Chronicle

The European Commission will disabuse consumers...

Advertising of food products containing false information about the product may soon be banned in the European Union. As RBC reports, the European Commission agreed with this proposal from the EU states. According to experts, consumers should find reliable information on the packaging. Designations such as “fat-free” and “lower sugar” must be supported by consumers with appropriate evidence. The commission also intends to oppose the use of the wording “relieves stress” on food packaging. Meanwhile, the European Commission filed claims with the European Court of Justice against the governments of 11 EU member states. The reason for this step was the refusal of these countries to enact laws governing the testing and licensing of genetically modified products. Continued failure to comply with EU requirements will result in fines. Thus, the European Commission intends to achieve an end to the moratorium on the import of genetically modified products, which has caused serious disagreements with the United States. Washington regards the EU ban on the import of such products as illegal and violating the rights of American agricultural producers, ABC News reports.

...And free from spam The initiative to ban the sending of unsolicited advertising by e-mail was taken by European Commissioner Erkki Liikanen, responsible for entrepreneurship and information societies. According to him, the so-called electronic waste (spam), usually containing advertising offers, makes up a third of all business correspondence received by companies in EU countries by e-mail. The annual damage to businesses from receiving such unsolicited messages is estimated at billions of euros. The proposed law is scheduled to take effect in early October. It provides for a ban on sending advertising messages by email. Mr. Liikanen also expressed hope that the United States and Asian countries will join this ban. ITAR-TASS

HSBC has come up with a mortgage for Muslims HSBC has become the first major bank in the UK to offer special mortgage terms for Muslims. Islam prohibits taking out loans or paying interest, which means Muslims are unable to carry out ordinary financial transactions. This problem is especially acute when buying real estate, since many people need a loan to buy a home, notes the BBC. As HSBC's head of department Noaman Hasan explains, the bank has developed a scheme based on an Islamic financing model, very similar to a conventional leasing system. The bank, acting on behalf of the client, buys the property itself. Then the client leases this property from the bank for a certain period of time and pays part of the principal debt and bank interest. When the amount of principal repaid by the client reaches the original cost of the property, the bank sells this property to the client. HSBC was founded in 1836, ranks 5th in the UK and 34th in the world in terms of assets (over £200 billion). AK&M

Citigroup wants to buy the credit card division of the American bank Citigroup is acquiring the credit card division of retail chain Sears Roebuck & Co. The cost of the transaction is estimated at $3 billion, RBC reports. The acquisition of the Sears division will further strengthen Citigroup's position as the largest financial institution in the United States, allowing it to surpass MBNA in total outstanding loans. Thus, the volume of Citigroup's loan debt as a result of the transaction will reach $169 billion, while for MBNA it is $107 billion. In turn, Sears, as a result of the sale of the division, will immediately receive $6 billion. In addition to the $3 billion that it will pay to Citigroup, Sears will still have $3 billion left from the bank's reserve in case of non-payment of bills. Sears plans to use the proceeds from the sale to reduce its debt, finance core operations, and return funds to shareholders.

Naftogaz of Ukraine did not transfer its Eurobonds to Gazprom. Due to a number of procedural problems, Naftogaz of Ukraine has not yet transferred its Eurobonds in the amount of $1.4 billion to Gazprom to restructure the debt for gas, said Minister of Fuel and Energy Sergei Ermilov at a press conference in Kyiv. At the same time, he emphasized that this topic “has not been forgotten” and expressed confidence that the problems will be resolved and Gazprom will receive bonds. In April, the head of Naftogaz of Ukraine, Yuriy Boyko, said that the transfer of Eurobonds could take place before July 1. Naftogaz of Ukraine issued Eurobonds in the amount of slightly more than $1.430 billion to settle the debt for gas to Gazprom. The principal amount of the debt is repaid in equal installments of 5% of the bond issue volume every six months from May 1, 2004 to November 1, 2013. The par value of the securities is $1,000. INTERFAX-UKRAINE

Bank of Japan believes in success The Bank of Japan said the recovery in exports, stock prices and corporate investment makes it more optimistic about the further development of the country's economy. As Bloomberg notes, the central bank expressed satisfaction for the first time this year. “Business investment is on a gradual growth path,” the bank noted in its July economic report. However, the Bank of Japan reiterated that economic activity remains “virtually flat”, while the situation in the export sector is improving. Thus, according to the Japanese financial corporation UFJ Holdings, the volume of exports from Japan to China will increase annually by an average of 11.1% over the next five years and will reach 8.4 trillion yen ($71 billion). Japanese exports to China increased by 32.3% in 2002 over the previous year and accounted for 10% of Japan's total exports. The Bank of Japan's statement has renewed economists' belief that the country can avoid a recession, in part due to rising prices in the United States, the country's largest trading partner. INTERFAX-AFI

Latvijas Naftas will buy 5% of the state shares of Ventspils Nafta The Latvian Privatization Agency has signed an agreement with Latvijas Naftas tranzits on the sale of the 5% shares of Ventspils Nafta reserved for it, INTERFAX/BNS reports. Thus, Latvijas Naftas will become the owner of 43% of the shares of Ventspils Nafta, the state stake in Ventspils Nafta will decrease to 38.6%. Latvijas Naftas will pay approximately $8 million for this stake.

OMZ will supply drilling rigs for Syria United Machine-Building Plants (OMZ) won the tender for the supply of drilling rigs for the Syrian Oil Company and plan to conclude a corresponding contract, INTERFAX reports. OMZ was represented in the tender by OMZ-MNP and Uralmashzavod. The main details and scheme for financing the contract on the part of the Syrian Oil Company are currently being worked out. OMZ-MNP is responsible for the engineering part of the project; the main part of the equipment will be manufactured at Uralmashplant. OMZ's portfolio of existing orders as of April 2003 amounted to more than $1 billion. The company's products are sold in more than 30 countries around the world.