Tax Havens: The Legal Infrastructure Behind Illegal Financial Activity
July 27th, 2012
According to a recent editorial from The Guardian, the illicit activities that drive capital flight, such as drug trafficking and terrorist financing, are actually supported by legal infrastructure. Namely, the lack of transparency in regions designated as "tax havens" allows for elaborate tax avoidance schemes and money laundering that funds these sorts of activities. As an example, banking company HSBC reportedly held a Cayman Islands subsidiary that "handled some 60,000 accounts," which "drug lords used . . . to fuel their jet-set lives."
According to the newspaper, politicians must address the issue of tax haven abuse. In affected countries such...
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