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May
20

Revenue Transparency: because God doesn’t like secrets

Tax Justice Network

The Huffington Post is carrying an interesting editorial by Peg Chamberlain, President of the National Council of Churches of Christ, an ecumenical consortium of Christian denominations in the United States.

In the Gospel of John, Jesus states that those who do what is right do so in the light, while wrong-doers shroud their deeds in secrecy and darkness.
. . .
That is why so many in the faith community are strongly supporting an amendment to the financial reform bill that would require greater transparency for these companies.

TJN is open to all faiths, and to all non-believers, and all fence-sitters, we are firmly aligned with the thinking outlined above.

The Energy Security Through Transparency (ESTT) Amendment to the U.S. Financial Service Reform Bill, sponsored by Senators Cardin, Lugar, Schumer and Wicker, would require extraction companies to report what they pay to foreign governments. The bill would make the U.S. an implementing country for the Extractive Industries Transparency Initiative (EITI) and companies listed on U.S. stock exchanges would disclose in their regular SEC filings their extractive payments to foreign governments for oil, gas and mining which builds on the EITI requirement that all extractive companies operating in an EITI implementing country must report their payments to the government.

“Why is this important? Because oil, gas, and mining revenues are critically important economic sectors in about 60 developing and transitioning countries. Paradoxically, these “resource-rich” countries are also home to more than two-thirds of the world’s poorest people and have been home to horrific acts of violence committed by those seeking to exploit those resources. Corruption and greed born of secrecy has led to the exploitation and oppression of thousands of people.”

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May
20

Eva Joly Responds to Tax Superhero Award, Renews Commitment to Fight Illicit Financial Flows

Clark Gascoigne

Eva Joly made the following statement in accepting Christian Aid’s 2010 Tax Superhero of the Year Award today:

Christian Aid announces the winner of the 2010 Tax Superhero of the Year award in the City of London on Wednesday.

‘I would like to thank Christian Aid as well as all the people who took part in the vote for this award. It is a great honour. I am very happy if my work can contribute to making the public aware of the damages of tax dodging on developing countries.

‘ Illicit financial flows from developing countries represents today roughly 10 times more than development aid. This vast sum is of absolute necessity for developing countries to face the current crises as well as to fulfil the basic needs of their citizens.

‘I am convinced that, if a binding mechanism is put in place, forcing Multinational Corporations to declare the profit they make and the taxes they pay in every developing country, Millennium Development Goals can be easily financed by developing countries’ themselves.

‘This award is a strong encouragement for me to keep on fighting against illicit financial flows and for more justice. Together with NGOs, in particular Christian Aid, I promise I will continue my work on this major topic.’

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May
20

Eva Joly Wins Christian Aid’s Tax Superhero of the Year Award!

Clark Gascoigne

From Christian Aid:

WINNER OF TAX SUPERHERO AWARD ANNOUNCED

Eva Joly chairs the European Parliament’s Committee on Development

Christian Aid today announced the winner of its Tax Superhero of the Year award, which recognises outstanding individual work on the potential of tax to change the world.

Eva Joly, an activist, European politician and former judge, has beaten other nominees including the comedians Ricky Gervais and Graham Norton and is the winner of this year’s Award.

Norwegian-born Joly was elected as a Member of the European Parliament in 2009 for the Europe Ecologie list and represents Ile de France. She also chairs the Parliament’s Committee on Development. Her work has shifted the terms of the international debate about the vital importance of tax revenues to developing countries.

As a judge in France, Ms Joly famously investigated a half-billion Euro corruption scandal involving the state-owned oil company Elf-Acquitane, and received death threats as a result. Thirty people were eventually convicted in connection with the affair.

‘Eva Joly has a proud record of championing the vital role that tax revenues play in both rich and poor countries – and also of successfully fighting corruption,’ said Helen Collinson, Christian Aid’s Campaign Manager, Economic Justice. ‘She is an outstanding ambassador for tax justice and good governance.’

Christian Aid will officially announce Ms Joly’s award outside the Royal Exchange building in the City of London during its Alternative Tax Awards 2010 ceremony, from 9.30am on Thursday, 20th May. The date coincides with accountants’ own awards bash at London’s Park Lane Hilton.

In addition to Ms Joly, Christian Aid also received nominations for comedians Ricky Gervais and Graham Norton, for tax justice campaigners John Christensen, Richard Murphy and Alvin Mosioma and for investigative reporter Denis Roberts. Other nominees were the singers Billy Bragg and Katie Melua, the novelist Rhidian Brook and the Christian Aid board member Phil Hodkinson. Another nomination was for the organisation Blood:Water Mission, which works on HIV/AIDS and water.

Christian Aid launched its Alternative Tax Awards in 2009, to highlight its campaign about the vital importance of tax for developing countries. The organisation estimates that they currently lose around $160 billion a year as a result of tax dodging by unscrupulous companies trading internationally. This is a vast sum, equal to roughly one-and-a-half times the amount of money that they receive in development aid each year.

‘The money urgently needed to pay for education, medical care, sanitation and other public services which we in the UK take for granted,’ said Helen Collinson.

Christian Aid is campaigning for the introduction of a new accounting standard, country-by-country reporting, which would require multinational companies to publish the profits they make and the taxes they pay in every country in which they operate. It is also working towards the automatic, multilateral exchange of tax information between countries, to help governments more effectively counter tax dodging. In addition, the organisation supports the strengthening of poor countries’ collection of tax domestically, to help strengthen their governments’ accountability to their citizens.

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For more information, pictures, videos or interview requests, please contact Rachel Baird on 0207 523 2446 or 07545 501 749 or rbaird@christian-aid.org

Christian Aid works in some of the world’s poorest communities in around 50 countries. We act where the need is greatest, regardless of religion, helping people build the life they deserve.

Poverty is an outrage against humanity. It robs people of dignity, freedom and hope, of power over their own lives. Christian Aid has a vision – an end to poverty – and we believe that vision can become a reality. We urge you to join us.

Christian Aid is a member of the Task Force on Financial Integrity and Economic Development.

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May
19

Wednesday’s Top News Stories

Clark Gascoigne

The Wall Street ICEcapade
The American Interest, May 18, 2010

Swiss business dismisses EU membership
Swissinfo.ch, May 19, 2010

Cantons urge parliament to approve UBS deal
World Radio Switzerland, May 19, 2010

Swiss Government: Rejection Of UBS Pact Would Reignite US-Swiss Spat
Dow Jones Newswires, May 19, 2010

Swiss banks’ mantra of ‘go east’ carries risks
MarketWatch, May 18, 2010

EU Moves to Tighten Control of Hedge Funds
The Wall Street Journal, May 19, 2010

Company at Center of Manas Fuel Probe May Have Ties to Afghan Entities
EurasiaNet.org, May 19, 2010

EMC Founder Egan Cheated IRS While Envoy, Judge Says (Update1)
Bloomberg News, May 19, 2010

Italy Investigates 7,000 HSBC Account Holders for Tax Evasion
Bloomberg News, May 19, 2010

Rp 3.6 billion alleged tax fraud emerges
The Jakarta Post, May 19, 2010

Denmark’s Hansen fined $1.1M for tax evasion
The Associated Press, May 19, 2010

China And HK Examine Transfer Pricing
Tax-News.com, May 19, 2010

Nigerian police probe Siemens bribery scandal link
Reuters, May 19, 2010

Indonesian Graft-Busting Credentials Tested by Lucky Fish Bribe
Bloomberg News, May 19, 2010

Indonesia awaits new finance minister
The Associated Press, May 19, 2010

Fraud Rose in Europe as Budgets Fell, Ernst & Young Survey Says
Bloomberg News, May 19, 2010

Ex-NJ lawmaker is convicted in corruption probe
The Associated Press, May 19, 2010

Illiteracy, corruption hamper Afghan police: NATO
Reuters, May 19, 2010

Nigerian President Sets Priorities for His Administration
VOA News, May 19, 2010

Mo. auto dealer pleads guilty to aiding al-Qaida
Associated Press, May 19, 2010

Ecuador Expects To Leave Money Laundering List In June -Official
Dow Jones Newswires, May 19, 2010

Man or Myth? American Drug Lord ‘La Barbie’ Fascinates and Terrorizes
ABC News, May 19, 2010

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May
19

Levin-Merkley Amendment Would Shed Light on an Opaque Financial System, Says GFI

Clark Gascoigne
Offshore Clearinghouse is Systemic Product of a Lack of Transparency;
Senate Leadership Decision to Prevent Vote on Amendment is Troubling

Senator Carl Levin (D-MI) speaks at the 2009 annual conference of the Task force on Financial Integrity and Economic Development in Washington, DC.

WASHINGTON, DC (GFI) – The fate of a crucial element of financial reform efforts, an amendment proposed to the Financial Stability Reform Act by Senators Carl Levin ((D-MI) and Jeff Merkley (D-OR) is in limbo ahead of a cloture vote scheduled to take place on the Senate floor later today.   The proposed amendment—which will reportedly be prevented from receiving a vote on the Senate floor—will ban banks from proprietary trading, and its omission from the financial reform bill would set back critical efforts to increase transparency in offshore financial markets, said Global Financial Integrity today.

An article published last night in the American Interest by investigative journalist, Lucy Komisar, outlines some of the crucial elements of the amendment, the problem of proprietary trading, and highlights one glaring example of how bankers game the system to evade taxes with the case of ICE Trust.

“Clearinghouses such as ICE Trust U.S. move large sums of money around the world,” writes Komisar.  “ICE Trust is located in the Cayman Islands.  Yet none of the owners of ICE Trust Holding Co. are based in the Caymans.”

Ms. Komisar’s article outlines how an entity such as ICE Trust U.S. is a “blocking company” whose owners benefit from the fact that the IRS and other U.S. financial regulators have differing views of responsibility and jurisdiction when it comes to monitoring and regulating offshore markets.  Ms. Komisar quotes Adam Rosenzweig of Washington University Law School as saying:

“The SEC and the Federal Reserve are treating ICE Trust U.S. as the place the action is going on.  The tax law looks at ICE Trust U.S. and says all the action is happening at the holding company level in the Caymans.  They are exploiting the benefit of being in the United States for regulatory purposes and being a foreign entity in the Caymans for tax purposes.”

According to Ms. Komisar’s piece, without the Levin-Merkley amendment banning proprietary trading, entities like ICE Trust will continue to help American banks conduct credit default swap trades while dodging millions of dollars in taxes.

The cloture vote is scheduled for this afternoon.  Roll Call reports that Senator Levin has expressed reservations about voting for cloture without the proposed amendment.  The rest of the Senate should take note.

To read the full article by Lucy Komisar, visit www.the-American-Interest.com or click here…

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Global Financial Integrity (GFI) promotes national and multilateral policies, safeguards, and agreements aimed at curtailing the cross-border flow of illegal money.  In putting forward solutions, facilitating strategic partnerships, and conducting groundbreaking research, GFI is leading the way in efforts to curtail illicit financial flows and enhance global development and security.

For additional information please visit www.gfip.org.

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May
18

Tuesday’s Top News Stories

Clark Gascoigne

Transparency in Financial Reform: Because God Doesn’t Like Secrets
The Huffington Post, May 18, 2010

Greek minister sacked over husband’s taxes
Financial Times, May 18, 2010

UBS may face US suits if parliament kills deal: Swiss minister
Reuters, May 16, 2010

EU Lawmakers Ok Rules For Hedge Funds,Private Equity
The Wall Street Journal, May 17, 2010

The AIFM directive: Another European mess
The Economist, May 18, 2010

Opinion: Tories are foolish to line up Northern Ireland as a tax haven
The Guardian, May 18, 2010

India, US end row over taxing captive units
The Economic Times, May 18, 2010

Seedy underworld of human trafficking
BBC News, May 18, 2010

Corruption, Mismanagement Strangle Vital Kenyan Watershed
New York Times, May 18, 2010

FIFA wants ‘bribery’ probe report before World Cup
The Associated Press, May 18, 2010

Police want Lieberman charged for obstructing corruption probe
Haaretz, May 18, 2010

Ambassador denies bribery in Africa independences
The Angola Press Agency, May 18, 2010

Panama looking to exit OECD gray list
Newsroom Panama, May 17, 2010

Gibraltar bank appeals against 1.7 million euro fine by Spain alleging money laundering
Panorama (Gibraltar), May 18, 2010

Legislators approve laws on trade and environment
The Taipei Times, May 19, 2010

AG King asks U.S. Senate to help Mexico fight border violence, human trafficking
The New Mexico Independent, May 18, 2010

‘FM looking into IPL tax evasion, money laundering’
Press Trust of India, May 18, 2010

House Panel to Quiz Top Banker Over Tax Cases
The Jakarta Globe, May 18, 2010

Alleged new tax fraud case worth Rp 3.6 trillion uncovered
The Jakarta Post, May 18, 2010

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May
18

Task Force seeking PhD economist to direct new data program

Christine Clough

The Task Force is currently accepting applications for Program Director of our new Economic Transparency Initiative (ETI).  Qualified candidates will have a PhD in macro economics, fluency in English and a second language (preferably French), and strong written and verbal communication skills.  Our goal for ETI is to significantly increase the amount and types of data available to the public related to illicit financial flows, so that we can better understand the nature and volume of the problem and then apply this knowledge towards amelioration efforts.

A full description of the position and qualifications is available in the jobs section of the Task Force website.  Applications are due by June 4 at 11:59 ET.

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May
17

15,000 US offshore tax evaders

Richard Murphy

Significant Number of Offshore Asset Cases to be Done by End of Year, IRS Officials Say | US Law Watch | BNA International.

As US Law Watch reports:

The Internal Revenue Service has assigned cases to agents for nearly all of the 15,000 taxpayers who came in under the special program to allow voluntary disclosures of offshore assets that ended last October, and expects a significant number of cases to be closed by the end of the calendar year, senior IRS officials said May 8.

As ever, you can be sure that’s the tip of the iceberg.

And as ever it proves these things.

First, offshore tax evasion is as serious as I and others claim it to be.

Second, it can only take place because vast numbers of people in secrecy jurisdictions turn a blind eye to it, very deliberately and very knowingly.

Third, more action is needed to tackle it.

Fourth, the case for more transparency is made, yet again.

Fifth, automatic information exchange  is essential.

But still the lawyers, accountants and bankers argue for secrecy.

Could it be that’s because they’re making money from this illegality?

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May
17

Monday’s Daily News Round-Up

Clark Gascoigne

Toothless parliament a symbol of Africa’s failed ambitions
The Globe and Mail, May 17, 2010

Possible ties to murky finance system examined
The Boston Globe, May 15, 2010

Swiss retreat helps Transocean save millions
The Associated Press, May 15, 2010

Viking raider has days to lift veil on tax haven assets
The Sunday Times (of London), May 16, 2010

Top football clubs flee to tax havens
The Sunday Times (of London), May 16, 2010

Tax Evasion: Lagos Shuts 250 Companies
This Day, May 17, 2010

Swiss banker turned whistleblower ended up with a prison sentence
The Washington Post, May 16, 2010

Greece says will clean up corruption in politics
Reuters, May 16, 2010

Ibori: EFCC, Met Police Meet for Extradition
This Day, May 17, 2010

Tymoshenko Summons Postponed
Radio Free Europe / Radio Liberty, May 16, 2010

Suspended IPL chief replies to graft charges
AFP, May 15, 2010

Taxing issues for multinationals
The Sunday Business Post (Ireland), May 16, 2010

Hearing in offshore betting case expected
United Press International, May 16, 2010

34 reputed mobsters indicted in New Jersey
The Associated Press, May 15, 2010

Court re-issues arrest warrants for Swiss directors of Cotecna
The Daily Times (Pakistan), May 16, 2010

Maltese link to San Marino bank being investigated
The Malta Independent, May 16, 2010

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May
14

Friday’s Top News Round-up

Clark Gascoigne

U.S. Firms Dodge Billions in Taxes by Moving Profits Overseas (Video)
World News with Diane Sawyer, ABC News, May 13, 2010

Profit Exports Import U.S. Tax Cuts for Pfizer, Lilly, Oracle
Bloomberg, May 14, 2010

Pharma’s ‘aggressive’ tax-avoidance tactics draw fire
FiercePharma, May 14, 2010

Greek ‘tax-dodging’ doctors named
BBC News, May 14, 2010

ECOFIN: Move On Hedge Fund Law Likely Despite UK Fears
Dow Jones Newswires, May 14, 2010

New UK aligns with US on hedge funds
Associated Press, May 14, 2010

Editorial: A matter now less taxing
Mint (India), May 14, 2010

Star magistrate warns of intense Iceland bank probe
AFP, May 14, 2010

Italy bribery scandal widens, casts pall on government
Reuters, May 14, 2010

Small-time corruption Greece’s big problem
Sydney Morning Herald, May 15, 2010

Nigerian Ruling Party Boss Resigns Over Graft Allegations
Voice of America, May 14, 2010

US: Poor Governance, Corruption Militating against Nigeria’s Progress
This Day (Nigeria), May 14, 2010

Zimbabwe: MPs Must Partake in Anti-Corruption Drive
The Herald (Zimbabwe), May 14, 2010

Nigerian politician faces extradition to Britain on money laundering charges
Daily Telegraph, May 14, 2010

Money Laundering Threatens L. American Banks
Xinhua, May 14, 2010

Daniel Tzvetkoff Answers Money Laundering Charges
Gambling 911. May 14, 2010

SA To Review Offshore Insurance Issues
Tax-News.com, May 14, 2010

Imminent End of Secrecy to Shake Up Swiss Banking
New York Times, May 14, 2010

ActionAid welcomes the new Secretary of State for International Development, Andrew Mitchell
ActionAid Press Release, May 14, 2010

Blood Diamonds: Still Bloody
WorldPress.org, May 14, 2010

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May
13

Thursday’s News Round-up

Clark Gascoigne

Offshore Centers Attract Larger Share Of Illicit Funds–Report
Dow Jones Newswires, May 13, 2010

Companies Dodge $60 Billion in Taxes Even Tea Party Condemns
Bloomberg, May 14, 2010

Swiss Whittle Away at Banking Secrecy
The New York Times, May 13, 2010

Swiss court requested to allow I-T to probe Hasan Ali’s wealth
The Economic Times, May 13, 2010

Obama committed to passing free-trade deals: Clinton
Reuters, May 12, 2010

Faisal Shahzad used “Hawala” System to Get Money, Sources Say
CBS News, May 13, 2010

Chasing Taliban’s overflowing coffers, cash couriers
CNN, May 13, 2010

Half of Russians believe bribery solves “problems”
Reuters, May 13, 2010

500 euro note – why criminals love it so
BBC News, May 13, 2010

Zardari’s ‘Eureka’ moment to see end of troublesome Swiss graft cases
Oneindia, May 13, 2010

Ibori arrested in money-laundering probe
Financial Times, May 13, 2010

Money laundering failure triggers £140k fine
FT Advisor, May 13, 2010

Afghanistan’s governance problem
Al Jazeera, May 13, 2010

Italian notables feel heat of corruption scandal
Financial Times, May 13, 2010

Offshore Hedge Funds moving to Europe
HedgeCo.net, May 13, 2010

HK Not In OECD’s Sights
Tax-News.com, May 13, 2010

Guernsey: Chief Minister Reinforces Guernsey’s Tax Credentials in Washington
Mondaq News, May 13, 2010

Editorial: Step in Right Direction On Money Laundering
Jakarta Globe, May 13, 2010

Tax czar ready for fight with multinationals
The Korea Times, May 13, 2010

South Africa Acts Against Tax Evasion
Tax-News.com, May 13, 2010

Amid OECD pressure, Marshalls signs second tax information exchange treaty
Radio New Zealand International, May 13, 2010

Hong Kong, Hungary Sign Pact To Avoid Double Taxation, Tax Evasion
Dow Jones, May 13, 2010

HK, Kuwait sign tax pact
Government of the Hong Kong

Macau resident convicted in US of illegal defense exports
AFP, May 13, 2010

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May
13

On the Dirty Money Trail-New Report Tracks Hundreds of Billions in Illicit Finances to Points of Deposit

Clark Gascoigne

WASHINGTON, D.C.—A report released today from Global Financial Integrity (GFI) examines where trillions of dollars in illicit finances—the proceeds of crime, corruption, and tax evasion—are being deposited.

The new report, The Absorption of Illicit Financial Flows from Developing Countries: 2002-2006, rounds-out the groundbreaking analysis put forward in GFI’s 2008 report Illicit Financial Flows from Developing Countries: 2002-2006, which estimated that the developing world was losing $1 trillion per year to illicit financial practices.

The report will be revealed at a media event May 13th, 12:00pm-1:30pm, at the National Press Club in Washington, D.C.

Report findings will include:

  • Where does the $1 trillion in illicit capital flight from developing countries end up?
  • What are the regional trends for illicit financial outflows? Are there linkages between the country origin and the point of deposit?
  • What impact did the terrorist attacks of 2001 have on illicit flows and the global shadow financial system?
  • Who is responsible for keeping track of total cash deposits moving through the world financial system and how accessible is that information to the general public and national governments?
  • What impact does the annual loss of hundreds of billions of dollars have on developing nations?
  • How are these hundreds of billions of dollars removed from developing countries and how may these illicit financial outflows be curtailed?

“We are crossing a threshold in global finance regulation and poverty alleviation with these illicit flows studies,” said GFI director Raymond Baker. “For every $1 in aid that the Western world is sending into developing countries, $10 is lost. Our first report looked at how much these countries were losing. Today we have an idea of where that money is ending up. Halting this annual loss of capital is crucial to successful poverty alleviation and economic development.”

To RSVP for Thursday’s event, request a copy of the report, or schedule an interview with GFI spokespersons contact Monique Perry Danziger, mdanziger@gfip.org, 202-294-0740.

Lunch will be served.

The full report can be downloaded here…

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