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Jun
16

Wednesday’s Daily News Digest

Scott Fahey

EU Council summit: action now will make or break MDG 8
Eurodad, June 15, 2010

Swiss Lawmakers Hold Up Agreement on UBS Tax Deal (Update1)
Bloomberg, June 16, 2010

Surgeon Avoids Prison for Plotting to Hide HSBC Cash (Update1)
Bloomberg, June 15, 2010

Crocodile Dundee Paul Hogan’s off-shore tax accounts to be published
Telegraph, June 16, 2010

ZRA probe multinational cotton company over $3 m tax evasion
Zambian Watchdog, June 16, 2010

Gold mining in Mali: Who really profits?
Eurodad, June 16, 2010

Corruption Risks Abound For ‘Frontier Market’ Investors
Wall Street Journal, June 15, 2010

Canada seen as free of bribery, corruption
Vancouver Sun, June 16, 2010

MACC Detains Four People For Bribery
Bernama (Malaysia), June 16, 2010

Rwanda: Fight Against Corruption to Bring in Private Sector, NGOs
The New Times (Rwanda), June 16, 2010

Nigeria: NSE Charges Abuja Engineers Against Corruption
The Daily Trust (Nigeria), June 15, 2010

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Jun
15

Irish government comes down off the fence on country by country reporting

David McNair

Government Buildings in Dublin houses the Irish Department of Finance.

In May 2010, Christian Aid published a report entitled ‘Tax of Life’ highlighting the impact of tax dodging on Irish Aid programme countries. It’s a somewhat obvious point. Why would a country in times of austerity give aid to a country without considering the impact of international policies on the ability of that country to develop.

Tax is something that is growing in importance in the development world. The European Council recently published conclusions which approved a paper emphasising the importance of tax for development and the need to explore transparency standards such as Country-by-Country reporting and Automatic Exchange of Information – recommendations which taskforce members have been pushing for some time.

Back in Dublin, the government’s committee on Foreign Affairs were so struck by Christian Aid’s report that they called in the relevant government departments to give an account of what they were doing about the problem of tax dodging.

This led to a somewhat humorous exchange where Senator David Norris accused the Department of Finance Official of sitting on the fence when it comes to Country-by-Country:

Senator David Norris: Mr. Tobin may have slightly misunderstood the question, although it may well be the case that I am thick. While he gave a useful historical account of the current position and the role Ireland plays in this area, he hedged his bets. I am curious to ascertain whether Ireland is actively in favour of country-by-country reporting and if this support is expressed at international levels.

Mr. Gary Tobin: I can honestly say that it is rare for the Department of Finance to sit on the fence. We tend to take either a black or white position on issues. Irish Aid views country-by-country reporting as a multilateral issue. Ireland can and does contribute to the debate but the issue is essentially being driven at—–

Senator David Norris: Mr. Tobin is sitting on the fence.

Mr. Gary Tobin: No.

Senator David Norris: Of course he is.

Mr. Gary Tobin: If the Senator would let me finish—–

Senator David Norris: I would be very pleased with a “Yes” or “No” reply.

Mr. Gary Tobin: We have absolutely no objection to country-by-country reporting. We are participating in the OECD and EU processes that are trying to drive it forward. Having said that, if country-by-country reporting is agreed and implemented, then we want it to work.

So there we have it – Ireland has “absolutely no objection to country-by-country reporting.“ With a growing number of governments in support and businesses recognising the value of transparency if feels to me like the tide is turning.

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Jun
15

Tuesday’s Daily News Digest

Scott Fahey

Column: Saudis act aggressively to denounce terrorism
Washington Post, June 13, 2010

Swiss close to final approval of UBS-U.S. deal
Reuters, June 15, 2010

Police Confiscated $6.5 Million from Tax Official Gayus
Jakarta Globe, June 15, 2010

Nigeria: Greed, Corruption Our Biggest Problems – Jonathan
Leadership (Nigeria), June 14, 2010

PM appoints Ken Clarke to be “anti-corruption chamption”
The Times (UK), June 15, 2010

Too many businesses neglecting human rights, corruption concerns – UN survey
UN News Centre, June 14, 2010

OECD:Only 13 Nations Have Punished Bribery Of Foreign Officials
Dow Jones, June 15, 2010

Money Laundering Law To Be Strengthened, Says MACC Director
Bernama (Malaysia), June 15, 2010

Mexico To Limit US Dollar Cash Transactions To Combat Crime
Dow Jones, June 15, 2010

Aeropostale Ex-Merchandising Chief Charged With Fraud
Bloomberg, June 14, 2010

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Jun
15

Discussion with Stephen B. Young, Esq. Global Executive Director of The Caux Round Table

Kelley Brescia

Stephen B. Young, Esq., Global Executive Director of The Caux Round Table, will discuss the financial crisis, the Caux Round Table Principles for Responsible Business, and pending federal financial regulatory legislation. An open floor discussion will follow.

Full event details below:

You are cordially invited to a reception and discussion regarding the ethical, economic, and policy dimensions of the global financial crisis with Stephen B. Young, Esq., Global Executive Director of The Caux Round Table.

Monday, 21 June 2010

6:00 to 8:00 p.m.

The Stewart R. Mott House
122 Maryland Avenue, N.E.,
Washington, D.C. 20002.
(The Mott House is on Capitol Hill next to the Supreme Court.)

Mr. Young will be discussing the financial crisis, the Caux Round Table Principles for Responsible Business, and pending federal financial regulatory legislation. After his remarks, the floor will be open for discussion. We shall serve light hors d’oeuvres and drinks and there will be opportunities during the evening for networking with colleagues from corporate, governmental, nongovernmental, professional services, academic, and other organizations.

Stephen B. Young has served as the chief executive of the Caux Round Table since 2000, working with globally prominent executives, government leaders, scholars, clergy, and others to promote integrity and responsibility in public and private organizations; encourage transparency and accountability in corporate and civic institutions; fight grand corruption through civil and criminal actions, including corrupt asset recovery; encourage productive dialogue between Eastern and Western religious and cultural traditions; and advance the scholarship and impact of organizational integrity and responsibility in the context of global integration.

Mr. Young worked for the U.S. Agency for International Development during the Vietnam War, and later served as assistant dean at the Harvard Law School and dean of the Hamline Law School. As an attorney, he has served corporate clients in business transactions and litigated in state and federal courts. He has published widely on legal, political, and economic policy issues in law reviews, prominent editorial pages, and in other venues. He is the author of the book, Moral Capitalism, now available in Japanese, Spanish, Croat, and Polish. His work for the Caux Round Table takes him to major conferences and universities around the world for frequent lectures on organizational integrity and responsibility.

In her book, The Difference Makers, Professor Sandra Waddock of Boston College named Mr. Young as one of the 23 leaders who developed the modern organizational responsibility movement.

Mr. Young is a graduate of Harvard College and the Harvard Law School. While an undergraduate at Harvard, he discovered the site of the ancient Bronze Age culture of Ban Chiang in Thailand, which UNESCO later declared a World Heritage Site. His full biography is available here.

This event is free of charge.

RSVP by Friday, 18 June, to Mr. Jed Ipsen, Associate Director for Washington, D.C. The Caux Round Table, at jed@cauxroundtable.net.

The Caux Round Table is a global network of senior leaders in business, government, and other fields that promotes integrity and responsibility in public and private organizations. Fast Company recently named the Caux Round Table site as one of the 51 best on the Internet for information on organizational responsibility

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Jun
14

Monday’s Daily News Digest

Scott Fahey

Pictet sees change as an ‘evolutionary process’
Financial Times, June 13, 2010

UBS faces Luxembourg forgery probe over Madoff funds
Reuters, June 10, 2010

Accounts of 500 UBS clients already sent to U.S.: report
Reuters, June 13, 2010

Governor signs anti-secrecy agreement with Germany
Turks & Caicos Weekly News, June 14, 2010

HK-Shenzhen police crack down on illegal gambling on soccer World Cup
Xinhua, June 13, 2010

Corruption robs developing nations of $40 billion annually: World Bank
The Times of India, June 13, 2010

Revealed: Japan’s bribes on whaling
The Sunday Times (UK), June 13, 2010

Hanoi police seek bribery charges against bank officials
Thanh Nien News (Vietnam), June 10, 2010

Corruption still rife in SA
The Times (South Africa), June 12, 2010

Kingfisher Airlines VP arrested for bribery
PTI (India), June 12, 2010

Guatemalan attorney general sacked
BBC News, June 11, 2010

Top China food, drug official under investigation
AFP, June 14, 2010

U.S. Intelligence Puts New Focus on Afghan Graft
The New York Times, June 12, 2010

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Jun
14

Letter Identifies Key Points for Financial Action Task Force to Consider

Kelley Brescia

Letter to the Financial Action Task Force (FATF)

Members of the Task Force on Financial Integrity and Economic Development and other signatories identified three key points for the Financial Action Task Force (FATF) to consider at its upcoming plenary meeting this month in a letter sent on June 11.

First, the Task Force on Financial Integrity and Economic Development offered suggestions on how to respond to FATF Recommendations 33 and 34, which are still debated. Recommendation 33 states the following:

Countries should take measures to prevent the unlawful use of legal persons by money launderers. Countries should ensure that there is adequate, accurate and timely information on the beneficial ownership and control of legal persons that can be obtained or accessed in a timely fashion by competent authorities. In particular, countries that have legal persons that are able to issue bearer shares should take appropriate measures to ensure that they are not misused for money laundering and be able to demonstrate the adequacy of those measures. Countries could consider measures to facilitate access to beneficial ownership and control information to financial institutions undertaking the requirements set out in Recommendation 5.

Recommendation 34 similarly states that preventive measures should be taken against the “unlawful use of legal arrangements by money launderers” [emphasis added]. The Task Force explains that public registries of beneficial ownership of companies is the “only meaningful option” to prevent misuse.

The second point by the Task Force calls for a list of jurisdictions that are failing to meet the FATF’s standards. In addition, a revised measure of the implementation of this legislation should be used for the fourth round of evaluations.

Finally, the Task Force would like to be involved in the open review process.

Task Force coordinating committee members Gavin Hayman, Campaigns Director, Global Witness; Raymond Baker, Director, Global Financial Integrity; John Christensen, Director, Tax Justice Network; Richard Murphy, Tax Research LLP; Alex Cobham, Chief Policy Adviser, Christian Aid; Francois Valerian, Head of Private Sector Programmes, Transparency International; and Marta Ruiz, Senior Policy and Advocacy Officer, Eurodad signed the letter, as well as 20 other signatories.

To view the letter in PDF or full text format, click here.

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Jun
11

Staggering Amount of Illicit Financial Flows Found In Greece and Portugal

Kelley Brescia

Photograph by Andrea Guerra

These days it seems as though word of a country’s economic crisis is commonplace. The world watched as Greece unexpectedly veered toward bankruptcy, and then other European Union (EU) countries—namely Portugal, Ireland, Italy, and Spain—were eyed with suspicion. Dr. Dev Kar, Global Financial Integrity‘s lead economist, writes that “Portugal lost a total of about US$138 billion through illicit transfers over a five-year period ending 2009″  in an article published today in The Portugal News. Here it goes again…

With the global economy already on unstable ground, Greece’s economic crisis created doubt in the EU and spurred fears that the crisis might spread to other EU countries and even, possibly, the United States.  Few saw Greece’s downturn coming, but as the true magnitude of their government debt has been released, few can avoid the seriousness of the issue.  But how did we get here?  And where did all of Greece’s money go?

In a blog post last month, Dr. Kar wrote that illicit financial flows “cost Greece an estimated US$160 billion over the last decade.” With Greece unable to tax the illicit money coming and going, the money needed for their consumption boom came in the form of external debt. Within the past decade, this debt jumped from a manageable 73% of GDP to almost 160% of GDP.

Dr. Kar explained, “The need of the hour is that Greek policy makers must not only ensure that the economy is placed on a sustainable path to debt solvency and economy growth, they must improve governance and implement economic reform so that Greeks would favor licit domestic, over illicit foreign, investments.”

Greece may have received the largest bailout in both IMF and EU history, but the common denominator for economic struggle is still largely unchecked. Case in point: illicit financial flows are also playing a role in Portugal’s  troubled economy. Over the course of five years, Portugal lost about US$138 billion. Considering this and the US$160 billion lost by Greece over a decade, and it seems evident that illicit financial flows have some connection to economic crises.

“Research at Global Financial Integrity (GFI) confirms that deteriorating economic conditions have been fueling massive illicit flows from Portugal over several years,” according to Dr. Kar.

So what exactly are these illicit flows? Model estimates indicate that Portuguese traders over-invoiced exports and under-invoiced imports. Dr. Kar suggests that traders over-invoiced exports to gain value added tax (VAT) refunds and under-invoiced imports to evade duties or VAT on imports.

To avoid such issues, the Task Force on Financial Integrity and Economic Development advocates that “the parties conducting a sale of goods or services in a cross-border transaction sign a statement in the commercial invoice certifying that no trade mispricing in an attempt to avoid duties or taxes has taken place.” In March, GFI released a report, which found that over the past 40 years African nations lost between US$854 billion and US$1.8 trillion in illegally transferred funds. Today, we see that Portugal is facing a high debt linked with trade mispricing as well.

With Spain, Italy and Ireland also under watchful eyes, the implications for the future of the Euro and other economies remain up for debate.

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Jun
11

Friday’s Daily News Digest

Scott Fahey

Woes of the Euro Zone: Can Portugal be far behind?
The Portugal News, June 11, 2010

Where the money went
Africa Confidential, June 11, 2010

Higher taxes, says the OECD
Africa Confidential, June 11, 2010

UPDATE 1-UBS CEO sees politicians backing U.S. tax deal
Reuters, June 11, 2010

Africa: OECD Report Calls for Radical Tax Reform Across Continent
Pambazuka News, June 10, 2010

German tax crackdown may yield 1.5 bln eur -union
Reuters, June 11, 2010

Sars’s opportunity to “come clean” on assets hidden offshore
Moneywebtax (South Africa), June 11, 2010

Legislation dogs govt in tax evasion issue
Mail Today (India), June 11, 2010

Legal pulse: Major transfer pricing dispute settled, offers relief to some Indo-US businesses
Legally India, June 11, 2010

EFCC blames judiciary for delay in corruption trials
Next (Nigeria), June 10, 2010

Ex-president offers to wire more money back in return for release
Focus Taiwan, June 11, 2010

Nigeria: Ibori’s Bail Revoked, Re-Arrested in Dubai
Daily Trust, June 11, 2010

Governor-elect in Gangwon loses bribery appeal
JoongAng Daily (SK), June 11, 2010

Witnesses in Olmert graft case take the stand
Haaretz, June 11, 2010

Corruption Allegations Hit Slovak PM Fico on Eve of Election
Wall Street Journal, June 11, 2010

27 charged with drug smuggling in Operation Burrito Grande and Operation Imperial Strikes Back
Los Angeles Times, June 10, 2010

Bogota soccer team linked to money laundering
Colombia Reports, June 10, 2010

Continue Reading »

Jun
11

Campaign for a country by country reporting standard

Richard Murphy
June 2010: Call to action

Download here!

Guidance for engagement

Investors, governments, tax authorities, the IASB

Download here!

Background briefing

Download here!

Call to action: We have a unique chance to make new global rules for company reporting

  • to make companies publish what they pay for oil, gas and minerals
  • to get information essential to fighting tax evasion and corruption

A new global standard for extractive company reporting is under development right now. It has the potential to make oil, gas and mining companies:

  • publish what they pay to the government of each country in which they operate
  • publish what they extract, the costs of production, the production revenues and the reserves for each country in which they operate.

This new standard is called an International Financial Reporting Standard (IFRS). It is being developed by the International Accounting Standards Board (IASB). A formal Discussion Paper has been published. This contains discussion of some of the proposed requirements for country-by-country reporting that Publish What You Pay and the Tax Justice Network have been pushing for a number of years.

But there are big gaps and weaknesses in the proposals and opposition from industry actors risks turning this crucial moment into a missed opportunity. A lot is at stake. Powerful interests are opposed to reforms and will likely pressure the IASB to maintain the status quo.

The time for action is June and July 2010

We are in the middle of the consultation period on these proposals. This is a big opportunity. But it cannot be missed. The deadline for comments to the IASB is July 30th.

What you need to do……and how this pack can help you

Our top target, the IASB, formally prioritises the views of investors and companies, but we also think it will listen to government agencies and the media. We think it should also listen to civil society. So you will make a huge contribution to the campaign if you can:

  • Get investors to support what we’re asking for: in the section called ‘Guidance for engagement’, we give you information on how to frame the issues in ways that will appeal to investors, ways to identify and target investors, and a 3-page summary/letter to send to them.
  • Get governments and tax authorities to support what we’re asking for: later in the same section, we give you guidance on the different government departments to think about, arguments to use with tax authorities and a 5-page summary/letter to send to them.
  • Get the IASB to listen to your voice: later in the same section, we tell you how you can submit your own comments, encourage you to generate media coverage, and show you how to identify and lobby members of the IASB, its Trustees and Advisory Council.

There are other possible targets, like extractive companies and national associations of accountants. But these are best investigated case-by-case so we haven’t included them in this general Campaign Action Pack.

What to ask for: the problems with the proposals, and what needs to change

1. Companies should be required to report for each and every country in which they operate

We do not accept the current proposal to allow companies in the extractive industries to establish a cut-off point for country-specific reporting. We are particularly concerned by the proposal to allow the threshold to be set in terms of what is material for the company based on the size of national reserves relative to their international operations. This ignores the fact that reputational and legal risks are unrelated to the scale of operations. We also believe that the proposal to leave the decision on where to set the cut-off to the discretion of the company will reduce comparability of data, a key principle of international standards. Combined, we are convinced that this will leave the data on many countries still aggregated and inaccessible.

  • The requirement must be that companies should report for each and every country in which they operate. Suggested thresholds for reporting that are set in terms of what is quantitatively material to the company, and set at its own discretion, should be removed.

2. Information on specific payments to individual governments is essential

The current proposal recognizes that capital providers/investors have stated that they would find country-specific information on payments to governments useful to their decision-making. Other users of financial reports – like civil society and tax authorities – also anticipate significant benefits in assessing the appropriateness of payments and holding governments to account for their use. Companies should already have this country-specific information to comply with host government taxation reporting. Many will also need it to address anti-bribery and corruption legislation in their home countries. Therefore, additional costs should not be significant, making the proposal for further cost-benefit analysis unnecessary.

  • The IASB should recommend country-specific reporting of payments to governments without the need for further analysis, in the same way that it has done for other reporting requirements.

3. A minimum set of information is needed to ensure the coherence and credibility of what is reported by a company for operations per country

PWYP has identified six reporting types which would provide the minimum integrated set of data that should be disclosed to ensure accounting credibility. The IASB Discussion Paper treats this minimum package of data as a set of options by rejecting country-specific reporting requirements related to production revenues, subsidiaries and properties, and by failing to give a clear recommendation relating to payments to governments. But all elements must be required to allow meaningful judgments and comparisons.

Therefore the minimum package must include:

  • Benefits streams (payments) to governments should be disclosed for each country and broken down by payment types – the proposals do not make a clear recommendation on this
  • Reserves – the proposals make some recommendations here but also leave scope for only regional and sub-national data in some cases. Data should also be disclosed on a standard country-specific basis
  • Production quantities – the proposals make some recommendations here but also leave scope for only regional and sub-national data in some cases. Data should also be disclosed on a standard country-specific basis
  • Production revenues – should be disclosed on a country-by-country basis to ensure the consistency of the new IFRSfor extractive industries and prevent tax avoidance and evasion – this type of reporting is currently rejected by the proposals
  • Production and development costs – the proposals make some recommendations here but also leave scope for only regional and sub-national data in some cases. Data should also be disclosed on a standard country-specific basis
  • The names and locations of each key subsidiary and property in each country should be reported – the proposal paper claims these are already available but does not offer proof

4. There should be no reporting exemptions, as these are unnecessary, would undermine comparability and would increase pressure on ethical companies seeking to be transparent

The current proposal to give companies the option to exempt themselves from reporting payments to particular governments undermines the whole added value of an IFRS. It would remove the protection of a standard reporting requirement, leaving companies to explain to untransparent host governments why they were not using the exemption. Resulting non-reporting would reduce the comparability of company reports. Such exemptions are not needed since regulations like IFRSs would override restrictions of confidentiality clauses if applied in a uniform manner.

  • The IASB should remove the currently proposed exemptions. To protect companies, the standard should require disclosure of payments to all governments without exemptions.

5. There are many legitimate users of company financial reports other than investors and other capital providers and their needs must be considered by the IASB in the design of standards

The constitution governing the IASB states that it must act in the public interest and address the needs of the various users of company financial reports. In spite of this, the Discussion Paper explicitly rejects specific consideration of the needs of any users except capital providers/investors.

  • Other users of accounts – including employees, consumers, the public, civil society organizations and governments and their institutions – are each in their own right valid user groups of accounting data. Therefore, their specific information needs must be included in the criteria used to judge the benefits of proposed reporting requirements.
What you can find in the rest of this Campaign Action Pack

We’ve created some other materials to help you get into action vital for the campaign:

GUIDANCE FOR ENGAGEMENT: As described above, this section will help you identify specific targets and how to contact them, frames our issues in ways that will appeal to their agendas and provides 2 page summary/letters to help your communications with these priority groups. This has four sub-sections, to help you:

1. Getting investors to support what we’re asking for
2. Getting governments and tax authorities to support what we’re asking for
3. Getting the IASB to listen to your voice
4. National contact points – people acting as country focal points in particular countries

BACKGROUND BRIEFING: This is a source of detailed information and sources, relating to issues like:

a. The potential benefits of a new accounting standard – why it will have such reach
b. Global context for country-by-country reporting: mechanisms, precedents, progress
c. The IASB (International Accounting Standards Board): how it’s structured, how it operates, and debates on its accountability
d. Process and timeline for the creation of a new reporting standard
e. Key issues and gaps in Discussion Paper proposals – detailed analysis and references

Where can you get additional support?

A number of people have agreed to be focal points for the campaign in their particular countries. Their names and contact information are listed in section 4 of the Guidance for Engagement. If there is no one listed for your country, you can contact the international contacts. They are:

Joseph Williams, PWYP international office
Information & Advocacy Officer
jwilliams@publishwhatyoupay.org
Work:
+44 (0) 20 7031 1616
Mobile:
+44 (0) 77 7575 1170

Vanessa Herringshaw, Revenue Watch, London office
Director, Training and Capacity Building
vherringshaw@revenuewatch.org
Tel: +44 (0)7900 492631

Søren Kirk Jensen, Independent Policy Analysis
Consultant
soren@independentpolicyanalysis.net
Tel: +45 5015 5783

Richard Murphy (Tax Research LLP) has been providing a lot of technical support. But please note he is a freelance consultant, so there are limits on what support he can provide without remuneration!
Richard Murphy
Richard.murphy@taxresearch.org.uk
Work: +44 (0) 13 66 383 500
Mobile: +44 (0) 77 7552 1797

Your support is critical in our effort to mobilize stakeholders to endorse country-by-country reporting. Please keep us updated on developments – We’re looking forward to hearing from you!

Please click here to download the pdf version.

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Jun
10

Thursday’s Daily News Digest

Scott Fahey

US swagger and a Swiss surrender on banking secrecy
Financial Times, June 9, 2010

How Panama is Emerging as The Top Offshore Destination
PMC Group, June 9, 2010

Six more countries join fight against cross border market misconduct: IOSCO
Investment Executive (Canada), June 9, 2010

Overseas banks could shun US customers after ‘game-changing’ tax laws
Financial News, June 10, 2010

Liechtenstein Makes Pitch to Tax Evaders as Swiss Guard Secrecy
Bloomberg, June 10, 2010

Barbados: Just don’t call us a tax haven
Financial Post, June 9, 2010

Italy Launches Major Corporate Tax Probe
Tax-News.com, June 10, 2010

US soldiers charged with corruption in Afghanistan
AFP, June 9, 2010

Corruption watchdog to investigate Macdonald’s expenses
AAP (Australia), June 10, 2010

Biden: Impunity, graft and poor governance holds you back
The Standard (Kenya), June 10, 2010

Businessmen to Aquino: eliminate corruption in 1st 100 days
ABS-CBN News, June 10, 2010

Ribadu to be adviser on anti-corruption
Daily Trust, June 10, 2010

How Scott Rothstein gambled — and lost
Miami Herald, June 10, 2010

U.S. targets Mexican citizens, firms for money laundering
Xinhua, June 10, 2010

Continue Reading »

Jun
10

Brazil issues updated list of secrecy jurisdictions

John Christensen

Photo: Andre Maceira

Brazil’s ministry of finance has published a list of jurisdictions or dependencies that we would call secrecy jurisdictions. The accompanying press release notes that Brazil will be able to use special instruments to deal with tax planning structures.

The list, replacing a list of 53 jurisdictions published in 2002, contains two sections.

The first (below) contains 65 jurisdictions which do not tax income, or which tax at below 20%, or whose internal legislation does not allow access to information about the ownership or composition of legal persons (which includes corporations.) This includes the usual suspects such as the Channel Islands (“Ilhas do Canal”), Switzerland and Liechtenstein.

The second is a list of eight “privileged fiscal regimes” (regimes fiscais privilegiados) which do not necessarily have low tax rates but whose legislation contains fiscal privileges for certain types of legal persons.

We are heartened to see that several (but not all) jurisdictions that concern us are listed here, which are often excluded from official lists of secrecy jurisdictions. Of special interest is the inclusion of the United States on this list: the USA topped Tax Justice Network’s 2009 Financial Secrecy Index.

This second list involves:

Luxembourg (with respect to its holding companies;)

Uruguay (with respect to its Financial Investment Companies (Sociedades Financeiras de Inversão, Safis);

Denmark, with respect to its holding companies;

Netherlands, with respect to its holding companies;

Iceland, with its International Trading Companies (ITCs);

Hungary, with its offshore KFTs;

United States, with its state non-resident Limited Liability Companies (LLCs)

Spain, with its International Spanish Holding structures (Entidad de Tenencia de Valores Extranjeros;

Malta, with its International Trading Companies (ITCs) and International Holding Company (IHCs).

The first list is here (in the original Portuguese format):

I – Andorra;

II – Anguilla;

III – Antígua e Barbuda;

IV – Antilhas Holandesas;

V – Aruba;

VI – Ilhas Ascensão;

VII – Comunidade das Bahamas;

VIII – Bahrein;

IX – Barbados;

X – Belize;

XI – Ilhas Bermudas;

XII – Brunei;

XIII – Campione D’Italia;

XIV – Ilhas do Canal (Alderney, Guernsey, Jersey e Sark);

XV – Ilhas Cayman;

XVI – Chipre;

XVII – Cingapura;

XVIII – Ilhas Cook;

XIX – República da Costa Rica;

XX – Djibouti;

XXI – Dominica;

XXII – Emirados Árabes Unidos;

XXIII – Gibraltar;

XXIV – Granada;

XXV – Hong Kong;

XXVI – Kiribati;

XXVII – Lebuan;

XXVIII – Líbano;

XXIX – Libéria;

XXX – Liechtenstein;

XXXI – Macau;

XXXII – Ilha da Madeira;

XXXIII – Maldivas;

XXXIV – Ilha de Man;

XXXV – Ilhas Marshall;

XXXVI – Ilhas Maurício;

XXXVII – Mônaco;

XXXVIII – Ilhas Montserrat;

XXXIX – Nauru;

XL – Ilha Niue;

XLI – Ilha Norfolk;

XLII – Panamá;

XLIII – Ilha Pitcairn;

XLIV – Polinésia Francesa;

XLV – Ilha Queshm;

XLVI – Samoa Americana;

XLVII – Samoa Ocidental;

XLVIII – San Marino;

XLIX – Ilhas de Santa Helena;

L – Santa Lúcia;

LI – Federação de São Cristóvão e Nevis;

LII – Ilha de São Pedro e Miguelão;

LIII – São Vicente e Granadinas;

LIV – Seychelles;

LV – Ilhas Solomon;

LVI – St. Kitts e Nevis;

LVII – Suazilândia;

LVIII – Suíça;

LIX – Sultanato de Omã;

LX – Tonga;

LXI – Tristão da Cunha;

LXII – Ilhas Turks e Caicos;

LXIII – Vanuatu;

LXIV – Ilhas Virgens Americanas;

LXV – Ilhas Virgens Britânicas.

Continue Reading »

Jun
9

GFI’s Raymond Baker and Heather Lowe Published in The American Interest

Kelley Brescia

Global Financial Integrity released the following statement today.

Global Financial Integrity Feature Stories in Print: Director Raymond Baker and Director of Government Affairs Heather Lowe Appear in Latest Issue of the American Interest

WASHINGTON, DC — Pieces authored by Global Financial Integrity (GFI) director Raymond Baker and GFI director of government affairs Heather Lowe appear in the latest issue of the American Interest.  The July/August edition of the bimonthly publication hits newsstands this week and may be viewed online at http://www.the-american-interest.com/.

In his piece, “Transparency First,” Mr. Baker discusses the on-going process of reform to the global financial system, including regulatory reform for banks and other financial institutions.

The range of current ideas for correcting flaws in the national and global financial system is extensive,” writes Baker.  In lieu of “incremental changes that will leave holes big enough for the global economy to fall through again,” Baker explains how “transparency based reform accomplishes far more, far faster than regulation and oversight,” and could be the best insurance against another global financial meltdown.

Mr. Baker outlines a plan for legislating transparency noting that “an attack on secrecy is not at the same time an attack on privacy…Transparency does not diminish financial security, it adds to it.”

Ms. Lowe’s article, “Law as Leverage,” looks at domestic reform efforts around the problem of corporate opacity and secrecy jurisdictions.  “Despite the renewed focus on the link between financial transparency and economic stability, opacity is still spreading,” Ms. Lowe writes.

Ms. Lowe examines the Stop Tax Haven Abuse Act, the Energy Security Through Transparency Act, and the recently-passed Foreign Account Tax Compliance Act.

“The legislation described here that is now pending in Congress represents an important start to solving several problems…Yet the attentive American public, which has been deluged with information about how to rein in Wall Street’s excesses, knows practically nothing of these measures, and the lack of knowledge could be a problem.”

Mr. Baker and Ms. Lowe are frequent contributors to various international, financial, and legal publications including recent pieces published in the The New York Review of Books and the American Bar Association International Anticorruption Committee newsletter.

Mr. Baker is the author of Capitalism’s Achilles Heel: Dirty Money and How to Renew the Free-Market System.  He has for many years been an internationally respected authority on corruption, money laundering, growth, and foreign policy issues, particularly as they concern developing and transitional economies and impact upon western economic and foreign interests.

Ms. Lowe draws upon extensive international legislative experience in banking and finance law to produce pieces on everything from U.S. domestic financial reform to international tax information exchange treaties.

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