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Cisco Offices Raided, Execs Arrested In Brazil
Many readers are writing in about the raids and arrests in Brazil's Cisco operation. At least 40 people were arrested earlier today, and Brazilian authorities asked the US to issue arrest warrants for five more suspects in this country. The allegation is that Cisco brought at least $500M of equipment into Brazil without properly paying import duties, and now owes over $826M in taxes, fines, and interest.
Basically... *Shwing* emerging markets.
"Damn, imagine if we weren't direct shipping to clients and had to pay taxes on the real value of all this shit!"
How accounting didn't realize this, or who's on top of the ladder of people in the know the article doesn't begin to speculate...
Corporate World at its finest, do it until caught, then pay a fine that doesn't affect the bottom line.
FTFA:
PS: This is the only text at all on Page 2.
Walk with Music;
I can't believe they have been running an enterprise without any drive redundancy.
As far as the arresting execs, I would check permissions and test memory, and try rerunning them.
U.S. officials were asked to reply to the arrest warrant requests by telephone, as all email service in Brazil appears to be out of order.
those meddling kids!*(&$!#
and their dog. musn't forget the dog
I work for the Department of Redundancy Department.
Translation:
Cisco officials were pwned by Brazilian authorities for not bribing enough of the right people with the right amount of money.
your-nafta-fu-is-weak dept.
Also in the your-nafta-fu-is-no-good-down-here dept.
digitalhallucination... now phosphate free!!
Sending them a tax bill seems a bit more sensible than arresting every janitor and secretary in the office. Is Brazil trying to frighten away foreign investment?
A slashdotter who didn't build his own computer is like a Jedi who didn't build his own lightsaber.
Cisco closes Brazilian plant, hundreds of jobs lost.
"Nine times out of ten, starting a fire is not the best way to solve the problem." - my wife
Probably. When our company ships appliances into Brazil, we never get them back. It's actually more expensive to ship them back out of the country than what they are worth, so we just have a warehouse filling up with half-broken appliances somewhere in Brazil... (posting AC for obvious reasons).
I find it interesting that they are holding Cisco's peons as hostages for Cisco corporate misdeeds.
There is a NEW company in brazil that just recently started building routers and switches. Most likely, it is using OSS as its base (smart), so is now paying politicians to damage Cisco (stupid).
I prefer the "u" in honour as it seems to be missing these days.
I guess they know the best way for "network tunneling"
[Randal]
Bunch of fucking savages in this town.
[/Randal]
You know you want to tag it...
Obligatory blog plug: http://www.caseybanner.ca/
"Come on... pay us! We have your... janitor... Give it some time. You'll see what all the stink is about."
yvan eht nioj
$500 million worth of telecommunications and network equipment, $826.4 million in taxes?
That's a 165% tax rate!
Exactly ... if they had taken a lesson from their big cousins in the US oil industry, they'd have known that it's no use to try cheap tricks like that. You're better off buying off the entire government and you can even make some extra money by telling your pawns (no .. that's actually the way it's written, not a typo;) to start a war or anything that might open new markets :P
I'm shocked that it got this far. I've worked in international forwarding for over a decade, and have done more heavyweight shipments to Brazil than I can count. The laws for importation of almost ANYTHING is strict as hell. In almost all cases import duties and taxes must be paid for upfront before the shipment will be released from Brazilian customs. I have a feeling that if arrests were being made at CISCO there were also people in customs being taken down. Brazil is kind of a paradox in this regard. They have the strictest of import laws, but their system is damn corrupt. It would also not surprise me if this was nothing more than a money grab by the Brazilian government.
extraditing corporate execs from the US, even though the extradition treaty specifically covers the described offense (see Article II, Section 29).
"National Security is the chief cause of national insecurity." - Celine's First Law
copy run start ...
n00bs....
getting moded Troll. What the hell, I am not one for xenophobia, but national pride is almost as bad. So I'll throw my name in the troll hat. Please, wait until the rest of all Brazilian routers are confiscated before making the rest of your jokes. I mean are those jokes that good that they can't wait a day or two?
Any guest worker system is indistinguishable from indentured servitude.
Comment removed based on user account deletion
If they could afford the US government for so long without a hit to their bottom line, I am certain they can handle several other continents. Not that the quality of bribed officials is any less, jus tthe cost of living has always been so much higher in the US.
"Somebody in Brazil didn't get their cut of the bribe money."
I am American who set up a software company in India; a place with corruption on par with Brazil. Let me tell you how it works in places like these:
- There are laws, but they really don't mean anything.
Well, technically this isn't true. They amount to a list of things you can be charged with, should the authorities decide to make it so. In America you hire legal advice, get the proper paperwork from the government, fill out all the forms, and submit them on time with the appropriate payment; done. India and Brazil have a different system; and nobody (especially a government employee) is interested in helping you obtain the right paperwork and keep it above board. You see, *the perk* of a government job is THE BRIBE. A position in the government has a tiny salary, and your teenage kids probably earn more in babysitting. The majority of your income will be derived from bribes given by the people you serve. Americans might best understand it as a "filing fee", but without all the annoying paperwork and signatures.
This in pandemic through every part of every government office and official. From the clerk where you pay a parking ticket, the average cop on the street, all the way up to the very top of the chain. Most of these offices have forms, but filling them out is a formality; they probably won't read them, and they'll be locked away in a box and water damaged beyond recovery in a month or so. Computer backups? Ha! Yeah right. You're not going to find computers in government offices. How does that help in taking a bribe?
I am being very serious in saying all this, and I will recount two of my own true life experiences for you now:
1. I personally brought 10 computers with me into India. I was instructed by the head cop at the airport in Delhi what to write on the form (not 10 computers!), and how much to pay at the customs window. The remainder of the money went into his pocket after I handed it to one of his junior officers. (The junior officer takes the money, because the senior officer can protect him; but not vice versa.); my attorney in India estimates that after all of it, we saved $500 on the regular customs fees; which includes his own cut, for helping to arrange it.
2. I got married in India. In order to get my wedding certificate, I paid a Rs.4000/- bribe (about ~$80 USD at the time) to the clerk. It wasn't required, I could have simply shown up every day for two years until they finally got sick of dealing with me. Or, I can pay the "filing fee" and be on my way.
According to my co-worker, Brazil is really no different. Corruption is pandemic there as well. Instead of tensions between Hindus and Muslims, it's gangs that come down out of the mountains to raid the towns. (Americans thinking of traveling there might consider kidnapping insurance, as this is also not uncommon.)
------
Why would Brazil hold Cisco's peons in custody? Legal hostages for bribe money; that is all.
Next time, Cisco will need to remember to pay the "filing fee". "When in Rome..." always applies, no matter where you travel on this big dirtball.
I worked with a Brazilian who's dad had a factory over there. He said nobody pays any tax of any form; that you have to be stupid to do so. Its the national sport.
He claimed that you had to keep papers around for only 8 years, after that you where home free. In the small chance you get cough once in a while (his father did not in over 35 years) you deal out of court for small amounts compared to all those years you did not pay anything.
Like my speeding tickets! Really just a few cents for each time I exceeded the limit!
When I was in Los Angeles, some lawyer had an add on Radio: "IRS Problems? We always settle for dime on the dollar" basically saying, don't pay, if you get in trouble you will pay 10% of what the other stupid people pay in tax.
Comments from Brazilian slashdoters? I always wondered if this was for real.
Except not pay protection^Wtaxes. Go Cisco.
I want to delete my account but Slashdot doesn't allow it.
http://www.zonalatina.com/Zldata245.htm
There is no shortage of articles about corruption in Brazil.
I have no doubt that Cisco behaved badly. I also have no doubt that there's more to the story than we're seeing on the surface.
So... Cisco's big and Brazil government figures it can make some quick bucks by looting... hey, who cares if this network equipment actually helps Brazil to develop, Cisco has money, we have guns, let's take it and let everyone know that they can't do business here without paying protection money. Oh sure on the short term they (the officials) will get the money and people will keep investing in Brazil, on the long term they're driving everyone to poverty.
\u262D = \u5350
About Brazil: Someone ought to stop the iggerunt comments with some facts:
1) Do you have billboards in your city? Sao Paulo, Brazil, one of the biggest cities in the world does not. Sao Paulo is more advanced than most cities in that way.
2) Officials from New York City visited Curitiba, Brazil to learn how to run a city.
3) Brazilians seem much happier than people in the U.S., even though people in the U.S., on average, have more money.
4) It is not correct to call Brazil part of "Latin America". Brazilians are part of a very different culture than the Spanish-speaking countries. (Brazilians speak Portuguese.)
5) I know this will seem strange to men in the U.S., but women in Brazil generally like men and generally treat them well.
6) At least 50% of the men from the U.S. I have known who have visited Brazil have very quickly found a woman they wanted to marry. Don't do that. Take your time and do the work. It takes a long time and a lot of effort to build a marriage-quality relationship, even with a very nice woman.
7) Brazilians like jokes. Often a Brazilian takes advantage of, or begins to laugh about, a humorous situation in less than 500 milliseconds.
8) The Brazilian government is far from perfect, but is much less corrupt than the U.S. government. How many Iraqi civilians has the president of each country killed? George W. Bush: 1,000,000. Lula: 0. How many countries has each country invaded or bombed for oil or weapons or other profits since the end of the 2nd World War: United States: 24. Brazil: 0.
I travel to brazil pretty often because of all the family I have that lives there. The tarrifs on electronics and DVDs is a ridiculous amount like 50%. In fact, to make some cash, I know people who will come to the states and smuggle iPods back. If they get through customs, they can make a pretty penny selling them to people in Brazil. (Prices are about 2x of what they are in the states because of the import duties.
-Bucky
Is there a patch in the works?
You are being MICROattacked, from various angles, in a SOFT manner.
Wrats Wroight!
Oh, Pancho!
I guess they haven't seen things from the other end like this(as in being legally outgunned) in ages.
Twitter supports and protects racists - by smearing their critics with the "Hate Speech" label.
This has basically been my experience in a number of places, and it in combination with the idiotic FCPA laws in the U.S. put any firm trying to do business completely above-board at a massive disadvantage.
I'm not sure that I'd really even call it 'corruption' in the sense that we think of that word in the U.S. and Europe. It's different from that. There's no shame, no real criminality in it. It's how you show that you're serious, it's how you show respect for someone's position and authority. It's just how business gets done.
I've seen deals fall apart because someone would refuse to play by the local rules (because of internal rules or FCPA), and would in doing so offend the locals. Sometimes the amount of money or gifts wasn't even that big; but the idea of giving *nothing* is a huge slap in the face.
I strongly suspect that Cisco insulted someone, and this is the result.
I think a lot of people do not realize how these things happen. basically, in any profit driven company, everyone has to answer to accountants.
Yeah, the ceo, the manager, the compliance officers, etc are not accountants. But they have to act like accountants. Profit/bottom line is everything - if you are doing something that is hurting the profit/bottom line you are doing it wrong - people are asking questions. At the end of the day, companies are out to make money and absolutely nothing else.
Sure, there are nice slogans, customers first, service is our priority, etc. American Express (where i used to work) used to distribute these nice flow diagrams that show Happy Staff ===> Happy Customers ===> Happy shareholders. There's focuses and sigma programs and etc.
At the end o the day however, it is all about profits, revenue - money.
How does this tie with Brazil "pwning" some executives ?
Someone came to the executives and said "I know a guy in Brazil that can help us save millions in tax, compliance officers/lawyers have checked it out and it is pretty borderline. Risk management department have cleared it as acceptable risk vs the savings, is it ok to go ahead ?"
Now, perhaps one or two executives thought to themselves "hrm, this doesn't sound good" or "we'll get busted and get raped with cattle prods"
But what can you say/do when your primary consideration is the next quarter profit projection or current quarter revenue reports ? You just cant argue against higher profit/revenue.
At the end of the day (again) any executive has a dozen explanations/justifications for their actions:
- the compliance officers/lawyers cleared it.
- we were direct orders to meet the profit projections
- we were direct orders to meet our key performance indicators
- it is the mission/directive of our department to maximise profit/efficiency/kpi/etc
- risk management cleared it
- we were only competing with the competitors
I wish I was at home and could get the appropriate quote from one of the Dune books where the chapter start quote talks about the qualities of a bureaucrat - how the epitome of a perfect bureaucrat is the loss of human qualities and strictly following procedures/policies.
what i am trying to say is, in a long convulsed way, is that not only there is no morality in big companies, there is no accountability for legal or moral wrong doings (quite often two separate things).
I for one applaud our new executive-arresting overlords!
This will probably turn into a pretty rapid-fire he-said she-said involving bribes, corruption, and really bad moves.
The high tarrifs, bribes, and corrupt officials make this kind of thing inevitable, but it was still stupid to try to get around the taxes. Understandable, in the sense of closing your fruit stall during the shift of the corrupt cop who collects protection money, but still stupid.
The problem is that, like India, the Brazil market is big enough for people to take risks to sell there.
We'll have to see how it turns out, but I'd place a small bet that the local Cisco office bribed the wrong official - who either turned on them or done got themselves busted.
That's why a (relatively) honest system is so important - certainty.
That's a shitload of WRT543Gs!
I think $826,000,000 will affect anyone's bottom line. Of course who knows what they'll actually end up paying...
More about Brazil:
9) The Brazilian media constantly emphasizes violent events in Brazilian cities. However, the murder rate in Rio de Janeiro was, the last time I checked, about two-thirds of the murder rate in the U.S. capital city, Washington, D.C.
10) Brazil is the music appreciation capital of the world. Brazilians have all the styles of their own music, and those of other countries, too.
11) Several years ago the most popular local band in Portland, Oregon was Rubberneck. On an average night they would draw an audience of 40. A local band in a small town in Brazil drew an audience of 800.
12) Brazilians often know all the lyrics to numerous Brazilian songs.
13) There is a magazine about Brazil called Brazzil, based in Los Angeles, USA.
14) Brazilians are often very socially skilled.
15) Brazil is approximately as large as the continental United States.
it such backdoors exist, then Brazil would be crazy to continue to buy from Cisco.
"National Security is the chief cause of national insecurity." - Celine's First Law
sigh http://it.slashdot.org/comments.pl?sid=330279&threshold=0&commentsort=0&mode=nested&cid=21005025
I live in Brazil and here electronics usually cost twice as much as what you pay in US or Europe. With these taxes is almost impossible to run a business (specially if you export you final product). What Cisco was doing is a common practice here: import declaring half (or less) of the product's value. With the insane taxes, the product (legal) cost will be close to the original (real) cost.
:)
I really think we should change our tax policy, specially for products that are targeted to industries and other companies. What we are doing is protecting an obsolete hardware industry in expense of other very competitive business. We should take the inverse approach: eliminate taxes from hardware and "steal" your software jobs.
Since it was "common" to do things like what Cisco di, I think the police arrested them as an example to others. Probably the charges won't hold in court, but they scared a lot of people arresting the "big guys".
They're confiscating a brazilian routers? That's a lot.
[runs away]
However interesting thing: Companies can and do refuse to do business in nations that are threatening to them. If it becomes known that they'll go and arrest everyone in your office, well maybe you decide that it isn't worth doing business there and just leave. That they cannot stop. If Cisco wants they can refuse to sell any gear, pull out all operations and say "fuck you".
They have a right to act like jerks with regards to business but it can, as the GP suggests, scare off foreign investment. Maybe that's what they want, and that's fine, but it is a real potential consequence.
Leads to an array of RAIDs...
Previously: "Linux... Toward the Sunrise..." Now: "Linux... Toward the-- No, now, part of Every Sunrise"
I wasn't responding to your joke. I was responding to all the negative, unknowing comments from people who have not had the chance to compare the United States and Brazil.
I wish they'd just arrest anyone who made a profit. Money should be a crime. Unless it's in the hands of The People.
The U.S. government is far, far more corrupt than most people in the U.S. realize. Here is only one example: Context of '1996-September 11, 2001: Enron Gives Taliban Millions in Bribes in Effort to Get Afghan Pipeline Built'.
Paying taxes isn't stupid if your government provides worthwhile services. And if it doesn't, it probably because you have the kind of culture where people think it's cool to avoid paying taxes.
keep this high quality info coming good sir
i'm going to go screw a horse RIGHT NOW
Anyone that has ever tried to do business in Brazil or many other developing nations are familiar with the hassles of dealing with a thoroughly corrupt system.
If you are installing some infrastructure in Brazil, you will have to pay off corrupt officials at every turn.
The biggest hassle is often toward the end of a project when you need to express ship some equipment to finish the work, and find that customs are holding onto the items awaiting a bribe. Maybe the customs officials are leaving the shipment outside in the rain to make sure you understand the importance of the bribe.
If the box you are shipping has a declared value of $100,000 you will be shaken down and hassled as infinitum as all the officials know you will and can pay a lot to get the box.
If you on the other hand ship the same box with a declared value of $50, it goes under the radar, or you may have to pay some low-level agent a few $$ to get it through.
This problem is magnified by the fact that US law does makes it illegal to pay bribes. Therefore you can not enter the item on the expense report. It is often money out of your own pocket.
So basically your choices are:
1. Do everything properly: Declare value, refuse to pay bribes (Illegal by US law), and have all your gear lost in customs for months, and very likely damaged.
2. Declare the value, and pay bribes out of your own pocket or with the assistance of your company. You have now committed a crime in the USA.
3. Declare the value low to go under the radar in the corrupt country. You have now committed a crime in the corrupt country, but hey, you can alway bribe your way out of it if you are cought.
don't cut it off www.mgmbill.org
You apparently don't live in the US.
IMAGE VERIFICATION IS EVIL!
I'm Brazilian, so if you wanna hear the REAL history: Yes, Brazil has a lot of corruption, everybody knows... But that has NOTHING to do with what happened with Cisco and a lot of other companies... Brazililian import duties are VERY HIGH, more than 100% in many cases, so Cisco (and others) were engaged in corruption schemes with the brazilian customs officials to import things paying almost none (or little) duties. I don't think cisco headquarters knew about that, that probably was something done by cisco executives in Brazil. Brazilian Federal Police is NOT corrupt (well, almost) and they REALLY work here, so they investigated this scheme for almost 2 years before charging a lot of people and arresting many... that include cisco employers, goverment custom officials and a many more... So you are right when you say Brazil has a lot of corruption, YES, that's true... But things are getting a little better year by year, and many people are being taken down... There is a lot of sensasionalism about this news, mainly because the "Cisco" is a brand everyone has heard about... but it's nothing new... almost everyday somebody is being arrested because of import fraud.
What would you do if you had to pay a sales tax of 40%?
What would you do if you had to pay import duties of 100%?
What would you do if you had to pay a total of 70 (seventy) different taxes to city, state, and federal government on a single product?
This is what happens when public servants can retire after, in some cases, eight years of "work", with full pay. Getting promotions and raises after retiring. Brazil is the paradise of public servants. Everyone I know is trying to get a job as a public servant. I know of people who have gone through five years of college to get a job as a street sweeper.
That's why the Transparency International organization states that "Some of the countries that have a significantly worse rating since 2005 include Brazil,".
If only we would shoot all public servants in the street, Brazil could be the richest country in the world, but, unfortunately, too many people are greedy, and too many Brazilians allow this situation to continue because they themselves want to get a public job...
You know, there is a difference between trolling and pointing out the flaws in your reasoning. Just saying.
Yea you fuk, scum up my ass day and night. I got kids to support you shit fuks.
Cisco execs take that as "usual business practices" and do it, too. Otherwise they cannot plausibly explain why their products can cost up to 5 times more than competitors' at the same FOB price.
Blame It On Rio!
Don't do business here. We will screw you over with taxes. Please find another country near us that has better laws and let them reap the economic benefits. I hear Argentina is nice this time of year. I'm sure their blend of multiculturalism and straight forward laws will suit you tastes better.
Sincerely,
The country of Brazil
Well.. maybe. Or Maybe not. But Definitely not sort of.
how can you call the city advanced when you say they haven't even invented billboards yet?
Who else parsed this as CRISCO????
Perhaps you meant "the contiguous United States" (i.e. excluding Hawaii and Alaska..)
16) Brazilian chicks are hot. Period.
17) There's also some interesting photographers, artist and music. A lot actually.
Quack, quack.
Did they use Warrior, Druid or Paladin as main tank? Did they get any epics?
If you raise taxes, you get less compliance, not more. You can raise them to the point where compliance is a literal impossibility and it sounds like they are reaching that point, or passed it. The workable answer is to have reasonable taxes and work on increasing compliance.
Imagine if a store took a similar tactic: Some people steal merchandise, and others simply choose to go to other stores. Rather than perhaps raise prices a bit to cover costs and work on advertising and loss prevention the owner says "Well because people aren't buying, I have to double prices." Now the number of shoppers drops even more, so the owner again says "Even less people are shopping here, so I have to triple my new prices." Eventually nobody at all buys anything because it's just too expensive.
Similar shit with taxes. If the government raises your taxes a bit, maybe you complain but you still pay them. But let's suppose now that the government set them to an unaffordable level. Suppose that the government took 50% of your income, sales tax was also 50% and then other taxes like property tax added up to be over 100% of the rest of your income. Suppose that there was literally no way you could pay all the taxes. What would you do? Live in the street and try to pay them, or simply avoid them to the maximum extent possible?
It's easy to get a high and might attitude of "Well everyone should just pay," when it's not your ass in the fire and your family going hungry. However you try it some time, see how it goes.
If people cannot comply with the law, they just won't.
Perhaps you should go tour a modern business, any one will do. Pick one that is on the cutting edge, the kind of thing that nations aspire to have because it equals good jobs, more money, economic growth, etc. You'll notice something: Lots and lots of electronics. You name the field, it takes electronic gear to make it happen.
I mean look at what we are talking about here. These are high end Cisco products. This isn't something that a rich person is buying for fun. This is things that businesses buy to make their operations work better. This is infrastructure, you know the magic term that always gets discussed in relation to developing vs developed.
This is not a luxury tax, this is an extremely harmful tariff.
So much for Brazil's IT sector for the next decade or so.
Any businessman would have to be nuts to open an office there after this.
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
...if they can't route the bribes correctly?
It's a small world and it smells funny; I'd buy another if it wasn't for the money; Take back what I paid (SoM)
You realise you just killed a bit of the Internet?
Deleted
When I had to travel to EU, the company that I worked for (a boeing subsidiary) was very conscious of exactly the equipment that I took. One of the issues was could they be held accountable for the equipment (yes, if it was left there). The point is that Cisco most definatly has a program in place to track ALL equipment leaving America and entering ALL other countries. VATs are very real issues to large companies. If this was a simple case of equipment being "forgotten", Cisco would have gladly paid the taxes and moved on (it is minor compared to losing business). In general, every time that you see something like this, it is a gov. helping one of its local business. And yes, America, HAS done the same.
I prefer the "u" in honour as it seems to be missing these days.
This is bad. Cisco is going to loose a lot of money for this, making my country looking as a not so good place to make business. This can lead to Cisco changing its investment strategy - endangering a lot of local jobs.
On the other hand, this is great news. By forcing EVERY honest entrepeneur to pay every duty, tax and bills, the pressure for a better, more honest and efficient goverment will raise.
Only by loosing incoming we can force a goverment to work for us, The People, and not for their own pockets.
But there's a price: our jobs. I'm so sorry that my people prefer to loose their jobs than to learn to vote on the right people.
Lisias@Earth.SolarSystem.OrionArm.MilkyWay.Local.Virgo.Universe.org
Organizations can't be better than the people inside them.
We have a very serious ethics problem here at Brazil: some people thinks it's ok to break bad laws instead to fight against then.
In the same time, our goverment takes advantage from that making really nasty (but profittable) laws to harvest every cent from the brazilians that don't want (or can't) break the law.
To gain an edge (or to protect itself from others taking the edge), some managers choose to break the law in the name of theis jobs - blatantly ignoring the fact that some day that mistake can be charged.
They take their chances on the short run, as all they have to loose is their jobs - what they already are loosing anyway, as their employers can't earn a good money paying every tax and duty.
Lisias@Earth.SolarSystem.OrionArm.MilkyWay.Local.Virgo.Universe.org
as in "pissing contest," because it certainly isn't apopos to your technical knowledge.
Cisco is a marketing company, not a technology company. They buy companies which have developed technologies they wish to market. In _any_ product category, Cisco has competitors who make better products, cheaper. Cisco does have a broad range of products, so can often serve as a "one stop shop," though. They're very much like Microsoft, using network standards with an "embrace and extend" philosophy, to try and lock customers into their proprietary solutions, and make it difficult for customers to move to competitive solutions. Brazil could easily do without them, and would save money in the process.
"National Security is the chief cause of national insecurity." - Celine's First Law
Im Brazilian and you're absolutely right!!!!!!! sad but true
as we said here, you take off the words of my mounth ("voce tirou as palavras de minha boca")
only a few (i think i can count with my hand) politians are descent ones.
sad but here the rich never go to the jail, just the poors.
there's so many wrong things happening in this country, im sad. i pratically gave up. sometimes i think, if i where a good cop or a good politian, i murdered a long time ago by the bad guys.
Cisc0wned!
Knowledge is power. Knowledge shared is power lost.
China locked in poverty, with little hope of economic growth?
Excuse me, but what are you talking about?
Ah, arrogance and stupidity, all in the same package. How efficient of you. -- Londo Mollari
If my government only collect enough taxes to support the things they should be doing, rather than what they are doing, I probably wouldn't mind paying taxes so much.
Haiti != Brazil.
Confucius say, "Find worm in apple - bad. Find half a worm - worse."
"Any businessman wanting to evade US$ 1.5 billion in taxes would have to be nuts to open an office there after this."
There. Corrected that for you.
http://www.dieblinkenlights.com
"Paying taxes isn't stupid if your government provides worthwhile services."
Just a thought: If you don't pay taxes, you can't wonder why the government doesn't have the money to provide worthwhile services.
Just on the line of "If you don't get involved in politics - some to the extent of not even bothering to vote - you can't complain much on who got elected"
http://www.dieblinkenlights.com
No offense to my argentinian "hermanos", but Argentina is about as multicultural as a WASP meeting. I don't see why people are so upset with the case. People committed a crime (it is a criminal offense here), they go to jail. I wish more high-ups would go to jail when caught wrongdoing.
To all trolls that keep saying "stop doing business in Brazil", do you really think CISCO and others do business here because they want to be kind to us? They want us to have access to that-oh-so-nice-and-advanced american hardware so we can be happy? They want to sell their stuff and that's all. If they leave the market, someone else will take it. And in case you haven't noticed, China has been replacing US as a hardware provider. Perhaps they still haven't got routers as good as CISCO's, but they will eventually. And if american companies leave markets open to them, the quicker they will. So good luck for any american companies wishing to leave the brazilian market.
Besides, the ones who really suffer with the high taxes and corruption are brazilian people and consumers. I highly doubt CISCO passed on the savings they got to their clients. Stop whining just because some american company was caught red-handed.
Where is that guy who'd die defending what I had to say when I need him?
I am a Brazilian ./er, so I will comment.
What your friend's father did 35 years ago was possible. Some kinds of tax evasion are still possible now, but, with the advance of computing technology, it is increasingly more difficult to do so.
What the folks at Cisco are being accused of doing is a massive effort to avoid paying a whole lot of import taxes. If you consider their competitors point-of-view, they are committing fraud in order to offer their products for prices their competitors can't match, driving them out of the market.
Not pretty by any point-of-view.
http://www.dieblinkenlights.com
Hell,that's just fine.
Cisco should pack its bags and never return to Brasil.
Let's see how Brasil gets along without Cisco.
Governments are really getting far too f**king arrogant(especially ours)
and need taken down a few notches by the common man,or a large corporation,I guess it doesn't matter how it happens.
Let Brasils screw up be shown to the rest of the world so they may ruminate over their misfortune and what led to it.
LOL
*Repent!Quit Your Job!Slack Off!The World Ends Tomorrow and You May Die!
Management>enable
Management#config exec
Management(exec-config)#evade taxes
Warning: Busted
Management(exec-config)#exit
Management#reload
I would have to say if the discussion is about the amount or the way the taxes are paid , it would to be a general discussion, but there are too many black holes in our information about this situation to start making assumptions about a specific countries tax system, unless someone has first hand experience.
You can't either use your parents as a point of reference on this, unless they have worked in Brazil , as the public servant positions there, greatly differ from ours here. The amount of corruption is also a factor. You have to remember that although we like to bitch, we have it pretty good in north america, wether you talk about canada or usa.
I would love to hear from a politicians point of view about working in that country. Although I am sure a lot of b*llsh*t would be vocalized as any politcian would, I tend to think you would be enlightened as to the situations over there....
So the Brazilian authorities want to steal Cisco's money and somehow it is the Cisco's execs that end up in jail? They want to force you to pay the product's price twice just so they can get their cut. I'm speechless.
Hi there.
My father joined the Brazilian navy when he was 16 years old and retired around 35 years later. My mother worked as an occupational therapist for Brazil's Ministry of Health for 30 something years as well.
I was born and I grew up in Brazil. I was 25 years old when I first put my feet out of the country. I then lived in NYC for 4 years and I've been living in London for 3 and a half.
Cheers, Andre
This is by no means on oversight. The Brazilian Federal Police has been investigating Cisco for the last two years and it found out that for the last 5 years Cisco has been illegally shipping equipment to Brazil:
- Cisco opened companies in tax heavens like Panama, Bahamas and British Virgin Islands. The companies where registered in the name of Brazilian nationals. The investigation found out the those Brazilians are poor and live in poor neighborhoods; the article is not clear but it is most likely that those people didn't even know about the companies.
- Police suspects that Cisco used falsified invoices and undervalued the equipment.
- The equipment arrived at Salvador airport where customs officers are suspected of corruption and helping the smuggling.
- All the paperwork was handled by an offshore office from Panama, working for Cisco.
- More than 30 other companies are involved in this scheme.
- Since Brazil does not tax software imports, Cisco then separated the software from the hardware, over-valuated the software and under-valuated the hardware. Source: http://g1.globo.com/Noticias/Economia_Negocios/0,,MUL151347-9356,00-AMERICANA+CISCO+E+ACUSADA+DE+INTEGRAR+ESQUEMA+DE+FRAUDE+TRIBUTARIA.html
- The amount of taxes that were not paid is about 1,5 billion BRL.
- Federal Police then raided offices (including Cisco Brasil) and arrested 40 people, including Cisco executives and government employees.
I don't understand why the criticism against the Brazilian government here. Look, I am a Brazilian and I know that the import taxes here are ridiculous. Most people try to avoid taxes as much as possible. But if you gamble the system you risk being caught. It is impossible that those executives didn't know what the company was doing, and if they didn't know it's their problem. Cisco and their buyers were knowingly committing FRAUD. The police investigated for two years and when it got enough proof it raided places and arrested people. What should it do? Say "don't do it again" and give a tap on the back?and their dog. musn't forget the dog And the talking great dane.
Kwisatz Haderach
Sell the spice to CHOAM
This Mahdi took Shaddam's Throne
You take accusations from notoriously corrupt officials as gospel?
Would you be interested in a bridge I have for sale?
-jcr
The only title of honor that a tyrant can grant is "Enemy of the State."
Corporation X does something illegal in Country Y, knowing full well that they wouldn't pull Shit Y in the states or EU, or at least they would attempt to hide it better and be able to greater distance themselves from it with more peons, because:
A) They know it will make them loads of extra money until caught.
B) When caught they will settle for a fine low enough to make their existential greedy frolicking worth while.
Privacy, the environment, economic, social, political ideologies, morals and ethics
Walk with Music;
Several years ago I did some IT work in Sao Paolo Brazil for a collection of IT companies including Sun, Informix, and others. My boss had me label all the software tapes (such as Solaris, Informix, etc), "video games" and bring it in my carry-on luggage to avoid "complications" in customs. As a naive young programmer in one of his first jobs I didn't think about it.
Now I'm not surprised to read this news...
It's a nice idea, but the fact is, if you don't do business in Brazil, someone else will, as long as there is profit to be made.
And once their infrastructure is set up and dependent on your competition's equipment, guess how much harder it will be to ever get back in the door in the future?
A work that expires before its copyright never enters the public domain and thus enjoys eternal copyright protection.
In the U.S. and the U.K, women do serious domestic violence like murdering their husbands or children about 4% or 5% more than men. I suppose the number of spouse murders in Brazil are somewhat similar.
I've talked with a university professor who specializes in studying domestic violence about this, and read many of the 18 studies that had been done at the time.
What if you're not "wondering" why? What if you know that they *do* have enough money, at least to do *something*? What if you know that what money they do get goes to waste? It's not either-or.
Japanese in Brazil seem happier to me that Japanese in Japan.
If you're an individual in Brazil, let's look at your options: A) Pay taxes, B) avoid taxes. Assuming you're a rational individual, you will pick the option that maximizes your expected value.
Let Pw be the probability that your government raises enough revenue to provide worthwhile services if you pay taxes, and Pq be the probability that your government raises enough revenue if you do not pay taxes. Let C be the amount of money you would pay in taxes, and let D be the amount of services you would receive.
E(A)=Pw*D and E(B)=Pq*D+C . In order for A to be the best choice, E(A) must be more than E(B)
E(A)>E(B) Pw*D>Pq*D+C (Pw-Pq)*D>C . Now, let's analyze this condition. Since Pw-Pw1000, you can safely treat Pw-Pq=0. So now, in order for to make E(A)>E(B), we need 0*D>C, 0>C. In other words, you actually have to be paying negative taxes (interestingly, this is sometimes true) in order for paying taxes to be in your self interest (And note that this is completely regardless of the level of service). (As a side note, I made a lot of unrealistic assumptions about income distribution, but smarter people have put some thought into it, and the results don't really change)
Now, it is fully possible that everyone would be collectively better off if everyone paid taxes (this depends on the government), but unless you place direct or indirect strict penalties (strictly more than C), the end result is going to be mass tax evasion.
Here's what I'd say to the Brazilian government:
"Very well, then. Cisco will never, ever again bring another one of our high-powered, world-leading routers or other equipment into Brazil. Good day, sir!"
(A few months later after Brazil's Internet starts falling apart...)
"I said, 'good day, sir!' "
(-1: Post disagrees with my already-settled worldview) is not a valid mod option.
While /some/ customs officials in my country are notoriously corrupt (and many politicians), /most/ federal police officers (equivalent to USofAn FBI's special agents) are notoriously non-corrupt and fierce anti-corruption fighters. /They/ were the ones that pursued Cisco's wrongdoings for two years.
It's better to be the foot on the boot than the face on the pavement. ~~ tkx Kadin2048
As long as $$$ is there, businessmen will come. Just look at Russia, with its arrests.
He claimed that you had to keep papers around for only 8 years, after that you where home free. In the small chance you get cough once in a while (his father did not in over 35 years) you deal out of court for small amounts compared to all those years you did not pay anything.
Like my speeding tickets! Really just a few cents for each time I exceeded the limit!
When I was in Los Angeles, some lawyer had an add on Radio: "IRS Problems? We always settle for dime on the dollar" basically saying, don't pay, if you get in trouble you will pay 10% of what the other stupid people pay in tax.
Comments from Brazilian slashdoters? I always wondered if this was for real. Completely NOT FOR REAL. Your friend was either pulling your leg or he did not know anything about his father's business. But I will explain:
0. nobody pays any tax: an exaggeration; while many people _do_ sonegate taxes, our Receita Federal (equiv to USofAn IRS) and Receitas Estaduais (state revenue services) are fairly efficient in separating people from their money. The fact is: the _richer_ you are, the _easier_ it is to sonegate. As another Brasilian tells you, maybe this was possible 35 years ago, but not nowadays. We also have a tax on moving money thru the banks, so the RF knows how much money you make, and their job is made easier.
1. keep papers for 8 years: there _are_ statutes of limitations for taxes, so this could be correct (but I think it is 15 years).
2. settle out of courts: is possible (like I suspect it is in other countries) if you are not commiting fraud, but just not paying the taxes.
3. speeding tickets: US$ 50 for going up to 120% the maximum speed, US$ 100 for going up to 150% the maximum speed, US$ 250 for going more than 150% the maximum speed... second and next tickets have the value doubled (not each time, just US$ 100, 200, 500...). For comparison, I was fined EUR 20 for a moving violation of speeding last time I went to Germany.
It's better to be the foot on the boot than the face on the pavement. ~~ tkx Kadin2048
This is true. If it's not in your self interest to pay taxes, it is most likely not in anyone elses interest either. The correct responce to this is not to pay taxes though, that does nothing to fix everyone elses evasion. The only real solution to the problem is to introduce tax penaltys and step up enforcement.
"Just on the line of "If you don't get involved in politics - some to the extent of not even bothering to vote - you can't complain much on who got elected""
This is not true either. If you strongly disagree with the policies of your government, your best bet is to move(hopefully this option is available to you). Lets try and model the decision of whether to vote or not.
You have a choice between A (voting), and B (not voting). Let C be the gain that your desired policy creates, D be the gain you would get from doing the thing other than voting that would make you happiest, Let Pw be the probability that your cause will win when you vote, and Qw be the probability that they will win when you don't vote.
E(A)=Pw*c E(B)=D+Qw*c In order for A to be the rational choice, E(A)>E(B).
Algebra shows that this condition is equivalent to (Pw-Qw)*C>D . There are a couple of ways to analytically derive Pw-Qw. A naïve binomial approach shows that it is approximately equal to 1/Sqrt(n), where n is population size. But recent regression work on congressional elections has shown that it is really much closer to 1/n(or 1/n^.92 if you want to be pedantic). No matter which model you use, in most elections, n is really large (even local election usually have a few thousand voters). This makes the corresponding factor (Pw-Qw) extremely small, which makes the corresponding product (Pw-Qw)*C very small as well. So small, that it can be modeled as 0. So now, rational voting is equivalent to 0>D, which contradicts the definition of D in itself.
Why do people vote at all? It gives certain people an irrational sense of power and control, rather akin to the lottery. So it's really more of a leisure activity than a social responsibility.
Don't mention civil activism as an alternative. Even if you manage to convince a 100 voters to switch sides (which is unlikely, even if you devote large amounts of time into it), the math is the same for any reasonable population size.
I personally don't like the idea that individuals who enjoy waiting in line to drop a slip of paper into a box have a monopoly on collective decision making. But the only alternative seems to be mandatory voting.
http://en.wikipedia.org/wiki/Continent
"Get your facts right. America is a continent, the continent your country was named after."
No, it isn't. YOU get YOUR facts straight before you post something that's wrong again.
America IS NOT a continent, but SOUTH America is, as is NORTH America.
As I said, repeating something that is wrong doesn't make it right.
"Here's an exercise for you: get North, South and Central America, put them together and tell me what do you get (tip: no, it's not "Americas")"
You get two continents named "North" America and "South" America. What was your exercise supposed to prove apart from your ignorance?
As for your tip, you're right, it's "THE Americas" and has been since explorers started coming here.
http://en.wikipedia.org/wiki/Americas
How many different ways do I have to prove it to you before you admit it?
I only go to buffets for the unlimited soft serve.
What difference does it make if you have to pay 70 small taxes or one large tax? I imagine that the 40% sales tax number is aggregate. If so, it seems somewhat high, but I'm assuming in an attempt to overstate your case you are using the tax rate of luxery items. What is the sales tax on food? Also, is the sales tax the only tax levied or is there an income/property tax?
Your ad here. Ask me how!
Apart from their shipping from tax havens, there's a subtle detail I learned seven years ago from a Cisco Rep:
Software isn't subject to taxes on customs. So, what did cisco do?
a) They declared their hardware far low than the retail cost (say, USD 10 out of a 200 retail value)
b) the remaining USD 190 would be listed as IOS.
c) ???
d) Profit!
Really smart, huh?
E(A)>E(B), so Pw*D>Pq*D+C, so (Pw-Pq)*D>C . Now, let's analyze this condition. Binomial models show that (Pw-Pq) is very close to zero for reasonable population sizes, so we can safely assume (Pw-Pq)=0. So now, in order for to make E(A)>E(B), we need 0*D>C, 0>C. In other words, you actually have to be paying negative taxes (interestingly, this is sometimes true) in order for paying taxes to be in your self interest (And note that this is completely regardless of the level of service). (As a side note, I made a lot of unrealistic assumptions about income distribution, but smarter people have put some thought into it, and the results don't really change)
If you receive a salary: salary tax (up to 25% of your salary, approx) + social security (11%), paid directly from your employer to the government.
;-) Notice that our government uses the financial movement tax to "check" if you and your company is paying roughly the right amount, so you can be on their sight...
If you buy anything (just not out of a street vendor): sales tax (up to 20% of the price you paid)
If you pay anything using checks, credit and debit cards: financial movement tax (0.4% of the value moved)... when you buy anything with a check or a card, you are paying a total of 3-4% in the form of this tax, spread by the production chain.
If you use any service: service tax (up to 10%) + revenue tax for the service provider (up to 20%).
The only "escapable" taxes in Brasil those days are the sales tax, if you are the salesperson, and make a lot of cash transactions and the import tax if: (a) you know the right customs officers to bribe; or (b) you bring things thru Paraguay or Bolivia; or (c) you pull a Cisco
It's better to be the foot on the boot than the face on the pavement. ~~ tkx Kadin2048
Thanks so much for that, but did you know your username is already included at the top of your post? Pretty much every other poster understands this, have a look around.
Sorry, did you miss the sarcasm tags?
As someone who has to deal with these deathly import taxes in Brazil let me tell you they are very wrong. The taxes are to help Brazilian companies compete, but unfortunately they tax things like silicon chips that no company in Brazil makes, so products produced in Brazil that are built with parts from elsewhere cannot compete in the world while paying this outrageous tax on imports for there source parts.
The government doesn't get this, and the poor companies that make up Brazil's high tech industry are hampered an may never amount to much using much older and less computers and equipment than the countries they compete with.
Of course thats why there are companies in Florida that specialize in shipping to Brazil without these taxes. If they were reasonable taxes IE 10% there would be no problems, but the taxes as they are now help no one and they are criminal.
-M
Pick it Up!!
Any businessman would have to be nuts to open an office there after this. Brazil's IT sector is huge.
Brazil is a country that has its own economy, and is viable without foreign investors, at least for IT stuff.
I think that they are doing the obvious. If a "company" commits a crime, the people responsible should be made to respond. If this had happened in the US, Cisco would have to pay a couple million dollars in cisco boxes for the customs (support not included).
Your strategy is wrong! As all MLM-ers and chain email senders know, you need to use the power of exponential growth. Why waste time convincing 100 voters? Just convince 10, and tell them to do the same, and you'll already have over 100 voters on your side. Another iteration will give >1,000, then 10,000—and before you know it you'll have 1,000,000,000 voters all on your side! More voters than there are in the entire US population! How can you possibly lose?!
Seriously though: grassroots campaigns can and do have an effect. Not nearly often enough, and it's an awful lot of work, but with an effective lobbying/campaigning organisation it is possible to influence enough people to swing a result.
I personally don't like the idea that individuals who enjoy waiting in line to drop a slip of paper into a box have a monopoly on collective decision making. But the only alternative seems to be mandatory voting.Or postal ballots. Or having enough resources so that long lines don't ever form. Or paying people to vote. (Not that I'm actually advocating any of these—just don't let your lack of imagination leave you with the conclusion that compulsory voting is the only solution to the problem you describe :-)
Need to type accents and special characters in Windows? Use FrKeys
Here in Chicago, the cops are pretty cool, one of the things that makes them cool is you can pay them off to leave your dubiously illegal parties/concerts alone (no liquor license, no venue insurance, improper emergency exists for a meeting place, etc). I've had personal experience with this, but as far as I know only the mob and large gang families pay off anyone for real crimes anymore. Then again few places in the US are more corrupt than Chicago.
Eternity is a time bomb.
"Cisco officials were pwned by Brazilian authorities for not bribing enough of the right people with the right amount of money."
Parent is not trolling. I lived in Rio de Janeiro and that is EXACTLY how it is. Everyone is on the take, and no one is too secretive about it.
"But this one goes to 11!"
Why?
You, as a businessman, would open offices only at countries where you can ignore the laws?
What the CISCO operation was doing was a CRIME. So your point is that any businessman should expect to commit crimes and not be punnished?
Please, explain yourself... I must be missing something here.
---- You know how some doctors have the Messiah complex - they need to save the world? You've got the "Rubik's" complex
Jesus, I feel like I've stepped into an episode of Numb3rs.
While I agree, keep in mind that if there was such a potential for a grassroots effort, it would almost certainly been done by somebody else.
"Or postal ballots. Or having enough resources so that long lines don't ever form. Or paying people to vote. (Not that I'm actually advocating any of these--just don't let your lack of imagination leave you with the conclusion that compulsory voting is the only solution to the problem you describe :-)"
I concede this point.
"3. speeding tickets: US$ 50 for going up to 120% the maximum speed, US$ 100 for going up to 150% the maximum speed, US$ 250 for going more than 150% the maximum speed... second and next tickets have the value doubled (not each time, just US$ 100, 200, 500..."
I don't know where you live, but when I lived in Rio (Barra da Tijuca) I was only pulled over for speeding once in about 6-7 months and I sped everywhere. Didn't even have a driver's license in Brasil, but US$10 was enough to have the police send me on my way without a ticket. Granted this was in the early to mid 90s and things may have changed a bit, but someone actually getting a ticket for a "moving violation" was absolutely unheard of when I was there.
"But this one goes to 11!"
Cisco committed a crime and were caught, so they were punished, as they should be. Don't bother repeating the 'all Brazilian officials are corrupt' slander, we know it isn't true. So what's your problem?
It sounds as though you are advocating that large corporations should be above the law. I think that's known as fascism.
What's with all the non ruling class people constantly defending ruling class interests? If you make less than 2 hundred thousand a year, and own assets of less than 1 million, you have more in common with the working poor than the owning class. Trust me, they don't care that you are kissing their ass, they still aren't going to let you in the club.
- None can love freedom heartily, but good men; the rest love not freedom, but license. -- John Milton
it's called "market incentive taxes", or something like that.
the [sarcasm]brilliant[/sarcasm!] idea behind that is that given that it is widely known that local companies cannot compete in equal terms to foreign companies, the government raises the taxes on imported stuff in order to protect local jobs. one prime example is the brazilian informatics protection law, that lasted until the 90's and was responsible for much of the suckiness of the local IT scene.
of course, in the long run, the country gets worse off because that technological gap that caused the tax to come into light, always gets wider, since there's no incentives for local companies to innovate due to the lack of competition.
the moment the goverment realizes that without certain capital investment, without certain imported goods they cannot leverage their competitive standing against the rest of the world, they even consider lowering taxes but that ends up being immensely unpopular - opposition political parties start exploring that to show how the current government doesn't give a s*** to its constituency, and then nothing else gets changed. ever.
I mean, the last guy who challenged that did it in such a haphazard and sudden way that he managed to get impeached (Collor). that's the only politician in brazilian history that got p4wned and paid the full cost of it (oh well, truth be told, he pissed off a whole lot of people for a lot of other reasons, of widely varied severity, but still marginally legal - under a civil law system anything that's not written goes), but at least the blasted the door open for imports of some goods, markedly cars. which improved a lot after that, but not without bringing a number of local carmakers into bankruptcy. poor sucker.
now, that's why, at least in brazil, there's some pockets of support for OSS initiatives, since that's the only way to escape the hole past administrations dug for themselves, without resorting to impossibly byzantine, convoluted fiscal laws to create holes so that those goods can enter legally into the country. and that only highly paid lawyers or fraudsters can master.
Remind me never to go anywhere in south america, only bad bad corrupt things happen down there. *shiver* [/politically incorrect]
This will probably sound harsh, but Rio de Janeiro is mostly like a shame to Brazil (at least to those of us who used to live in the south and parts of the southeast): excess of violence, bribe, too much "jeitinho brasileiro" (brazilian workaround) and lots of other despisable things. Of course, not everyone there is like that and there are problems like these on other parts of the country. But RJ is just worse. Things are changing, though, to the better :)
Funny, when I lived there, all the Cariocas thought the same things about parts of southern and northern Brasil. I guess everyone wants to think that where they live is not the "worst" part of the country.
"But this one goes to 11!"
Now there's radar-guided photo cameras everywhere and nation-wide integrated computer vehicle databases. You'd just get your picture and your fine in the mail, together with a penalty on your driver's license.
Yeah. Not the 90's anymore.
PS: Rio has a notoriously chronic corrupt police. Not to be taken as a standard.
Main difference between the BSD license and the GPL license: one is from California and the other is from Massachusetts
It's ok, I am used to being modded "Troll" for saying the truth...
"So your point is that any businessman should expect to commit crimes and not be punnished?"
You must be new here. Welcome to the United States of America.
"But this one goes to 11!"
Here in Argentina having your house completely built from scratch may take less time and effort than getting the construction permit...insane! So you have your new house and you don't have the permit, and the government sues you because you are avoiding taxes on the house, but it's the government fault because they didn't give you the permit on time. Bottom line: if you want compliance, you can't have it: taxes are too high, bureaucracy doesn't work, government offices are filled to the ceiling with unprocessed paperwork.
South is indeed better. I used to live there dammit :P
Jokes aside, the south does have better standard living rates that southeast but this has nothing to do with my point. I'm talking about the culture of the people. And to make it clear: i wanted to mention Rio de Janeiro, the city, not the state as a whole.
I am from Brazil, our government is raising expenditures as crazy, and thus, have to raise taxes enormously. We already have the most expensive iPod in the world because of our taxes and tariffs. It will be cool for IT and Telecom and its jobs if we starting also having the most expensive routers....
Your ad could be here!
"He claimed that you had to keep papers around for only 8 years"
Wow, that's amazing! In Spain you only need them 4 years.
Sorry, it doesn't work that way... if they get more money (enough to run the service/institution decently), corrupt officials will just steal more money.
I actually know about a public university where the cost per graduate is higher than in private universities; nevertheless, salaries are lower, you have less equipment and buildings are in much worse state of repair.
If shipping $500M in equipment incurs $1500M in taxes, any businessman would have to be nuts to open an office there.
You, as a businessman, would open offices only at countries where you can ignore the laws? ...
/no sarcasm flag here, blunt truth.
So your point is that any businessman should expect to commit crimes and not be punnished?
Please, explain yourself... I must be missing something here.
Ummmm, these are American businessmen we're talking about here. That's just what they do.
If Brazil is going to hold the execs until 820M is paid, then Cisco should just pull everything out of Brazil and let their data infrastructure fall apart, and not pay the exhorbitant "fine" that Brazil is imposing. ) Where else was Cisco supposed to get their machines from without importing?!) Cisco should just let the infrastructure fall apart by either removing all of their hardware, disabling their software, or blocking (Tech support, software blocks, sales, maintenance, service, etc.). Then, after their infrastructure falls apart and becomes totally crippled and unusable, offer to restore service *AFTER* the charges hav been dropped and the execs freed.
If Brazil is going to be a dick, then refuse service. If Brazil is going to complain about "import taxes", then solve the problem by pulling all of your equipment back out of the country, along with your services.
If Cisco did that, I'd like to see the change of attitude from Brazil when they do it.
Knowing Google's lust for data collection, the Soviet Union is still alive and well inside the psyche of Sergey Brin....
I wonder if the Brazilian government realizes that *ALL* (100%) of Brazil's Internet traffic to/from the rest of the entire planet must flow thru one or more Cisco routers somewhere along the path.
Then I will recant my previous statement slightly, to say that many individuals tend to critize without fully knowing first hand the experiences lived by the population there. I live in Canada, and keep tabs on current events in other countries such as Brasil, such as the governments move towards linux based systemes in the work place etc. But I would never make assumptions about living conditions.
I enjoy hearing much from other countries and fear our media seems to hide or deface news from other countries, and feel thankful for individuals like you that can bring first hand information on such situations...my sincerest apologies, I never meant to ofeend, merely to validate the source of info.
Cheers!
good luck to the family!
Hey, no need to apologize for anything. Cheers, Mate!! Andre
It wasn't a funny joke, since Cisco routers don't have back doors, hopefully, and Brazil uses routers from other companies.
I am Brazilian born and I work for a Wall Street firm as a senior economist. I believe your theories are essentially flawed and here are the reasons behind my opinion:
First, to understand the effect of increasing tax rates actual tax revenues, please visit http://en.wikipedia.org/wiki/Laffer_curve. Brazil is definitely post-peak here, but you cannot, in practice, have zero tax revenues unless your government no longer exists.
Second, the tax rates in Brazil are not nearly as high as your example purports them to be. Yes, there are cascade taxation matters and although it can make your business not make economic profit (return in excess of a benchmark at a similar risk rate), it will not reduce your income to zero or below zero.
Third, low income individuals in Brazil only pay indirect taxes in the form of increased prices, they do not pay personal income tax - that weigh is mostly borne by the middle class. So, if you are within the 80% lowest income brackets (or so) you are not paying a cent in income taxes, so cut the "Live in the street and try to pay them" bullcrap.
Fourth, you are not asked to pay taxes. You are required to do so. It is not an option. If you are paying taxes in Brazil, you are already "rich", so your family is _not_ going hungry.
Those directors got too greedy and were caught red-handed. If there is no serious penalty associated with a slim probability of getting caught, the law is moot. Let us hope that it is not.
GOOD! THEY DESERVE IT!, serves Cisco right for trying to go offshore.
I'm late to the thread as usual, but I'd just like to say that I live in a developing country with the same rampant corruption situation, and I think I'll give you an idea of how bad it is.
My father, until recently, had one of the top ranking jobs at one of the biggest corporations in the country. He goes far out of his way to be honest, if he got a large drink at the drive-thru when he ordered a medium I wouldn't be surprised if he took it back, even if the rest of the food was cold and crappy. It's common knowledge that this corporation is (more) rife (than usual) with corruption. His peers always tried to get him to cook the books and turn a blind eye, but he kept on doing things the honest way, and actually made a lot of improvement at his company (the fact that he made more money while doing things the honest way tells me they had quite a few "money leaks"). The downside is that while his peers (sometimes even lower-ranking people) lived the lives of aristocrats after putting in a few hours at the office each day, my family didn't even enjoy the lifestyle of middle-class Americans (because my dad was only taking home what he was owed on paper), and my father was working sometimes over 12hrs a day (probably around 10 on average). He recently lost his job, I wish I could say more but I might have already said too much, if the right people read this I could be identified which would make it even harder for my father to find a new job.
Given the levels of corruption in procurement in the US and other countries (UK, France) companies based on those countries should not expect an easy ride in developing countries anymore.
That you try to twist this against Brazil speaks volumes about you and your ethics.
IANAL but write like a drunk one.
Corruption exists because people pay bribes.
In any case, I don't want to make a long case, suffice to say Halliburton or Saudi Royal family and those British planes.
In other words no country can lecture any other.
IANAL but write like a drunk one.
I suppose you are Brazilian, because you sound like other Brazilians with whom I have talked.
"The only thing I don't like about US is that they think they are the peacemakers of international relations. I mean, Iraq can't have nukes and US can? Have Iraq ever used a nuke to kill innocent civilians?"
Good observation.
"... the air is so polluted..."
The air is more polluted in San Diego, on days when the wind is blowing south from Los Angeles. Why? Partly because people in L.A. have so many more cars than in São Paulo. Partly because there are few cars fueled with alcohol in Los Angeles.
"Also, I feel much more safe walking down the street."
Good point.
"Do they [American women] despite [despise] men? Treat them badly?"
You don't know very much about women in the U.S. if you ask that question. See this quote from a comment in this Slashdot thread: "... many men all around the world seem to regard American women as some of the most aggressive and downright ferocious females on the whole darn planet. I have traveled a great deal and talked with guys about this perception in more than 50 countries."
"First you talk about corruption and use WAR arguments to support that?"
Part of the taxes you pay in San Diego, California will go for murdering innocent people, because the people who control the U.S. government want to make more profit in weapons and oil. Because you are paying the government to kill, you are now a killer. How do you feel about that?
"If the US is more corrupt, then they hide that a LOT better than we do."
That's the issue, entirely. Cheney has engineered a largely secret overthrow of the U.S. government, and broken the rule of law that was strong for decades. You can see a video about that, if you like: Cheney's Law (First aired yesterday, on 2007-10-16)
In RE: your earlier insights - have you considered educating the public to understand the benefits of taxation rather than educating them as to the perils of noncompliance?
The current US government - and indeed most libertarian and conservative factions with any power at all - is heavily oriented towards punishment and the avoidance of punishment as the prime motivator for all human activities. This reminds me of the arguments between Universalists and the other Christian cults of the 19th century... in brief, mainstream Christians stated that moral behaviour can not result from any belief system that does not include divine retribution for immorality. The Universalists proved by example that this was not so, and this was mostly ignored by the Christian mainstream (who continue to support child-abusing priesthoods who preach divine punishment to this day) because the people shouting at them from pulpits every Sunday weren't Universalists. Empirical proof boots naught if nobody looks at it!
If it were proved to people that paying taxes would benefit everyone directly, they'd happily pay them for the most part; true sociopaths are rare. Of course, since currently most governments do as much harm as good, they are not supplying any convincing proofs to the populace. Parents grieving for children who died to prop up the price of Texas oil are unlikely to be thankful for the educational opportunities provided by the land-grant university system, for one example.
The premise of the current crop of populist conservative and libertarian movements in the USA is that "all government is invasive and inherently bad for you" which is not really helpful. How can you fix something if you deny there is any value in it to start with?
I realize that the world would suck if everyone followed this line of reasoning, but that does not make it any less valid. Luckily, a certain percentage of individuals enjoy(in the sense that they will do it consistently) grassroots efforts, so we can free-ride off them.
"If it were proved to people that paying taxes would benefit everyone directly, they'd happily pay them for the most part; true sociopaths are rare. Of course, since currently most governments do as much harm as good, they are not supplying any convincing proofs to the populace. Parents grieving for children who died to prop up the price of Texas oil are unlikely to be thankful for the educational opportunities provided by the land-grant university system, for one example."
Even if you include the possibility of altruism, that just changes the value of the tax policy D. I showed that no matter how high D is, it still does not make sense to pay taxes.
The real problem is that your taxes will only help society if everyone else pays taxes. If you pay taxes, you have to hope that everyone else will. If you don't pay taxes, you still have to hope everyone else pays taxes. But in the second case, you more pocket cash. Please re-read the mathematical argument, you'll see the "caring about others" term cancels out.
And while I consider myself to have very libertarian values, I don't have any issues with paying taxes to programs I don't support. But I do want any tax system to pass basic mathematical muster.
So, how much Cisco equipment is that? *counting on hands* 1, 2, 3,... eight routers, two Catalysts, and a FastHub.
I realize that the world would suck if everyone followed this line of reasoning, but that does not make it any less valid. Luckily, a certain percentage of individuals enjoy(in the sense that they will do it consistently) grassroots efforts, so we can free-ride off them.
I've been running on the categorical imperative for a few decades, myself, so my view is a bit different. I attempt to achieve internal harmony through right action, rather than acting to accumulate wealth, and paradoxically enough this has led me to earn a reasonably high salary. Perhaps the need for reliably honest staff in important positions makes employers willing to put up with a few self-righteous pricks, in order to obtain predictable behaviour.
The real problem is that your taxes will only help society if everyone else pays taxes. If you pay taxes, you have to hope that everyone else will. If you don't pay taxes, you still have to hope everyone else pays taxes. But in the second case, you more pocket cash. Please re-read the mathematical argument, you'll see the "caring about others" term cancels out.
I am not much on maths, but I believe I see your point. Nonetheless; if we posit a tax policy that will not beggar the taxpayer, under the terms of the moral values I linked above, it behooves me to pay my taxes regardless of the actions of others because I will not be destroyed by these payments. Retention of funds is not a primary motivator for me; it's only a means to certain goals, such as self-sufficiency for myself and my family, and I have enough money to continue my progress towards my goals despite taxation. The chance of tax-funded road maintenance is worth more than the extra cash, in my terms.
When you try to quantify inexact benefits in the fashion that we are, subjective values and unexamined base axioms can prevent these equations from working for other people. For example; a Rastafarian cannot necessarily even conceptualize a term of "caring about others" - in his worldview, there are no others - I and I are one. A Buddhist might be similarly handicapped, because most forms of Buddhism teach that every individual is responsible for everything that exists - "caring for others" is not optional, it's like saying "water is wet" and just indicates that one understands the true nature of reality. Some Buddhists and Jains disdain money, and will give it away like St. Francis rather than contaminate their souls with it, so an equation that minimizes cash in pocket would be preferable to them - they prefer that any product of their labor be immediately released.
And while I consider myself to have very libertarian values, I don't have any issues with paying taxes to programs I don't support. But I do want any tax system to pass basic mathematical muster.
Which again is where philosophy comes into play - I truly hate paying for things that I consider evil or unsustainable. I'd gladly pay double my current taxes if I could allocate the funds where I chose - for instance, I'd never fund foreign military adventuring or corporate welfare payouts, but I'd happily fund defense, space exploration, science research, education, and pretty much any form of shared infrastructure maintenance. Many people share this view, although perhaps not the majority... I'd have to cut back quite a bit on my lifestyle if my taxes were doubled.
Despite all my blathering, I think you are right to expect a value equation for taxation that works from your worldview. I do not believe that any mathematical equation can be universally applicable to all the taxpayers, though. Remember, mathematical proofs are "proved" by logic and reason because any representational notation that can accurately describe the real world is necessarily inconsistent. Therefore, it seems to me that any rationale for tax
I lived in Brazil for a while. I have seen both sides of the story. When you set up a branch of business in another country you agree to abide by there laws. Period. One Christmas I sent a $13 electric can opener to my mother-in-law that cost over $100 by the time the postage and duties were paid. That is outragous and insane. There people need to speak up and rise up against such taxes. If Cisco pulls out then they will loose a emerging economy that is highly in favor of tech. Brazil is no small country like Ecuador, it is The major market in South America. Cisco should pay the fines, and restructure there business plan or pull out. The life in Brazil is a lets see if we can cut the corners so we can put bread on the table. The people and businesses live by this mentality. The Goverments there Federal State and Municiple should rethink there protectionist taxations and balance the benifits to the people.
I don't get it...
Try to follow the following context:
1) 1st World countries like USA, France, and England make a lot of pressure over "emergent" countries to avoid piracy, including commercial embargo, etc.
2) "emergent" countries had military governments during ~ 1960->1980 imposed by USA (*), cause by the fear of socialism influence in America, leading to the lack of democracy, freedom of speech which contributes a lot for increasing corruption and worst, the external debits with the World Bank and the International Monetary Funds
3) The International Monetary Fund makes pressure over those "emergent" countries to increase taxes for foreign products, since those countries needed to have US Dollars to pay for the same debts, making emergent countries to have a huge lack in technology to not be competitive with the first world
Now, CISCO...
It was a huge "X-kema" to bypass local taxes, and I of course that it's not happening only in Brazil
But as far I understood, despite the corruption and bla bla bla of Brazilian government, somehow after two years of investigation (and pressure from the governments of the home countries of the cheating companies) they were able to and arrested 40 people... what corruption of the government and incompetence had to do with it?
It's not wrong in Brazil - what's wrong is a big company making magical with numbers to increase their profits and, guess they got busted? Am I wrong or what?
Fermion
(Is what matters)
* if you didn't knew that, I suppose you never heard of CIA's influence in Latin America and hence have no idea why the whole world hates the USA GOVERNMENT. But note, people are people everywhere and btw generally they don't have problems with each other... give them beer and barbecue and we have buddies. Therefore, governments fuck everything
That's wrong!
your chicken countries hides themselves behind the World Bank and the IMF and THEM impose those markets to be closed... I suppose your ignorance doesn't allow you to know anything about it.
stay living on darkness idiot! you deserve it
ps: btw, the war already started on 9/11
So, Cisco owes 800 million in taxes on 500 million of product? Sounds like we don't have to look far to find the reason for Brazil's economic woes. That's what? something like a tax rate of 160%? Hope that's a typo in the story.
Everybody knows 3 people with my name.
"Any businessman wanting to avoid import duties and taxes of US$ 0.8 million that are 165% the cost of the goods would be nuts to open an office there after this."
There. Corrected that for you.
This sounds like the RIAA talking about how many billions they lose to piracy.
If you had to shell out an extra $1.65 for every dollar of product, you can be sure you wouldn't be buying anywhere near that amount of product -- instead, it would strangle the import goods needed for business.
Really sounds more like Brazil is shooting themselves in the foot.
I think you might want to check those figures again. Cisco was ordered to pay $800M+ for importing $500M in equipment. But that $800M figure is not just taxes, it includes fines and interest as well.
yeah. we don't have voodoo. we have something even better: macumba!
What ? Me, worry ?
According to http://www1.folha.uol.com.br/folha/dinheiro/ult91u337699.shtml, the 40 suspects - there still are 4 runaways - detained are been accused of passive and active corruption, tax evasion, falsification of documents and concealment of assets. Only 4 where Cisco executives. Aleggedly, they had a network of 14 offshore companies, used to tax evasion and get a 70% cost reduction on Cisco products. Yesterday, Cisco did not want to make comments for Brazilian Newspaper Folha.
Grey's Law: Any sufficiently advanced incompetence is indistinguishable from malice.
And, I suppose, your suggestion is that we should evade taxes instead of creating pressure for more strict government expenditure laws and reduced taxes. It sure looks easier.
Evading taxes allows business to continue as usual despite having too heavy taxes. By masking the problem, it prevents it from being properly identified and solved. It's hard to credibly complain taxes are high if you don't really pay them.
http://www.dieblinkenlights.com
That number, as someone else pointed up, is taxes plus fines (huge ones) plus interest.
By not paying taxes, Cisco is able to compete at prices its competitors are unable to match, thus engaging in anti-competitive practices and driving its competition off the market.
There are plenty of ways to avoid paying import taxes (or paying less of them). One is to open up a local factory as the taxes on finished goods is a lot higher than on materials. I am sure the money they will end up paying could be much more cleverly invested.
"instead, it would strangle the import goods needed for business."
No. As I said earlier, it would allow Cisco's competition to actually compete.
http://www.dieblinkenlights.com
Actually, Im from Brazil ;-)
---- You know how some doctors have the Messiah complex - they need to save the world? You've got the "Rubik's" complex
Then let me explain it like this - this is an example of "jeitinho americano".
"But this one goes to 11!"
18) Brazilians often have very negative ideas about their country. That's especially true of Brazilians who don't live in Brazil.
19) Brazilians consider their culture incompatible with any of the Spanish-speaking cultures.
"What do you mean in item 19?"
One example is that, in general, Brazilians don't listen to Spanish-language music. That's especially remarkable because Brazilians love music more than any other culture I know, and many different kinds of music.
Brazilian attitudes about people from Argentina are more obvious because so many visit Brazil on vacation. But Brazilians don't seem impressed with any Spanish-speaking culture.
I agree, very few Brazilians would treat anyone very badly.