This weekend, The Economist—building off information discovered by Task Force member Global Witness—released an extensive feature on the operations of the “Queensway syndicate,” a corporate partnership centered around the trade of oil from Angola to China. Through a series of shell companies, family relations, and personal ties dating back to the Cold War, a network of Chinese and Angolan business-people purportedly dominate many African resource markets, generally doing so through illicit means.
In order to gain access to valuable mineral resources across the African continent, the syndicate allegedly promised developmental aid, generally in the form of infrastructure development, which is crucially needed in many of these under-performing economies. However, many of those purported promises have turned out to be empty:
Zimbabwe is still awaiting even a fraction of its promised infrastructure. Guinea never received the 100 public buses that were meant to arrive within 45 days of the 2009 deal.
Price That Poor Countries Pay for Illegal Exit of Illicit Capital From Their Economies
Business Daily, August 14, 2011
A look at the world’s new corporate tax havens
60 Minutes, August 14, 2011
Special report – The bonds that turned to dust
Reuters, August 15, 2011
Inside “secrecy jurisdictions”
Reuters, August 15, 2011
Credit Suisse Likely to Settle Criminal Tax Probe, Lawyers Say
Bloomberg, August 15, 2011
Fixing arm’s length price
Hindu Business Line, August 13, 2011
David McNair of Christian Aid has an article under the first part of the above title in the Guardian today.
David is right to draw attention to the toxic nature of a new deal between Germany and Switzerland – but the UK is also set to sign such a deal very soon.
I wrote about this in May, saying the following, and nothing has changed since:
The FT reported today that the UK is to shortly sign a new tax deal with Switzerland. As it said:
Britons with billions of pounds hidden in Switzerland will pay tax at 50 per cent under a groundbreaking deal that will legitimise their undeclared assets, according to a source familiar with negotiations between the Swiss and British governments.
The agreement, which is expected to be announced this month, marks a shift in emphasis in the international crackdown on tax havens. Over the past two years, the focus has been on lifting bank secrecy and exposing evaders.
Under the deal, £3bn is expected to be raised over the course of this parliament and investors will also pay a one-off retrospective levy in recognition of past unpaid tax.
I’m pretty confident you won’t have read it, but this week’s edition of Transfer Pricing Week saw Vodafone’s tax director, John Connors, publicly enter the debate regarding Christian Aid’s campaign for country-by-country reporting.
For some time now we have been talking with Vodafone about tax and development and trying to convince it that it should get on top of this crucial issue. And Vodafone has acknowledged that we have ‘had some interesting discussions.’
This week, that conversation went public – and this is something we welcome. We are campaigning for transparency after all.
Connors said in the article that ‘country-by-country reporting is a little misguided’ suggesting that our campaign is based on ‘fanciful numbers and figures of the impact of tax avoidance and transfer pricing.’
When we launched our first tax report, I was working in Ireland – where I got all kinds of abuse for the things we were saying – but things have changed.
Now, when we talk about tax and development and country-by-country reporting we are in good company. Since we started working on the tax, the G20, the OECD, the EU and the UN have started taking our proposal very seriously.
India stud farm owner jailed for ‘illegal money’ freed
BBC News, August 12, 2011
Seeking Sunlight: The Stop Tax Haven Abuse Act
TrustLaw (Blog), August 11, 2011
Export and import mispricing; the big cloud over dirty cash
Business Daily (East Africa), August 12, 2011
Germany has set back the fight against tax evasion
The Guardian, August 12, 2011
Italy turns on the ‘parasites on society’ in tax clampdown
Daily Telegraph, August 11, 2011
The best of weeks, the worst of weeks for Switzerland
Financial Times, August 12, 2011
There is a lot about the world that defies explanation. But if we do know one thing it’s that the world is a complicated place. That answers aren’t always obvious. That you have to look at short-run and long-run dynamics, with the full inter-play of all the forces, to truly begin to understand why things in our world happen as they do.
The tragic famine that struck Somalia this summer is no exception to this rule, which occurred as East Africa faced one its worst droughts in 60 years, precipitated by dangerously low rainfall, depleting food supplies, and rising prices of basic necessities like grains and milk. But droughts and food shortages do not by extension lead to famines, which the United Nations conservatively will only declare when “acute malnutrition rates among children exceed 30 percent, more than 2 people per 10,000 die per day and people are not able to access food and other basic necessities.” While food shortages are, perhaps, necessary for famine, they are not sufficient. In today’s world starvation is the product of not only biological and economic forces, but political ones, too.
The draught was not confined to Somalia. In fact, food shortages are plaguing the entire Horn of Africa, which includes Kenya, Ethiopia, Sudan, and Eritrea. American officials estimate that across the region, more than 10 million people need emergency rations to survive. But the UN has declared the catastrophe an official famine in only two areas southern Bakool and Lower Shabelle, both are in southern Somalia, both are controlled by the lethal militant group, al-Shabab. There are reasons for this.
Black money: Is Indian law tightening grip?
Economic Times, August 11, 2011
Book Reviews: Treasure Islands and Only the Super-Rich Can Save Us!
Seeking Alpha, August 10, 2011
Colombia loses $13.3B a year through sales tax evasion, smuggling
Colombia Reports, August 10, 2011
Fallen Angels: Italy’s Top-Heavy Corruption And Never-Ending Appeals
Wall Street Journal, August 10, 2011
Political dysfunction fuels Italy financial crisis
Associated Press, August 10, 2011
Deere Faces Scrutiny for Possible Bribery Violation
Wall Street Journal, August 11, 2011
We already blogged about the signing yesterday of the Swiss-German tax deal, and TJN’s opposition to it. This blog goes into a little more detail than before, and outlines some of the salient points of the deal. This is something that matters a great deal – because several other countries are believed to be considering doing something similar. Which, in TJN’s view, would be a grave mistake.
(Our last blog also highlights the strange, even fishy-looking timing of this deal.)
A similar agreement with the UK will follow soon, probably within just days or weeks. It is important that civil society and parliamentarians in the UK and elsewhere understand the treaty and its implications. They will soon be facing a similar deal.
Multinationals, not corrupt politicians are the biggest source of dirty money flows
Business Daily Africa, August 10, 2011
Goldman Sachs Facing Foreign Corrupt Practices Act Investigation
Bloomberg, August 10, 2011
West Africa Rising: New effort to boost regional trade by fighting delays, corruption
Christian Science Monitor, August 9, 2011
Indonesian mining industry ‘lacks transparency’
Jakarta Post, August 10, 2011
Swiss, Germany Agree to Settlement in Tax-Evasion Dispute
Bloomberg, August 10, 2011
VAT Fraud Costing Bulgaria Billions
Reporting Project, August 10, 2011
Illegal poaching and trade of wildlife is a massive problem for developing countries, particularly those in Asia. Often these
products find their way across boarders—stuffed into suitcases, packed into trucks, and occasionally carried. Protected and endangered species are killed and sold for their organs, flesh, bones, skin, and scales, which are turned into tonics, ornaments, meat, and traditional medicines. Many of these animals are endangered or protected. Of all the illegal wildlife product seizures in Australia last year, two-thirds were traditional medicines containing ingredients from endangered species. Global Financial Integrity has estimated that the illegal trade in wildlife among residents of developing countries generates about $US10 billion annually.
But the truth is these numbers drastically underestimate the true value of these assets and the illicit extraction’s true cost to development. Some resources have enormous value when they are extracted and then sold (for example, diamonds and oil). These resources, called natural resource products, often have an extractive value that far exceeds their non-extractive value. But other resources have value in situ that does exceed their extractive values. For example, forests yield timber through an extractive process, and that timber has monetary value on a market. But forests also have recreational value to backpackers and hikers and provide ecosystem protection, including flood control and carbon dioxide sequestration.
Italy Tries to Get Tax Cheats to Pay Up
New York Times, August 8, 2011
Lawmakers target “shell” companies
Wyoming Tribune Eagle, August 8, 2011
Bribery websites up and running
China Daily, August 9, 2011
Reports: Bahamas Gov’t Failed to Co-operate with Investigation Into Bank Scandal
The Tribune, August 8, 2011
Court orders Admiralty to air Chile deal
Sydney Morning Herald, August 9, 2011
Anti-corruption protests hit parliament
Reuters, August 9, 2011
On p28 of the UK edition of Treasure Islands, I write:
Almost no official estimates of the damage exist. The Brussels-based non-governmental organisation Eurodad has a book called Global Development Finance: Illicit flows Report 2009 which seeks to lay out, over a hundred pages, every comprehensive official estimate of global illicit international financial flows.
Every page is blank.
It’s a gimmick, but an important and telling gimmick. (Take a look at the picture: if you’re interested, the book’s cover looks like this). Now, for something I wrote yesterday on the TJN blog:
A startling quote from James K. Galbraith:
December 5, 2013·
The FACT (Financial Accountability and Corporate Transparency) Coalition today praised Representative Lloyd Doggett (D-TX) and Representative Rosa DeLauro (D-CT) for the introduction ...
December 3, 2013·
Transparency International’s Corruption Perceptions Index 2013 offers a warning that the abuse of power, secret dealings and bribery continue to ravage societies ...
November 25, 2013·
Some of the world’s most infamous secrecy jurisdictions, such as the British Virgin Islands and Jersey are considering becoming more transparent, whereas ...