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Goldman Sachs’ strategy for Shell — to obtain funding at the lowest cost through currency swaps — has failed so far before the Canadian courts. Ron Schlumpf of CIBC Wood Gundy, Toronto explains the regulatory risks of derivatives

Under a government decree (finance ministry, April 13 1998) a commission has been created to prepare a report on the status of Portuguese international tax laws. The report will:

Globalization has finally hit legal services with a series of cross-border mergers and alliances in 1998. Paul Lee analyzes this year’s gathering of statistics on the world’s 50 largest law firms – the IFLR 50 – and identifies the firms spearheading international growth

On October 1 1998, the Spanish parliament passed a law amending the Securities' Market Law and modifying various other aspects of Spanish securities market-related laws. Among the main features of this new law are the following:

Banking confidentiality in Poland is regulated by the Banking Act of 1997. Generally it is based on the rather restrictive French model, however, the legislators have used their own construction in the wording of the legislation. Polish confidentiality regulations are within the bounds of the EU's legal framework and the requirements set for OECD members.

Stock exchange equity transactions are settled through a complex procedure, the first stage taking place within the relevant regulated market, and the second stage performed by the clearing houses managed by the Bank of Italy.

The Hungarian Civil Code governs collateral agreements in a separate chapter. Some forms of collateral are accessory in nature, ie are dependent on the principal claim (eg a suretyship), others are independent. Section 249 of the Hungarian Civil Code expressly includes in the second group bank guarantees by which a bank obliges itself to make payment to the beneficiary in accordance with the conditions in the statement of indemnity, and within the agreed period of time.

A government bill on amending the Finnish Act on the Book-Entry Securities System, prepared by the ministry of finance, was given to parliament in September. The bill pays particular attention to the international relations established between securities depositories and to the handling of foreign securities in the Finnish book-entry securities system. In addition, the provisions governing the entering of foreign securities into the Finnish book-entry securities system have been specified in the bill.

The government has now published its Bill on the UK’s new financial regulatory system, but only time will tell whether the new hybrid will function effectively. By Simon Gleeson of Richards Butler, London

The Castagnede Report produced by the Commission this month recommends that the EU should begin a gradual reconciliation of the member states' VAT rates, ie turnover tax, and it should harmonize reduced rates by widening their field of application. The report comments that the level of VAT rates in member states still varies considerably with the normal rate lying somewhere between 15% and 25% and reduced rates lying between 5% and 17%. The report states that there are a number of substantial differences between the member states in their application of VAT. Denmark does not apply any reduced rates; Austria, Portugal, Finland and Sweden apply two reduced rates; the other member states apply a single reduced rate but also apply special rates, including a zero rate on some products. At the moment these differences do not cause distortions in competition or affect trade flows. However, the Commission is concerned that with the continuation of market integration, the arrival of the single currency and the increased use of electronic commerce, competition will increase, creating the need to harmonize VAT.