Thursday, November 19, 2009

Cry Havoc - why mercenaries love tax havens

From the FT this morning:

"Authorities in Pretoria are investigating reports that South African mercenaries are operating illegally in the West African state of Guinea, training and equipping militias loyal to the military junta there. Ayanda Ntsaluba, South Africa’s director-general of international relations and co-operation, told journalists the mercenaries appeared to be working for a company “operating largely through Dubai”

Why Dubai? We have a one-word answer: secrecy. Dubai is a secrecy jurisdiction. Our Mapping the Faultlines project gave it an opacity score of 92%, one of the worst. Why do mercenaries love tax havens? Obviously, they want to hide what they are doing. And Guinea's situation is very, very nasty.

"Since Guinean soldiers opened fire on opposition demonstrators in September, killing 150 of them according to human rights groups, the country has been on a knife edge. International concern is mounting that an outbreak of violence could spill into the fragile neighbouring states of Sierra Leone, Liberia and Ivory Coast, all of which are recovering from civil war."

This use of secrecy jurisdictions by those in the business of killing happens as a matter of routine. Just off the top of our heads: take the very recent case of Delaware being fingered as hosting business for the notorious arms trafficker Victor Bout. There is the Simon Mann-Equatorial Guinea connection, featuring Guernsey and other tax havens which fought for the privacy of their client who sought to take over a small African country. This blogger has met several mercenaries in the field in Africa, who make no bones about their routine use of tax havens to conduct their business behind the scenes.

It isn't pretty. The tax havens are steeped in blood.


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