wallstreetjournaleurope_20170111_The_Wall_Street_Journal___Europe

WEDNESDAY, JANUARY 11, 2017 ~ VOL. XXXIV NO. 241 WSJ.com

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EUROPE EDITION

CONTENTS

Business News...... B

Crossword.............. A

Finance & Mkts B6-

Heard on Street. B

Life & Arts......... A9,

Management.......... B

Markets Digest..... B

Opinion.............. A10-

Property Report... B

Technology............... B

U.S. News............. A6-

Weather ................. A

World News........ A2-

sCopyright 2017 Dow Jones &

Company. All Rights Reserved

What’s

News

 Top U.S. senators pro-

posed new sanctions against

Russia that could limit

Trump’s ability to improve

ties with the Kremlin. A

 The FBI chief said Rus-

sians also successfully

hacked Republican groups

and campaigns, as well as

Democratic organizations. A

 Trump’s pick for attorney

general, Sen. Sessions, re-

jected accusations he has

racist views during a Senate

confirmation hearing. A

 Germany released a plan

to rein in extremists, making

it easier to detain and de-

port asylum seekers believed

to pose a terror threat. A

 Elite U.S. forces killed an

Islamic State official during

a weekend raid in Syria

that was meant to capture

the militant leader. A

 Iranians massed for Raf-

sanjani’s funeral procession

as moderates mulled how his

death will affect the presi-

dent’s re-election chances. A

 Iran agreed to shrink its

stockpile of enriched ura-

nium far below the cap in

its 2015 nuclear deal. A

 Blasts in Afghanistan

killed over 45 people, high-

lighted the country’s wors-

ening security situation. A

 China is introducing a

new corruption watchdog,

but some legal experts worry

it will boost President Xi’s al-

ready substantial clout. A

 The White House de-

fended the health-care law,

saying that a jump in pre-

miums this year was a

one-time correction. A

V

Wisin advanced talks

to plead guilty and pay a

$4.3 billion fine to resolve a

U.S. probe of the firm’s die-

sel-emissions cheating. A

 Snap will make London

its global headquarters and

start booking overseas rev-

enue in all the countries

where it has offices. A

 The EU proposed rules

that would curb how com-

panies like Google and

Facebook track users to de-

liver targeted ads. B

 Valeant agreed to sell

three skin-care brands to

L’Oréal for $1.3 billion and

its cancer business to San-

power for $820 million. B

 Libya’s oil production has

more than tripled in the past

six months, posing a threat

to OPEC’s plan to raise

prices by cutting output. B

 Google is in talks to sell

its satellite-imagery unit to

startup Planet Labs, which

is seeking to raise funds to

help pay for the deal. B

 Yahoo plans to slim down

its board after completing

the sale of its core internet

business to Verizon. B

 Oil and gas companies

pledged to invest at least

$5 billion in Argentina this

year after unions agreed

to lower labor costs. B

 GM said pretax profit

this year should beat the

record expected for 2016,

and its board approved a $

billion share repurchase. B

 The CFTC’s head warned

the Trump administration

against rolling back postcri-

sis financial regulation. B

Business&Finance

World-Wide

€3.20; CHF5.50; £2.00;

U.S. Military (Eur.) $2.

loopholes as well as probes

into whether firms, including

Apple Inc., have been unfairly

paying too little tax.

Targeted companies have

said they pay their fair share,

but many have moved recently

to overhaul their tax practices

in the wake of these reviews.

As Snap, based in Venice,

Calif., gears up for an IPO in

the U.S. that could value the

startup at as much as $25 bil-

lion, the tax strategy could

boost investor transparency—

while potentially avoiding

any distracting criticism or

scrutiny of its overseas tax

arrangements.

Still, few have gone so far

as Snap in promising to keep

its overseas tax arrange-

ments tidy, something tax

lawyers said could be a sign

of how other companies

could restructure.

“Creating a structure to pay

no tax is increasingly diffi-

cult,” said Heather Self, a tax

partner at Pinsent Masons LLP

in London. “Large groups are

Please see SNAP page A

Snapchat owner Snap Inc.—

gearing up for what could be

one of the year’s highest-pro-

file public offerings—said it is

making London its main over-

seas office and will eschew

some of the controversial ma-

neuvers many larger tech com-

panies have used, especially in

Europe, to lower taxes.

Those arrangements have

attracted intense scrutiny in

recent years, triggering an in-

ternational effort to close

BYSAMSCHECHNER

Snapchat Parent Tidies Up Tax Strategy

sides, they say, walking on es-

calators is unsafe.

The arguments run counter

to the now familiar exhorta-

tion, which is currently embla-

zoned in bold characters on

many a public escalator. It’s

also leading to confusion, as

well as exasperation.

“If this ‘civilized behavior’

really does harbor immense

dangers, then who should we

blame for all the effort and

resources that have gone into

getting people to cultivate a

bogus faux-civilized habit

these past few years?” said

the Communist Party-con-

trolled China Youth Daily

newspaper, in a commentary

last week.

“It’s a good habit and peo-

ple finally learned it. Now you

want to cancel it, and what

are we supposed to do?”

Zhang Li, a saleswoman in the

Mall at Oriental Plaza, said

while traipsing through the

nearby Dong Dan subway sta-

tion in Beijing. “How could

people walk faster during

rush hours?”

Please see RIDE page A

Just as subway commuters

in some of China’s biggest cit-

ies begin to embrace a key te-

net of escalator etiquette—

standing to one side to let

others pass—experts in the

field are challenging the prac-

tice as potentially unsafe.

For years, subway authori-

ties in cities such as Beijing

and Shanghai struggled to

convince escalator riders to

stand to the right to let those

in a rush pass on the left.

“Stand right, walk left” was a

central feature of civilized-be-

havior campaigns launched

ahead of both the 2008 Bei-

jing Olympics and 2010

Shanghai Expo.

In a recent spate of news-

paper articles, commentaries

and social media posts, ex-

perts in the field have warned

that the practice represents a

danger to public safety. The

reason, they say, is the uneven

wear to escalators caused by

so many people standing on

the right side increases the

chances of breakdowns. Be-

BYJOSHCHIN

How to Ride an Escalator: China

Says You’re Doing It Wrong

iii

Commuters begin standing to one side,

but some warn practice may be unsafe

MOSCOW—In the spring of 2014,

after the U.S. punished Russia with

sanctions for seizing Ukrainian terri-

tory, Rex Tillerson made a major deci-

sion. The Exxon Mobil Corp. chief ex-

ecutive, now Donald Trump’s nominee

for secretary of state, would deepen

his company’s longstanding partner-

ship with the Kremlin.

During negotiations, the CEO of

By Justin Scheck ,

James Marson

and Bradley Olson

HEARINGS BEGIN:

Sen. Jeff Sessions,

Donald Trump’s

choice to be

attorney general,

rejected accusations

he has racist views

during a

confirmation hearing

in Washington. It

was the first of

several Senate

hearings for cabinet

choices likely to

face resistance from

Democrats.A

Rosneft, the Kremlin’s state-controlled

oil company, looked over a proposed

contract related to the pair’s opera-

tions off Sakhalin Island, in Russia’s

Far East, and scowled, said a person

with knowledge of the meeting.

Exxon, he said, put language in the

contract he didn’t expect. He looked

at Mr. Tillerson and tore it up.

Mr. Tillerson, the person said,

leaned back, put his hands together,

smiled silently—and waited. With bil-

lions of dollars already invested, the

Russians had few other options. Ros-

neft’s CEO, a former intelligence offi-

Attacks Across Country Shake Afghanistan

MOHAMMAD ISMAIL/REUTERS

RESCUE:Three major Afghan cities suffered attacks that killed more than 45 people on Tuesday. A person injured in Kabul, above.A

cer and top Putin ally named Igor

Sechin, eventually backed down, and

an agreement was struck.

A look at Mr. Tillerson’s negotiating

style, honed over years at the head of

one of the world’s largest oil compa-

nies, shows an executive determined

to hold the course, even when the

landscape shifts dramatically. Personal

relationships were often a deciding

factor. So were deliberately theatrical

tactics, such as preplanned temper

tantrums and silent stare-offs.

The question for the Senate, which

Please see STATE page A

TILLERSON’S DEAL STYLE:

UNBENDING, THEATRICAL

Senate to weigh if Exxon experience, especially in Russia, is qualification for secretary of state

Trump Pick

Defends

Himself

JIM LO SCALZO/EUROPEAN PRESSPHOTO AGENCY

Volkswagen AG said it is in

advanced discussions to plead

guilty to criminal wrongdoing

and pay a $4.3 billion penalty

to resolve a U.S. Justice De-

partment probe of the Ger-

man auto giant’s diesel-emis-

sions cheating.

Separately, the company

said it sold 10.3 million vehi-

to produce toxic tailpipe emis-

sions up to 40 times allowable

limits during normal road use.

People familiar with the

matter said a final settlement

is expected to be announced

Wednesday. The deal, which

includes appointment of an

independent monitor to audit

the company’s compliance

practices, must be approved

by U.S. authorities and Volks-

wagen’s management and su-

pervisory boards.

Volkswagen has taken €18.

billion ($19.2 billion) in provi-

sions to pay for the legal costs

and penalties associated with

the diesel scandal in the U.S.

Volkswagen said the agree-

ment, if reached, would “lead

to a financial expense that ex-

ceeds the current provisions.”

The expected settlement of

the criminal probe comes

days after Federal Bureau of

Investigation agents arrested

a Volkswagen executive, Oli-

ver Schmidt, accused of con-

spiring to defraud the U.S. in

the auto maker’s emissions-

cheating scandal. Mr. Schmidt

was arrested at Miami Inter-

Please see VW page A

cles last year, likely driving

past rival Toyota Motor Co. to

claim the throne as the

world’s biggest automotive

group by sales.

It achieved the

milestone de-

spite the emis-

sions scandal,

after a decadelong effort to

outpace competitors Toyota

and General Motors Co.

Volkswagen said in a writ-

ten statement it had agreed to

a draft settlement with the

Justice Department and U.S.

customs authorities, in what

would be a significant step to

resolve legal fallout from the

emissions scandal. Volkswagen

has already agreed to pay as

much as $17.

billion to ad-

dress civil

claims with con-

sumers, regula-

tors, dealers and state attor-

neys general in the U.S.

Volkswagen admitted in

2015 it had rigged nearly 11

million diesel vehicles world-

wide, including some 600,

in the U.S., to cheat on emis-

sions tests, allowing the cars

By William Boston

in Berlin and Mike

Spector in Detroit

Volkswagen to Plead Guilty in U.S.

Auto maker would pay

a $4.3 billion penalty

in emissions scandal;

top sales ranking likely

WASHINGTON—Leading U.S.

senators proposed new sanc-

tions against Russia that would

markedly increase Moscow’s

economic isolation and could

limit President-elect Donald

Trump’s ability to improve re-

lations with the Kremlin.

Tuesday’s proposed legisla-

tion would set in stone many of

the Obama administration

sanctions levied against Russia

after revelations of election-re-

lated cyberhacking, and sub-

stantially increase the penalties

for companies that invest in

Russia’s energy sector and the

state-run corporations that

dominate its economy.

The sanctions, which U.S. of-

ficial acknowledge could lead

to retaliation by the Kremlin,

also would directly target U.S.

and foreign banks that help

Russia sell sovereign debt, a

restriction the Obama adminis-

tration had previously pre-

ferred to assert more infor-

mally, through conversations

with Wall Street executives.

“We have been attacked by

Russia. That’s no longer up to

any debate,” said Sen. Ben Car-

din (D., Md.), one of the spon-

sors of the bill. “It cannot be

business as usual.”

The measure, called the

“Countering Russian Hostilities

Act of 2017,” has also been

spearheaded by Sens. Lindsey

Graham of South Carolina and

John McCain of Arizona, two

Republicans who have differed

sharply with Mr. Trump’s skep-

ticism over U.S. intelligence

agencies’ finding that the

Kremlin was behind last year’s

cyberhacking of the Democratic

National Committee and Hillary

Clinton’s presidential cam-

Please see RUSSIA page A

BYJAYSOLOMON

ANDWILLIAMMAULDIN

Senators

Propose

Sanctions

On Russia

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