Feds want more info on small business owners

A new federal rule on small business ownership will become effective Jan. 1, 2024. The ruling – requested by the Financial Crimes Enforcement Network – would require small businesses to identify “the beneficial owners of the entity, and individuals who have filed an application with specified governmental authorities to create the entity or register it to do business.” Beneficial owners would be anyone with at least 25% ownership, according to the network.

The rule said it is designed to reveal hidden players. “Illicit actors frequently use corporate structures such as shell and front companies to obfuscate their identities and launder their ill-gotten gains through the U.S. financial system,” the rule said. “Large operating companies” exemptions are posted in section H of the rule.

The rule was posted on Sept. 30 and has received multiple comments, according to the Federal Register. See the final rule here:

https://www.federalregister.gov/documents/2022/09/30/2022-21020/beneficial-ownership-information-reporting-requirements

 

Insurer gets reaffirmed insurance rating

AM Best has affirmed the Financial Strength Rating of B++ (Good) and the Long-Term Issuer Credit Rating of “bbb+” (Good) of First Net Insurance Co., which does business as Moylan’s Insurance. The outlook of these Credit Ratings (ratings) is stable.

The ratings reflect First Net’s balance sheet strength, which AM Best assesses as strong, as well as its adequate operating performance, limited business profile and appropriate enterprise risk management.

“The company has faced an additional expense burden since April 2019 when its tax-exempt qualifying certificate expired; however, this was offset partially by an increase in commission income from fronting business in recent years. Its underwriting performance was favourable in 2020/2021 mainly due to reduced claims in key business lines as economic activities decreased during the COVID-19 pandemic,” AM Best said in its Nov. 18 release.

 

Tourism and travel updates:

Philippine Airlines announced Nov. 21 it will transfer a number of international flight operations from the Ninoy Aquino International Airport Terminal 2 to Terminal 1.

Flights to and from Guam, Hawaii and the U.S. mainland will operate at Terminal 1 from Dec. 1, among other destinations.

Domestic flights will operate from Terminal 2. Shuttle buses will be available between terminals, the airline said.

Guam saw 30,593 arrivals – excluding military and sea arrivals during October, with the largest number of air arrivals – 22, 176 – coming from Korea, according to the Guam Visitors Bureau. All markets saw an increase over October 2021. Guam saw 134,830 visitors in October 2019.

The Hotel Association of the Northern Mariana Islands reported a 26% average occupancy rate among its 13 member hotels for October, compared to 33% average occupancy in October 2021.

Although the average percentage rate is lower, the number of rooms sold is 15% higher than last year, as more hotels and more rooms have reopened. A total of 16,171 of 61,445 available room nights sold during October 2022, compared to 9,915 of 42,282 available rooms sold in October 2021.  Average room rates have also increased in the last year to $144.50 in October, compared to $136.10 last October.

HANMI reported a 68.24% average occupancy rate among its 11 member hotels in October 2019, when the average room rate was $143.93.

For October 2022, visitor arrivals to Palau (excluding residents, students, employments, flight crews and transits) totaled 1,178, representing an increase of 80% compared to October 2021 with 653 arrivals and an increase of 26% compared to September. USA/Canada remains the leading market representing 56% of arrivals, followed by Others with 18%, then Japan representing 12% of arrivals, according to the Palau Visitors Authority.

Palau saw 6,196 visitors in October 2019, with 9,261 visitors in December of that year.

In tourism-related news, the Marianas Visitors Authority is seeking opinions on “global branding” for the Northern Mariana Islands. A survey has been launched at https://www.mymarianas.com/mva-global-brand/ for the top three proposed designs. Voting will be open until Nov. 30 and MVA will take the public’s opinion into consideration in its design process and final selection,” according to a Nov. 21 release.

 

Balate’ under export ban

CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora) is an international agreement between governments. The U.S. is a party to CITES, which has banned the export of sea cucumbers, or balate’ in CHamoru – specifically the pineapple sea cucumber, the amberfish sea cucumber and the red-lined or ‘candy cane’ sea cucumber, which has been recorded in Yap. All species are threatened by trade and will be protected under Appendix II of the Convention on International Trade in Endangered Species of Wild Fauna and Flora.

“Exports of these Indo-Pacific species will now only be allowed by permit and only if trade is determined to be sustainable,” according to a Nov. 18 release from the Center for Biological Diversity.

The most research on sea cucumbers has been undertaken in Guam to include at the University of Guam. Studies have also reviewed the feasibility of export of sea cucumbers.

 

Guam company see BOS service contract modification

Pacific Federal Management Inc. was awarded Nov. 23 a $10,866,804 firm-fixed-price, indefinite-delivery/indefinite-quantity modification to previously awarded contract “to exercise Option Period Three for base operations support services at Naval Base Guam [70%] and Andersen Air Force Base [30%.]. This award brings the total cumulative value of the contract to $41,310,452. Work is expected to be completed by November 2023 and was awarded by Naval Facilities Engineering Systems Command Marianas.

 

Financial updates:

The [Compact] Trust Fund Committee of the Trust Fund for the People of the Federated States of Micronesia — also known as the Compact Trust Fund, which distinguishes it from the separate FSM Trust Fund — announced that as at Sept. 30, the Compact Trust Fund had a net value of $911,236,499.

The Compact Trust Fund was down 11.5%, net of fees, compared to the previous fiscal year.

The fund ended fiscal 2021 with a final audited value of $999,763,600 with a weighted annual return of 22.7%. The loss was due to market volatility and weak economic performance occurring globally since early 2021.

The Home Depot announced Nov 17 its board of directors declared a third quarter cash dividend of $1.90 per share. The dividend is payable on Dec. 15 to shareholders of record on the close of business on Dec. 1. This is the 143rd consecutive quarter the company has paid a cash dividend.

Macy’s announced net sales of $5.2 billion, down 3.9% versus the third quarter of 2021; up 1.1% versus the third quarter of 2019.

Digital sales decreased 9% versus the third quarter of 2021; up 35% versus the third quarter of 2019.

Brick-and-mortar sales decreased 1% versus the third quarter of 2021; down 9% versus the third quarter of 2019.

Macy’s reported “43.6 million active customers shopped the Macy’s brand, on a trailing twelve-month basis, a 2% increase compared to the prior year.” Star Rewards program members made up about 70% of the total Macy’s brand owned-plus-licensed sales on a trailing twelve-month basis, up approximately 5 percentage points versus the prior year. “The company continued to see strength in “occasion-based categories, including career and tailored sportswear, fragrances, shoes, dresses and luggage,” Macy’s said.

Executives were confident heading into the holiday season, touting an improved inventory turnover. “The company strategically brought in seasonal merchandise earlier to strengthen its competitive position for Holiday and has the added capacity to chase in-season trends,” Macy’s said.

Nevertheless, the gross margin for the quarter was 38.7%, down from 41.0% in the third quarter 2021.

“Merchandise margin decline was driven by a year-over-year increase in promotional and permanent markdowns within the Macy’s brand, as the company sold through slower moving categories including casual apparel, soft home, and warmer weather seasonal goods,” the chain said.

Delivery expense as a percent of net sales was relatively consistent with the prior year. Higher fuel costs more than offset the impact of a 2-percentage point decline in digital penetration and reductions in cost-per-package.

 

Health updates:

The Guam Department of Public Health and Social Services reported Nov. 21 150 new cases of COVID-19 from 1,381 specimens analyzed from tests administered Nov. 14 to Nov. 20.

There were nine hospitalizations as at Nov. 21, with two people in ICUs and one fatality on Nov. 14.

Updated Pfizer BioNTech and Moderna bivalent boosters are available at the DPHSS vaccination clinics at The Plaza Shopping Center, the Northern and Southern Community Health centers, and at outreach vaccination events.

In other health related news, Beginning Nov. 21 the Federated States of Micronesia began Nov. 21 “a massive campaign” to roll out Measles, Mumps, & Rubella vaccines for children aged between one to three years old, in addition to other routine vaccines for children aged between two to 59 months, and COVID-19 vaccines for children aged between six months and four years in all four states, according to a release from the Office of the President.

VVVIP visits Guam briefly

President Joseph R. Biden Jr. visited Andersen Air Force Base briefly for a couple of hours the evening of Nov. 16. Gov. Lourdes A. Leon Guerrero and first gentleman Jeffrey A. Cook chatted briefly with Biden when he descended from Air Force One.

No photo was released, though Andersen did release a video showing the three talking.

“President Biden was warm and friendly during our conversation, and I conveyed my utmost gratitude for his leadership and for keeping the people of Guam safe,” Leon Guerrero said. “In the years ahead, we will see more involvement and investment from the United States in the Indo-Pacific, and Guam will serve as a trusted partner to support economic expansion, sustainable development and international security, among other regional priorities. With the support of the Biden-Harris Administration and the strength of our federal partnerships, we know that Guam will receive substantial assistance to help us build a better healthcare system, better schools, and a better quality of life for our island and people.”

No Guam media were permitted to attend the visit, though the request was made by the Journal.

Biden also met with U.S. troops while on Andersen.

In geo-political news, North Korea fired an intercontinental ballistic missile that landed near Japanese waters on Nov. 18, in its second major weapons test in November, indicating a potential ability to launch nuclear strikes at all of the U.S. mainland.

 

Photo by Airman 1st Class Laureen Clevenger, 36th Wing Public Affairs

 

And also:

Bank of Guam announced Nov. 23 that its Visa debit card clients will receive a 6% discount at Shell gas stations through Dec. 31.

Residents in the Northern Mariana Islands will receive utility credits of $300 in November and December, according to a Nov. 23 from the Office of the Governor.

 

For your diary:

Nov. 23 – Non-essential employees of the NMI Government’s executive branch can take Administrative Leave after 12 p.m. on Nov. 23.

Nov. 25 – the Runoff Election date in the Northern Mariana Islands – will be a public holiday.

Nov. 25 – The day after Thanksgiving is a public holiday for the Government of Guam. mbj