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Cyprus is not an offshore centre. An offshore centre has no double tax treaties and is not a signatory to international conventions. Moreover, it is used by wealthy individuals or international corporations for brass plate structures and for sheltering their wealth without tax liabilities.

To reduce private expenditure and a growing balance of payments deficit, the Danish government has presented an economic constraint. The initiative includes a reduction of the interest allowance and increased taxation on real property.

Mortgage banks were an important part of the Hungarian banking system until World War II. After a long break during the socialist era, mortgage banks have now been reintroduced in Hungary through Law No. XXX of 1997, which took effect on June 7 1997.

In Great Northern Insurance Co v Mount Vernon Fire Insurance Co, No. 97-7989, 1998 US App LEXIS 8413 (2d Cir May 1 1998), the US Court of Appeals for the Second Circuit certified a question to the New York Court of Appeals regarding the interpretation of the "other insurance" clause in a commercial general liability policy. The "other insurance" clause is a standard provision commonly found in commercial liability policies which typically comes into play when multiple insurance policies cover a single loss. It should apply only to disputes between insurance companies over how much each must pay for a particular loss. Great Northern gives New York's highest court the chance to confirm that "other insurance" clauses should not be employed to cut a policyholder's right to the full limit of an insurer's liability for a covered loss.

With projects often needing amendments or waivers from financiers, the use of project agents instead of trustees has been suggested for project bonds. Richard Forster reports

The US$231 million Merida III project, one of the first independent power plants in Mexico, reached financial close on June 19. The project is being developed to sell power to the Mexican national electricity utility, Comision Federal de Electricidad (CFE). Lead sponsor AES Corporation with Nichimen Corporation in Japan and Grupo Hermes of Mexico looked to US firm Chadbourne & Parke. New York partner John Baecher and Peter Fitzgerald in Washington led the team. Also representing the sponsors were Antonio Franck and Ignacio Pesqueira of Franck, Galicia, Ducland & Robles in Mexico City.

Arthur Andersen has abandoned plans to acquire Wilde Sapte, the city law firm it settled on after an 18-month search. Because of the defection of some of Wilde Sapte's most highly-regarded lawyers, Andersen felt the nature of the deal had substantially changed. Although they had originally voted in favour of the transaction, Wilde Sapte asset finance specialists David Smith and Mario Jacovides resigned shortly afterwards to join UK rival Allen & Overy. Also moving to Allen & Overy was top leasing partner Graham Smith. Several other Wilde Sapte stars were reported to be in talks with rival firms, including Philip Rocher, a litigator, and shipping finance head Robert Dibble.

Italy continues to attract foreign law firms with UK firm Ashurst Morris Crisp announcing a strategic alliance with Milan-based Negri-Clementi Montironi & Soci. The agreement, based on an equal relationship, involves reciprocal exclusive referrals. Ian Nisse, Ashurst's managing partner, says: "This alliance is strategically based and strongly client driven for both firms." Ashurst, with offices in Paris, Brussels and Frankfurt, is trying to build a pan-European partnership.

New benchmarks in corporate loan securitization (collateralized loan obligations, or CLO) technology were set when the Structured Finance Group at the London branch of The Sumitomo Bank completed their Aurora CLO on April 8 1998. The £1.395 billion (US$ 2.3 billion) issue of floating rate notes by Aurora Funding was supported by a structure which:

Potential moratoria on payments of foreign currency to overseas persons need not necessarily worry exporters. They can structure to protect their interests. By Andrew O’Keeffe of Simmons & Simmons, London