Wednesday, June 02, 2010

Mauritius: a gateway for illicit flows to and from Africa

When is a tax haven not a tax haven? When a senior politician says so, points out Khadija Sharife in an excellent article about Mauritius in the latest edition of South Africa's The Thinker magazine.

We have previously noted the TweedleDee/Tweedledum characteristics of tax havens, who on the one hand are happy to promote themselves to the punters as bastions of client confidentiality (meaning secrecy and non-co-operation on information exchange), while simultaneously claiming to be models of transparency and international co-operation.

Mauritius is no exception. Vice Prime Minister RamaKrishna Sithanen cites the island's removal from the OECD list of uncooperative havens as evidence to support just such an assertion. We beg to differ with Vice P.M. Sithanen.

The OECD did this on the basis that Mauritius has signed up to more than 12 bilateral tax information exchange agreements: but the OECD has not required evidence that a single information exchange has actually occurred. We have exposed, on numerous occasions, the charade that the OECD process is - and will continue to do so. Signing 12 agreements with such global economic behemoths as Greenland and the Faroe Islands is enough to get you off the blacklist.

TJN has ranked Mauritius 32nd overall out of the sixty jurisdictions covered in the 2009 Financial Secrecy Index, assessing the island's opacity score at an appalling 96 (when 100 indicates a comprehensive lack of transparency and failure to cooperate).

We can't both be right. Here is our assessment of Mauritius, and here is the underlying data on which the ranking is based. Feel free to judge for yourself, but we'd refer you back to Khadija Sharife's superb article (which can be obtained through online subscription) in which the author goes through the process of setting up an offshore company in Mauritius to shift profits from a fictitious egg carton company. The ease with which she was able to jump through the various hoops of what is laughably called "customer due diligence" demonstrates the farcical nature of global financial regulation.


Blogger Bruno said...

Dr Sithanen is not the Mauritian Finance Minister anymore.

7:35 am  

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