Web of financial secrecy: Britain, satellites dominate tax haven rating

Published on Russia Today RT, Nov 8, 2013.

The UK is “by far the most important” player on the global financial secrecy market. While only ranked 21 on the Tax Justice Network index, the aggregated web of jurisdictions around the world makes Britain the top router of global financial secrets … //

… Overall Tax Justice Network ranked 82 global financial jurisdictions, 10 of which are directly connected to UK, whose head of state is the British queen. They include places like the fourth-ranked Cayman Islands, fourteenth-ranked Bermuda and the British Virgin Islands ranked 20th.   

According to the financial secrecy watchdog, up to US$32 trillion is sitting in offshore zones where it is either untaxed or slightly taxed.

“Rolling back the secrecy that shrouds up to $32 trillion in offshore financial assets remains one of the great challenges of the 21st century,” Christensen said in a statement

The report believes that offshore zones have cost African countries over $1 trillion since the 1970s of which $640 billion came from 16 Commonwealth countries.

“These losses dwarf the external debts of ‘just’ $190 billion for the 33 countries, meaning that Africa is a major net creditor to the world, contrary to what is widely believed,” the letter said.

“The yawning gap between fact and fiction in the fight over global financial transparency is only just starting to shrink. Important shifts – such as the European Union’s decision to curb one important aspect of banking secrecy from 2015 – mask waning momentum for other urgent changes elsewhere,” Markus Meinzer, lead researcher for the Financial Secrecy Index said.

The ranking was calculated by combining a secrecy weighting scale, that factors in components such as banking secrecy and anti-money laundering regulation, with the jurisdiction’s share of services of the world’s total.

The three highest ranking countries on 2012 financial secrecy index are Switzerland, Luxembourg and Hong Kong.

Switzerland, the “grandfather of the world’s tax havens”, accounts for just fewer than 5 percent of the global market share of offshore financial services.

Last year the country managed about a quarter of the world’s total assets or approximately $2.8 trillion, according to the   Swiss Bankers’ Association.

“Switzerland has also been playing the spoiler, striving to block or derail emerging international transparency initiatives,” the watchdog said on its website.

Luxemburg, a tiny EU nation, has also been accused of undermining transparency efforts, when it was placed second on the index.

“Outside what might traditionally be regarded as the financial sector, it also runs a lucrative line in hosting holding companies of transnational corporations, principally to help them avoid (and evade) tax. It is also strenuously seeking to build up an industry based on Islamic finance, and in October 2012 achieved a further fillip when a group of major Chinese banks said they were departing the (very lightly regulated) London markets in favor of the even less regulated Luxembourg,” the country profile reads.

Hong Kong has been ranked third for the rapid growth of offshore industries in Asia that expanded with the overall economic growth on the continent. One of two Chinese Special Administrative Regions, the island accounts for over 4 percent of the global market share for offshore financial services and is the “fastest growing secrecy jurisdictions or tax havens today.”

“Our Index shows that too many jurisdictions still help tax evaders hide their identities and assets behind shells and smokescreens,” Moran Harari, researcher for the Financial Secrecy Index said.

“Without public disclosure of the beneficial owners of these assets, and the automatic exchange of information between   jurisdictions to provide the information that law enforcement and tax authorities need, it will be impossible to tackle some of the world’s most pressing problems.”
(full text).


Tax Justice Network TJN on en.wikipedia is a coalition of researchers and activists with a shared concern about what they argue are the harmful impacts of tax avoidance, tax competition and tax havens, which “corrupt national tax regimes and onshore regulation, and distort markets by rewarding economic free-riders and mis-directing investment.” The use of “justice” in the name illustrates its philosophies towards taxation, including a belief that taxes can be a tool for social justice …;
… including Philosophy, See also and External Links;

Overall Tax Justice Network on Google News-search.

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