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Mar
20

Can transparency exist behind closed doors?

Christian Freymeyer

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Lately, we’ve had quite a few reasons to get outraged as global citizens, especially when looking at the financial system, which seems all too well rigged in favor of a small, wealthy elite. We’ve learned of secret tax deals undoubtedly concocted in ominously tall office buildings between some of the worlds biggest companies and a tax haven; and we’ve also learned of billions of dollars that were being held by a Swiss bank by the world’s wealthiest, amid claims that the bank was helping many of these people evade taxes in their home countries.

But there’s an important caveat to all of this.

Mar
19

Addressing Illicit Financial Flows in the FfD and SDG Processes

Tom Cardamone

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On Monday, the United Nations released a so-called “Zero Draft” of the Financing for Development (FfD) Conference Outcome Document. Simply stated, this draft lays out the current political consensus on a vast array of development issues including how to address the growing problem of illicit financial flows (IFFs). It is by no means the final word on IFFs—or any other issue for that matter—but it gives a good indication where things are heading.

Mar
19

New Report: Ten Reasons to Defend the Corporate Income Tax

Nicholas Shaxson

The corporate income tax is under attack. Nation states are scrambling to offer multinational corporations an ever growing feast of lower taxes, loopholes and incentives. Lobbyists and politicians constantly try to persuade us that the corporate tax is a bad, inefficient, unreasonable tax. Yet it is one of the most precious of all taxes.

One of our ten points concerns revenue. Corporate income taxes have added up to almost US$ 7.5 trillion since the global financial crisis erupted in 2008, in OECD countries alone. This is nearly half of all OECD public health spending and around double the amount spent on public tertiary education, one of the fundamental underpinnings of corporate profits.[i] It is even more important for developing countries.

And yet the corporate tax is disappearing fast. Average headline tax rates are around half of what they were in 1980, and on current trends will reach zero in the next two or three decades. We may not even have this much time, given the influence of the large accountancy firms and corporate lobbyists actively working to hasten its demise.

Press Releases
Mar
18

European Commission’s Tax Transparency Package keeps tax deals secret

Financial Transparency Coalition

The European Commission’s new measures to combat secret tax deals made between multinational companies and governments cannot be called tax transparency, as they fail to give citizens access to any information. 

The Tax Transparency Package, published today in response to the Luxembourg Leaks scandal, makes some improvements to the information that tax administrations receive, but keeps tax rulings confidential, denying proper public scrutiny of governments’ tax administrations and large companies. 

Tove Ryding, Head of Tax Justice at the European Network on Debt and Development (Eurodad), said: “This is not tax transparency or tax justice. The veil of secrecy remains in place.”

Twenty-two EU member states currently offer tax rulings – also known as “comfort letters” – to multinational enterprises. These agreements have been abused to offer “sweetheart deals” to companies, which is why the public needs access to this information 

The lack of public information also means that tax administrations in developing countries cannot identify corporate tax dodgers.

Press Releases
Mar
16

The world can’t afford to exclude developing countries from new anti-tax evasion system

Financial Transparency Coalition

BRUSSELS—Weeks after the shocking revelations of wide-spread tax evasion at HSBC’s Swiss branch, a new report from a European Commission expert group on the Automatic Exchange of Financial Information (AEFI) makes it clear that the world can’t afford to exclude developing countries from new anti-tax evasion measures.

The expert group set out to address a number of questions around new efforts to clamp down on tax evasion through the automatic exchange of financial information between governments. Composed of business and industry associations, as well as some civil society groups, including the Financial Transparency Coalition (FTC), the panel concluded that the strongest cross-border exchange is one that includes all countries, not just the ones who are deemed ready to participate from the start.

Mar
4

Who’s in your backyard? Looking at anonymous companies and their ownership of London Property

Christian Freymeyer

UKUnmask

Do you know who owns the house behind yours? What about the one down the street, or that mansion in the nice part of town?

When anonymous companies are involved, you can’t just walk up and ring the door bell, which makes it tough to find out who really owns a house or property. We’ve seen anonymous companies come up in property ownership time after time, from former Ukrainian President Vktor Yanukovych’s mansion to Iran’s secret ownership of a Manhattan skyscraper. Now, Transparency International has released a new report looking at this very question, and set off to uncover just how many properties around London are owned by anonymous companies in secrecy jurisdictions or tax havens.

Some of the results are pretty staggering.

Feb
18

Settling accounts: what happens after SwissLeaks?

Koen Roovers

A major leak of incriminating HSBC records last week resulted in print and television news coverage around the globe, trended on Twitter for several days and prompted several governments to start long-anticipated investigations. Through its Swiss entity, the British banking juggernaut helped customers from around the world to hide their money for tax evasion or other nefarious purposes without any questions asked. In fact, in several of the ‘scripts’ which accompany the accounts, banking personnel are seen to be very willing to accommodate dubious requests—from allowing cash withdrawals worth millions of dollars to setting up sham legal entities to obscure the ownership of the funds.

The ‘Lagarde list’, as the files have come to be known, has been around for a couple of years and so many have been asking: ‘Why do we only see government action once a group of reporters put the spotlight on this?’ Another frequent question has been whether the bank has really (as it claims) cleaned up its act.

Relatively few commentators have asked: how do we prevent this in the first place?

Feb
13

HSBC findings don’t surprise us. What will it take for things to change?

Robert Palmer

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Fresh revelations from the Guardian today, paint an even bleaker picture of HSBC Geneva’s client list. According to the paper, the bank’s customers included those who faced allegations of drug-running, corruption, doping and money laundering.

Over twenty years, Global Witness has campaigned to stop a lot of things, from blood diamonds to corrupt dictators, to the money flows that fuel conflict. It appears that HSBC has been playing its part in enabling the money flows that support such activities. In some cases, the Guardian claims to have evidence that HSBC bankers were aware of some of the allegations against their clients.

Press Releases
Feb
9

Leaked HSBC Records Shed Light on Culture of Corruption in the International Banking System

Global Financial Integrity

WASHINGTON, DC – Leaked HSBC documents revealed today by the International Consortium of Investigative Journalists (ICIJ) highlight a culture of corruption in the international banking system that goes far beyond the world’s second biggest bank, noted Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization. Featured Sunday evening on CBS News’ 60 Minutes program, the files allegedly highlight how the Swiss branch of the bank meticulously catered to some of the world’s biggest dictators and criminals, and they are but the latest example of a global bank gone rogue.

Feb
6

How long does it take for an era to end?

Joseph Stead

As the G20 finance ministers assemble in Istanbul this weekend, there’s a good chance at least one of them will repeat the phrase ‘the era of bank secrecy is over’, heard several times since the 2009 G20 Summit. But before anyone thinks of repeating it again, they should instead look at the plans (or lack thereof) for including developing countries. As our new report, Information for the Nations, explains, while new reforms on financial transparency are welcome, the proposals could end up leaving a number of developing countries behind.

At the heart of all this is the fact that vast amounts of money are held offshore (by some estimates up to $21 trillion); at best, only 20% of this is thought to be declared for tax. With little ability for tax authorities to find out who has cash stashed offshore, up until now little could be done to stop these tax evaders. That’s now set to change (for rich countries at least), as 52 of the biggest economies and the biggest tax havens have agreed to automatically share details of offshore accounts to tax authorities in other countries.

Press Releases
Feb
6

Era of Bank Secrecy Still Far From Over For Developing Countries

Christian Aid

G20 Finance Ministers meeting in Istanbul this weekend still have much to do if the claim ‘the era of bank secrecy is over’ is to mean anything in developing counties.

In a new report from Christian Aid, endorsed by 18 other civil society organisations, the flaws in the current approach of the G20 towards automatic exchange of tax information are laid bare.

Joseph Stead, Christian Aid’s senior economic justice advisers said today: “There remain loopholes in the standards that will limit the impact in all countries, but for developing countries there are some specific challenges that remain, despite the promises of the G20 to take action.

“It’s estimated that 33 per cent of African and Middle East-owned assets are held offshore compared to 6 per cent of European-owned assets. This suggests tax evasion on a significant scale.

Feb
4

Five take-aways for Europe from the African Union’s High-Level report on illicit financial flows

Christian Hallum

6171626086_24fafd82fa_zLast Saturday a landmark decision was taken when the African Union, made up of 54 African Heads of State, adopted the report of the High Level Panel on Illicit Financial Flows (IFF). This report documents the scale and impact of IFF from the continent and gives a range of policy recommendations. Our friends at the Tax Justice Network says the report is“probably the most important report yet produced on this issue” and for good reasons.

The new report is not only a strong testament to the importance that African leaders are placing on the issue of IFF, but its publication ahead of July’s Financing for Development (FfD) conference is an indication that the issue is likely to figure prominently among items raised by developing countries during the negotiations.

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