Friday, March 06, 2009

The Writing on the Wall for Secrecy Jurisdictions

This blogger has just returned from meetings in three of Europe's major capitals. The message from all three is plain and simple: the secrecy jurisdictions in and around Europe, and the banks and law firms who have colonised these places, must cease their trade.

In Germany, finance minister Peer Steinbr├╝ck proposes that the European Council of Ministers introduces a law to sanction secrecy jurisdictions that don't cooperate with tax information exchange.

In France, budget minister Eric Woerth has described secrecy jurisdictions as thieves, who have contributed to the financial market turmoil, undermined regulation, attracted fraudsters, and created a predatory tax environment that enables tax cheats to evade the laws of their countries of residence. Also in Paris, the Organisation for Economic Cooperation and Development is burning the midnight oil to prepare a new list of non-cooperating secrecy jurisdictions, which will be used as the basis for introducing clear and decisive sanctions against these fiddle factories.

And British prime minister Gordon Brown, addressing the US Congress in Washington, talked about "how much safer would everybody's savings be if the whole world finally came together to outlaw shadow banking systems and offshore tax havens".

Across the Atlantic, of course, Barack Obama and his treasury secretary Timothy Geithner, have made it quite clear that they will be using their legislative might to force secrecy jurisdictions to reveal the identities of the clients who use their facilities. Importantly, these measures will include requirements to bust open the secretive trusts and offshore companies that are the speciality of places like the Cayman Islands, "we are not a secrecy jurisdiction Jersey", and the Isle of Man.

By now it should be absolutely clear to even the most insular of these secrecy jurisdictions that the upcoming summit meeting of the G-20 will be addressing the issue of how to abolish the loopholes that these places exploit to earn their tawdry incomes. We, Tax Justice Network, will support steps in that direction, since we know that such steps will do more to alleviate global poverty and inequality than all the aid and debt relief programmes put together.

At the same time, however, we will be demanding that the legislative bar is set as high as possible to prevent any further legislative window dressing or abuse of lax regulation. We will also be setting the bar as high as possible on the blacklisting process, demanding that the mere existence of a few tax information exchange agreements with selected north American and European nations is not sufficent evidence of a willingness to cooperate to justify inclusion on the list. At the very least, we would expect evidence that the volume of information requests acceded to by the courts of these jurisdictions is listed in the hundreds every year rather than in single figures.

The message to the political leaders of these secrecy jurisdictions is clear: GAME OVER. Start work now on devising your plan B. And if you aren't capable to devising a plan B, shove off and let other more capable people take over.

0 Comments:

Post a Comment

<< Home