Britain: The World’s Tax Evasion Capitol.

by Jerry Alatalo

cropped-suits-333.jpgAlphabet Tax evasion whistleblower Herve Falcioni produced evidence to the French government in 2008 containing the names of thousands of moneyed people from HSBC computers. Of those names, around 6,800 were of residents of Britain. In the seven years since, only one of those thousands has faced prosecution by British tax authorities. That is because Britain is a world “leader” in facilitating tax evasion, accounting for around 50% of the approximate 70-80 tax haven jurisdictions globally.

So, while the United States and European countries maintain crippling sanctions against Iran, Russia, Venezuela and other geopolitically-independent nations, Britain and the other 35-40 tax havens around the planet go on with their merry, massive tax-evading ways. So, all the remaining 6,799 Brits on the list of tax evaders need to do is wait until the statute of limitations runs out, with help from British government officials who have sat on their hands.

HSBC is the world’s second largest bank, based in Britain, and currently experiencing one more in a long line of scandals associated with illegal actions that run the gamut of crimes possible for large banks to commit. The firm supplies training manuals to its staff on how to violate U.S. tax laws for its wealthy clients and get away with it. For a period of ten years HSBC laundered illicit money for a Mexican drug cartel in the range of a billion dollars. The drug cartel has murdered more people than ISIS.

Those who follow non-prosecution of white-collar criminals in the financial industry remember U.S. Attorney General Eric Holder’s statements to Congress where he made a connection between prosecuting and jailing criminal banking executives to the consequences of doing so. Putting white-collar criminals behind bars would “damage the economy”, according to Mr. Holder. Worth noting is that Mr. Holder’s successor, Loretta Lynch, was the prosecutor in charge of the HSBC Mexican drug-money laundering case, and that no HSBC official went to jail.

Returning to the global tax evasion industry, facilitated by the world’s largest accounting and legal firms for decades simultaneously “in secret” while every aware politician knew about it, researchers have shown that more tax evasion “whistleblowers” have become prosecuted than actual tax evaders themselves. In the world’s tax evasion capitol of Britain, Prime Minister David Cameron could easily move for transparency in the Cayman Islands, Bahamas, British Virgin Islands and the remaining crown tax haven jurisdictions, but after seven years since the first massive revelations of their existence hit the international press he has done zero but talk before the media about how wrong tax evasion is.

While low-level criminals languish in prisons, many for drug-related crimes which harmed only themselves, white-collar criminals who’ve inflicted massive harm to the people and economies of their nations and nations around the planet walk the streets as free men and women. Unless those white-collar, “pinstripe mafia” members become prosecuted and jailed for their clearly repetitive criminal actions, a sufficient deterrent effect will not become manifested, and nations around the Earth will continue to lose an estimated combined trillion dollars every year to tax evasion.

Perhaps British Prime Minister David Cameron can meet with Queen Elizabeth, Prince Charles and the Rothschild clan to come up with real solutions that offer precisely that deterrent.

Just saying…

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For more information visit the Tax Justice Network’s website: www.taxjustice.net

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Global Tax Haven Industry: World Leaders Still ‘Working On It.’

(Cross-posted from www.taxjustice.net on February 23, 2015 / Comment: Surely, governments have the resources/expertise to shut down the global tax evasion industry. So, after that trillion-dollar/year industry has been humming along and operational for decades, why hasn’t global tax evasion been shut down?)

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Settling accounts: what happens after SwissLeaks?

   

From Koen Roovers, re-posted from Open Democracy:

Settling accounts: what happens after SwissLeaks?

By Koen Roovers, Financial Transparency Coalition

ocean77A major leak of incriminating HSBC records last week resulted in print and television news coverage around the globe, trended on Twitter for several days and prompted several governments to start long-anticipated investigations. Through its Swiss entity, the British banking juggernaut helped customers from around the world to hide their money for tax evasion or other nefarious purposes without any questions asked. In fact, in several of the ‘scripts’ which accompany the accounts, banking personnel are seen to be very willing to accommodate dubious requests—from allowing cash withdrawals worth millions of dollars to setting up sham legal entities to obscure the ownership of the funds.

The ‘Lagarde list’, as the files have come to be known, has been around for a couple of years and so many have been asking: ‘Why do we only see government action once a group of reporters put the spotlight on this?’ Another frequent question has been whether the bank has really (as it claims) cleaned up its act.

Relatively few commentators have asked: how do we prevent this in the first place?

Information exchange

Last year, the Organisation for Economic Co-operation and Development (OECD)—a rich nations’ think tank—proclaimed the death of banking secrecy when it launched its new ‘Common Reporting Standard’, a global system intended to enable automatic information exchange (AEoI) between governments on the deposits of residents, for tax purposes. The Financial Transparency Coalition (FTC) has been following this closely and questions whether the plan, in its current shape, will prevent the next global tax-evasion scandal.  The poorest countries suffer most from tax evasion and other illicit financial flows, and they may be left out of the plan.

The idea behind AEoI is simple: financial institutions everywhere will determine which of their clients are foreign tax residents. Each institution will provide information about them to its ‘home government’, which will forward this ‘automatically’ at set intervals to the government whose citizens it concerns. Essentially, instead of governments relying on their own tax residents to disclose their foreign accounts, a tax resident’s foreign bank will let its government know about them.

A good idea in principle, but the way it is intended to be put into practice is controversial. OECD members have made participation dependent on confidentiality standards yet to be defined. And some states—including Switzerland—have added further reservations, wanting to exchange only with countries with which they have political and economic ties.

To illustrate why such a requirement would be disingenuous, look at offshore holding around the world. Residents of Africa and Latin America are estimated to hold over a quarter of their assets offshore, whereas the volume of offshore assets from other countries held in the poorest countries is negligible. Nigeria, with one of the most developed financial sectors in Africa, holds less than 1% of its bank assets in the UK, for example. In other words, wealthier states generally have little to gain economically from exchanging information with poorer countries, whereas the latter have a great deal to gain. If the criteria for exchange include whether wealthier countries obtain a substantial economic benefit, the intended global development benefits of the plan will be lost before the first bytes of data are exchanged.

It is in everyone’s interest that automatic information exchange becomes a global standard, with all jurisdictions participating as soon as possible. But it is widely accepted that developing countries will face challenges in joining the AEoI system and fully benefiting. Both for OECD members and developing countries the stakes are high, as potential loopholes in the global system could be devastating. Creating a system where developing countries are effectively excluded risks the creation of new tax havens outside of the exchange, as well as depriving developing countries of the necessary information for them to enforce their tax systems effectively.

Significant challenge

Capacity in developing countries will need to be increased, so that any technical barriers to taking part in the global system can be overcome sooner rather than later. The scale of the challenge is significant: the UK-based charity Christian Aid has estimated that sub-Saharan Africa would need around 650,000 more tax officials to reach the world average. Inadequate information technology represents another barrier.

A good idea in principle, but the way it is intended to be put into practice is controversial.

Through the G8, the G20 and the Global Forum—a platform hosted by the OECD with 125 participating governments—rich states have promised help to poor countries to build the capacity they need, but these commitments have yet to be honoured. Investing in AEoI is one of many pressing issues facing developing countries, so if and when they make a commitment to it they should be ensured that support will be there.

Such technical assistance should engage developing-country tax authorities and investigative and prosecutorial personnel, to demonstrate how AEoI information can be mined for specific data or used to identify trends. For this to happen, developing countries need to be receiving data. The FTC strongly recommends a phased approach for the poorest countries (those with gross national income per capita of less than $4,125), to prepare them for full co-operation in a global system of information exchange.

Identifying assets

Meanwhile, potential benefits for developing countries can also be assessed by identifying the assets of their residents held overseas, for example using data collected by the Bank of International Settlements. As sufficiently disaggregated data are not available publicly, only government-led research is currently possible here. Governments are encouraged to publish the volume of data being exchanged, the number of individuals involved and the extent of the assets concerned.

These statistics would give citizens, journalists, politicians and organisations an idea about the potential impact of AEoI. Research on the deterrent effect—which may be the main impact—would very likely prompt countries to prioritise participation. And what, other than such a deterrent of tax evasion, would prevent the next big scandal?

But even if all the loopholes in global information exchange are fixed, this is a solution to today’s problems, not tomorrow’s. Criminals and their enablers are creative, so the only way to prevent future scandals is to shed light on what criminals and tax dodgers are trying to hide. This is why online registers of assets for all legal persons and arrangements are necessary and should be publicly available. And law-enforcement bodies around the world should have access to information about other stores of wealth, such as gold and art held in freeports.

If we turn a blind eye to these loopholes, economic development for all will continue to be undermined by illicit actors looking to exploit them.

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Luxembourg Leaks Reveal Global Corporate Tax Crisis.

Posted on December 4, 2014

by Jerry Alatalo

ocean55The International Consortium of Investigative Journalists (ICIJ) has produced more world-shaking reports on secret, massive tax evasion schemes, this time focused on Luxembourg. The six month project – “Lux Leaks” – was undertaken by ICIJ journalists around the Earth, and has reverberated and been reported by the largest news organizations in the world. Because of the revelations a great deal of pressure has become felt by new European Commission President Jean-Claude Juncker – whose previous government position was as Prime Minister of Luxembourg for 19 years.

Somewhere in the neighborhood of 340 of the world’s most well-known corporations have become identified for using complex accounting schemes in Luxembourg, avoiding paying taxes altogether in their home nations, while paying as little as 1/4 of 1% tax to Luxembourg on tens of millions of Euros in income.

Whether ICIJ’s second tax evasion bombshell in recent years – the first revealed massive corporate/individual tax cheating carried out in the British Virgin Islands tax haven – results in strong, concrete actions to tackle the decades-old, trillion-dollar per year, global tax avoidance/haven industry, enabled by the world’s largest accounting and legal firms, will become publicly known as this astonishing news story grows.

The following link to ICIJ’s website opens the door to a treasure of information/articles explaining in detail what their journalists around the world have uncovered so far:  http://www.icij.org/project/luxembourg-leaks

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(Thank you to TheLipTV at YouTube)

Tax Justice Network Waiting For Queen Elizabeth’s Response.

Posted on August 24, 2014

by Jerry Alatalo

“Luxury and avarice – these pests have been the ruin of every state.”

– MARCUS PORCIUS CATO (234-149 B.C.) Roman statesman

aaa-20John Christensen sent a letter to Queen Elizabeth. In the letter he expressed his concerns about British crown colonies’ long-running status as “tax havens”, how tax evasion through those colonies is immoral, and suggested she do something to straighten it out. Mr. Christensen is director of the Tax Justice Network (TJN), a group of men and women focused on bringing the world’s attention to the decades-old tax evasion industry operated by the largest accounting, banking, and legal companies on Earth.

After listening to the group’s August radio program “Taxcast”, it looks like Mr. Christensen has yet to receive a reply from Queen Elizabeth to his letter. It is unfortunate that the work of men and women at Tax Justice Network is not more well-known, because the group has been successful to some extent in raising awareness on the very important topic of tax evasion – which continues to occur on a massive scale.

TJN members have taken on an entrenched, pervasive, and secretive global financial operation protected by the world’s most wealthy and powerful people. The battle they fight is truly a “David vs. Goliath” affair, one which involves accounting, finance, and legal tools/weapons that most people find difficult to understand. Tax haven jurisdictions such as the British Virgin Islands, Bahamas, Luxemburg, Switzerland, the state of Delaware, Hong Kong, and dozens of others around the Earth offer high net worth people and the world’s largest transnational corporations low to zero tax rates as incentive to stash money.

“Patriotic” politicians stand at podiums with rows of perfectly folded flags behind them – elected to office through the support of multi-billionaire tax evasion cheats – and continue to completely ignore tax havens while speaking publicly about the urgent need to “cut the deficit” and reduce taxes. All the while, nations around the world lose trillions of dollars in tax revenue every year, and political “lovers and defenders of their country” do absolutely nothing.

The most important facts surrounding the tax haven industry people need to become aware of is that, first, this is a global industry. Second, that any individual or family on Earth who has accumulated a large amount of wealth, along with every large corporation, most likely are involved in tax evasion through tax haven schemes. Third (as mentioned), the largest and most highly respected accounting, banking, and legal firms on the planet are deeply and intimately involved.  These firms are the “engineers” of the $multi-trillion tax haven industry.

So, while those belonging to the Occupy-coined group 99% will likely not be “stashing” any wealth into tax haven jurisdictions, the wealthiest people from all nations on Earth conduct “business as usual”. Tax evasion cheats continue on without any feelings of guilt over not “paying their fair share”, satisfied to protect and increase fortunes through complicated financial schemes, while their fellow elected-politician tax evaders remain silent.

The global tax haven/evasion industry rolls on full-steam ahead, free from any serious interference in the form of laws, sanctions, or effective blocking actions by politicians, almost “nuisance-free” but for moral economists like John Christensen and his friends at the Tax Justice Network, concerned academics in the fields of accounting, finance, and law, and politicians who’ve become aware of the industry – “the pinstripe Mafia” – and how loss of tax revenue hurts national economies and people everywhere.

So, if any person reading this sees John Christensen, please send along encouragement, words of support, and thanks for the good work and effort he and his dedicated group of men and women have undertaken. If he hasn’t received any response from Queen Elizabeth to his letter yet, pass along this suggestion. Get a group of men and women – a really big group – and pile up in cars over to her house.

Knock on the door and see if she’s home.

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For more information, please visit: taxjustice.net

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(Thank you to goingundergroundRT at YouTube)