Tax Haven Hypocrisies

What are the Group of 20 countries really up to, with their grand plans against tax havens?  France’s Nicolas Sarkozy had been particularly noisy on that score, hoping for tough sanctions against off shore centers intent on evading tax officials.  Such moves are ostensibly based on an effort to cleanse the global financial system of this “scourge” – capital that moves in less than mysterious fashion to areas of lesser accountability and higher returns.

The G-20 countries, after their London labours, were meant to produce a “blacklist” of recalcitrant jurisdictions.  But as Alexander Neubacher of the German magazine, Der Spiegel, rightly remarks, it must be one of the shortest blacklists in history.  With remarkable deftness, a list that would have seemed impressively long seemed startlingly short.  None, to be exact.  Overnight, tax havens had, it would seem, ceased to exist.  No country was willing to throw their hat in the ring – we are all saints in the financial system now.

The reasoning behind this sudden willingness to make such escape options for enterprising businesses and individuals disappear is clear enough.  No country wants sanctions on the basis that they offer such services.  The official communiqué of the G-20 London summit trumpeted with confidence that, “The era of banking secrecy is over” promising stern measures against countries not in accord with the “international standard for exchange of tax information.”

How did tax havens and associated countries miraculously purify themselves overnight?  A solemn assurance to abide by the new rules was all that was required, an odd kind of gentleman’s agreement.  Given the recent chapters in banking and financial irresponsibility, this provision is barely believable.

The G-20 gloss has also given the impression that tax havens and abuses are the stuff of small offshore states, exotic retreats with little or no regulation to speak off.  Nothing similar could, it is implied, take place within the states of the OECD itself.  Surely.  This, is far from true.  As the Economist pointed out last month (March 26), “The most egregious examples of banking secrecy, money laundering and tax fraud are found not in remote alpine valleys or on sunny tropical isles but in the backyards of the world’s biggest economies.”

The OECD has been busying itself with drawing up a blacklist of tax havens for sometime, an exercise that is weakened by what it leaves out.  In fact, the OECD nations control a staggering 80 percent of the world’s “offshore” market, with many member states qualifying as havens themselves.  Additionally, it has only focused on smaller jurisdictions, suggesting, perhaps, an anti-competitive bias in the whole exercise.

One key offender is, unsurprisingly, the United States, where reporting requirements in such states as Delaware, Wyoming and Nevada are skimpy.  Indeed, political scientist Jason Sharman of Griffith University in Australia argues that the US is worse on such things as shell corporations than classic tax havens, more so than Liechtenstein or Somalia.  The state of Nevada boasts, through its website, “limited reporting and disclosure requirements” along with rapid incorporation services.   Shareholders do not need to be named, and information is rarely shared with the federal government.  Given such services, the ratio of companies to people in that state is roughly one to six.

The new regime of strict bookkeeping and accountability must, as ever, take root within the OECD states before the tentacles are extended to jurisdictions of little consequence to the financial system.  After all, the diligent evasion of financial regulations and rules, the result of an ideological mania, began there.

BINOY KAMPMARK was a Commonwealth Scholar at Selwyn College, University of Cambridge.  Email: bkampmark@gmail.com


More articles by:

Binoy Kampmark was a Commonwealth Scholar at Selwyn College, Cambridge. He lectures at RMIT University, Melbourne. Email: bkampmark@gmail.com

March 21, 2018
Paul Street
Time is Running Out: Who Will Protect Our Wrecked Democracy from the American Oligarchy?
Mel Goodman
The Great Myth of the So-Called “Adults in the Room”
Chris Floyd
Stumbling Blocks: Tim Kaine and the Bipartisan Abettors of Atrocity
Eric Draitser
The Political Repression of the Radical Left in Crimea
Patrick Cockburn
Erdogan Threatens Wider War Against the Kurds
John Steppling
It is Us
Thomas Knapp
Death Penalty for Drug Dealers? Be Careful What You Wish for, President Trump
Manuel García, Jr.
Why I Am Leftist (Vietnam War)
Isaac Christiansen
A Left Critique of Russiagate
Howard Gregory
The Unemployment Rate is an Inadequate Reporter of U.S. Economic Health
Ramzy Baroud
Who Wants to Kill Palestinian Prime Minister Rami Hamdallah?
Roy Morrison
Trouble Ahead: The Trump Administration at Home and Abroad
Roger Hayden
Too Many Dead Grizzlies
George Wuerthner
The Lessons of the Battle to Save the Ancient Forests of French Pete
Binoy Kampmark
Fictional Free Trade and Permanent Protectionism: Donald Trump’s Economic Orthodoxy
Rivera Sun
Think Outside the Protest Box
March 20, 2018
Jonathan Cook
US Smooths Israel’s Path to Annexing West Bank
Jeffrey St. Clair
How They Sold the Iraq War
Chris Busby
Cancer, George Monbiot and Nuclear Weapons Test Fallout
Nick Alexandrov
Washington’s Invasion of Iraq at Fifteen
David Mattson
Wyoming Plans to Slaughter Grizzly Bears
Paul Edwards
My Lai and the Bad Apples Scam
Julian Vigo
The Privatization of Water and the Impoverishment of the Global South
Mir Alikhan
Trump and Pompeo on Three Issues: Paris, Iran and North Korea
Seiji Yamada
Preparing For Nuclear War is Useless
Gary Leupp
Brennan, Venality and Turpitude
Martha Rosenberg
Why There’s a Boycott of Ben & Jerry’s on World Water Day, March 22
John Pilger
Skripal Case: a Carefully-Constructed Drama?
March 19, 2018
Henry Heller
The Moment of Trump
John Davis
Pristine Buildings, Tarnished Architect
Uri Avnery
The Fake Enemy
Patrick Cockburn
The Fall of Afrin and the Next Phase of the Syrian War
Nick Pemberton
The Democrats Can’t Save Us
Nomi Prins 
Jared Kushner, RIP: a Political Obituary for the President’s Son-in-Law
Georgina Downs
The Double Standards and Hypocrisy of the UK Government Over the ‘Nerve Agent’ Spy Poisoning
Dean Baker
Trump and the Federal Reserve
Colin Todhunter
The Strategy of Tension Towards Russia and the Push to Nuclear War
Kevin Zeese - Margaret Flowers
US Empire on Decline
Ralph Nader
Ahoy America, Give Trump a Taste of His Own Medicine Starting on Trump Imitation Day
Robert Dodge
Eliminate Nuclear Weapons by Divesting from Them
Laura Finley
Shame on You, Katy Perry
Weekend Edition
March 16, 2018
Friday - Sunday
Michael Uhl
The Tip of the Iceberg: My Lai Fifty Years On
Bruce E. Levine
School Shootings: Who to Listen to Instead of Mainstream Shrinks
Mel Goodman
Caveat Emptor: MSNBC and CNN Use CIA Apologists for False Commentary
Paul Street
The Obama Presidency Gets Some Early High Historiography