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Kenya: Many Prospecting and Mining Licenses Cancelled; New Mining Law Considered

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(May 22, 2015) Kenya's Ministry of Mining has cancelled 65 licenses for prospecting and mining; some of the revoked permits were held by individuals and others by companies. The moves have raised concern that investors will lose confidence in the viability of the industry in Kenya, and some have threatened lawsuits over the issues of licenses and royalty rates. (Kennedy Senelwa, Kenyan Ministry Revokes 65 Mining Licenses for Violating Laws, EAST AFRICAN ONLINE (May 16, 2015), Open Source Center online subscription database, ID No. AFN2015051861715551.)

According to Najib Balala, the Cabinet Secretary who heads the Ministry of Mining, the licenses were cancelled either due to their having reached their dates of expiration or due to breaches of licensing conditions and of the Mining Act. He stated on May 8, 2015, "[h]enceforth, any mining or prospecting activities by these persons or companies over the areas that are subject of [sic] the revoked licence shall be illegal." (Id.; Mining Act, 306 LAWS OF KENYA (rev. 2012), FAOLEX [website of the U.N. Food and Agriculture Organization].)

The cancelled licenses covered a number of regions in the country and a variety of types of mines, including some for bauxite, gemstones, gold, gypsum, iron ore, and nickel. Cliff Otega of the mining consultancy firm Standard & Mutua notes that the "law allows the Cabinet Secretary to cancel licences but how the issue is handled matters, as Kenya is competing for investment with other countries and investors require a predictable environment." (Senelwa, supra.)

Possible Increase in Royalty Rates

In addition to revoking some licenses, the Ministry has said it wants to raise the amount of royalties that Base Resources Ltd. of Australia must pay for titanium, in contradiction to the existing agreement. The royalty rate in effect in February 2014, when Base Resources obtained its mining lease, was 2.5% for the first five years of production, according to a gazette notice quoted by the East African. The Ministry now would like to base the rate on the charges in South Africa and Australia, which charge a 5% mining royalty. The comparable rate in Mozambique, Senegal, and Sierra Leone is 3%. (Id.)

New Mining Law Under Consideration

Kenya is now in the process of considering a new law on mining, based on draft legislation from 2014. The expectation, according to Balala, is that the law will provide policy stability and make Kenya more attractive to potential investors. Speaking in March of this year, Balala expressed the hope that the new law could be enacted by the end of the fiscal year on June 30. (Ilya Gridneff, Kenyan Mines Minister Sees Law Boosting Investment Interest, BLOOMBERG BUSINESS (Mar. 23, 2015); The Mining Bill 2014, Commission for the Implementation of the Constitution website (last visited May 20, 2015).)

Kenya has been given a low ranking on an investment attractiveness index produced by the Fraser Institute of Vancouver, based on taxation and regulation uncertainty and a lack of transparency, in addition to the threat of terrorist action. (Gridneff, supra.)

In addition to improving the investment climate, the revision is aimed at increasing the share of revenue the state receives from the mining industry. Royalty rates will reportedly vary based on the product mined, including:

  • 1% of gross sales value for minerals such as gypsum and limestone;
  • 10% for coal, titanium, niobium, and rare-earth elements; and
  • 12% for diamonds. (Id.)

Commenting on the draft law, Balala said "[t]here have been bad practices before, so we want to change that. … This bill is good not only for the government, but also for the industry as it guarantees them stability, it guarantees them their rights. It also brings transparency to the process." (Id.)

Author: Constance Johnson More by this author
Topic: Mineral resources and mines More on this topic
Jurisdiction: Kenya More about this jurisdiction

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Taiwan: Long-Term Care Legislation Adopted

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(May 22, 2015) On May 15, 2015, the Legislative Yuan, Taiwan's main legislative body, passed a draft law on long-term care services. Passage of the law clears the way for legislation on long-term care insurance to be adopted. (Alison Hsiao, Legislature Passes Long-Term Care Bill, TAIPEI TIMES (May 16, 2015); Long-Term Care Services Act [Act] (May 15, 2015), Legislative Yuan website (in Chinese).)

Passage of the new law, which was authored by the Nationalist Party (Kuomintang, KMT), was achieved only after a controversial provision on funding was put to a floor vote as a last-ditch measure. The provision states that the funding of long-term care should come from five sources: "public coffers, health surcharges on tobacco, donations, interest from the fund, and other sources." (Hsiao, supra; Act, art. 15, ¶ 3.) The Democratic Progressive Party (DPP) had instead recommended that inheritance and gift taxes be increased to fund the services. (Hsiao, supra.) The same provision authorizes the establishment of a Long-Term Care Services Development Fund, with a minimum amount of NT$12 billion (about US$394.8 million), to be developed by the government over a five-year period. (Act, art. 15, ¶¶ 1 & 2.) The limits on and sources of the Fund should be reviewed after the law has been implemented for two years. (Id. art. 15, ¶ 4.)

While DPP legislator Yu Mei-nu noted that the new law "is progressive as it guarantees universal, plural and affordable services and the dignity and rights of both care-receivers and caregivers" and clearly prohibits discrimination, she found it regrettable that the Act "lacks the funding to be extensively and substantively enforced," given that it works out to be "only NT$2.4 billion per year." (Hsiao, supra.)

Features of the Act

The Act defines long-term care as life support, assistance, societal involvement, and care and the related medical services to meet the needs of individuals whose mental or physical incapacity has lasted for or is expected to last more than six months or of their caregivers. (Act, art. 3(1).) The Act distinguishes between the services to be provided by central institutions (art. 4) and by local institutions (art. 5). The types of long-term care services include home care; community care (in a certain community place or facility), including daytime care, household support, temporary accommodation, group housing, and small-scale multifunctional and other integrated services; institutional residency, providing the care recipient with full-time or night-time accommodation; household caregiver support services, provided at a specified time, at the home, etc. to a family care giver; and other types that may be announced by the central authorities in charge. (Act, art. 9 ¶ 1.)

KMT Legislator Alicia Wang pointed out that the four main pillars of the Act are "personnel management and training; management of institutions; protection of the rights of the care-receivers[;] and encouraging and rewarding measures for the development of services." (Hsiao, supra.) She added that the new law also provides for "employed, personal and family caregivers to be systematically incorporated into the long-term care system framework, with the former group, including migrant caregivers, provided with training and the latter with respite care services." (Id.)

Minister of Health and Welfare Chiang Been-huang indicated that there are nearly 800,000 disabled people in Taiwan in need of long-term care, so that in effect more than two million people would benefit if those who need the services and their families are included. (Id.)

Author: Wendy Zeldin More by this author
Topic: Health More on this topic
 Health insurance More on this topic
Jurisdiction: Taiwan More about this jurisdiction

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Egypt: State Litigation Authority Rejects Request to Suspend a TV Show

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(May 22, 2015) On May 19, 2015, Egypt's State Litigation Authority rejected a petition submitted by Al Azhar (the main religious institution in Egypt) to suspend a television program. The petition accused the show's host of deliberately criticizing religious symbols and influencing Muslims to doubt their beliefs. (A Memo of the State Litigation Authority Rejects the Al Azhar Petition to Suspend El-Behiry Show, AL YOUM 7 (May 19, 2015) (in Arabic).)

In April 2015, Al Azhar filed petition No. 48059 before the administrative court against the Prime Minister and the Minister of Investment to order TV show host Islam El-Behirey to shut down his program on Islamic heritage and the science of religious jurisprudence. (Al Azhar Files a Lawsuit to Suspend El-Behirey Show, AL-BAWABA (Apr. 22, 2015) (in Arabic).)

In its petition, Al Azhar accused El-Behirey of attacking religious institutions, doubting the "pillars" of Islam, and attempting to influence other Muslims to doubt their religious beliefs. Furthermore, the Al Azhar legal representatives argued that El-Behirey violated and deliberately ignored article 7 of the Egyptian Constitution of 2014 by discussing religious concepts without obtaining the prior approval of the Al Azhar religious institution. (April 26: When the Court Will Hear the Lawsuit Filed by Al Azhar Against the El-Behirey Show, AL YOUM 7 (Apr. 23, 2015) (in Arabic).) Article 7 identifies Al Azhar as "the main reference" for religious science and Islamic affairs in the country. (Constitution of the Arab Republic of Egypt 2014 [unofficial English translation], State Information Services website.)

Finally, Al Azhar also claimed that El-Behirey disregarded the common interpretation of the Qur'an and preached his own personal understanding of the holy text, without any consultation with Al Azhar. (April 26: When the Court Will Hear the Lawsuit Filed by Al Azhar Against the El-Behirey Show, supra.)

In response, El-Behirey stated that he defended the moderate version of Islam. He also alleged that his criticism focused only on the extreme religious views that helped in forming terrorist groups like the Islamic Jihad, al-Qaeda, and ISIS. (Adham Youssef, Al-Azhar to Prosecute TV Presenter over 'Critical' Content, DAILY NEWS EGYPT (Apr. 07, 2015).)

After reviewing the petition submitted by Al Azhar, the State Litigation Authority rejected the request. The Authority stated in its legal memorandum that the Prime Minister and the Minister of Investment are not authorized to order the suspension of the program. The Authority elaborated by saying that the only entity that is authorized to suspend the show is the Egyptian Satellite Company (Nilesat). (The State Litigation Authority Rejects the Al-Azhar Petition to Suspend El-Behiry Show, AL-WASAT (May 19, 2015) (in Arabic).)

Author: George Sadek More by this author
Topic: Church and state relations More on this topic
 Freedom of speech More on this topic
 Television and Film More on this topic
Jurisdiction: Egypt More about this jurisdiction

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Sweden: Tax Authority Publishes Guidelines for Income Tax on Bitcoin Mining, Suggests Prohibition of Bitcoin Use in Waste and Scrap Metal Transactions

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(May 20, 2015) On April 24, 2015, just days before the May 4 tax filing deadline, Sweden's Tax Authority published guidelines on how to declare income from Bitcoin mining. (Beskattning vid mining av bitcoin och andra virtuella valutor m.m. [Guidelines on the Taxation of Mining of Bitcoins and Other Virtual Currencies] (Apr. 24, 2015), Dnr [Case No]: 131 191846-15/111, Tax Authority website.)

Mining of Bitcoins, or of other virtual currencies, is generally set up so that it can be done from a server; because there are only a limited number of Bitcoins that can be mined, there is a race to mine them before another party does. Successful Bitcoin mining is therefore not guaranteed. (Id.)

Under Swedish tax law there are three main forms of income: income from employment, which includes income from hobby activities; income from economic activity (such as a personal business); and income from capital. (1:8 § INKOMSTSKATTELAG [Tax Code], (Svensk författningssamling [SFS] 1999:1229).) Income is considered to be derived from employment if it is not considered income of the other two types. (Id. 10:1 §.) Economic activity must be carried out "professionally and independently." (Id. 13:1 §.)

The Tax Authority explained that because of the limited potential for profit in light of the cost of the equipment needed, it is unlikely that income from Bitcoin mining can be considered economic activity, not least because it is not consistent over time for a sufficiently long period as prescribed by the legal provisions characterizing such activity. However, if the person mining the Bitcoins (or other digital currency) "carries out the mining in a professional and cost efficient manner over a longer period with appropriate equipment," or if "the activity is expected to create a surplus as measured over the full financial calculation period" and "the computing capacity can be expected to generate more than 25 bitcoins a year (or the equivalent value in form of transactional fees or other virtual currency)," it can be considered economic activity. (Guidelines on the Taxation of Mining of Bitcoins and Other Virtual Currencies, supra.)

Income from hobby activities often generate little taxable income.  Also, the costs associated with such activities are deductible for up to five years prior to the year the hobby activity generated a surplus. (Tax Code, 12:37 §.)  Thus, income from the mining of Bitcoins typically will be characterized for tax purposes as income from employment rather than from economic activity.  

The Tax Authority guidelines also state that mining of Bitcoins does not require payment of VAT. (Guidelines on the Taxation of Mining of Bitcoins and Other Virtual Currencies, supra.)

Trading in Bitcoins, on the other hand, is taxed as capital gains. (Skatteverkets ställningstaganden, Beskattning av bitcoin och andra s.k. virtuella valutor i inkomstslaget kapital (Apr. 23, 2014), Dnr [Case No]:131 212709 -14/111, Tax Authority website.)

Prohibiting the Use of Bitcoins in Scrap Metal Trade

The Swedish Tax Authority also advocates a prohibition on the use of Bitcoins in the buying and selling of scrap metal. On March 9, 2015, the Tax Authority published its response to a formal consultation being conducted by the government on the prohibition of the use of cash in waste and scrap metal transfers. The police had noted that the main problem with cash is that it is difficult to trace; the Tax Authority argued that certain digital currencies, such as Bitcoin, are equally difficult to trace and therefore their use should also be prohibited in such transactions. (Skatteverkets yttranden: Remiss av SOU 2014:72, Handel med begagnade varor och med skrot – vissa (Mar. 9, 2015), Dnr/målnr/löpnr:131 693400-14/112, Tax Authority website.)

Prepared by Elin Hofverberg, Foreign Law Research Consultant, under the supervision of Luis Acosta, Chief, Foreign, Comparative, and International Law Division II.

Author: Luis Acosta More by this author
Topic: Currency More on this topic
 Income tax More on this topic
 Taxation More on this topic
Jurisdiction: Sweden More about this jurisdiction

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Italy: Summary Divorce Proceedings Revised

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(May 20, 2015) On May 26, 2015, new legislation amending the procedural rules on the declaration of a divorce will enter into effect in Italy. (Law No. 55 of May 6, 2015, Provisions on the Dissolution or Cessation of the Civil Effects of Marriage as well as Cohabitation Between Spouses [Law No. 55], GAZETTA UFFICIALE [G. U.] No. 107 (May 11, 2015), NORMATTIVA (in Italian).)

Law No. 55 reduces the statutory period for the declaration of divorce from three years to 12 months from the date of the appearance of the couple before the president of the court in which the separation proceedings are held, even if a contentious trial becomes a consensual proceeding. (Law No. 55, art. 1(1), amending Law No. 898 of Dec. 1, 1970, art. 3(2), G. U. No. 306 (Dec. 3, 1970), NORMATTIVA (in Italian).) In cases of consensual separation proceedings, the statutory period for declaration of a divorce is always six months. (Law No. 55, art. 1(1).)

Amending the Civil Code, Law No. 55 establishes that in the case of separation, cohabitation between the spouses legally ceases from the moment at which the president of the court authorizes the spouses to live separately or from the date on which the spouses sign the minutes of separation by mutual consent before the court president and the president approves such minutes. The judicial order authorizing the separation or approving the spouses' agreement to separation is communicated to the civil registry authorities for registration. (Id. art. 2(1).)

The new rules also apply to separation proceedings underway on the date of entry into effect of Law No. 55, that is, on May 26, 2015. (Id. art. 2(1).)

Author: Dante Figueroa More by this author
Topic: Divorce More on this topic
 Evidence More on this topic
 Legal remedies More on this topic
 Marriage and family status More on this topic
 Trials and court proceedings More on this topic
Jurisdiction: Italy More about this jurisdiction

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