Friday, January 14, 2011

More on Barclays and its offshore situation

Recently Tax Research blogged on Bob Diamond, CEO of Barclays, under questioning by a UK Treasury Committee. He said he didn't know how many offshore subsidiaries the bank had; the questioner put the number at over 300. Diamond denied tax dodging.

This also brings to mind the exposure by our friends at Global Witness that Barclays kept open an account for the son of the dictator of oil-rich Equatorial Guinea long after clear evidence emerged that his family were heavily involved in substantial looting of state oil revenues - see report Undue diligence - How banks do business with corrupt regimes.

Barclays Wealth Advisory Terms and Conditions for Trust, Fiduciary, Fund Administration and Corporate Services - available here, has some interesting points. For example, in the Appendix:

"The companies included in the definition ‘Barclays Wealth’ are as follows": 3 in Jersey, 2 in Guernsey, 3 in Isle of Man, 2 in Switzerland, 1 in each of India and Hong Kong, and 1 in Cayman being the Private Bank and Trust.

Predictable, perhaps. More noteworthy, perhaps, is the section "Client’s certification of non-United States of America Status," which contains the following:

" Where Barclays Wealth acts outside the U.S.A. the Services are generally not provided to" US persons liable for US tax.

This is not a Barclays issue - it's a more generalised one, and it's been around for a while. A source from the private banking world has commented earlier how even from long before the U.S./UBS furore, there were private banking institutions refusing business from U.S. persons because of the fear of potential punitive action from the long arm of the U.S. A bank cannot afford to risk losing their ability to deal in U.S. dollars - so the U.S. gets special treatment, apparently.

Which raises another question. If the U.S. is getting special treatment, does this mean that other countries are getting sub-standard treatment? In other words, are private banks assisting customers to diddle their countries out of tax revenues? Perhaps Barclays, and other private banks that give special treatment to the United States, would like to answer that.

On "Disclosure" it states.. "Where Barclays Wealth is bound by the requirements of banking or trustee confidentiality law, it shall ensure that any Client Information will only be disclosed in accordance with such law. Supplementary terms and conditions may be provided to
Clients of the Switzerland and Cayman Islands Barclays Wealth Companies where appropriate." The italics are ours. We'd love to know what such "supplementary terms" happen to be. And Swizerland and Cayman are ranked 3 and 4 of the Financial Secrecy Index.

Just some more questions for private banks to answer.


Blogger Demetrius said...

You might care to look at this from The Slog (John Ward).

2:22 am  

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