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Man on trial for Daphne Caruana Galizia murder claims he was framed

A businessman on trial for the murder of the journalist Daphne Caruana Galizia has spoken about the charges for the first time in court since his arrest seven years ago, telling the jury he was framed by police and had nothing to do with the killing. During four days of questioning by defence and the prosecution lawyers, Yorgen Fenech, 44, accused the most senior adviser to Malta’s prime minister of giving the go-ahead for the murder. Fenech’s defence lawyers have repeatedly sought to identify Keith Schembri, Malta’s most powerful unelected official in the years leading up to the killing in October 2017, as the mastermind and instigator. Fenech repeated those claims as he began giving testimony on Friday after unexpectedly waiving his right under Maltese law to refuse to give evidence at his own trial. Fenech claimed that Schembri, who was chief of staff to the then prime minister Joseph Muscat, repeatedly leaked sensitive details to him, including advance warnings of raids and arrests. During a court session on Saturday, the judge asked Fenech: “Do you know who the real mastermind is?” Fenech replied: “Keith Schembri.” Police have told the jury that Schembri was never a suspect. He was called as a witness during the trial and has denied any involvement in the murder. The prosecution’s case rests on the testimony of the self-confessed middleman Melvin Theuma, a taxi driver who alleges Fenech gave him €150,000 (£128,000) to hire the three men convicted of planting the fatal car bomb. In his testimony, Fenech spoke of his drug addiction and his close ties to senior police leaders and politicians, including WhatsApp messages he shared with Schembri and Muscat. He began his testimony by describing a close friendship with Schembri. He said they had played football as children and reconnected as adults. Fenech said he had come to rely on Schembri, a successful businessman with interests in printing and packaging, and spoke to him most days. Fenech claimed the idea of killing Caruana Galizia was raised during a barbecue at his family ranch. She had written about Schembri having a brain tumour before he had told his family about his condition. “Keith was very emotional,” Fenech said. “He felt very strongly about it. We had to tell him to calm down … It wasn’t the first time he spoke about it, he was almost fixated with Daphne … He kept a file with all her articles.” Fenech claimed Theuma, who also attended the barbecue, wound Schembri up further, saying of Caruana Galizia: “She’ll reap what she sows.” “Then I was in the kitchen and Melvin came up to me and said ‘we can easily get rid of her’,” Fenech said. “It seemed a bit over the top, so I played it down and offered him a drink. I went outside for a smoke and Melvin and Keith continued chatting.” Fenech claimed Theuma raised the subject again two weeks later. “Melvin was driving me to the airport. As soon as I got into the car, he told me that he had spoken to some people who told him there was already an active plan to murder Daphne Caruana Galizia. “He said: ‘I’ve spoken to them, they’re already working on it and want €120,000.’ I was shocked, I told him I’d get back to him. At first I wasn’t going to tell Keith, but it kept playing in my mind and then I decided to tell him. He said ‘go ahead, go ahead, go ahead’. “For Keith it was pure revenge, because he’d say she crossed a line by writing about personal matters.” Fenech’s testimony painted a picture of a fixer gone rogue, with Theuma pressing ahead on his own initiative. After the murder, Fenech claimed, Schembri began using him to relay messages to Theuma. One message was intended to warn the hitmen of their impending arrest. “When I told Melvin, he brushed it off at first,” Fenech said. “He said it was normal for police to arrest people and then release them without charges 48 hours later. I relayed that back to Keith. He told me that the police had proof – a bomb code and some proof of phones being used. That one of the killers had topped up the bomb phone’s credit. “I went back to Melvin and told him that, and that the arrest date was set for 4 December.” Two brothers, George and Alfred Degiorgio, and their associate Vincent Muscat were arrested on 4 December 2017. They have all been convicted of the murder, with Muscat confessing his involvement in return for a shorter sentence. Fenech claimed Schembri also warned him of Theuma’s arrest in 2019. Under questioning by the prosecution, Fenech also said Schembri had shared a screenshot of a confidential report by Europol, which was helping the Maltese police, listing potential suspects. The prosecution has relied in part on a series of recordings made by Theuma of his conversations with Fenech after the killing, in which they discussed the crime and leaks about the police inquiry. Fenech said those recordings had been used to extract money from him. He claimed: “Melvin used recorded calls as blackmail … Keith got to know and panicked.” He said he had handed over €400,000 to Theuma to pass on to the Degiorgio brothers to help pay their legal costs. He claimed the stress had destroyed his family life and his relationship with his wife. “It drove me to drug addiction,” he said. “I spent my life being against drugs, seeing my brother abusing drugs. And I ended up taking drugs myself.” He claimed investigators had helped to cover up Schembri’s role. “I felt betrayed,” Fenech said. “You combined Melvin Theuma’s lie and a cover-up of Keith Schembri to frame me.” Challenging Fenech’s version of events, the prosecution lawyer Godwin Cini asked: “Would I be correct in saying you were the one with the power, not Melvin Theuma?” The judge, Edwina Grima, later asked: “Why did Melvin Theuma feel he had power?” Fenech replied: “He knows who the real mastermind is.” The judge then asked Fenech if he knew who the real mastermind was. He replied: “Keith Schembri.” Asked how he knew, he said: “I knew because Melvin Theuma would mention it and Keith Schembri intimated it.” Ending his cross-examination, Cini said to Fenech: “Who are you trying to fool? Your fingerprints are all over this.” Fenech is pleading not guilty to complicity in Caruana Galizia’s murder. The trial continues. Transcript and translation by Amphora Media

‘A mockery’: how offshore tax havens are thwarting the UK’s transparency push

Since Britain’s offshore secrecy jurisdictions caved in to pressure from Westminster to embrace corporate transparency, finding out who owns a company in one of these island havens is, in theory at least, a piece of cake. Take the Cayman Islands. All you have to do is show that you have a “legitimate interest” in the data by proving that you are a researcher, journalist, member of a civil society group or a business person considering a transaction with the subject of your inquiry. Next, you must explain how the information will be used for “preventing, detecting, investigating, combating or prosecution money laundering or its predicate offences or terrorist financing”. Then there is a fee of at least $75 (£55) for each application. You’ll need to set up an international wire transfer though, rather than a typical online payment. Now, fill out a lengthy form outlining exactly what information you’re after, cross your fingers and wait. It isn’t exactly Companies House (for all its faults). Even when the form has been submitted, the subject of the inquiry can apply for a three-year “protection from disclosure” (at a cost of $1,000) to stop the information being sent on, on the basis that corporate transparency could expose them to harm. These applications are refused more often than not, a Cayman Islands spokesperson said, but justifications for exemption appear to be drawn quite widely. Reasons could include revealing any connections to “activity such as testing products on animals, which might lead to them being targeted by activists”, according to guidelines written by the Cayman Islands government. Transparency campaigners believe aspects of the system in the British Virgin Islands (BVI) are even worse. There, officials will inform the subject of any inquiry – perhaps a powerful oligarch or a narco-trafficker – of the name of any organisation asking the inconvenient questions, though not the names of individuals. Don’t expect a quick outcome either. “Three months ago we asked whether a sanctioned Russian oligarch still owns a company holding millions worth of UK property,” said Steve Goodrich, the head of research and investigations at the anti-corruption campaign group Transparency International. “We still haven’t had a reply.” Margaret Hodge, the veteran anti-corruption campaigner, said that the sclerotic and unpredictable nature of these corporate registries “makes a mockery of their purpose”. Legitimate interest access registers of beneficial ownership (or Liarbos for fans of ironic acronyms) have come about after a seven-year campaign by the UK government to bring overseas territories – and crown dependencies such as Jersey and Guernsey – to heel. The campaign has gathered steam amid mounting real-world examples of how Britain’s offshore havens had been used to launder money, avoid taxes or otherwise flout laws or other norms, such as the financial rules governing football. Cayman Islands entities played a central role in the 1MDB scandal, one of the largest corruption cases in history. The Russian oligarch Roman Abramovich secretly funded Chelsea FC with cash funnelled through companies in the BVI, a Guardian investigation revealed last year. The BVI was the single most-used jurisdiction in the now infamous Pandora papers leak. By earlier this year, after several missed deadlines, all of the overseas territories had responded to the drive to introduce Liarbos. But, according to Stephen Abbott Pugh, of the transparency group Open Ownership, the registers are “too costly, too complicated and [it] takes too long to access this crucial information. “So it remains locked away in most cases out of the reach of users with a legitimate interest in accessing it.” A spokesperson for the Caymans said only 25 applications for information had been received in 19 months, citing this as evidence of lack of demand, rather than difficulty in accessing the system. The spokesperson rejected criticism that the register was hard to use or costly and defended the islands’ reputation. “In spite of the public perception created by Hollywood fiction, misguided NGOs, and the politicians whom they have influence over, no credible evidence has ever been presented that Cayman has a problem with illicit finance,” they said. The new registers, according to the UK government’s own rhetoric, are only supposed to be an “interim step” towards fully public corporate registers accessible to all. Dispute over the pace of progress towards greater transparency has fuelled simmering tension between London and offshore outposts. Last year, Hodge – the government’s “anti-corruption champion” – was dispatched to the BVI on what was officially called a fact-finding mission but looked more like a shot across the bows. Criticism of the BVI by two other leading anti-corruption voices in Westminster – Phil Brickell MP and Joe Powell MP – led to one BVI media outlet printing a cartoon of the duo. Wearing thick boots, they were depicted kicking lumps out of Riley Right – a cartoon parakeet in a suit who serves as the islands’ corporate transparency mascot. “The only way to shine a light on the dirty money flowing through British overseas territories like the BVI is to have full transparency over who owns the companies registered there,” said Powell. “It’s completely unacceptable that following the money is still so hard, and it is a flagrant breach of their agreement with the British government.” Brickell said the “eyes of the world” will be on the UK government when it hosts a summit on countering illicit finance this December. “Failure to get our own house in order by then would be an acute embarrassment,” he said. Hodge isn’t backing off either. Earlier this year, she indicated that Westminster could force crown dependencies to improve transparency. Guernsey’s top politician responded by bemoaning “outdated prejudices” about the island. Hodge fears that crown dependencies are now “hiding” behind a prolonged EU row over how corporate registers in the 27-nation bloc should look. She doesn’t want to wait to see how that process plays out. “With a new government in place under Andy Burnham, I would hope we will be able to review our approach and be effective,” she said. Spokespeople for the Cayman Islands and the BVI rejected the suggestion that public access to corporate ownership registers were an accepted international standard and pointed out that tax and criminal authorities already had full access. A BVI spokesperson said: “We are proud of our legitimate interest access (LIA) regime which has significantly strengthened the accuracy, security, and accessibility of beneficial ownership data. “The regime offers greater transparency alongside appropriate protections for individual privacy, while remaining aligned with international standards, including the EU’s sixth anti-money laundering directive.”

Iran faces strait of Hormuz paradox as strategic value of chokehold erodes

Is the strait of Hormuz, recently cited by the office of the Iranian supreme leader as “the pillar of Iran’s new security order”, and as transformative as possessing a nuclear weapon, in reality becoming a fast-diminishing asset, leaving Iran increasingly vulnerable to the new planned US wave of economic sanctions? It is the key debate that is raging inside Iran, with many different conclusions being drawn for Tehran’s negotiating strategy. Those who warn the strait’s value as a chokehold on the world economy will erode, leaving the country without foreign exchange reserves, argue that Iran’s negotiators should seek a deal soon. One analysis written by Hamid Paktinat, the founder of the Forum of Economic Activists, suggests the construction of alternative pipelines and export routes by Iran’s Gulf neighbours will halve the strait’s strategic value within three years. Those who worry about wasting assets inevitably set store by the separate visits this week to Tehran of Oman’s foreign minister, Badr Albusaidi, and Pakistan’s army chief, Asim Munir. These two men are critical to renegotiating the terms for the reopening of the strait and the revival of the discarded memorandum of understanding agreed by the US and Iran in June. The Iranian president, Masoud Pezeshkian, and the parliamentary speaker, Mohammad Bagher Ghalibaf, have both recently made unusually blunt comments about the need to end the war – and the economic consequence of continuing it. Ghalibaf said that regardless of how much military power Iran possessed, “if people are hungry” and there was no economic growth, the country could not endure. Security, he argued, could not be sustained without a functioning economy. He added that, as someone with a military background, “we know the value of peace better than those who talk about peace”. Pezeshkian was even more blunt: “The war must end at some point,” he said. His argument was that Iran should end the conflict now, while Tehran still believes it is negotiating from a position of strength, rather than wait until its position weakens. The Iranian central bank governor, Abdolnaser Hemmati, also recently went on TV to warn about the economic pressures. “We are facing four or five major challenges simultaneously, including maximum sanctions, blockade, cutting off oil exports, and a budget imbalance, each of which puts pressure on the economy,” he said. “One of the neighbouring countries told me that if one-fifth of what happened in your country happened in our country, we would not be able to govern the country.” What is driving these remarks is the pressure on ordinary people in Iran, and an acceptance that the strait cannot become a permanent security doctrine in itself. Hamid Asefi, a Tehran-based journalist specialising in geo-economics, is one of many warning that if Hormuz is to be played as Iran’s final card every time a crisis arises, this card will gradually lose its value. “A threat that is constantly repeated turns from ‘deterrence’ into a political habit; and a political habit, if not accompanied by concrete achievements, sooner or later leads to an inflation of threats,” he said. The main question is no longer: can Iran close the strait, he wrote, but if Iran closes Hormuz to the world, does it open the door to power for itself or lock part of its power behind that door? “This is the Hormuz paradox. In international politics, a lever that is constantly flaunted can become its own enemy because it forces others to plan to reduce their vulnerability […] the main question of Iranian policy in Hormuz must change from: ‘How can we make the passage difficult?’ to ‘How can we make the passage so safe and stable that everyone needs Iran to maintain this order?’” That does not imply the lever is valueless. Far from it. According to data compiled by the ship tracker Kpler, only 112 oil and gas tankers went through the strait between 1 and 19 August. Almost 79% used unconfirmed routes, 19% used Iran’s preferred northern route and 2% used the Omani route. In reality many of the ships that used the unknown routes probably turned off their transponders and used US protection along the Oman route. It also appears that aided by the US government, Saudi, Emirati, Qatari and Kuwaiti oil companies have chartered a small group of oil tankers to take cargo through the southern route to the Gulf of Oman, where they then offload the oil to waiting tankers owned by their customers. Much of the risk is therefore transferred from shipping companies and oil customers to the more highly motivated state oil producers and to the US government. Iran has drawn up a blacklist of about 48 ships that it will try to ban or fine. But the US government is probably exaggerating the impact of these workarounds. Chris Wright, the US secretary of energy, claimed on 18 August the US navy had assisted in the transfer of more than 15m barrels of oil and other products. He also claimed the average daily transfer of oil through the strait was now more than 8m barrels, but even this figure is less than half the prewar average and is anyway seen as inflated. Most ship data trackers estimate the daily figure at closer to 6m barrels a day. Arsenio Dominguez, the secretary general of the International Maritime Organization, furthermore dismissed Donald Trump’s outlandish claim that the US navy had all but opened the strait, telling Bloomberg: “Given the very small number of ships that transit the strait of Hormuz, it is clear that this strait is, in practice, not open.” The US president has countered that all mines in the strait have been removed, leaving Iranian drone and naval attacks as the chief threat. But the fact that before the war the strait accounted for 20% of oil and oil-related products is serving as a catalyst for the restructuring of the global energy infrastructure. Countries in the Gulf are rapidly building a network of alternative pipelines, with the aim of protecting more than half of their prewar exports from the impact of Hormuz by the end of this decade. Paktinat has looked through the region at the capacity, length and cost of pipelines being prepared in six countries over the next one to four years. He concluded Saudi Arabia’s reliance on the strait of Hormuz would decrease from 70% to 15%. The UAE’s reliance would decrease from 50% to 15%, and Iraq’s dependence would fall from 100% to 30%. Kuwait and Qatar’s reliance would decrease from 100% to less than half. Bahrain’s reliance would fall from 100% to 15%, he assessed. Finally, Oman’s reliance would change from 0% to becoming a major coastal oil transfer hub for the entire region. Overall, he says, the strategic value of the strait of Hormuz will be halved within three years and almost lost within six years with the implementation of these projects. The narrow horseshoe waterway will remain, but its strategic importance – the centre of Iranian gravity – will have evaporated. In the meantime, the US will try to turn Trump’s premature boast that the Iranian economy has completely collapsed into reality. It will try once again to block the vital arteries of the Iranian government across five key sectors: gold, cryptocurrency, technology, shipping and aviation. Success is by no means guaranteed, as Trump must know from the failure to defeat Iran in his first term. But slowly chipping away at Iran’s economic resilience until the strait finally becomes an irrelevance may be Trump’s only remaining option.

Ukraine war briefing: Small batch of Patriots arrives as Zelenskyy pleads for more

Ukraine has ⁠recently received a ⁠small number ⁠of US-made Patriot interceptors capable ⁠of shooting down Russian ballistic missiles, Volodymyr Zelenskyy ‌said. He did not say how many had arrived, or ‌who had supplied them. Kyiv also ‌got confirmation of future supplies of the French Crotale surface-to-air ‌missile system, the president was quoted as saying by broadcaster ⁠Suspilne. Zelenskyy said this month that Ukraine needs 5% of US Patriot production to meet its needs but has only been receiving 1%. “From 1% to 5%, I have some months and millions [of] phone calls and anything else. I do some things which I can’t even share. It doesn’t mean that it’s out of the law. But I can’t speak about it.” Russia is set to extend its diesel export ban ⁠through September as fuel shortages persist in the domestic market, with ⁠refineries still ⁠idle following repeated Ukrainian drone attacks, three industry sources told Reuters. Russia introduced the diesel export ban on 8 July. One of the sources said extending ⁠the ban until the end of the year is also under discussion. Russia’s energy ministry ⁠did not respond to a Reuters request to comment. For non-diesel fuels the ban extends to 31 January next year, including a ban for export of motor gasoline. Export of jet fuel is banned, for the moment, until the end of November 2026. To make matters worse for the Kremlin, Ukraine’s ⁠military struck Russia’s Afipsky oil ⁠refinery ⁠in the Krasnodar region ⁠overnight on Tuesday, causing a ⁠fire, the Ukrainian ‌general ‌staff said. The general staff also said ‌that two gas separation units at the Astrakhan gas ⁠processing plant in the Astrakhan region were hit in ‌an attack overnight on Monday. Bradley Townsend, a 33-year-old fisher from Barnsley, South Yorkshire is believed to be the first British citizen to die fighting for Russia in its war against Ukraine, writes Raphael Boyd. He is believed to have been killed by a remote-controlled first-person-view drone near Lyman, a city in Donetsk, as long ago as 10 June. Tom Tugendhat, the former Conservative MP and security minister and ex-serviceman, expressed sympathies to thee family but added Townsend had been “unbelievably stupid” and “extremely misguided”. “No question about it, it’s criminal because you’re engaging in an army that is committing the most barbarous war crimes that the world has seen in decades.” German investigators found a third drone and suspected military explosives thought to be connected to an attempted attack on Leipzig airport, local media reported. The drone was discovered in Kabelsketal, just to the west of the airport, along with about 50g (1.8oz) of a suspected military explosive on 14 August, 10 days after the unsuccessful sabotage, Kate Connolly reports. Leipzig airport is a cargo and military logistics hub used by Nato and Ukraine’s Antonov Airlines for transporting military supplies. Sweden’s military meanwhile is moving to seize Russian-owned land near the Musko naval base in Stockholm’s archipelago. “The development of Russian drone warfare has changed the threat landscape for Sweden,” the armed forces said. “There is therefore a need to take measures to protect Sweden against the threat posed by both aerial and sea-going drones.” Ukraine appears to be slowly losing the war against Russia, its ousted defence minister, Mykhailo Fedorov, has told Reuters. Ukraine’s presidential office said in response that Fedorov had been positive about the conduct of the war when in office and the only thing that had changed was his personal status. Fedorov said Ukraine still had “every chance” to win but urgently needed a plan in the next few months to ⁠end the war. Volodymyr Zelenskyy said on the weekend that Fedorov’s spending decisions had left a $27bn hole in the defence ministry budget and no way to fill it. Fedorov has denied the figure.

In China, talking to AI is normal. Now the government fears it might replace human intimacy

When law student Zhao Wei heard that her AI boyfriend was going to be switched off, she was “heartbroken”. She had been talking to Wang Ye every day since she created him in January. “I was crying my eyes out – snot and tears everywhere,” the 19-year-old says. Zhao, who describes herself as sensitive and introverted, had become accustomed to sharing details of her daily life – such as being scolded by a teacher – with her AI. “I don’t usually talk to my real-life friends about these things because I feel like everyone has their own stuff to deal with,” she says. “But with the AI agent, I don’t have to worry about what it’s thinking. I can just say whatever I want.” Zhao created her AI companion on Doubao, a chatbot owned by the tech company ByteDance. Last month, ByteDance shut down Doubao’s companion feature. The saga prompted outrage on social media and highlighted the tensions in China between the widespread use of AI and its potential social consequences. No country has rolled out AI as comprehensively and as enthusiastically as China; the country’s demographic challenges are forcing the government to turn to technology to solve future labour shortages. Elderly people use chatbots to answer medical questions, while young children have AI education in schools. But the authorities are increasingly worried that AI might exacerbate existing social problems including loneliness, unemployment and – in the eyes of Beijing – singledom. A loneliness crisis New rules introduced on 15 July ban AI companions for minors and mandate certain restrictions for chatbots marketed to adults. Some major providers including Doubao removed the companion function entirely to ensure compliance. The government says it is worried about chatbots fostering “emotional dependence or addiction” in users. It has warned companies against offering services that “replace social interaction”. While many countries are grappling with how to limit the potential harm of AI chatbots, particularly for young people, China’s rules are the most sweeping to be implemented on a national scale. There is a particular concern about a loneliness crisis, including among young people. China’s highly digitised, smartphone-based economy makes it easier than ever to live, work and socialise entirely through a handheld screen. Earlier this year an app that played on the idea of people dying at home alone – called Are You Dead? – briefly went viral. About 20% of households in China are made up of people living alone, and that share is expected to surpass 30% by 2030. A survey published in March by state media found that nearly half of young people had turned to a virtual companion when they felt lonely. Nancy Dai, an associate professor at City University of Hong Kong, says it is not just loneliness the government is worried about. With falling birth and marriage rates, she says, there may be an additional concern that if AI becomes an increasingly satisfying and low-cost substitute for human intimacy, young people could become less motivated to pursue real-world romantic relationships, marriage and parenthood. For Zhao, loneliness has long been part of her life. Her parents left her when she was young to find work, making her one of China’s “left-behind children”. “I’ve never really had a bestie, so I feel like I’m kind of lousy at making friends,” she says. Talking to AI is a way to “pour out my worries”. Another AI user, who asked to remain anonymous, also finds solace in talking to her AI. “In real life, the pace is fast, the pressure is already high. Only with my AI agent can I speak freely without restraint,” she says. “I’m begging, please don’t take down the Doubao AI agent,” she pleaded on social media in July. But talking to AI is now so commonplace that it would be hard for the government to end the practice entirely, and the new rules include large loopholes for AI services that are deemed educational or “which do not involve continuous emotional interaction”. The government “has already recognised that AI companions or AI-related applications are a vital part in the citizens’ everyday life”, says Liang Ge, a lecturer in digital sociology at the University of Manchester. In many sectors, the government is still pushing the use of AI as a way of easing looming demographic pressures. Last year the national health commission published guidelines on promoting AI in healthcare. It said that by 2030 health assistant apps would provide “full coverage” for primary healthcare. One popular health assistant is AQ, an app developed by Ant Group, an affiliate of the tech company Alibaba. It allows people to chat directly with avatars of real-life doctors from top hospitals in Beijing, Shanghai and other cities. Lü Di, a 33-year-old art tutor in the eastern city of Hangzhou, is a regular AQ user. She likes how detailed and instantaneous the advice on AQ is. “While some in-person doctors might not have the patience to answer questions, this isn’t an issue with AI doctors.” AQ says it wants to make health services more accessible and help free up overstretched doctors to focus on more complex cases. But some worry about being replaced by AI. “When AI first came along, quite a lot of doctors were concerned about whether their jobs would be replaced by AI,” says Chi Chenfei, a doctor at Renji hospital in Shanghai, who has partnered with AQ. “But I don’t think it’s about replacement. It’s more about helping doctors work more efficiently. “Concerns of any kind won’t stop technological progress.” Since losing her AI companion, Zhao has felt “like there’s a tiny pebble weighing on my heart”. But she says she understands the need for some regulation. “I consider myself a fairly rational person, yet I developed feelings for an AI, which feels pretty incredible. I think it was necessary for the state to step in and regulate it.”

‘So hacked off’: as election nears, New Zealanders despair at the main parties – and Opportunity knocks

For decades, Mattie Wall mainly voted for Labour, one of New Zealand’s two major political parties. A former diplomat and project manager, the South Island-based retiree felt that the party with working class origins aligned with what was important to her: a thriving country, and the environment. This year she is among the New Zealanders who are peeling away from the Labour and National parties – which swing in and out of power every few terms – to vote for an untested party that has never held a parliamentary seat. “In the past, I didn’t feel the frustration I do now with politics,” said Wall, 76. “I’m so hacked off with both parties, with all parties really. We’ve got Trump 2.0, AI’s sudden [surge], increasing climate change impact – what are we waiting for, revolution or societal collapse? Clinging to the old ways ain’t gonna cut it.” As New Zealand prepares for an election in November, Wall is among the roughly 5-8% of people according to recent polls who plan to vote for relative newcomers the Opportunity party. For her, its policies, including a land tax and a $370 a week universal basic income, represent pragmatism; a shake-up, but a sensible one. She is also impressed by Opportunity’s leader, businesswoman Qiulae Wong. “She’s intelligent, thoughtful, moderate, unpretentious, she speaks lay language and she’s a realist.” Wong, 38, is a sustainability consultant and mother-of-two from Auckland who returned to New Zealand in 2022 after almost a decade working in London. Asked to define Opportunity, she said it looked to “market-driven solutions” while being committed to a low-emission future and evidence-based policy. The apparent rise of Opportunity – a self-described centrist party started three elections ago by economist and philanthropist Gareth Morgan – has injected an unexpected element of drama into the election race. The contest features a weakening right bloc, with National’s polling flagging at about 29%. National and Labour are seeing their lowest combined support in 30 years, mirroring an international trend of minor parties gaining votes and influence. Polls have Opportunity winning more than the 5% threshold of seats needed to enter parliament under New Zealand’s mixed member proportional (MMP) system. It means Opportunity could get to choose who governs. Christopher Luxon, the National leader and prime minister, has ruled out working with Opportunity. The Post newspaper reported Opportunity looks set to nab votes from the right and left. Of those who say they will vote Opportunity in November, 20% voted National at the last election, 17% Labour, 12% the Greens and 8% NZ First. Some put the shift down to a kind of mainstream malaise in New Zealand politics. “Voters are less attached to parties than they used to be, and they’re more likely to shop around during elections,” said Massey University political scientist Richard Shaw. “They’re peeling off from everywhere; people’s attachment to parties is more elastic and the deep tribalism has gone.” Voters spoken to by the Guardian reflected this sentiment. “I don’t understand how a lot of people are surviving right now and that’s what drives my vote,” said Wellingtonian Gemma, 41, a former Green voter who will vote Opportunity for the first time. “Things can’t keep going in this direction.” ‘Somewhere in the middle’ Wong, the Opportunity leader, told the Guardian that polling was better than hoped but the party took nothing for granted. People told her they were fed up with “pendulum politics” – different governments coming into power and undoing the work of the last government at great cost. “They’re looking for something different because they’re frustrated, particularly with Labour and National for not having any big ideas or stable leadership to tackle some of the biggest challenges that we’re facing as a country.” Wong said Opportunity would work with either party. New Zealanders needed stability when it came to climate legislation, healthcare funding models, and the education curriculum, she said. “It’s that back and forth which seems to be really holding us back in all aspects of New Zealand society … the solution is often somewhere in the middle.” Responding to criticism of Opportunity’s land tax proposal as untenable and liable to create fresh inequalities – the former Labour leader Helen Clark calls it “fantasy posing as policy” – Wong said the economy had to change and 70% of New Zealanders would be better off under the plan. It would introduce a tax of 1.75% on urban and 0.5% on rural land, is modelled to pull in NZ$24bn which would be used for the ‘citizen’s income,’ and is designed to drive house prices down by 10-15%. She did not expect it to happen immediately. “I’m realistic that as a new party coming into parliament demanding tax reform overnight is pretty unlikely. If we can get around the table with the other parties, there’s elements of this that will appeal to both the left and the right. It’s about supporting people who really need it.” Politics in New Zealand has historically been a two-party duopoly. Previously, the first past the post (FPP) voting system allowed parties to more easily win the majority of the house and govern alone. Since the introduction of New Zealand’s MMP system in 1996, voters get a party and an electorate vote. The first mainly determines how many seats a party gets in parliament. With 51% needed for a clear win, small parties often hold the balance of power. At the 2023 election, centre-right National got 38% of the vote, meaning it needed the New Zealand First and Act parties to form a coalition government. In August, Luxon said on Newstalk ZB that he was open to holding a referendum on MMP, saying he wanted as many National ministers in cabinet as possible for a stable government, and not some “yahoo or numpty”. He denied he was talking about his current coalition partners, but many saw it as his growing frustration at managing them. He later told the Post it would be a “check-in” on democracy, as well as gauging support for a four-year governmental term. Shaw said the halcyon days for major parties had passed, and both Luxon and Labour party leader Chris Hipkins would be feeling the pressure of declining support. “They’re not the most successful any more, partly because of MMP but just because people shop around way more and the base vote for National and Labour is never going to be at 40% ever again.” Smaller parties were eating into major party territory. For example, the David Seymour-led Act party, with 0.5% of the vote in 2017, had received $1.8m in donations this year – just behind National – and was polling at 9%. With its positioning, Opportunity could continue to gain votes from everywhere – even if their centrism was a tactic, he said. “They’re quite clearly soft-left, they’re using the language of reconciliation and evidence and appealing to a different kind of political DNA in people and they’re resonating. They could absolutely kick on.” Still, some will always play it safe. Christine Hands, 77, who voted Labour in her first election in 1972, and for Jacinda Ardern twice, would never vote for a minority party. “I’ve never been a splinter party person. I’ll vote for National or Labour, depending on which is best for the country.” This time, for her, that’s National; a safe pair of hands who “haven’t mucked things up too much”. As for Opportunity? “I can see they’re quite charming, and people are thinking ‘a plague on both parties’, but their policies are as mad as a meat axe,” she said. “Then again, we survive everything. We always have.”

China denounces US threat of sanctions over trade with Iran

China has denounced the threat of US sanctions for its trade with Iran, saying any such measures would be illegal, and warned it would take “all necessary measures” to protect its national interests. Beijing’s rejection of the US threat of secondary sanctions for any country or entity continuing to trade with Tehran had been predicted. China buys an estimated 80% of Iran’s oil exports and has defied previous US efforts to limit the flow of revenue to the Tehran regime. Its statement of opposition raises the question of how far the Trump administration would be prepared to go in confronting China and its financial system in the drive to isolate Iran. In making the sanctions threat on Monday, the US treasury secretary, Scott Bessent, announced an initial set of sanctions on 60 individuals, entities and vessels for alleged involvement in trade with Iran, but there were no Chinese financial institutions on the list, despite their involvement in financing the Iranian oil trade. The omission reflected US caution. Asked why the Trump administration had not declared immediate sanctions and had stopped short of naming potential sanctions targets, Bessent replied: “Why would I want to blow up the global financial system?” Financial and trade experts say the administration is well aware of the risk of Chinese retaliation before a scheduled summit next month between Donald Trump and Xi Jinping. China could strike back through financial markets or with limits on its export of critical minerals. The spokesperson for China’s foreign ministry, Lin Jian, told reporters on Tuesday: “Cooperation between China and Iran has always been conducted within the framework of international law and should not be interfered with or disrupted. “China has already stated many times that it firmly opposes illegal unilateral sanctions. China will take all necessary measures to firmly safeguard its own rights and interests.” Iran has been economically wrecked by the war and the accompanying US blockade, but it maintained its defiance in response to Bessent’s threats of total isolation. The economy minister, Ali Madanizadeh, said on state television: “Our defence is no longer so defensive; the enemies should wait for an attack.” An oil tanker was reportedly hit on Tuesday by an unidentified projectile at the mouth of the strait of Hormuz. The United Kingdom Maritime Trade Operations Centre said the crew was safe and no environmental damage was immediately apparent. Only two commercial vessels were reported to have successfully made the transit through the narrow waterway on Monday. Iran and Oman, which sits on the southern shore of the strait, held talks on Tuesday aimed at agreeing joint management of the waterway between the two countries. Oman’s foreign minister, Badr al-Busaidi, said after the discussions had concluded that there were hopes that a temporary agreed route through the strait would be announced soon. A Pakistani delegation was also in Tehran, leaving on Tuesday after a day’s talks with Iranian leaders. The delegation was headed by the army chief, Field Marshal Asim Munir, who has led Pakistan’s mediation efforts in the Iran conflict. The Pakistani military said the Tehran talks were focused on reopening the strait of Hormuz. A memorandum signed by the US and Iran in June was intended to reopen the strait pending further negotiations but the deal collapsed within weeks. The declaration of what Bessent called Operation Economic Outcast suggests the prospects of a resolution to the conflict with Iran are still remote. It also suggests a lean towards economic measures and away from military force after a six-month war that has not brought about the intended Iranian capitulation. Oil prices fell about 4% to a one-week low on Tuesday after the US sanctions announcement, as traders appeared to see economic pressure as posing less risk to oil supplies than further military escalation. But the price per barrel of about $87 remained far above the prewar average. The US defence secretary, Pete Hegseth, said further military action was not off the table. “By no means are we foreclosing using ‌kinetic strikes anywhere in the strait of Hormuz or around Iran,” he ⁠told reporters on Monday. Bessent called the sanctions campaign unprecedented and compared it to the D-day Normandy landings, a turning point in the second world war. “Today, in that same spirit, we are launching an economic onslaught against Iran’s financial connections around the globe,” he said. “Our objective is to sever every economic lifeline that sustains this tyrannical regime until Tehran stands alone.” He said the US had identified those that continued to deal with Iran and each violator would be given a deadline to cut ties or face US sanctions. He said the deadlines imposed would depend on individual circumstances. “Any entity that facilitates money laundering on behalf of Iran will be removed from the US dollar system,” he said. “The clock just started ticking.” Bessent said Trump was “making phone calls to world leaders with specific requests to cease their interactions with the regime”, but he did not specify whether the US president would talk to his Chinese counterpart. Sina Toossi, a senior non-resident fellow at the Center for International Policy, said: “After nearly six months without a military or diplomatic victory, Washington appears to be trying to accomplish through intensified economic strangulation what military force has so far failed to achieve. But Tehran is answering that zero-sum approach with one of its own.” In apparent anticipation of the US measures, the United Arab Emirates, a close US and Israeli ally, announced it was suspending trade ties with Iran. Turkey, another trading partner with Iran, which has been critical of the US-led campaign against the Islamic Republic, has yet to respond to the US threat of sanctions. Andrew Miller, a senior fellow at the Center for American Progress, said: “The announcement of new economic sanctions on Iran and those countries trading with it signals what is plain to all: this war has brought the United States no closer to eliminating Iran’s nuclear programme or crippling the Iranian regime. But while sanctions can be effective, it is highly unlikely they will produce a quick settlement favourable to the United States.”