International Offshore Tax Havens
Working for an international investment magazine, it doesn’t
take long to realise that some offshore tax havens suffer from a
bad press.
Speak to the financial services demigod at any offshore centre,
and you’ll soon realise that, in fact, these places are not
trying to harbour ill-gotten gains from drug barons or dictators.
Au contraire. Offshore centres are cleaner than onshore countries
because they have the likes of the IRS, the OECD and the Financial
Action Task Force breathing down their necks.
International Offshore Tax Havens & The G7 Group
So what if the G7 Group of countries reckons about US$60 billion (10
per cent of the global total) of dirty money passes through the Caribbean
each year? Rotten lies, spread by imperialist governments, desperate
to retain tax revenues. Okay, so there has been the odd scandal...Nigerian
dictator Sani Abacha’s missing billions. Even Jersey and Switzerland
were implicated there. Now it is the filthy lucre of Peruvian
secret serviceman, Vladimiro Montesinos, that has washed up on Cayman’s
shores. But it’s not Cayman’s fault.
International Offshore Tax Havens - The Islands Grand Court
Indeed the island’s Grand Court responded fiercely, freezing
Montesinos’ (and cohorts’) bank accounts, trapping a cool
US$33 million in the process. So has Cayman shown regulatory
efficiency in acting, or has it demonstrated a weak vetting procedure,
allowing these funds to beach in the first place? What happened
to the principle of ‘Know Your Customer’? Meanwhile,
over in Grenada, the central bank has revoked 17 offshore banking
licences for individual contraventions of the country’s offshore
banking act.
International Offshore Tax Havens & The Grenadan Financial Services
Authority
The Grenadan Financial Services Authority was tight-lipped about the
revocations, but says it will discuss details following an independent
investigation. At the same time, the Central Bank of the Bahamas
confirmed that Suisse Security Bank & Trust’s licence
had been suspended with a view to revocation.
Of course it is not just the Caribbean that is thought of by some
as a hub of money laundering. Lichtenstein, the tiny state that
is so small that it does not appear on many maps, has one of the
world’s worst reputations.
International Offshore Tax Havens - Financial Action Task Force
But in a bid to improve its image - and escape the Financial Action
Task Force’s list of money launderers, and the Organisation
for Economic Cooperation and Development - the country has appointed
four new judges and founded a new Financial Intelligence Unit.
This, the country’s government claims, will lead to it being
removed from both blacklists and becoming a leading ‘clean’
finance centre. Hurrah! Let’s wait and see, though, eh?
Offshore fightback
But let’s not be too pious about these tax havens. Many offshore
centres do have a case to argue against onshore countries.
Remarkably, as many as 42 British banks - quite appallingly unnamed
- have so far been implicated in the cleaning of Abacha’s
dirty money.
And, in many ways, Britain is no bastion of propriety when it comes
to money laundering. It is not a well-publicised fact that you can
pay for a property in Britain in cash with no-questions-asked
International Offshore Tax Havens & The UK Reputation As A Financial
Centre
.The UK’s reputation as a financial centre will soon come under
scrutiny when French anti-laundering tsar, Montebourg, gets his teeth
into its defences against money laundering.
Many in the offshore world, notably in Guernsey, Jersey and the Isle
of Man, will be keen to read that report. Vintage year?Fund managers
are getting very excited about the growth opportunities in emerging
markets. Are they talking sense, or is it merely marketing speak?
Will Foggon investigates.
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