Thursday, May 19, 2011

Tax havens need unified voice, TIEAs unconstitutional - Norris

Bermuda's Royal Gazette is carrying some forthright views from Professor Gilbert Norris, a speaker at a conference by the Society of Trust and Estate Practitioners (STEP,) an influential lobby group for tax havens and offshore secrecy. A number of separate things are worth nothing:
International financial centres (IFCs) will not survive unless they join forces to create a united body to articulate the benefits they provide the global economy.
Well, there are plenty of bodies - like STEP or the Center for Freedom and Prosperity - that are already doing that. We wouldn't be surprised to see more of them. There is more from him:

Mr Norris said that the tax information exchange agreements (TIEAs) that Bermuda and other IFCs had been signing at a rapid rate at the behest of the Organisation for Economic Cooperation and Development (OECD) were unconstitutional.

“If you are a common law jurisdiction, then you have constitutional confidentiality that can’t be lightly disapplied,” Mr Norris said. TIEAs trampled on fundamental confidentiality rights including legal and professional privilege and privacy, he added. “I believe that organisations like the OECD, the IRS and EU are not only behaving inappropriately, but also illegally,” Mr Norris told delegates."


That isn't our analysis. Our analysis is that the TIEAs are, at best, almost useless - and possibly worse than useless, because they have allowed a number of jurisdictions to claim they are 'clean' while allowing secrecy business as usual. More here. Norris goes on:
Over the coming years, Mr Norris expects economic powers to develop preferences for certain IFCs. “I can see Brazil using Panama, India using Mauritius, China using Macau and the US using whoever they want,” he said.
Well, that's already happening - and it has been a pattern for a long time. And he added:
“The UK will destroy their financial centres and then discover that they were the engines that kept things going.”
Well, that's not quite our analysis, but we can see what he's getting at. First, we aren't confident - though we hope he's right - that the UK will "destroy" its financial centres. The City of London, which is fed by Britain's offshore network, is too powerful to think this could happen any time soon. On the "they were the engines that kept things going" - we don't disagree with that - although that requires us not to unpack the word "things" here. What "things" refers to is the capture of UK politics by the City of London and by the City of London Corporation; too-big-to-fail banks; what Andrew Haldane of the Bank of England called the financial "doom loop;" the Dutch Disease as applied to finance, the appalling inequality and impoverishment of lives for ordinary British people, the decline of British manufacturing and agriculture - and that sort of "thing." Yes, he's right - the British tax havens have been an engine for all this. He added
IFCs not aligned to any major power would likely disappear, he added.
This is interesting. It may be true, and it underlines that points made by TJN and in Treasure Islands, that we aren't talking about a bunch of independent sovereign states here, but about the projects of elites in major powers.

Which is why it's so hard to tackle.

Which is why public mobilisation is now essential.

We're working on it.

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