How to change the world in one easy step
Nobel laureate Professor Joseph Stiglitz, former Chief Economist to the World Bank and former head of the Council of Economic Advisers to President Clinton, has been discussing tax havens. In an event organised jointly by TJN-USA and Professor Stiglitz' Initiative for Policy Dialogue at Columbia University, New York, he told an amusing tale:
I’ve been very concerned for a very long time about these secret bank account havens and argue that they are bad for the developing countries, they are bad for money laundering, drugs, corruption – they are bad in every dimension. I occasionally, for reasons that I don’t fully understand, get invited to give talks in these places. I was in one of these havens and gave my lecture and afterwards a couple of the bankers came up to me a little bit sheepishly and said ‘we’re not as bad as you seem to think we are. We don’t do bank secrecy for corruption, drugs - all these nefarious things you accuse us of – we only do tax evasion.
Stiglitz then outlines a measure that he argues could transform the world, and events following the September, 2001 attacks in the United States showed that in broad terms it would be relatively simple to do.
There was an initiative of the OECD to do something about bank secrecy, and that led to drawing up a convention to reduce bank secrecy, which the bush administration vetoed in August 2001. The timing could not have been worse. We all know what happened in September 2001. We discovered that secret bank accounts are not only used for drugs, money laundering, but also for terrorism. Since then, the Bush administration has shown fairly convincingly that we can stop bank secrecy. But we have chosen only to do it for terrorism and North Korea. Bank secrecy has continued. We now know – it’s not difficult to stop bank secrecy, secret bank accounts. All the United States would have to say is that no American bank can do business with any bank that operates in a jurisdiction that does not subscribe to these basic transparency codes, these basic codes of conduct . . . for appropriate bank behaviour.
We would make a few comments on this. First, it is not just bank secrecy that we should worry about. We need to tackle secrecy of company ownership; the secrecy of offshore trusts and foundations, and other issues -- these are mechanisms which are used in jurisdictions such as Jersey where it is not bank secrecy per se that is the big problem. Nevertheless, Stiglitz is right. As Richard Murphy has pointed out, "just passing the law would be enough to end banking secrecy for good. It would never need to be used. All that’s lacking is the political will to tackle this crime."
Second, Stiglitz is perhaps too kind to the U.S. administration and banks. In his classic book Capitalism's Achilles Heel, the money-laundering expert Raymond Baker, a guest scholar at the Brookings Institution and director of the Global Financial Integrity program in Washington spoke of the wake of the September 2001 attacks: "October 2001, the U.S.A Patriot Act, and the ugliest period ever in the history of anti-money laundering legislative efforts." He described a major lobbying effort by big U.S. banks to dilute or abort proposed legislation to strengthen money-laundering efforts. They sought, among other things, to reduce the strength of "due diligence" requirements, and to decouple anti-money laundering proposals from the Patriot Act, so that anti-money laundering could be fought separately and hopefully killed. Luckily, the mood in America this time was such that they failed. As Baker continued:
In the minds of some people this caps three decades, since the Bank Secrecy Act was passed in 1970, of great progress on the anti-money laundering front. I do not agree that great progress is anywhere evident. The distinction that has to be made is between efforts and results. How can a trillion dollars a year - or more of illicit funds, despite all the laws we have passed and programs we have set up, still move with ease and abandon around the globe?
Who is going to do something about this? Well, Stiglitz has an idea.
It’s clear to me that we could shut down this bank secrecy if we wanted to. Why don’t we want to? You probably know why we don’t. The real question is how do we do something about this problem that costs all of our societies so much, in so many ways, and benefits so few. This is one of the areas where civil society – some kind of activism – will be necessary.
And that is where we are only too happy to help. Who will join us?
I’ve been very concerned for a very long time about these secret bank account havens and argue that they are bad for the developing countries, they are bad for money laundering, drugs, corruption – they are bad in every dimension. I occasionally, for reasons that I don’t fully understand, get invited to give talks in these places. I was in one of these havens and gave my lecture and afterwards a couple of the bankers came up to me a little bit sheepishly and said ‘we’re not as bad as you seem to think we are. We don’t do bank secrecy for corruption, drugs - all these nefarious things you accuse us of – we only do tax evasion.
Stiglitz then outlines a measure that he argues could transform the world, and events following the September, 2001 attacks in the United States showed that in broad terms it would be relatively simple to do.
There was an initiative of the OECD to do something about bank secrecy, and that led to drawing up a convention to reduce bank secrecy, which the bush administration vetoed in August 2001. The timing could not have been worse. We all know what happened in September 2001. We discovered that secret bank accounts are not only used for drugs, money laundering, but also for terrorism. Since then, the Bush administration has shown fairly convincingly that we can stop bank secrecy. But we have chosen only to do it for terrorism and North Korea. Bank secrecy has continued. We now know – it’s not difficult to stop bank secrecy, secret bank accounts. All the United States would have to say is that no American bank can do business with any bank that operates in a jurisdiction that does not subscribe to these basic transparency codes, these basic codes of conduct . . . for appropriate bank behaviour.
We would make a few comments on this. First, it is not just bank secrecy that we should worry about. We need to tackle secrecy of company ownership; the secrecy of offshore trusts and foundations, and other issues -- these are mechanisms which are used in jurisdictions such as Jersey where it is not bank secrecy per se that is the big problem. Nevertheless, Stiglitz is right. As Richard Murphy has pointed out, "just passing the law would be enough to end banking secrecy for good. It would never need to be used. All that’s lacking is the political will to tackle this crime."
Second, Stiglitz is perhaps too kind to the U.S. administration and banks. In his classic book Capitalism's Achilles Heel, the money-laundering expert Raymond Baker, a guest scholar at the Brookings Institution and director of the Global Financial Integrity program in Washington spoke of the wake of the September 2001 attacks: "October 2001, the U.S.A Patriot Act, and the ugliest period ever in the history of anti-money laundering legislative efforts." He described a major lobbying effort by big U.S. banks to dilute or abort proposed legislation to strengthen money-laundering efforts. They sought, among other things, to reduce the strength of "due diligence" requirements, and to decouple anti-money laundering proposals from the Patriot Act, so that anti-money laundering could be fought separately and hopefully killed. Luckily, the mood in America this time was such that they failed. As Baker continued:
In the minds of some people this caps three decades, since the Bank Secrecy Act was passed in 1970, of great progress on the anti-money laundering front. I do not agree that great progress is anywhere evident. The distinction that has to be made is between efforts and results. How can a trillion dollars a year - or more of illicit funds, despite all the laws we have passed and programs we have set up, still move with ease and abandon around the globe?
Who is going to do something about this? Well, Stiglitz has an idea.
It’s clear to me that we could shut down this bank secrecy if we wanted to. Why don’t we want to? You probably know why we don’t. The real question is how do we do something about this problem that costs all of our societies so much, in so many ways, and benefits so few. This is one of the areas where civil society – some kind of activism – will be necessary.
And that is where we are only too happy to help. Who will join us?
posted by TJN at 4:17 am
1 Comments:
I have read the above.
I am not convinced that stopping tax havens would stop all the above problems described.
Tax havens may be used by some crims, but are often man'ed by ordinary and relatively honest people.
You stop the tax havens, do you stop the crims and the crime?
What if the worlds governments are run by those who are involved in criminal activities?
What if it is their money that is kept in the tax havens, indirectly.
Bin Laden Family......
George Who? B...
(does exposing a corrupt government make me a terrorist?)
Does stopping Tax havens create world peace?
To be honest, i think that the issue is a control one, by those in power.
They, as usual, want more, or should i say, complete control.
So they have all the power.
They are not satisfied with their lot, even though they have the most power in the world.
Take the US for instance,
they have now taken basic liviving essentials from the poor.
US citizens are now only eligible to claim benefit for a limited period.
After that period, they will have to become criminals or die.
So, this is what the world has in store for us.
I know the Tax Justice Network uses Charity organizations to give them credentials.
but,
what if the tax network get their wishes fullfilled, will they solve the problems addressed by the Charity Organizations.
Such as eradicating 3rd world debt and hunger, and giving all inhabitants of the world equal rights and rights to living essentials.
Perhaps thats why George Bush has cut social benefits, so the unemployed are only elligable for x amount of weeks benefits.
If the UN puppets and their MASTERS get their way,
Their will be more war, famine, pestilence and death.
So what is the answer.
Well.
Taxes.
as anything.
Used for good.
Can do much good.
Taxes could change the world.
Cure Famine.
Prevent War.
Cure Pestilance.
Prevent Death.
Taxes, if used in an altruistic manner.
Could SAVE THE WORLD.
And THE PEOPLE OF THE WORLD.
but the problem is,
the people simply don't trust the governments of the worlds to work in a positive way.
As most of them, over time, have proven to sell them out.
So, what needs to be done, if the TJN is genuine and not just another tool of the evil oppressors, is this:
they need to get the people on their side.
How do they do this.
Honour their agreements.
Keep their promises.
Save peoples lives.
Give people at least living essentials.
Cancel debt.
tax those who can afford to be taxed.
Work for positive reasons and not for self gain.
Do what the people want.
Save the World
Save LIVES.
Do not kill, starve, deprive etc.
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