Apple Ordered to Pay Ireland 13 Billion Euros in Back Taxes; U.S. Presidential Candidates Accuses Eachother of Bigotry, Racism; Aleppo's

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Presidential Candidates Accuses Eachother of Bigotry, Racism; Aleppo's

Father of Flowers. Aired 11a-12p ET - Part 1>

Barbie Nadeau, Jason Carroll>

Presidential Candidates Accuses Eachother of Bigotry, Racism; Aleppo's

Father of Flowers.>

[11:00:11] BECKY ANDERSON, HOST: More than 14 billion dollars, that is how much the European Union is ordering Apple to pay in back taxes. Details on the tech giant's giant bill is just ahead.

Plus...

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: (SPEAKING IN FOREIGN LANGUAGE).

(END VIDEO CLIP)

ANDERSON: As the battlefield in Syria gets even messier, we have a story of one man choosing to see the beauty in life, even in war.

And...

(BEGIN VIDEO CLIP)

UNIDENIFIED MALE: Accusations of racism leading to more personal attacks on the campaign trail.

(END VIDEO CLIP)

ANDERSON: New controversy in the U.S. presidential campaign. I'm joined by Republican National Committee's director of African-American engagement later this hour.

This is Connect the World live from CNN Center all this week. Now, European regulators are taking a big bite out of Apple. They say the tech giant owes Ireland $14. 5 billion in unpaid taxes.

Apple runs its entire European operation from Ireland and regulators say a sweetheart deal with the Irish government allowed Apple to pay taxes of just 1 percent or less in some years.

Let's dig deeper on this. CNN Money editor at large Rchard Quest joins me from New York, and CNN Money business and tech correspondent Samuel Burke joining me from London. Samuel, let's start with you, this is a complex story which could have huge ramifications now just for Apple and its employees, but many other big U.S. corporations doing business in Europe.

So, break it down for them at this point. What do would know?

SAMUEL BURKE, CNN MONEY: Becky, Apple, an American corporation, has had much of its international operations headquartered in Ireland. We have known all along that they weren't paying a whole lot in taxes. We know the that signature tax rate, as it's known in Ireland, is 12.5 percent. And we have long assumed that it was way less than that that they were paying.

But Apple has always said listen we do what the Irish government tells us to do. We work within their framework. And the Irish government has always said, that's right they are following our tax rules.

Today, the European Union says those rules violate the larger EU rules and that Apple will have to pay back the $14.6 billion plus interest that it owes in back taxes to Ireland. But the number that really stands out to me here, Becky, when the commissioner was speaking she said these two numbers. And let me put them up on the screen.

She said back in 2003, Apple paid just 1 percent in corporate tax. And in 2014, just .005 percent in corporate tax. I don't know how much you pay in taxes, Becky, but I know a lot of people at home are thinking, that is a lot less than what I have to say.

ANDERSON: Yeah, you are absolutely right I can tell you that from my side.

Richard, from our side it does sound a little dodgy, doesn't it?

RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: Well, except for one thing: the Irish tax authorities signed off on it. In 1991, and again in 2007, they issued what was known as a tax ruling. And that tax ruling allowed Apple to apportion its European profits to a ficticious head office. This head office existed nowhere, belonged seemingly to no one, and paid taxes to no one. And that's how you get the number that Samuel just talked about.

Basically, Ireland said to Apple, fine, book all your business in Ireland. Wherever you sell a computer in Europe, book it as if it was done in Ireland and we will let you hive off the profits into this fictious headquarters company.

Now, if anybody is guilty of anything, it's Apple for putting in place an egregious tax avoidance system, which -- but, frankly, Becky, they must have laughing and absolutely amazed that the Irish ever signed off on it.

ANDERSON: This is what I find extraordinary. One of the guests I have got on the show a later today has said thanks EU commission tweeting this morning, win or lose, Ireland wins both ways -- i.e., it's going to get this back tax -- it doesn't know -- to a certain extent it doesn't, does it? Because this is a big deal for Ireland. There are other companies out there. What are the ramifications of all of this?

QUEST: The obvious one is first of all, Becky, everybody is up to it in some shape, form, or description. Belgium is being clobbered, Ireland is being clobbering, the UK in the past has been clobbered. So that is why you have to -- I know people are making this as being a supra national European overreach into the tax affairs of individual countries. But the moment you have tax affairs in a single market, you have to have a referee that says this is illegal aid.

And that's what this is all about. Basically, we can boil it down to one sentence: Ireland was giving Apple an unfair tax advantage over other companies.

ANDERSON: Right. Let's get reaction from Apple then, Richard. The CEO reacting today, Tim Cook says in part -- I want to get this up on the screen for our viewers. The opinion issued on August 30 alleges that Ireland gave Apple a special deal on our taxes. This claim, he says, has no basis in fact or in law. We never asked for nor did we receive any special deals. We now find ourselves in the unusual position of being ordered to retroactively pay additional taxes to a government that says we don't owe them any more than we've already paid.

What are the consequences or the ramifications for the wider story about Europe and how companies do business? We just had the Brexit issue. Massive deal as the UK works out what its deal with the EU will be going forward? What are your thoughts.

QUEST: Well, I'll just take this briefly, if I may, Samuel, the reality is it's fine for me to say, you know, look this is all horrible for Ireland and it is a dreadful overreach by Europe and it is a stretch too far. But remember, Becky, this is about making sure everybody is playing in a level playing field in Europe.

And yes, maybe Apple's deal wasn't special to Apple, maybe other companies in Ireland also got similar details in which case they shouldn't. But companies in Italy, in Spain, in France, in Germany -- I can go through the whole 27 members of the EU, they will all be saying it wasn't fair on them.

BURKE: And even though so many people agree with exactly what exactly Richard is saying I'm hearing from so many analysts, Becky, that say they're afraid that companies like Apple might leave Ireland. Yes, they're not playing on a fair level, according to the EU, but there could be countries like Ireland. There are tax deals similar to these, maybe not as big, but similar in nature, in The Netherlands, in Luxomburg with Amazon, with Starbucks. And so what some analysts tell me they fear that some of these companies could just uproot and put their headquarters in other places like The Caribbean, the far East and the Middle East.

QUEST: You can't have it both ways when it comes to tax, Becky. On the one hand, every countries wants the companies there for jobs, for prestige, for reputation. But on the other hand, the tax has to be paid. And if I'm paying more tax than you, well, obviously you end up with a sort of unfair situation of somebody has to say, this has to change.

ANDERSON: It has a lot of leg this story. Chaps, thank you for breaking it all down for us.

And we are going to get back to this story later in the show. An Irish economist is my guest from Dublin in about half an hour's time.

Well, it is a one of the bloodiest conflicts in the world, and almost -- also one of the most complicated. I'm talking about the war in Syria. It's in its sixth year, and the battlefield, well it's very crowded.

One thing is clear, just about every party involved has a common enemy, and that is ISIS. But some groups are also going after other interests. One of the biggest players, as you know, is Turkey.

It now has boots on the ground facing ISIS, but also targeting Kurdish militants. And that is rattle nerves in Washington because the U.S. supports the same Kurdish forces that Turkey, a NATO ally is targeting.

Washington wants both parties to shift their focus back to the militant group known as ISIS.

But is Turkey listening? Let's get you CNN's international correspondent Nick Paton Walsh. She's in the Turkish city of Gaziantep near the Syrian border.

Is Ankara listening to Washington at this point?

NICK PATON WALSH, CNN INTERNATIONAL CORRESPONDENT: We are getting some sort of indication that there may be yet another deal coming to fruition at this point. You know, the U.S. has been pressuring, as you heard yesterday from Secretary of Defense Ashton Carter, the Turkish and their Syrian allies to stop heading south towards those Syrian Kurds, and as they have for over a week now, to some, frankly, Frustration, pushing the Syrian Kurds to honor what Washington have always said was their red line, that they go back to the eastern side of the Euphrates River.

Remember, they crossed over the Euphrates to kick ISIS out of a town called Manbij. The U.S. say the deal always was said once they'd done that was they've go back. But they haven't at this stage.

Now, we're hearing from a spokesperson for the Syrian Kurds. Remember, they were in lots of loose different factions here, but the spokesman has spoken on behalf of quite a few of them for some time. They are suggesting that since midnight, there had been in effect some sort of ceasefire between them and Turkish. And that appears to be holding, certainly in the areas south of Jarablus.

At the same time, though, earlier today, we did hear from the Turkish military they conducted 21 different targets being struck in just the last 24 hours. That would be using artillery.

So, clearly there is still some volatility in that area, but there is a lot of pressure from the Pentagon to get Turkey to step back from their allies, the Syrian Kurds and ensure that these two long-term adversaries don't waste all their energy fighting each other, frankly, and forget the fight against ISIS.

But we've heard these signals now repeatedly out of Washington for about 72 hours that they are pretty much finding a way to get everyone to get along and the fact we're still hearing it now suggests it hasn't really been that smooth sailing, Becky.

[11:10:56] ANDERSON: Nick Paton Walsh on the border for you. Updating us on what is a critical story.

If you find this all a little bit confusing what's going on on the ground, well, we have tried to break it down. And I do understand if you do. It's on our website. Check out this graphic showing all the parties involved and who they are fighting, an attempt to break that down on CNN.com.

Well, the war in Syria is one of the conflicts that led to Europe's migrant crisis. People fleeing violence and poverty are still risking their lives to reach the continent. Well, the Italian coast guard tells CNN it pulled some 6,500 migrants from the waters of the Mediterranean Sea in just over a day, piling into dangerously overcrowded boats.

Families from across Africa trying to reach Europe but got stranded just off the coast of Libya.

Barbie Nadeau is monitoring the situation for us from Rome -- Barbie.

BARBIE NADEAU, CNN CONTRIBUTOR: Oh, it is a tragic situation. 6,500 people over the course of 30 hours. A day before that, 1,100 people.

And you know, Becky, once they get to land in Italy, their journey really has to begin almost all over again, because they need asylum, they need to be vetted. It's not just get to Italy and go.

But among those that were saved, were twins, 5 days old premature twins that had to be air lifted to safety. A woman so heavily pregnant she gave birth just shortly after she was on the rescue vessel.

You know, these people have difficult lives before lives before they even get on these boats. And it's going to be more and more difficult as they get to shore, Becky..

ANDERSON: Yes, it is a very sad situation. What happens next at this point?

NADEAU: Well, once they get to the Italian mainland, and this journey between the place they were rescued and to get the Italian shore can take up to two days, depending on where they're going to be going. They will be vetted. They will be separated based on their country of origin.

But of course so many people don't have documents. So many people don't have -- they are a story that has to be checked out. They don't have proof of that story. They will take to children who are separate from their parents. They will try to determine how many people may have died on the journey. They will start talking to people to see if anyone fell overboard. There were 40 operations that these 6,500 people came in on. All these ships were very, very dangerous. People could have lost their lives. They will start to sort it out.

But, you know, there are four rescue operations going on right now that could be bringing in any thousands more people. And the ships just keep coming.

Italy is increasingly overwhelmed as they try to figure out what to do with these people.

The borders with France and the border with Austria are very difficult to cross right now. So, Italy is trying its best to House and put them in camps and reception centers and places where they can wait. But it is just a waiting game. Some people wait two or three years for their asylum application to be heard before they even know where they might be able to go next.

ANDERSON: And so many, Barbie, don't make it. The International Organization of Migration say more than 3,000 killed or missing so far this year alone. Has the EU at this stage worked out where it goes next so far as looking after these people who are effectively oftentimes being trafficked. They pay thousands to do this journey.

NADEAU: No. The European Union has a lot of ideas, but at the end of the day, Italy and Greece are the ones that are really dealing with the crisis firsthand and they are asking the European Union, please take some people, please provide what they you would like. The Italians would like a safe corridor. We know these people are going to be making this dangerous journey. Provide a safe corridor.

If they know they are going to Germany then they would like Germany to provide that safe corridor, to France, fly people in to do something to apply people in, to do something to make it so they don't have to risk their lives. That's one of the thing the Italians have been so, so adamant that the European Union needs to do, but so far it falls on deaf ears.

The Italians are getting fed up with it, but they are a border country, that's what they have -- they have to deal with it.

[11:15:10] ANDERSON: Barbie, thank you.

Gripped by chaos, Libya has become an increasingly popular route for migrants, as you have been learning, as you saw on that map, amid the power vacuum there ISIS has been trying to gain a foothold. But now Libyan troops lulled the UN backed government, say they have recaptured a key neighborhood from ISIS in the city of Sirte, saying that the militants are now confined to just one district of that city. 10 Libyan troops were killed in the fighting on Monday.

Still to come, the EU wants Apple to pay up billions in back taxes that it owes the -- they say owes the Irish government. So, why isn't Ireland on board? I'll speak to an Irish economist later in the show.

And, amid the horror that is Aleppo, one man tries to see the beauty in the world. His story, a powerful one, is up next.

(COMMERCIAL BREAK)

ANDERSON; Another Syrian town in ruins, and still littered with signs that ISIS once held sway. This is the town of Manbij, a couple of weeks after U.S.-backed fighters recaptured it from the terror group.

You are watching CNN. This is Connect the World, with me, Becky Anderson. Welcome back.

When it comes to Syria, it's all too easy to become immune to the scenes of devastation and horror that fill our screens and scream alongside the headlines every day.

Well, after more than five years even the words we use seem too stale and too small to describe what Syrians are going through. But at its most basic, millions of people like you and me are trying to survive not just live, not just find shelter and food, trying to survive. They are trying to keep their humanity, their humor, even their sense of beauty in a war that is so ugly.

In a corner of rebel-held Aleppo, channel 4 news and filmmaker Wad al- Khateb (ph) met one man who had found a way of doing just that and here is his story.

(BEGIN VIDEOTAPE)

ABU WARD, ALEPPO GARDEN CENTER: (SPEAKING IN FOREIGN LANGUAGE)

KRISHNAN GURU-MURTHY, BBC CHANNEL 4: He's called Abu Ward. It means father of the flowers. That is his young son, Ibrahim. For five years of hellish war, this pocket of serenity has been perhaps the most amazing survivor in Aleppo.

Abu Ward runs the city's last garden center.

[11:20:13] ABU WARD (through translator): My place here is worth billions of dollars. I own the world. We ordinary people own the whole world. This world is ours.

GURU-MURTHY: But Abu Ward's world is in rebel-held Aleppo, and it's been bombed relentlessly by the Syrian regime and now the Russians.

We met during a lull in the bombing earlier this year. Of the million people who lived in this part of the city, just 250,000 remained. And throughout this time, Abu Ward hasn't stopped gardening.

ABU WARD (through translator): The sound of war is like Beethoven's music. We have become accustomed to this music. Without it we couldn't manage. So we think of it as music now.

This one was hit by shrapnel from a barrel bomb. But it is still alive, thanks to god. (SPEAKING IN FOREIGN LANGUAGE)

GURU-MURTHY: Aleppo was one of the great cultural beauties of the world, and one of the longest inhabited. Today, so much of it has been laid waste, and thousands have been killed. Defiantly amid all this, Abu Ward's whole existence seems dedicated to the beauty of life.

ABU WARD (SPEAKING IN FOREIGN LANGUAGE)

UNIDENITIFIED MALE (through translator): How much is it?

ABU WARD (through translator): 300.

GURU-MURTHY: This customer chooses rosemary plants.

UNIDENTIFIED MALE (through translator): Take them to the roundabout where my car is.

ABU WARD: (SPEAKING IN FOREIGN LANGUAGE)

GURU-MURTHY: Rosemary, not for remmbrance here, as much as resistance.

UNIDENITIFIED MALE (through translator): For us, making remembrances beautiful gives meaning to life. It motivates people. So we don't only see destruction from the construction. We continue to live and rebui9ld that which has been destroyed.

GURU-MURTHY: Some Aleppans buy the flowers and plant them on roundabouts in the city, small islands of vitality, and surely a comfort to those who by choice, or lack of it, remain in Aleppo, because to live here is to live every day with grief.

13-year-old Ibrahim gave up school to stay close to his dad. He helps in the garden center, but is clearly weighed down by the worries of war.

IBRAHIM (through translator): The customer Abdul Aziz used to buy flowers here, but now he is dead. But whoever wants to buy flowers is welcome here. Sometimes it's people from the hospital who come here. And sometimes Free Syrian Army fighters come to buy flowers.

GURU-MURTHY: Freshly cut flowers in the middle of Aleppo's war seems too extraordinary to believe.

It didn't last. In the final days of May, six weeks after we met, the intense bombing by the Syrian regime and Russia began again. A bomb landed near the garden center. Abu Ward was hit and died immediately. The nursery is closed. Nobody comes to buy flowers anymore.

And this is where Abu Ward, the gardener of Aleppo, is buried, with no blooms to decorate the graves. Without his dad, Ibrahim seems lost.

IBRAHIM (through translator): What do you want me to do?

UNIDENTIFIED FEMALE (through translator): Your dad -- God rest him -- before he died, you were working with him?

IBRAHIM (through translator): Yes.

UNIDENTIFIED FEMALE (through translator): He (inaudible) care for your brothers, just like you did?

IBRAHIM (through translator): That's true.

UNIDENTIFIED FEMALE (through translator): You knew something like this might happen?

[08:15:03] IBRAHIM (through translator): I know.

UNIDENTIFIED FEMALE (through translator): So what are you planning to do now?

IBRAHIM (through translator): I really don't know.

[11:25:01] GURU-MURTHY: In time, perhaps he will remember how this father described the cycle of life.

ABU WARD (through translator): The flower is finished now, but the new one can now start to grow. Flowers help the world, and there is no greater beauty than flowers. Those who see flowers enjoy the beauty of the world created by God. And when you smell them they nourish the heart and the soul. The essence of the world is a flower.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(HEADLINES)

ANDERSON: Well, resource rich Uzbekistan has courted both Washington and Russia. From Moscow, CNN senior international correspondent Matthew Chance has more on big changes ahead it seems in a dictatorship that was once a U.S. ally. Just explain where things stand.

MATTHEW CHANCE, CNN INTERNATIONAL CORRESPONDENT: Yeah, we don't actually know the state of affairs when it comes to Isalm Karimov's health care move's health. Earlier the reports had been that he had died. That's subsequently been denied and certainly the latest statement from the Kremlin, which is obviously the Russian government -- perhaps one of the closest governments to that of the very closed dictatorship of Uzbekistan says that as far as they are concerned he is still alive but is ill. we have that statement from his daughter, Lola Karimova (ph), saying he had a brain hemorrhage. But beyond that, we don't know his state of -- state of health. But clearly, Uzbekista, this country that's been essentially ruled since really 1989 by Islam Karimov, he was appointed during the Soviet Union as the leader of that Soviet state and he never left office even after independence a couple of years later, is on the brink, as it were, of major change with the potential change in its leadership. Of course, we'll have and see what happens with the health of President Karimov, but if it turns out badly for him, then obviously, yeah, I mean, the success there will become the big question.

[11:30:45] ANDERSON: And without making too many sort of guesses about who that might be. What are the consequences at this point?

CHANCE: Well, I think it's a big question mark, because it's been such an autocratic state for the past several decades. And no clear successor has ever been anointed. And it's essentially run by this one figure with the use in extreme circumstances oftentimes of his security forces.

It's not entirely clear what will happen after President Karimov -- there has been civil unrest in the past, of course, most notably in 2005 in the town of Andijan (ph) where hundreds of people were killed by Karimov's security forces when they took part in a popular uprising. And since then, any popular discontent has been suppressed.

But this could be the opportunity, obviously, for that popular discontent about the economic situation and about poverty to resurface again.

ANDERSON: And just if you will, briefly, explain the relationship these days between Washington -- sorry Moscow and the Karimovs in Uzbekistan.

CHANCE: Well, I think to a certain extent, Islam Karimov has been playing the various powers off each other. And you can include China in that mix as well as Washington and Moscow. It is a country that is at a strategic crossroads, I think it's fair to say, of all those countries' interests. They have been useful to Washington because of the access that Uzbekistan has to Afghanistan. It's on the northern border of Afghanistan.

Of course, it's south of Moscow and is a former province of the Soviet Union. And of course China has a flowing influence in the central Asian region as well.

And so President Karimov has been at -- gone to great lengths to try to play those powers off each other.

And so the hope in Moscow will certainly be that somebody with a more sympathetic view towards the Moscow point of view will follow him.

ANDERSON: How likely is it that we will learn anything about his health any time soon? Is this a place that has closed down sort of media access?

CHANCE: Over the past several years, really since Andijan in 2005 and the massacre there, Karimov and Uzbekistan has really cracked down on the journalistic community there. Foreign journalists have been expelled, independent media have been shut down. It's essentially a police state.

I went there a few years ago and every couple of hundred yards -- and I'm not exaggerating -- there are police checkpoints checking your identification, checking who they are. At the moment, reports that we're getting out of the capital of Uzbekistan suggest everything is calm. There's an increased military presence around the hospital where President Karimov is in bed and is being treated. And so, yeah, we don't know. We'd have to wait and see what comes out.

Constitutionally, the arrangements are that if the president should die, the head of the senate, the speaker of the senate, effectively rules the country for a period of three months until a new president can be elected. But I think behind the scenes, there are probably lots of machinations right now amongst the power brokers in Uzbekistan,, not least the head of the secret police and the wife of Karimov, Tatiana Karimova, to decide who should be the most appropriate successor should he die.

ANDERSON: Matthew Chance is in Moscow. 6:34 in the evening there, 11:34 in the morning here on the east coast in the States.

Matthew, thank you for that. We are going to take a very short break. We'll be back after this.

(COMMERCIAL BREAK)

[11:36:40] ANDERSON: You are watching CNN. This is Connect the World with me, Becky Anderson. Welcome back.

Now the CEO of Apple is firing back over a ruling by European regulators. Apple has been ordered to pay back $14.5 billion in back taxes to Ireland. And Tim Cook says the ruling has, quote, no basis in fact or law.

But the EU's commissioner for competition begs to differ. She says there is there are lots of reasons to do business in Europe, and avoiding taxes isn't one of them.

(BEGIN VIDEO CLIP)

MARGRETHE WESTAGER, EU COMMISSIONER FOR COMPETITION: This is a question of how profit is distributed within a company, within Apple Sales International, and Apple Operation Europe.

Between what is so cold head office, a head office that has no employees, no premises, no real activities, and yet the huge majority of profits is attributed to this so-called head office, which only exists on paper and which doesn't pay any taxes.

So it is quite straightforward. And I think for all the businesses who pay their taxes, for all the citizens who pay their taxes, this is good news.

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