Monday, May 25, 2009

European Investment Bank and tax havens

At a time when aid programmes are increasingly being challenged as effective ways of tackling poverty, its appropriate that agencies ostensibly engaged in delivering aid are brought under the spotlight.

Step forward the European Investment Bank, the "house bank" of the European Union, which our colleagues at Counter Balance finds has been structuring major investment programmes in developing countries via offshore companies registered in tax havens. Examples include:

WAPCo. incorporated in Bermuda, sponsor of the West African Gas Pipeline from Nigeria to Ghana, financed by the EIB in the amount of EUR 75 million in December 2006.

Tenke Holding Ltd/Lundin Holding, registered in Bermuda, part-owners of the Tenke Fungurume copper/cobalt mining project in the Democratic Republic of Congo, for which the EIB agreed a preliminary commitment up to EUR 100 million in August 2007

Mopani Copper Mines plc is majority owned by Carlisa Investments Corporation, incorporated in the British Virgin Islands, that is the sponsor of the Mopani Copper Project in Zambia, loaned EUR 48 million by the EIB in February 2005.

Setting aside the moot point about whether funding extractive industry programmes is the most effective way of delivering assistance to the poorest people of the countries concerned, the EIB needs to explain why it has allowed the use of tax haven structures, and to whose benefit. We hope that this Counter Balance initiative will be followed up by sharp questions within the European Parliament.


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