Saturday, November 14, 2009

Sweden bans aid funding via tax havens

Development Today has just published the following news item:

The Swedish Ministry of Foreign Affairs has instructed the aid agency Sida to avoid new engagements in funds and companies facilitated through so-called tax havens. Sida was informed about the decision in a recent addendum to the Letter of Appropriation. The risk capital fund Swedfund also has a temporary ban on investing through tax havens, following a critical report from the Swedish Auditor General. (See DT 8/09)

The ban on tax haven investments is valid until the Swedish government has formulated a policy on how Swedish aid institutions should relate to tax havens, likely to be completed later this year, Development Today is told. "We are now working on developing a policy in this area and our ambition is to move fast," says Director Sten Johansson at the Ministry of Foreign Affairs in Stockholm.

Tax havens have come under increasing international scrutiny as they facilitate massive capital flight from developing countries, corruption and money laundering. Such offshore financial centres offer partial or total exemption from taxation and owners can conceal who controls businesses.

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