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  • Wayne Komer
    started a topic FIDE Finances

    FIDE Finances

    FIDE Finances

    February 13, 2018

    Letter from FIDE Treasurer regarding FIDE Bank Account

    FIDE letterhead

    Zug, February 12, 2018

    Dear Members of the Executive Board
    Dear Members of the Presidential Board
    Dear Presidents and Delegates of National Federations
    Dear Chairpersons of the Commissions

    As FIDE's treasurer I am obligated to inform all of you about a serious problem FIDE is facing at the moment.

    On November 25th 2015 the U.S. Department of the Treasury has put Kirsan Ilyumzhinov on a sanction list due to 'Networks Providing Support to the Government of Syria, Including For Facilitating Syrian Government Oil Purchases from ISIL' (ISIL = Islamic state of Iraq and the Levant). Since then Kirsan Ilyumzhinov has unsuccessfully tried several times to be removed from this list and at the moment there is no hint at all that there will be a charge.

    In order to protect FIDE from the president's problem we gave him the time and space to solve his issues. On December 6th 2015 the Presidential Board unanimously took the decision that Kirsan Ilyumzhinov withdraws from "any legal, financial and business operations of FIDE". This presidential power given by the statute was then transferred to the Deputy President Georgios Makropoulos.

    Subsequently, Kirsan Ilyumzhinov informed FIDE at various occasions that he will be removed from the sanction list in the very near future. This information was given to our Swiss bank UBS and, hereby, we could keep our accounts. Now, however, after more than two years of Kirsan Ilyumzhinov's presence on the sanction list of the U.S. Department of the Treasury, the Swiss bank UBS has announced that they will immediately close our accounts. The white money strategy in Switzerland does not allow business to be done with institutions or persons on the sanction list of the U.S. Department of the Treasury. Thus, it was only a question of time until we faced this serious problem.

    In summary, Kirsan Ilyumzhinov's problems severely damage FIDE's business activities and we have to look for a new bank connection. In the process of this change we anticipate some problems. However, we will do our best (so) that payments will not be delayed.

    Sincerely yours,

    Prof. Dr. Adrian M. Siegel
    FIDE Treasurer


    http://www.fide.com/component/conten...k-account.html

  • Wayne Komer
    replied
    FIDE's Finances

    FIDE Finances

    May 24, 2018

    I am really lost as to what Nigel wants after this tweet this morning. So is the Treasurer.

    “To Treasurer, Adrian Siegel. 1) When exactly did the Presidential Board approve of the transfer of @FIDE_chess funds after @UBS bank closure? 2) Was the entire PB informed, including independents like @MagnusCarlsen & political opponents like Ncube? 3) If not, why not?”


    FIDE Letterhead

    Zug, May 24, 2018

    To: All National Chess Federations, members of FIDE

    Dear chess friends

    Although detailed information was published, Mr. Short still continues to question the handling of FIDE’s money. Now he wonders whether the current World Champion, Magnus Carlsen, and the President of the African Chess Federation, Lewis Ncube, have also received the Board Resolution regarding the approval of the new accounts.

    Of course, I am very surprised by Mr. Short’s questions which reflect once again a complete lack of knowledge. These false allegations are also a striking example how people use tweets without first getting any background information. This notorious search for a putative mistake has the smack of querulent behavior.

    I can assure the really interested chess friends that all members of the Presidential Board have been asked to approve the use of our new accounts. Only Kirsan Ilyumzhinov was not asked for approval since he is no longer involved in any decision regarding FIDE.

    Now, with all due respect, I take the liberty to bring this silly game to an end. Neither one question from Mr. Short has brought up a serious issue nor does it belong to the Treasurer’s duties to answer Mr. Short on a daily basis.

    From now on I will not comment on any of these untenable accusations of a candidate who is only looking for a public platform. From a presidential candidate another attitude would be expected.

    Sincerely yours

    (signature)

    Prof. Dr. Adrian M. Siegel
    FIDE Treasurer

    http://fide.com/component/content/ar...rs-letter.html
    Last edited by Wayne Komer; Thursday, 24th May, 2018, 04:17 PM.

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  • Vlad Drkulec
    replied
    Re: hedge your bet in this one

    Originally posted by Nigel Hanrahan View Post
    This is why I initially argued that GM Short was the attack dog ("bad cop") and Macro was the "bon cop". This is a US story after all and they suffer from an interminable lack of imagination. The United States of Stupid and all that. However, Macropoulos made a statement, on GM Spraggett's site, that Short's candidacy would help Kirsan.

    Who you gonna believe? As you said elsewhere, it's going to be a hot summer....
    Maybe not so hot.

    Mr. Short probably does not help or hurt either candidate. He may eat into Kirsan's support on the African continent as he has been very active there but that is unclear. The CFC has been contacted by one candidate directly, by another indirectly as mentioned on the CFC forums and not by the third.
    Last edited by Vlad Drkulec; Thursday, 24th May, 2018, 10:15 AM.

    Leave a comment:


  • Egidijus Zeromskis
    replied
    Re: hedge your bet in this one

    Originally posted by Nigel Hanrahan View Post
    However, Macropoulos made a statement, on GM Spraggett's site, that Short's candidacy would help Kirsan.
    The best place to make solid statements LOL

    Leave a comment:


  • Nigel Hanrahan
    replied
    hedge your bet in this one

    Originally posted by Vlad Drkulec View Post
    Nigel Short is not doing his candidacy any favours complaining about this. The bank closes the account and you take your money elsewhere. FIDE has been fairly transparent in this and keeping the member federations informed of their actions.
    This is why I initially argued that GM Short was the attack dog ("bad cop") and Macro was the "bon cop". This is a US story after all and they suffer from an interminable lack of imagination. The United States of Stupid and all that. However, Macropoulos made a statement, on GM Spraggett's site, that Short's candidacy would help Kirsan.

    Who you gonna believe? As you said elsewhere, it's going to be a hot summer....

    Leave a comment:


  • Kerry Liles
    replied
    Re: FIDE Finances

    Originally posted by Egidijus Zeromskis View Post
    I found strange that a such big organization have no legal way to kick its president out other than regular elections.
    FIDE may be a "global" organization but I am not sure it is "big" ... seems that there are not a lot of employees and the 'management' org chart seems to be obscure :)

    Leave a comment:


  • Egidijus Zeromskis
    replied
    Re: FIDE Finances

    I found strange that a such big organization have no legal way to kick its president out other than regular elections.

    Leave a comment:


  • Steve Douglas
    replied
    Re: FIDE Finances

    Originally posted by Wayne Komer View Post
    FIDE Finances

    May 22, 2018

    Another day, another letter from the FIDE Treasurer. Nigel Short is again invited to drop into FIDE’s Athens office although he has been away at the Kolkata Tournament most of May.

    FIDE letterhead

    Zug, May 22, 2018

    To: All National Chess Federations, members of FIDE

    Dear chess friends,

    In recent days, Nigel Short made several unjustifiable allegations concerning the transfer of FIDE’s money away from UBS. Since full transparency is in the interests of FIDE, this information is for all members and federations and is published openly.

    But firstly, I would like to put on the record my disappointment with Nigel Short’s very public and insulting behaviour towards me, mentioning possible illegal and unconstitutional actions. As Treasurer, my major concern and my priority is dealing with the problems caused by Kirsan Ilyumzhinov’s continuing refusal to act in FIDE’s best interests and stand down as President.

    It is unfair to accuse the current FIDE administration of causing the financial problems as it is plain to see they are the direct result of the sanctioning of Kirsan Ilyumzhinov.

    Nigel Short questioned whether the transfer of FIDE’s money was approved by the Presidential Board or the Executive Board. Even the question betrays a complete lack of understanding of the situation. As soon as the funds were unfrozen, we took action to transfer them the same day to avoid the real risk of the funds being frozen again.

    I can assure all members of FIDE that I asked for approval by the Presidential Board to engage the financial institutions that hold our funds. Without that approval I would not have done so. For the record, the Presidential Board gave its approval without any opposing votes.

    Due diligence of the receiving financial institution was conducted by our lawyers here in Switzerland. Instead of repeating baseless accusations, it would be interesting to hear a practicable alternative Nigel Short could come up within one week to safeguard our funds. The transfer of Fide’s money was clearly in line with FIDE’s statues and our financial regulations of which the presidential candidate Nigel Short seems to be unaware.

    Nigel Short has demanded that the Athens office sends the scanned contracts with the trust companies we have engaged to him by email so that he can ‘examine’ them. I am not in the habit of sending important contracts by email ‘on demand’, even to a candidate for President. It presents too great a security risk and sets a very bad precedent.

    However, again in the spirit of total transparency, and according Nigel Short the respect he has sadly not given me, I invite Nigel Short to make an appointment with the FIDE office in Athens (his home city) to read the contracts in person and satisfy himself that the funds are safe and with a reputable institution.

    Finally, I hope that Nigel Short’s outbursts do not set the tone for a ‘dirty’ campaign – throwing mud at every opportunity. I remind Nigel Short and member nations that despite the problems, the FIDE finances are in much better shape since Kirsan Ilyumzhinov was stripped of executive authority.

    Sincerely yours,

    (signature)

    Prof. Dr. Adrian M. Siegel
    FIDE Treasurer
    Thanks for taking the time to edit the title of your post. But it looks like you were two minutes too late.

    Steve

    Leave a comment:


  • Vlad Drkulec
    replied
    Re: FIDE finances

    Nigel Short is not doing his candidacy any favours complaining about this. The bank closes the account and you take your money elsewhere. FIDE has been fairly transparent in this and keeping the member federations informed of their actions.
    Last edited by Vlad Drkulec; Wednesday, 23rd May, 2018, 08:12 AM.

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  • Wayne Komer
    replied
    FIDE Finances

    FIDE Finances

    May 22, 2018

    Another day, another letter from the FIDE Treasurer. Nigel Short is again invited to drop into FIDE’s Athens office although he has been away at the Kolkata Tournament most of May.

    FIDE letterhead

    Zug, May 22, 2018

    To: All National Chess Federations, members of FIDE

    Dear chess friends,

    In recent days, Nigel Short made several unjustifiable allegations concerning the transfer of FIDE’s money away from UBS. Since full transparency is in the interests of FIDE, this information is for all members and federations and is published openly.

    But firstly, I would like to put on the record my disappointment with Nigel Short’s very public and insulting behaviour towards me, mentioning possible illegal and unconstitutional actions. As Treasurer, my major concern and my priority is dealing with the problems caused by Kirsan Ilyumzhinov’s continuing refusal to act in FIDE’s best interests and stand down as President.

    It is unfair to accuse the current FIDE administration of causing the financial problems as it is plain to see they are the direct result of the sanctioning of Kirsan Ilyumzhinov.

    Nigel Short questioned whether the transfer of FIDE’s money was approved by the Presidential Board or the Executive Board. Even the question betrays a complete lack of understanding of the situation. As soon as the funds were unfrozen, we took action to transfer them the same day to avoid the real risk of the funds being frozen again.

    I can assure all members of FIDE that I asked for approval by the Presidential Board to engage the financial institutions that hold our funds. Without that approval I would not have done so. For the record, the Presidential Board gave its approval without any opposing votes.

    Due diligence of the receiving financial institution was conducted by our lawyers here in Switzerland. Instead of repeating baseless accusations, it would be interesting to hear a practicable alternative Nigel Short could come up within one week to safeguard our funds. The transfer of Fide’s money was clearly in line with FIDE’s statues and our financial regulations of which the presidential candidate Nigel Short seems to be unaware.

    Nigel Short has demanded that the Athens office sends the scanned contracts with the trust companies we have engaged to him by email so that he can ‘examine’ them. I am not in the habit of sending important contracts by email ‘on demand’, even to a candidate for President. It presents too great a security risk and sets a very bad precedent.

    However, again in the spirit of total transparency, and according Nigel Short the respect he has sadly not given me, I invite Nigel Short to make an appointment with the FIDE office in Athens (his home city) to read the contracts in person and satisfy himself that the funds are safe and with a reputable institution.

    Finally, I hope that Nigel Short’s outbursts do not set the tone for a ‘dirty’ campaign – throwing mud at every opportunity. I remind Nigel Short and member nations that despite the problems, the FIDE finances are in much better shape since Kirsan Ilyumzhinov was stripped of executive authority.

    Sincerely yours,

    (signature)

    Prof. Dr. Adrian M. Siegel
    FIDE Treasurer
    Last edited by Wayne Komer; Tuesday, 22nd May, 2018, 04:44 PM.

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  • Nigel Hanrahan
    replied
    the nefarious actions of the US Treasury Department

    Some background information which I already provided on another thread seems very pertinent here. In particular, the history of the US Treasury Department since 9-11, the possible interference in the global SWIFT banking system, and so on, all of which is relevant to the US persecution/prosecution of Kirsan Ilyumzhinov.

    The Economist has a piece from May 5 behind their paywall but a relevant quote is here.

    1. "Everything changed after September 11th 2001. American officials realised they could use data and financial flows as a weapon, according to Juan Zarate, a former official, in his memoir “Treasury’s War”. The Patriot Act in 2001 allowed the Treasury to label foreign banks as threats to financial integrity and to ban them from the system for clearing dollar payments."

    9-11 has allowed the US regime to weaponize data and financial flows. Kirsan is only one of many victims here.

    2. "In 2001-03 America won the right to peer into SWIFT, a formerly confidential global bank messaging system. Suddenly America could track its enemies. And it could make them radioactive to most counterparties, because any bank that touched them, even indirectly and with multiple degrees of separation, could be banned from clearing in dollars—which, if you run a cross-border bank, is fatal.

    Between 2002 and 2008 the Treasury experimented with small fry. It brought to heel Victor Bout, an arms dealer; BDA, a bank in Macau that traded with North Korea; and Nauru, a Pacific island with a sideline in exotic finance. Since 2008 Western banks have been fined for breaking rules in the past, but not banned from dollar clearing. More recently Iran and Syria have faced new sanctions but they have few links with the global economy.

    Last month, the stakes were raised. At the end of 2017 Rusal was one of the world’s largest aluminium producers, with an enterprise value of $18bn, controlled by Oleg Deripaska, an oligarch close to Vladimir Putin. Kapow! In April it was sanctioned as part of a package of measures against Russia. Rusal’s links to America are slight. It makes 14% of its sales there, does not typically use American banks and is listed in Hong Kong and Moscow (a related company, EN+, is listed in London).

    The consequences have still been devastating."

    It could well be argued that these are simply acts of war by the US government.

    3. The Economist waters it down, but suggests, in a wimpy way, that such weapons "could be used" for political ends. lol. Of course, they already have.

    4. This is critical and is along the lines of what I've argued [elsewhere].

    Originally posted by The Economist
    The third conclusion is that other countries will develop ways to escape America’s reach. ZTE and Rusal offer a step-by-step guide to what you need to survive without American permission: semiconductors, a global currency and clearing system, credit-ratings agencies, commodity exchanges, a pool of domestic investors and shipping firms. These are all things that China is working on. America’s use of its new weapons simultaneously demonstrates its power and will hasten its relative decline.
    (all quotes above from The Economist behind their paywall over here.]

    ...............................................

    I mentioned as well that the Chinese government has started selling futures in crude oil. This relates to how fast the US decline will be and not its general and inexorable direction.

    For the time being, then, the US regime seems to be able to get away with what can be called a kind of international brigandage. The Treasury Department mandate flows from anti-terrorism laws - laws which have to do with vaguely defined "National Security" fictions - which lifts the covers just enough to expose the fairy tale around one Kirsan Ilyumzhinov.

    Leave a comment:


  • Wayne Komer
    replied
    Re: FIDE Finances

    FIDE Finances

    May 14, 2018

    To get an idea of the money coming in to FIDE each year, look at:

    Financial Regulations

    https://www.fide.com/fide/handbook.h...&view=category

    The annual statement of income and expenses for 2015 can be seen at:

    https://www.fide.com/images/stories/...16/Annex_1.pdf

    Peter Doggers wrote an article on these financial accounts for 2015 at:

    https://www.chess.com/news/view/is-f...-bankrupt-3846

    Part of what he wrote in the article:

    Is FIDE Going Bankrupt?

    Chess Event Coverage

    The financial accounts for 2015 show an alarming decrease of the World Chess Federation's assets. An extensive reform of FIDE's internal structure seems inevitable to guarantee a healthy continuity.

    As part of the agenda for the upcoming General Assembly in September in Baku, FIDE has published its financial statement of income & expenses for 2015. The figures show that its reserve fund has decreased from €1,287,551 to €332,343, a staggering decrease of 74 percent. The federation spent €955,208 more than it earned last year. Something similar happened in 2014, when FIDE's funds decreased from €2,011,156 to €1,287,551.

    In 2015 FIDE suffered a big blow with its securities. The value of its UBS investments fell from €623,271 to €152,099 in one year, suggesting that the federation decided to sell securities but did not meet the desired result.

    Although the total income of €2,030,703 is higher than the budgeted €1,870,000, some posts have generated less income than expected. For example, entry fees, money that comes in from participants who play tournaments (e.g. the World Juniors), have generated €102,790 less than budgeted.

    Furthermore, although budgeted €55,000, no money was generated from the World Rapid & Blitz Championship in Berlin. The regulations stated that Agon, the company that organized the event, should have transferred 20 percent of prize money (U.S. $80,000) to the FIDE bank account.

    Overspending

    The total expenses for 2015 were €2,985,910, but they were budgeted at €2,260,500. Below are the largest examples of overspending on budgets:

    FIDE's legal costs were an astounding €183,883 compared to the budget of €30,000. This was partly related to the CAS case against Silvio Danailov.

    The travel costs of FIDE President Kirsan Ilyumzhinov were €183,284, but they were budgeted at €120,000.

    The World Championship and Olympiad Commission (WCOC) spent €63,763 (mostly travel costs) which wasn't budgeted.

    Journalists awards went as high as €46,910 and were not budgeted. This involved two prizes given to Russian journalist Sergey Makarychev and Norwegian TV channel NRK.

    FIDE covered the unbudgeted travel costs for delegates from South Korea traveling to the 2015 FIDE Congress in Abu Dhabi for €24,871.

    Verification Commission

    A rule of thumb is that an organization should have about 20 percent of its balance total as assets, which is only just the case for FIDE. The federation needs to stop over-spending or else it will get into serious trouble.

    This was also noted by Graham Boxall, the Chairman of FIDE's Verification Committee. In his June 2016 report he writes: "We should also mention here that the majority of the debts to FIDE are those related to commitments due by our President. If the differences between the figures in 2013, 2014 and 2015 were to represent a continuing trend, FIDE's financial position would quickly become very difficult indeed."

    Boxall also noted that much of the cash flow problems are caused by organizers of important events who fail to comply with their payment obligations to FIDE. Besides the aforementioned World Rapid & Blitz in Berlin, examples are the Mariya Muzychuk vs Hou Yifan World Championship in Ukraine, and the forthcoming Olympiad in Baku. “In both cases FIDE was left without receipt of contractual payments,” writes Boxall.

    Even when organizations do comply, sometimes it is with big delays. "Tournaments can pay three to four months late, sometimes even more," said Siegel, "and that can lead to cash flow problems." Siegel suggested penalties should be enforced, but said that the Presidential Board members didn't want this, fearing that no organizer would be interested anymore. Siegel: "I am afraid that this is true. But at the same time, it's not how it works in the real world."

    The whole article is well worth reading.

    Leave a comment:


  • Larry Bevand
    replied
    Re: FIDE Finances

    Hi Wayne,

    Thanks for keeping us informed about this.

    Any organization that can produce a surplus of about 2 million dollars (Canadian) in the last two years of operation, can't be doing that badly. Yes I know, they have issues to tackle.

    Does anyone know the net worth of FIDE?

    Larry

    Leave a comment:


  • Wayne Komer
    replied
    Re: FIDE Finances

    FIDE Finances

    May 13, 2018

    FIDE Treasurer’s Letter posted Sunday, May 13 at:

    http://fide.com/component/content/ar...rs-letter.html

    FIDE Letterhead

    Zug, May 12, 2018

    To: All National Chess Federations, members of FIDE

    Dear chess friends,

    As you already know, UBS has closed FIDE’s bank accounts in Switzerland. During the recent meeting of the FIDE board in Minsk, it was agreed that the Executive should try to find solutions regarding FIDE’s funds were UBS to enforce their decision (which they finally did on April 30th).

    Today, we are in a position to announce that FIDE has opened temporary fiduciary accounts with Kei Trading Services Ltd (Hong Kong) and Arkion SA (Switzerland). After UBS froze our money for three days, FIDE’s money was transferred on May 4th. As previously informed, there was no alternative because UBS made it clear that they (were) no longer prepared to provide banking facilities.

    The transactions were handled in their entirety by our Swiss lawyers and at no stage were the funds at risk. Although the transfer was completed under the supervision of our lawyers on May 4th, the contracts were only finalized a few days later as signatories were in different countries.

    The Presidential Board has decided that the fiduciary accounts mentioned above will be operated by FIDE’s treasurer and FIDE’s Executive Director signing jointly.

    In a recent question addressed to me by Nigel Short I was asked “how the current arrangement meets the legal, KYC and compliance standards of the institute” (KYC, know your customer). I would refer Nigel to the Head of the Compliance at the trust companies. Further information on the trust companies assisting FIDE is readily obtainable online.

    Until we are in a position to open a regular bank account in Europe, a task which as become increasingly difficult due to the US sanctions imposed on Kirsan Ilyumzhinov, these fiduciary accounts will be used to hold FIDE assets safely.

    At this time, it should be obvious to all who have FIDE’s interests at heart that unsubstantiated speculation and false statements regarding FIDE’s finances do not help the objective of reinstating FIDE into the international banking system. We hope that the intentions of those spreading such rumours is not to create problems for FIDE’s daily operations in the period before elections. We ask that low-level campaign tactics from candidates for FIDE office cease and we are confident the vast majority of national chess federations support our efforts.

    In addition, in the spirit of complete transparency, I would like to invite Nigel Short to make an appointment to visit the FIDE office in Athens (where Nigel lives) so that he can inspect the documents and satisfy himself all is in order.

    Sincerely yours,

    Prof. Dr. Adrian M. Siegel
    FIDE Treasurer

    Leave a comment:


  • Wayne Komer
    replied
    FIDE Finances

    FIDE Finances

    May 13, 2018

    Letter from Nigel Short to the FIDE Treasurer:

    10thMay, 2018

    Dear Professor Adrian Siegel,

    I have taken note of the contents of your FIDE Treasurer’s letter of 9thMay 2018 as posted on the FIDE website. You asked for a serious discussion on the matter, so in this spirit I would like to ask the following specific questions, so that the chess world can get clarity as to how FIDE is in fact handling it.

    The specific questions I would like to ask are as follows:

    1. Your letter makes it clear that the FIDE funds were transferred from the UBS account on the 4thMay 2018. Please advise

    a. Where the funds have physically been sent?

    b. The name of the bank or financial institution that is currently holding the funds as well as the country where this entity is domiciled?

    2. You mention that a trust company is involved. Kindly advise

    a. What is the structure of the new entity that currently controls FIDE’s funds?

    b. If the funds are held by a Trust company, as alluded to in your letter, please provide the names of the trustees and advise where the controlling Trust company is legal domiciled?

    3. Please advise if the above transaction was approved in any way by either the FIDE Executive board or the FIDE Presidential Board?

    a. If yes, please advise when this approval was sought and granted?

    b. If no, please confirm the names or identify the body or group of individuals who are legally responsible for FIDE’s decision to transfer the funds from the UBS account to the entity above?

    4. Please explain how the current arrangement meets the legal, KYC and compliance standards of the institute that has accepted the funds (where more than 20+ reputable global banks have previously refused to open an account for the purpose of receiving the same payment)?

    5. By your own admission, the funds were transferred from the UBS account on 4thMay 2018. Your published letter states however that the contract was only signed on 9thMay with the Trust Company. Please therefore explain how and why FIDE funds were transferred out of the UBS account without any contract being in place between FIDE and the receiving entity?

    Answers to the questions above would bring much needed clarity to the members, presidents and chairpersons to whom your published letter is addressed, as well as to the members of the global chess community in whose interests FIDE is expected to act.

    Election politics aside, the chess world deserves a straight answer to the questions posed above.

    Regards
    GM Nigel Short
    FIDE Presidential Candidate,

    Athens, Greece

    https://twitter.com/nigelshortchess?...Ctwgr%5Eauthor


    (The reply to this letter is in the next posting)

    Leave a comment:

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