of the offending, or any mitigating circumstances. If an ‘immigration detention offence’ conviction has been recorded, the person will automatically fail the character test.

(d) Association with persons suspected of engaging in criminal conduct

A person does not pass the character test under subsection 501(6)(b) if the person ‘has or has had an association with someone else, or with a group or organisation, whom the Minister reasonably suspects has been or is involved in criminal conduct’.

Direction No. 55 requires that in establishing ‘association’ for the purposes of the character test, decision-makers are to consider:

  • the nature of the association
  • the degree and frequency of association the person had or has with the individual, group or organisation, and
  • the duration of the association.

Direction No. 55 also requires decision-makers to assess whether the person was sympathetic with, supportive of, or involved in the criminal conduct of the person, group or organisation, and directs that ‘mere knowledge of the criminality of the associate is not, in itself, sufficient to establish association’. The association must have some negative bearing upon the person’s character in order for the person to fail the character test on this ground.

(e) Past and present criminal or general conduct

Under subsection 501(6)(c) of the Migration Act, a person does not pass the character test if, having regard to the person’s past and present criminal conduct and/or general conduct, the person is ‘not of good character’.

In considering whether a person is ‘not of good character’, Direction No. 55 requires decision-makers to take into account ‘all the relevant circumstances of the particular case … to obtain a complete picture of the person’s character’, including evidence of ‘recent good behaviour’.

In determining whether a person’s past or present criminal conduct means that they are ‘not of good character’, decision-makers are to consider:

  • the nature, severity, frequency and cumulative effect of the offence/s
  • any surrounding circumstances which may explain the criminal conduct
  • the person’s conduct since the offence/s were committed, including:
    • the length of time since the person last engaged in criminal conduct
    • any evidence of recidivism or continuing association with criminals; any pattern of similar offences; or any pattern of continued or blatant disregard or contempt for the law
    • ‘any conduct which may indicate character reform’.

The consideration under subsection 501(6)(c)(ii) of a person’s past or present general conduct allows the decision-maker to take into account ‘a broader view of a person’s character where convictions may not have been recorded or where the person’s conduct may not have constituted a criminal offence’. In considering this broader view of character, the decision-maker should take into account all relevant circumstances, including evidence of rehabilitation and any relevant periods of good conduct’.

Direction No. 55 sets out the following factors which may be considered in determining whether a person’s past or present general conduct means that they are ‘not of good character’:

  • whether the person has been involved in activities which show contempt or disregard for the law or human rights (such as war crimes, crimes against humanity, terrorist activities, drug trafficking, ‘political extremism’, extortion, fraud, or ‘a history of serious breaches of immigration law’)
  • whether the person has been removed or deported from Australia or another country, and the circumstances that led to the removal or deportation
  • whether the person has been dishonourably discharged or discharged prematurely from the armed forces of another country as the result of disciplinary action in circumstances, or because of conduct, that in Australia would be regarded as serious.

(f) Significant risk of particular types of future conduct

Subsection 501(6)(d) provides that a person does not pass the character test if there is a significant risk that, while in Australia, the person would:

  • engage in criminal conduct
  • harass, molest, intimidate or stalk another person
  • vilify a segment of the Australian community
  • incite discord in the Australian community or in a segment of the community or
  • represent a danger to the Australian community or to a segment of the community, whether by way of being liable to become involved in activities that are disruptive to, or in violence threatening harm to, that community or segment, or in any other way.

Direction No. 55 provides that these ‘significant risk’ grounds are enlivened if there is evidence suggesting that there is ‘more than a minimal or remote chance that the person, if allowed to enter or remain in Australia, would engage in [the prescribed] conduct’. It is not sufficient to find that the person has engaged in such conduct in the past – there must be a significant risk that the person would engage in such conduct in the future.

Direction No. 55 also states that the operation of the last three grounds of ‘future conduct’ set out above must be balanced against Australia’s ‘well established tradition of free expression’. The Direction states that these grounds are not intended to be used in order to deny entry or continued stay of persons merely because they hold and are likely to express unpopular opinions, even if those opinions may attract strong expressions of disagreement and condemnation from some elements of the Australian community.