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A recent Court of Appeal decision (Russell McVeagh McKenzie Bartleet v Tower Corporation) provides a useful indication to New Zealand law firms of the judiciary's approach to Chinese walls in large firms.

President Jiang Zemin's recent call for restraint of the People's Liberation Army's widespread business activities is only part of a greater campaign to separate government and business in China. In the areas of tax and finance, two events highlight this tendency:

Credit derivatives are contracts intended to transfer credit risk on loans, bonds and other assets (the underlying assets) from the protection buyer to the protection seller. Under these contracts, the payment or other obligations of the protection seller are triggered by credit events affecting the reference asset.

For some years money laundering prevention measures of considerable effectiveness have applied to banks in Switzerland. These measures did not, however, cover the rest of the financial sector, and as a result the regulatory framework had large gaps. One of these was filled on April 1 1998 when the Federal Statute for the Combating of Money Laundering entered into force. It extends the standard of care exacted in the banking sector to financial intermediaries operating in the non-banking sector. If an attorney-at-law chooses to act as a financial intermediary within the meaning of the statute, he or she is fully subject to its regulatory requirements and may not, in particular, invoke professional secrecy if requested to disclose details of his or her financial activities.

In connection with the financial and political crises that swept Russia in August and September, the Russian government has adopted certain extraordinary measures, including the restructuring of the state's obligations under widely-held debt securities, and a moratorium on repayment of certain other hard currency debts. Creditor losses as a result of these measures are potentially enormous; by some estimates, in the hundreds of billions of dollars. Among other effects, the new measures have precipitated the effective collapse of the Russian banking system. From a legal perspective, the imposition of the measures has raised a host of issues, including the effective remedies available to bond creditors and the status of private debtor obligations in view of the moratorium.

Additional First Provision of Law 28 of July 13 1998 on Installment Sales, in force as from September 13, has solved some of the traditional legal issues concerning financial leasing transactions. The law's main features are as follows.

Since mid-1997, Hungarian legislation has imposed taxes on money transfers in cash so that cash payments made by companies over a certain sum (about Ft1.2 million (US$5.454 million)) entail various tax disadvantages. In an attempt to curtail cash payments, Hungary intended, on the one hand, to encourage non-cash money transfers common throughout Europe and, on the other hand, to gain greater control over the so-called black market.

In an attempt to attract more investors to join the Cyprus Stock Exchange (CSE), the income tax law has been amended to offer substantial tax incentives. The incentives aim to attract both offshore and local organizations to invest in the CSE as well as private companies.

The US is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. The New York Convention is incorporated into federal law by Federal Arbitration Act which governs the enforcement of arbitration agreements and arbitral awards. A principal advantage of the New York Convention is that a US party, in whose favour an international arbitration award has been rendered, may use the Convention to enforce the award in another country that has ratified the Convention. But may a foreign party use the Convention to enforce an award arising out of an arbitration proceeding in the US?

The National Telecommunications Agency (Anatel) announced on September 8 1998 that the auction of the so-called mirror companies is set for December 2 1998 on the Rio de Janeiro Stock Exchange. The mirror companies will be able to exploit fixed telephony in three regions: region one (Tele Norte Leste mirror), region two (Tele Centro Sul mirror) and region three (Telesp mirror), as well as in competition with Embratel (domestic and international long-distance services, telegraphy, maritime communications and data transmission). Accordingly, there will be four mirror companies, all starting from non-existing structures, which will require considerable investment in infrastructure.