Sunday, May 24, 2009

Exchange of information: the Yossarian approach

From Paul Sagar's Bad Conscience blog:

"I recently had direct experience of trying to break this circular logic when I met some representatives of a prominent Offshore Financial Centre, which I would certainly class as a secrecy jurisdiction. I asked them to prove that they weren’t committed to banking secrecy by detailing how many pieces of information they had exchanged with other nations. I asked when their company accounts would be open to audit by being placed on public register. I wanted to know when the Tax Information Exchange Agreements (TIEAs) they claimed to have signed were actually coming into force.

I didn’t get answers to any of those questions. What I did get was a catch-all reply that went: “Hey, we’re fully committed to stopping crime – if you know of any criminals, we’ll help you catch them!”

This is the closest thing secrecy jurisdictions have to a trump card. It’s their claim to the moral high-ground. Unfortunately, it doesn’t stand up to a moment’s consideration. The problem with criminals who operate their finances via offshore is that usually the criminality cannot be proved until authorities have access to their accounts. Yet the offshore centres in which the criminals stuff their stolen wealth will refuse to release any accounts until their client is proved to have engaged in criminality. See the problem? You can’t prove criminality until you have the accounts, but can’t get the accounts until you have proved criminality. Yossarian would recognise the predicament only too well."


Quite. And we like the Woody Guthrie quote at the top too.

"Yes, as through this world I've wandered I've seen lots of funny men; Some will rob you with a six-gun, And some with a fountain pen."

(or perhaps with a spread sheet.)

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