Global Risks and Resilience

Question 1

what is profit repatriation

Answer 1

the ability of a firm to send foreign-earned profits or financial assets to the firm’s home country in hard currency (i.e. USD) after meeting the host nations tax obligations

Question 2

Apple -> case study
Name some facts about Apple’s plan to repatriate $285 million back into the US

Answer 2

• Trump revealed that he would reduce the tax per cent rate from 35% to 15.5% to get big companies like Apple to bring their money back to the USA from overseas holdings
• Apple’s money was kept in Ireland for years, before the EU investigated Apple about its ability to pay taxes, causing them to move it to the small island of Jersey off the coast of Normandy (2015), which hardly taxes corporations -> Ireland stated it would ban tax avoiding corporations
• The rate of corporation tax in Ireland was the most competitive in Europe at 12.5%, but Apply had arranged whereby the max tax rate was just 1%, and in 2014 it only paid 0.005%
• Apple’s first step is to buy back even more of its shares as a first step. It has already purchased 22% of its outstanding shares since 2012

Question 3

Define tax avoidance

Answer 3

legal usage of the tax regime in a single territory (country) to one’s advantage - reduces the amount of tax payable by means that are within the law.

Question 4

what is a tax shelter

Answer 4

one type of tax avoidance

Question 5

What is a tax haven

Answer 5

jurisdictions that facilitate reduced taxes

Question 6

name 2 examples of tax avoidance

Answer 6

• multinational companies who use complex offshoring methods to reduce their taxation payments in host countries
• others who refuse to repatriate profits back to their country of origin, again as a way of reducing tax burdens.

Question 7

Nandos case study - tax avoidance
Briefly describe ->

Answer 7

• use the tax havens of Jersey
• reductions of the profits using image rights (£20 million) -> use of an offshore company to collect money from people using their image
• a place in the British Virgin Islands was anonymously owned, by the Nandos family trust to hold money there, therefor inheritance tax could not be paid

Question 8

Who are the winner of tax dodging _ explain with stats or facts

Answer 8

big corporations and super-rich people:
- Since 2015, the richest 1% have more wealth than the world combined
- The super-rich use tax havens to continue to dodge their taxes
- 2014 -> saw the leak of the Panama papers -> unveiling how tax evasion and avoidanec have become a standard parctice globally
- rich individuals store their profits offshore to increase tehir profits
- they aim to make countries compete to provide tax breaks, exemptions and lower artes
- 50 biggest US companies stashed $1.6 trillion offshore in 2015
- Europe’s biggest banks have registered over a 1/4 of their profits in tax havens

Question 9

Who are the losers of tax dodging + explain

Answer 9

Ordinary people and poor countries:
- When rich people stash their profits overseas in tax havens, they deprive governments of resources they need to provide public services like schools and hospitals
- Governments either have to cut back on these services or collect higher taxes from everyone else
- tax dodging costs poor countries at least $100 billion every year -> enough to provide an education for 124 million childrena nd prevent almost 8 million deaths of children and mothers
- Africa loses $14 billion due to tax havens taht could save 4 million lives and get every child into the education system there.

Question 10

what are disruptive technologies + example

Answer 10

a technology which brings major changes to the way people live and work instead of merely supporting and enhancing the current way things are done. One example is a drone -> unmanned aerial vehicles operated by a remote control - either by an operator or an on-board computer

Question 11

benefits of drones

Answer 11

• people can mount cameras for their aerial films
• surveillance to help locate victims in earthquake and hurricane zones
• conflict can be waged remotely using armed drones
• can be used for companies -> Amazon use drones to deliver goods to customers
• can make structural surveys of buildings -> to monitor env conditions and provide farmers with info
• employment -> through manufacturing and tech
• monitor large crowds for saftey

Question 12

cons of drones

Answer 12

• drones are not always properly accurate for war and conflict
• hacking drones - causing civilian fatalities
• spying - invading peoples privacy
• may desensitise armed personnel to war and killing
• problems of cost, breakdown and malfunction of computer software, and human error in operation
• used by terrorist organisations to conduct mass killings or killings of important people, i.e prime ministers, creating chaos within the country

Question 13

what were the gatwick drone incident 2018

Answer 13

when drones were irresponsible flown closing Gatwick airport - an international transport hub at one of the busiest times of the year

Question 14

impacts of the gatwick drone incident

Answer 14

• delayed and diverted flights
• introduction of technology to catch and stop drones
• business people may not be able to conduct work
• loses confidence/ rep in Gatwick
• transport on perishable goods may be diverted or lost

Question 15

Whats is 3D printing

Answer 15

Technology that allows for the creation of 3D physical objects from a digital model, by building it up in a sequence of layers

Question 16

What can 3D printing be used for? Advantages

Answer 16

• bone replacement, prosthetics -> medical advantages
• less waste from the design
• digital designs can be shared easily via online platforms
• short time
• parts may be printed for aircraft manufacturing (i.e. the fuel nozzles for Boeing and Airbus aircrafts)
• more energy efficient
• could cut the cost to produce manufacturing parts

Question 17

Disadvantages of 3D printing

Answer 17

• lack of legislation - guns (3d printed gun was used to attack former Finnish PM), weapons and counterfeit goods can be created
• create tools to unpick locks - i.e. off handcuffs (german prisoners picked their handcuffs locks)
• could replace labour in increasingly complex tasks

Question 18

using examples, analyse how disruptive technologies can threaten the security of states (12) - plan, what would u include