HYPOCRISY AND PARADISES

Transcription

INTEGRATED CYCLE OF MOVIES DEBATES AND CONFERENCES AT FEUC
2008-2009
GLOBAL ECONOMY, COMMODIFICATION, AND PUBLIC INTEREST:
PERSONS, COMMODITIES, ENVIRONMENT AND TAX HEAVENS
(DOC TAGV / FEUC)
---------------------------------------------------------------------------------------------SESSION 8
WORLD ECONOMY, THE AUTONOMY OF NATIONAL POLICIES AND TAX HEAVENS
MARCH 25, 2009
---------------------------------------------------------------------------------------------CONFERENCES:
LE CAPITALISME EST-IL CRIMINEL?
JEAN DE MAILLARD
(Sciences Po, Paris, France)
BERNARD BOUZON
(Animateur Réseau DFS, ATTAC France)
THE ENGINES OF CHAOS: SECRECY JURISDICTIONS AND GLOBAL CRISIS
JOHN CHRISTENSEN
(Director of Tax Justice Network, UN advisor)
COMMENTS:
JOSÉ DA SILVA LOPES
(former Minister of Finance and former Governor of the Portuguese Central Bank)
ANTÓNIO MARTINS
(Faculty of Economics, University of Coimbra, FEUC, Coimbra, Portugal)
----------------------------------------------------------------------------------------------
FEUC
Faculty of Economics
University of Coimbra
COIMBRA
PORTUGAL
http://www.fe.uc.pt/index_uk.html
INTEGRATED CYCLE OF MOVIES DEBATES AND CONFERENCES AT FEUC
2008-2009
GLOBAL ECONOMY, COMMODIFICATION, AND PUBLIC INTEREST:
PERSONS, COMMODITIES, ENVIRONMENT AND TAX HEAVENS
(DOC TAGV / FEUC)
---------------------------------------------------------------------------------------------SESSION 8
WORLD ECONOMY, THE AUTONOMY OF NATIONAL POLICIES AND TAX HEAVENS
MARCH 25, 2009
----------------------------------------------------------------------------------------------
CONFERENCES:
JEAN DE MAILLARD
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BERNARD BOUZON
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THE ENGINES OF CHAOS:
SECRECY JURISDICTIONS AND GLOBAL CRISIS
JOHN CHRISTENSEN
Faculty of Economics
University of Coimbra
Coimbra
Portugal
20
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JEAN DE MAILLARD
(Sciences Po, Paris, France)
Fontenelle, un homme de lettres français qui a vécu au XVIIe et au XVIIIe siècle, a dit un jour :
« Ne disons pas du mal du diable : c’est peut-être l’homme d’affaires du bon Dieu ».
Je dédis cette pensée pleine d’esprit et de sagesse cachée – que je livre aussi à leur méditation – à
tous ceux qui espèrent pouvoir résoudre les crises du capitalisme par un surcroît de morale. Mon
propos ne se situera donc pas, vous l’avez compris, sur le terrain de la morale ou, comme l’on dit
plus volontiers en ces temps de modernité tardive, de l’éthique. Laissons le diable et le bon Dieu
à leurs propres affaires et contentons-nous d’observer le monde qui nous entoure – et nous
emporte dans sa sarabande – avec un regard circonspect et terre-à-terre. D’où le retour à une
question que l’actualité met à l’ordre du jour : si on laisse, par hypothèse, la question de
l’immoralité individuelle en-dehors des explications sur les dysfonctionnements de l’économie et
les scandales qu’ils charrient dans leur sillage, pourquoi y a-t-il de tels dysfonctionnements et
comment surviennent-ils ? Je précise que j’entends par dysfonctionnement tous les mécanismes
de l’économie et de la finance qui ne correspondent pas aux critères reconnus d’une bonne
gouvernance, mais qui néanmoins se perpétuent dans l’ensemble du système sans que les
réformes introduites pour les éliminer ne parviennent jamais à des résultats tangibles. Plus
particulièrement, vous l’aurez compris, je vise les activités criminelles, frauduleuses, illégales,
informelles, parallèles, qui sont constamment dénoncées, parfois combattues, mais jamais
éliminées.
Je voudrais présenter deux explications simples, quoique économiquement très incorrectes, sur la
manière dont ces dysfonctionnements sont rendus possibles. Ces explications montrent ensemble
d’une part qu’ils ne sont pas quelques gouttes d’irrationalité au milieu d’un océan de rationalité,
d’autre part qu’il faut interroger d’autres experts que les économistes - dont la faillite est
aujourd'hui criante - pour en comprendre au moins les mécanismes. Autrement dit, comme je
vais essayer de vous en convaincre, les dysfonctionnements économiques – qui se traduisent en
illégalismes de toutes sortes – sont des révélateurs de la société tout entière et c’est un sujet trop
sérieux pour le laisser aux seuls économistes qui, d'ailleurs, ne savent jamais quoi en faire. Ce
que je vais simplement soutenir, c’est que les distorsions économiques et financières et les
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délinquances qui vont avec, qui peuvent aboutir à des crises telles que celle dans laquelle nous
sommes plongés aujourd’hui, ne sont pas, justement, des dysfonctionnements mais une manière
de gérer les contradictions de la mondialisation dérégulée.
Le crime est une variable d’ajustement de l’économie et de la finance
La première explication, me référant à une approche fonctionnaliste de la criminalité, et plus
particulièrement de la criminalité organisée, est qu’il existe dans toute configuration sociale un
certain nombre de fonctions qui doivent être impérativement remplies : la fonction économique
(production-distribution-consommation), le contrôle social, la socialisation, la solidarité, la
sécurité en constituent l’essentiel. De deux choses l’une : soit la société est capable de gérer ellemême et de mettre en place les diligences permettant d’assurer la bonne marche de chacune de
ces fonctions, soit elle ne peut y parvenir. La théorie fonctionnaliste explique que dans ce cas, la
société ayant horreur du vide, d’autres instances que les institutions légales-légitimes prennent en
charge la satisfaction des besoins qu’expriment les différentes fonctions sociales que j’ai
énumérées. L’Etat est-il incapable d’assurer la sécurité des citoyens ? Les mafias y suppléent, à
condition bien sûr de leur faire allégeance et d’en payer le prix. L’expérience montre que, très
vite, les Etats trouvent avantage à cette délégation et négocient, plus ou moins discrètement, avec
les représentants mafieux pour qu’ils assurent l’ordre public en contrepartie de l’impunité qu’ils
leur garantissent quant aux méthodes employées.
Il en va de même en matière économique et financière et la période des trente dernières années a
été riche en ce domaine puisque la doctrine de la globalisation, qui s’est répandue comme une
traînée de poudre à partir de la fin des années 70, était : dérégulation, déréglementation. Que
pensez-vous qu’il arriva ? Ce qui devait arriver ! Quand il n’y a plus de règles, il y en a encore,
mais de pires... L’étonnement aujourd’hui est que l’on continue de s’en étonner. Quand les règles
de la société légale-légitime ne fonctionnent plus, quand elles se sont évanouies parce que les
élites dirigeantes les ont elles-mêmes éliminées, d’autres se mettent en place et il ne faut pas être
surpris si la logique de leur déploiement s’écarte de celle que l’on espèrerait dans une société
bien ordonnée. Quand deux solutions (ou plus) s’offrent pour régir une situation donnée, il est
une règle de principe qui s’applique en toutes circonstances, celle que Gresham avait vue quand
deux monnaies se font concurrence : la mauvaise chasse la bonne.
Revenons par conséquent à notre démonstration. Quand les Trente Glorieuses ont pris fin, la
nouvelle idéologie qui a triomphé partout dans le monde a imposé de mettre fin à l’encadrement
et aux contrôles de l’économie et du système financier. Cela ne s’est pas fait en un jour, bien sûr,
et cela ne s’est pas accompli entièrement, j’en conviens. Mais cela ne s’est pas fait tout seul non
plus. Les gouvernements ont tous, les uns après les autres, apporté leur contribution, souvent
même dans la surenchère. Le meilleur exemple, bien qu’il ne concerne pas un gouvernement ou
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peut-être même d’ailleurs pour cette raison, est celui de l’Union européenne et plus
particulièrement de la Commission, qui a fait de l’espace européen le plus dérégulé du monde. A
une exception près, mais je ne sais si c’en est vraiment une : les paradis bancaires, fiscaux et
judiciaires et de façon plus générale toutes les places financières off shore ou on shore, qui sont
entrés dans la compétition mondiale comme dans une partie de poker-menteur.
A quoi servent les paradis bancaires et fiscaux ? Ils ne sont pas les vilains petits canards qu’on
voudrait aujourd’hui nous faire croire. Ils remplissent des fonctions aussi précises qu’utiles à
l’économie et surtout à la finance dérégulées dont il faut bien comprendre l’usage si l’on ne veut
pas faire de contre-sens sur leur place dans la mondialisation. Leur existence est inhérente à tout
système qui revendique la dérégulation comme mode de gouvernance pour une simple et bonne
raison : celle du moins disant juridique. La loi et la pratique des places off shore s’accordent avec
la résignation complice de l'ensemble des autres Etats pour leur faire faire ce qu’on ne peut pas
faire ailleurs et qu'il est plus facile de soustraire aux lois, sans encourir pour autant le moindre
risque. Mais ces places financières complaisantes ne sont pas les seules et elles ne sont après tout
que les coffres-forts dans lesquels on cache les bijoux de famille et les secrets de leur origine. Ne
nous trompons pas : les coffres-forts ne se remplissent pas tout seuls et ne nous faisons pas
d’illusion : on n’est pas près d’en ouvrir les portes.
Le problème des paradis bancaires, fiscaux et judiciaires n’est donc pas tant qu’ils existent, mais
qu’on ne les supprimera pas, à moins de changer radicalement la doctrine de la mondialisation.
Et pour une raison là encore toute simple : qu’est-ce qu’on ferait sans eux ? Cela ne les
empêchera pas, bien sûr, de devoir essuyer tous les reproches que l’on se gardera bien d’adresser
à tous ceux qui les font exister, au nom de cette morale dont Fontenelle nous disait le caractère
trompeur. Banques, Etats, mafias, cartels, services secrets, multinationales, fraudeurs en tous
genres, du plus petit au plus gros, surtout les plus gros, personne ne veut la mort de ces paradis.
On se contentera de les rendre présentables. Car l’économie et la finance dérégulées en ont un
impérieux besoin, comme clé de voûte de tout le système globalisé dont ils constituent la plus
petite pièce, mais aussi la plus indispensable. Faisons même un rêve : si le G 20, dans un
moment d’aberration, décidait la mise hors la loi des PBF répertoriés comme tels, il ne faudrait
pas 24 heures pour que tous les pays du monde se lancent dans une course endiablée pour
prendre leur place. Le diable est bien l’homme d’affaires du bon Dieu.
Derrière les PBF, c’est en effet toute une ingénierie de la fraude et du crime qui tire les ficelles.
Et si l’on se demande pourquoi, la réponse, une fois encore, est toute simple : la fraude, le crime,
toutes les formes de tricherie et de tromperie dont l’imagination humaine est capable sont les
raccourcis de l’économie et de la finance qui apportent deux avantages absolus dans toute
compétition. Le premier est qu’ils sont des réducteurs, voire des éliminateurs, de risques. Quand
vous jouez aux cartes, vous ne perdez jamais si vous avez regardé les cartes de l’adversaire avant
de déposer votre mise sur la table. Plus on triche, plus on gagne souvent. Le second est que la
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fraude, le crime, la tricherie et la tromperie sont des multiplicateurs de profits. Si vous ne pouvez
pas perdre, vous augmenterez vos mises. Plus on triche, plus on gagne gros. Prendre moins de
risques pour gagner plus : qui n’en rêverait ? Bien sûr, on ne le dit pas, le risque ne disparaît
jamais, il passe seulement sur la tête des autres. Dans la crise des subprimes, les banques et les
assureurs ont si bien anesthésié le risque financier, mais à leur seul profit, qu'ils l'ont transféré à
toute les économies de la planète qui se cotisent aujourd'hui pour les renflouer. Ils vont ainsi
pouvoir continuer, comme AIG, de fournir leurs bonus à ceux qui en sont responsables.
Le retrait des régulations économiques et financières a donc chassé la bonne économie et la
bonne finance au profit des petits et grands arrangements entre amis. C’est à cela que sert la
criminalité, car contrairement à ce qu’on nous a toujours dit, la criminalité n’est pas seulement la
manière de se comporter des pauvres et des miséreux. Elle est un mode de gestion alternatif de la
société, quand les institutions légales-légitimes ont, pour une raison ou une autre, renoncé ou
échoué à l’assurer elles-mêmes. Des dispositifs de remplacement se mettent alors en place,
comme du temps de la Prohibition : l’économie légale ne pouvant plus fournir un produit que la
société continuait de considérer comme légitime (l’alcool en l’espèce), d’autres circuits ont
immédiatement pris le relais. Mais ils étaient mafieux. La criminalité organisée, la délinquance
économique et financière ne sont donc pas des anomalies qu’un sursaut moral corrigera. Elles ne
sont que des variables d’ajustement d’une économie ou d’un système financier qui préférera
toujours globalement les raccourcis qui rapportent de l’argent aux détours qui en coûtent.
Le crime n’est qu’une étape quand on peut faire mieux sous la protection de la loi
La seconde remarque que je voudrais faire aboutit paradoxalement à la conclusion inverse de ce
que je viens de dire, mais sans enfreindre pour autant les lois de la logique. Le crime ou la
fraude, s’ils sont des modes alternatifs de gestion de l’économie ou de la finance, ne sont bien
que des variables d’ajustement et ils n’ont d’usage qu’autant qu’ils sont utiles ou nécessaires. Si
le même résultat peut être obtenu autrement, le système s’adapte pour y parvenir en prenant luimême en charge le contournement des règles de bonne gouvernance. En d’autres termes, il y a
mieux encore que le crime pour frauder : c’est soit d’accorder à la fraude un statut légal-légitime,
sois au moins de lui accorder la protection, directe ou indirecte, de la loi.
Je ne peux, dans le court espace de temps qui m’est imparti, développer longuement la manière
dont la criminalité organisée a joué, par exemple, un rôle déterminant dans les crises du
capitalisme mondialisé à partir des années 80, dans une continuité et avec une constance qui,
quelque part, forcent l'admiration. Cela commence avec la crise des caisses d’épargne
américaines (Savings & Loan) durant les années 80-90, dont celle des subprimes n'est que
l'aboutissement. Cette crise a conduit à éliminer le secteur du crédit au logement populaire, qui
bénéficiait aux catégories sociales modestes et moyennes en finançant leur accession à la
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propriété. En deux mots, ce secteur à vocation sociale n’avait plus sa place dans l’Amérique
reaganienne où ne devait plus exister que le secteur bancaire concurrentiel. Etranglé par la
hausse des taux d’intérêt, le secteur des caisses d’épargne tombe en faillite au début des années
80. Le gouvernement profite de cette situation pour le déréguler mais sans vouloir assumer la
charge financière de la liquidation des nombreuses caisses devenues brutalement insolvables (la
moitié des caisses disparaîtront dans la crise). Il laisse ainsi une multitude d’escrocs, agents de la
CIA, affairistes véreux et mafieux en tous genres, soutenus par des hommes politiques
complaisants (sinon corrompus) et par des institutions défaillantes, s’abattre sur les caisses en
difficulté pour en soutirer, par de multiples fraudes de toutes sortes que je ne puis ici détailler, de
fabuleux profits qui accélèrent l’effondrement du secteur. Le coût final pour le contribuable sera
officiellement évalué à environ 125 milliards de dollars. Dans cette affaire, qui a duré pas loin
d’une quinzaine d’années, la gestion de la liquidation du secteur a été laissée à la pègre et aux
affairistes et le gouvernement n’est sérieusement intervenu pour mettre un terme à la crise et au
scandale – très mollement d’ailleurs - que lorsque le travail était fait. Le résultat de la faillite des
caisses d’épargne américaines a été la disparition du secteur aidé de l’accession au logement,
conformément aux canons du néolibéralisme qui a servi de doctrine à toutes les administrations
(Démocrates compris) qui se sont succédé au pouvoir depuis la fin des années 70.
Il n’empêche que cette élimination a posé un problème politique et social qui aurait pu
déboucher sur un autre désastre : la politique libérale en vogue supposait de laisser les
entreprises s’organiser à leur convenance pour diminuer leurs coûts de production et l’un des
moyens les plus prisés a été, on le sait, la délocalisation des entreprises. Nombre d’activités
économiques ont été externalisées dans les pays du tiers-monde et émergents où le prix de la
main-d’œuvre était beaucoup moins cher. Les Etats-Unis, dont le système social est rudimentaire
et qui venaient de liquider le seul compartiment, ou à peu près, qui permettait aux ménages
modestes d’atteindre le rêve américain du « home sweet home » qui est lui-même l'un des
secteurs-clés de l'économie américaine, se trouvaient alors devant un dilemme délicat : soit
laisser les catégories les moins aisées sombrer dans la misère, avec tous les risques politiques,
économiques et sociaux associés, soit trouver les moyens de leur éviter le décrochage
économique et éviter ainsi l'effondrement de l'économie américaine.
Il n’était pas question de « fausser les règles du marché » mais l’inventivité financière a permis
de trouver la solution. Afin de ne pas diminuer la capacité de consommation des ménages
américains et de ne pas risquer par ricochet la stagnation ou même la récession économique, le
crédit a servi d’exutoire à l’impossibilité croissante des ménages de financer leur consommation
par leurs revenus ou leur épargne. Les ménages américains ont donc trouvé un crédit de plus en
plus facile, y compris et d’abord les catégories insolvables mais dont la tranquillité sociale devait
impérativement être assurée : les minorités ethniques (noirs, latinos, etc.) à qui l’on a permis,
grâce à la baisse des taux d’intérêt dans les années 2000, d’accéder au crédit notamment
immobilier à travers les subprimes. Je ne rentre pas, là encore dans les détails, qui sont assez
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bien connus, mais je voudrais répondre à la question que je sens sur toutes les lèvres : où est ici
le problème de fraude ou de criminalité ?
Il se situe à deux niveaux. Celui de l’octroi de prêts à des débiteurs insolvables et celui de la
sécurisation du système financier qui ne pouvait évidemment supporter le risque induit par cette
finance éminemment malsaine. On sait que l’octroi des prêts aux débiteurs insolvables a pu être
réalisé grâce à une trouvaille géniale consistant à garantir le crédit non sur les revenus
(inexistants, insuffisants ou aléatoires), mais exclusivement sur le patrimoine sur l’acquisition
duquel portait le crédit, en recourant également à des taux variables différés qui ne faisaient
sentir le poids du crédit à l’emprunteur que deux ou trois ans après qu’il ait pris possession de
son nouveau chez-soi. La martingale reposait sur la croissance régulière et ininterrompue du prix
de l’immobilier et l’on sait ce qu’il est advenu quand la courbe de l’immobilier a commencé à
s’inverser tandis que les taux d’intérêts montaient. Mais avant cette échéance et durant plusieurs
années, il a fallu ouvrir toutes grandes les vannes du crédit, notamment immobilier, ce qui a
donné lieu à deux difficultés : 1) comment financer des gens insolvables à l’encontre de toutes
les normes d’octroi du crédit ? et 2) comment gagner quand même de l’argent ?
A la première question, il a été donné une réponse en deux temps. Dans une première période, la
constitution de dossiers de prêts frauduleux a permis de contourner les règles traditionnelles en
matière de financement de prêt. D’un côté, les évaluateurs, profession chargée aux Etats-Unis de
garantir la valeur des biens immobiliers avant toute offre de prêt, a été mobilisée pour truquer les
évaluations en les surestimant afin de hausser le montant des prêts, de l’autre les courtiers en
prêts falsifiaient les documents, notamment les déclarations de revenus. Quelle a été
l’importance de la fraude dans le nombre de prêts considérés ? Sans doute environ 30%, peutêtre plus. En tout cas une explosion de poursuites judiciaires a été signalée par le FBI, modestes
dans les chiffres absolus, mais significatifs quant à la hausse, surtout si l’on prend en compte que
les effectifs de la police fédérale avaient été massivement transférés à partir de 2001 sur la lutte
anti-terroriste et que l’agence fédérale ne disposait dans les années 2000 que d’une poignée
d’enquêteurs en matière économique et financière. En 2005, par exemple, le FBI faisait savoir
qu’il estimait que « la fraude hypothécaire est l’une des formes de délinquance en col blanc qui
connaît la croissance la plus rapide aux Etats-Unis ». Nul ne peut dire que les avertissements
aient manqué, avant même ce signal d’alarme. Dès le 24 mai 2000, un des gouverneurs de la
Réserve fédérale, Edward Gramlich, alertait la Chambre des Représentants devant laquelle il
témoignait sur les « prêts prédateurs » subprimes et dénonçait les « pratiques abusives en lien
avec les prêts d’accession à la propriété ». Et pour que les choses soient bien claires, il définissait
les « prêts prédateurs » comme « des pratiques spécifiques qui exploitent les consommateurs et
sont déloyales, trompeuses et frauduleuses ». Pas plus que les Représentants, Alan Greenspan,
président de la Réserve fédérale n’a voulu lever le petit doigt alors même qu’il était, lui aussi,
informé et mis en garde par diverses sources (il avait fait preuve de la même inertie lors de la
crise des caisses d'épargne).
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Dans une seconde période, le système a été affiné. Etait-ce parce que la proportion de dossiers
frauduleux devenait trop importante et risquait d’entraîner des réactions répressives
indésirables ? Etait-ce parce que l’extension du système aux classes moyennes allait permettre
d’en étendre substantiellement les capacités, notamment pour alimenter le secteur financier qui
recyclait ces prêts dans les conditions que je vais ensuite examiner ? Quoi qu’il en soit, les
courtiers en prêts, les prêteurs et les banques ont imaginé de nouveaux types de prêts, les prêts
« Alt A », que la vox populi a appelé significativement les « prêts menteurs », et qui avaient la
particularité de dispenser l’emprunteur de toute déclaration de revenus. Les prêts devenaient
quasi-automatiques et accordés souvent en une seule après-midi à qui en voulait, riche ou
pauvre, solvable et insolvable… A ce niveau, on le voit, le meilleur moyen de frauder est encore,
quand la fraude émane du système économique ou financier lui-même, de l’intégrer dans les
« bonnes pratiques » en lui ôtant son caractère frauduleux. Et le tour est joué : plus de fraude,
plus de souci !
D’où la seconde question, qui vient aux lèvres de l’économiste le plus débutant : comment peuton gagner de l’argent dans de telles conditions ? Le génie bancaire y a répondu : en transférant le
risque aux autres, à travers les désormais fameuses créances « titrisées » en MBS, ABS, CDO,
CDS et tutti quanti. Naguère encore considérés comme le nec plus ultra de la finance globalisée,
ces produits financiers devenus invendables depuis l’écroulement du marché mondial sont
désormais traités dédaigneusement de « toxiques ». En réalité, tout laisse à penser là encore que,
derrière la façade high tech de ces produits financiers et le clinquant des bureaux où officiaient
toute la panoplie des traders surpayés, ceux-ci avaient une conscience très claire, pour peu qu’ils
aient bien voulu se poser la question, de ne vendre que des montages financiers pourris. La
Chambre des Représentants, après la chute de Freddie Mac et Fanny Mae, a découvert, mais un
peu tard, que les dirigeants des deux organismes de refinancement des prêts hypothécaires
savaient pertinemment que les emprunteurs dont ils titrisaient les prêts « auraient eu du mal à
obtenir leur crédit si leur situation financière avait été correctement révélée ». Deux gérants de
fonds spéculatifs de Bear Stearns se sont fait prendre également pour avoir sciemment dissimulés
aux investisseurs la réalité des CDO qu'ils leur vendaient. Mais ne nous y trompons pas :
quelques-uns, très peu, se sont fait prendre la main dans le sac à mensonges, mais tout le système
reposait sur une gigantesque tromperie. Tout le monde fraudait : les courtiers qui rabattaient la
clientèle en montant des dossiers bidonnés, jusqu’à ce qu’on les dispense de leurs gros
mensonges pour aller plus vite et agir plus discrètement, les évaluateurs qui surévaluaient les
maisons pour gonfler les prêts, les organismes de prêts qui fermaient les yeux comme les
organismes de refinancement qui les achetaient, les banques qui transformaient les crédits
pourris en beaux produits financiers qui ont inondé la planète financière et qui n’ignoraient rien
non plus des bizarreries auxquelles ils demandaient aux agences de notation, qui ne pouvaient
rien leur refuser, de mettre les plus hautes notes possibles pour les vendre au prix fort…
Laissons de côté, en ce qui nous concerne, l’aspect financier des choses, c’est-à-dire la manière
dont on a fabriqué du vent sur lequel on a refaçonné, en quelques fulgurantes années, tout le
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système financier mondial, aujourd’hui transformé en champ de ruines. La seule chose qui
m’intéresse concerne les moyens grâce auxquels on a pu faire prendre à ce point les vessies pour
des lanternes. Je serai bref. Tandis que, dans la crise des caisses d’épargne américaines, l’enjeu
n’était que de faire table rase d’un secteur en bout de course, épuisé par la libéralisation brutale
de l’économie et de la finance, afin de laisser la place au secteur concurrentiel et à ses
spéculations, il y avait derrière les subprimes d’autres défis de plus grande importance dont
dépendait en fin de compte toute l'économie américaine : l'effondrement de la demande solvable
- ou la disparition de l'aide aux catégories les moins favorisées pour accéder à la propriété
résultant de la liquidation des caisses d'épargne - risquait d'entraîner l'effondrement à son tour de
toute l'économie américaine. La finance pourrie a été le moyen de faire vivre l'Amérique des
années Bush au-dessus de ses moyens en soutenant une consommation artificielle. Le système de
subprimes et tout ce qui a été construit sur ce modèle était donc devenu essentiel à la société et à
l’économie américaines. Parce que ces mécanismes impliquaient l’ensemble du système
financier mondial et de l’équilibre politique, économique et social des Etats-Unis, parce que les
plus grandes institutions étaient mobilisées dans la plus formidable construction financière de
tous les temps, il ne pouvait plus être question que les procédés frauduleux nécessaires à
l’élaboration de cette pyramide soit abandonnés à des groupes ou des individus hors contrôle.
Non pas qu’il y ait eu un complot des capitalistes pour ruiner le monde, mais parce que
l’importance des enjeux obligeait à décriminaliser la fraude, autant que faire se pouvait. Celle-ci
a été confinée dans les activités de terrain, dans la collecte quotidienne des prêts qui servaient à
alimenter le système financier de plus en plus vorace, qui transformait l'ensemble des crédits
douteux en produits financiers pourris pour les diffuser dans le monde entier. Plus on s'éloignait
des pauvres et des insolvables qui étaient l'instrument de la fabrication de ces pyramides
financières, moins le recours à la fraude était nécessaire. Il suffisait de les titriser sans rien dire.
Quelques maladroits, placés sur écoute téléphonique ou qui ont laissé traîner quelques papiers
compromettants découverts dans des perquisitions, se sont fait prendre en flagrant délit de
tromperie. Ils paieront peut-être pour l'ensemble du système, mais surtout pour solde de tout
compte.
Quant au diable, le jour reviendra où il pourra demander au bon Dieu le quitus de sa gestion et le
renouvellement de son mandat.
8
▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀
BERNARD BOUZON
(Animateur Réseau DFS, ATTAC France)
Introduction
Périodiquement, des Responsables politiques ou de vénérables Institutions internationales
prônent une croisade sans merci contre les Paradis Fiscaux et judiciaires.
Très récemment nous pouvons citer, crise financière oblige:
Dominique Strauss-Kahn Président du FMI :
« Il faut pourchasser et faire disparaître les Paradis Fiscaux »
François Fillon premier Ministre Français déclarant devant le Parlement:
« Les trous noirs comme les centres off shore ne doivent plus exister »
Ces appels ne datent pas d’hier. Souvenons- nous de l’appel du 1er Octobre 1996, lancé à Genève
par7 Magistrats Européens, et des ouvrages pédagogiques comme: « Un monde sans loi » rédigé
par Jean de Maillard (1) en 98.
Nous pourrions simplement nous contenter d’être des relais de ces différents appels mais, ne
faut-il pas se poser d’autres questions ?
Comment se fait il que depuis plus de 10 ans ces problèmes ne soient pas réglés ? Que font les
autorités politiques mondiales ?
Il est clair que les Paradis fiscaux constituent un outil important pour les pirates financiers et
méritent à ce titre d’être neutralisés, mais attaquer seulement les Paradis fiscaux est-ce la bonne
cible ?
9
Nous pourrions simplement, dans un souci pédagogique, présenter des propositions techniques
d’interventions plus efficaces …. il y en a, elles sont depuis longtemps formulées, nous en
donnerons des exemples ?
Pourquoi ne sont elles pas mises en application ? existe-t-il une véritable volonté politique de les
mettre en œuvre ?
Ceux qui devraient les appliquer n’ont-ils pas de bonnes raisons pour ne rien faire ? Comment
comprendre l’incapacité de la sphère politique mondiale à répondre à cet appel: Complicité, ou
asservissement ? Voilà qui mérite d’être éclairci.
En fait, que voulons- nous remettre en cause ? Le dérapage d’une domination de l’économique
sur l’humain ? Cela impose d’ouvrir notre champ de réflexion à l’analyse des motivations qui ont
permis l’émergence de ce « monde sans loi » en imposant ses choix.
Ceci est il possible sans une mise en cause généralisée de la sphère de la piraterie financière
mondiale hors contrôle qui a créé ses propres outils, les utilise, et les protège.
Il faut peut être aller au-delà: sommes nous vraiment prêts à tout remettre en cause ?
Ceux qui devraient agir ont-ils de bonnes raisons pour ne pas le faire ?
Au fond quels sont nos repères éthiques prioritaires?
Quels sont vraiment nos propres choix fondamentaux ?
Et finalement: Méritons nous vraiment « un autre monde »
Nous vous proposons de survoler ces différentes interrogations.
Nous n’avons pas la prétention de vous apporter une réponse: clés en main.
Nous vous proposons simplement de cheminer avec vous dans cette réflexion.
Pourquoi cette levée de boucliers contre les paradis fiscaux
Quels sont les objectifs recherchés dans cette levée de bouclier contre les Paradis fiscaux ?
Il paraît normal d’évoquer en priorité en se référant à leur nom, la lutte contre l’évasion fiscale et
la fraude fiscale.
La fiscalité est le principal outil régulateur et répartiteur de richesse dont disposent les Etats pour
compenser les disparités de revenus des systèmes libéraux. Il pourrait donc être normal à ce titre
d’attacher une grande importance à la neutralisation des facilités apportées par les Paradis
fiscaux à l’évasion fiscale, ce qui justifierait leur forte mise en cause
10
La concurrence fiscale qui se généralise entre les pays économiquement développés y compris de
façon interne au niveau Européen, devrait à ce titre être aussi vivement rejetée. Le refus de
certains Etats de pénaliser l’évasion fiscale, et l’incitation à l’évasion fiscale mériterait le même
traitement…. Cela ne semble pas pour autant d’actualité ?
Il semble bien, en réalité que ceci ne constitue pas la motivation principale de la mise en
accusation des paradis fiscaux en cette période de crise financière.
Leur appellation tout aussi exotique de « Places financières off shore » apporte une autre
explication. Ces zones de non droit fiscal et judiciaire sont devenues: des places financières
équipées de tous les supports techniques nécessaires pour les transactions financières
internationales, l’outil principal de la finance hors contrôle. Une finance hors contrôle qui traite
50% des mouvements financiers de la planète porte forcément une part de responsabilité dans le
développement de la crise financière. Ils peuvent être aussi des réservoirs financiers dont les
contenus sont convoités.
Nous comprenons mieux pourquoi les Paradis fiscaux, alias « place off shore » viennent au
premier rang des accusés pour nos responsables politiques.
Actions antérieures des autorités politiques mondiales impliquant les paradis fiscaux
Les autorités politiques mondiales ont centré leurs actions sur la lutte contre le blanchiment de
capitaux se rapportant à des infractions graves, qualifiées de « Criminalité financière» (trafic de
drogues, proxénétisme, trafics humains…et lutte contre le terrorisme.)
La mise en cause des Paradis fiscaux résultait essentiellement du développement dans ces Etats
de la facilité d’implantation de « sociétés écran », et d’une protection judiciaire facilitant le
blanchiment d’argent provenant de la criminalité financière. A noter que les problèmes fiscaux
(Fraudes – évasions) ne relèvent pas de cette catégorie.
Les pays économiquement développés (G8 initialement) ont mandaté et rétribué des organismes
chargés de leur faire gagner ce combat.
Le GAFI/FATF (Groupe d’action financière sur le blanchiment des capitaux (2) a rédigé un texte
de 40 « recommandations » destiné à introduire ces dispositions dans les lois de chaque
Etat.….pas forcément dans les faits !
La mise en œuvre de leurs propositions (simples recommandations respectant la liberté de
choix) peut laisser planer un doute sur la volonté réelle d’efficacité de la part de leurs
mandataires
L’ OCDE: Organisation de Coopération et développement économique, ne retient plus
actuellement que 3 Etats dans sa liste mondiale des paradis fiscaux (Andorre, Monaco,
Liechtenstein).Les organisations non gouvernementales en compteraient plutôt 70.
11
Le passage de 70 à 3 résulte tout simplement d’un changement des critères de sélection. Au lieu
de définir une liste d’interdits qui permettaient lorsqu’elle n’était pas respectée par un Etat de le
mettre sur une liste noire, il est maintenant demandé aux Etats de s’engager par des traités
bilatéraux à fournir des informations à leurs partenaires.
Ces négociations bilatérales sont influencées par le rapport de force économique des partenaires.
Les écarts constatés entre les concessions faites sur la levée du secret bancaire par la Suisse aux
Etats-Unis (Affaire UBS) et non accordées à l’Europe, illustrent ce constat.
En résumé bien peu de résultats.
S’en prendre aux paradis fiscaux: est-ce la bonne cible ?
Nous ne le pensons pas totalement, Pourquoi ?:
- Déclarer leur suppression est un vœu illusoire, si l’on ne s’en prend pas à ceux qui les font
exister.
- Leur statut juridique d’Etat Indépendant les protège et il ne faut pas compter sur eux pour se
saborder….ni sur leurs multiples protecteurs pour les supprimer.
- La délinquance financière utilise les Paradis fiscaux, mais les supprimer ne ferait pas
disparaître les Prédateurs financiers qui vivent plus dans les capitales que sous les cocotiers.
- Il s’agit surtout d’une cible trop limitée. L’appellation paradis fiscaux et judiciaires est bien
trop restrictive (faut il se limiter à 3 ou à 70).Il faut en réalité mettre aussi en cause toutes les
places financières internationales hyper actives dans le domaine de la finance sans loi (City de
Londres, Delaware, Luxembourg, Suisse … )
En fait nous devons plus nous intéresser à tous ceux qui « tirent les ficelles ». Souvent apatrides
ils n’ont que des boites aux lettres dans les paradis fiscaux. Ils pratiquent dans le monde entier ce
que nous qualifions de « Délinquance Financière ». Ce terme de « délinquance financière » peut
paraître un peu faible vis-à-vis de certaines conséquences à l’échelle mondiale de leurs actes.
Nous l’utilisons car une grande partie des modes d’actions des prédateurs financiers que nous
mettons en cause au nom de la protection de l’intérêt collectif, ne tombent pas actuellement sous
le coup de la législation de ce monde sans loi …et ne peuvent pas encore être qualifiées d’actions
illégales.
Les prédateurs financiers manipulent l’économie mondiale à des fins personnelles sans prise en
compte de l’intérêt collectif, et provoquent des effets destructifs sur la Société dans un total
anonymat et une parfaite impunité.
Une autre approche
probablement plus efficace, à titre d’exemple
12
Combattre l’anonymat et l’irresponsabilite financiere
Il s’agit d’empêcher les délinquants financiers de devenir « irresponsables devant la loi en
agissant de façon anonyme »
Donnée à titre d’exemple (et probablement plus efficace qu’une action uniquement ciblée sur les
Paradis fiscaux) cette approche peut mettre en difficulté, non seulement les paradis fiscaux et
places off shore, mais tous les utilisateurs de ces places financières, et la plupart des délinquants
financiers. Elle consiste à prendre pour cibles les dispositions législatives qui les protègent.
Progressivement les Prédateurs financiers ont réussi à instaurer mondialement l’anonymat et
l’irresponsabilité financière.
Au lieu d’affronter les risques financiers et éventuellement judiciaires de leurs actes Les
prédateurs financiers ont joué habilement auprès des Responsables politiques sur:
le registre de la protection des libertés individuelles et l’intouchable « secret
bancaire »,
ou sur la nécessaire limitation des risques de ceux qui ont le « courage ?
d’entreprendre »
Ils ont ainsi pu obtenir la création des « véhicules juridiques» (statuts juridiques de société)(3)
garantissant leur irresponsabilité individuelle
Nous devons prendre pour cibles ces lois qui les protègent.
Patiemment tissées: les législations de Sociétés écran par exemple permettent aux pirates
financiers d’être en dehors du domaine des lois. Nous devons les contraindre à revenir dans un
champ légal.
L’OCDE a écrit un rapport officiellement diffusé en 2001 à tous ses Etats membres sur:
« L’utilisation des entités juridiques a des fins illicites (3)
Nomenclature de «véhicules juridiques support » et de leur mode d’utilisation abusif. »
Même si ce texte mériterait d’être transposé dans une tournure plus volontariste et amendé par
des propositions plus coercitives, il constitue un bon support pour ouvrir un débat à l’échelle
internationale.sur cette approche mettant même en cause: l’ anonymat de l’actionnariat.
A notre connaissance ce rapport déclaré intéressant par les autorités concernées ne semble pas
avoir été suivi d’effets.
Comment agir (7)
13
Il faut inviter les Etats à interdire aux investisseurs de se camoufler par l’utilisation de Sociétés
écran, fondations, trust, « special purpose vehicles »(3) et exiger la remise en cause de la légalité
internationale de leurs statuts.
Nous devons exiger la remise en cause de la légalité internationale de ces statuts.
S’il y avait réellement une volonté politique partagée de le faire, il suffirait que les Etats refusent
de reconnaître ces entités. Dés lors les paradis fiscaux disparaitraient d’eux-mêmes car plus
personne ne pourrait faire de transaction valable juridiquement avec les entités qu’ils abritent.
Ce serait d’ailleurs un excellent moyen pour assainir le fonctionnement du système bancaire dont
les multiples connexions avec les places financières off shore ne peuvent pas actuellement être
mises en cause par absence de traçabilité.
Mode de mise en œuvre des dispositions envisagées:
La crise financière et ses répercussions économiques montrent à quel point les dérapages des
prédateurs financiers ont des répercussions négatives à l’échelle mondiale.
Asservir ces prédateurs à des contraintes de protection de l’humanité ne constitue pas une «
atteinte à la liberté individuelle » mais un « devoir de protection de la Société humaine. »
Leurs actions ont des répercussions mondiales.
Elles doivent être soumises à des Réglementations mondiales auxquelles aucun Etat ou place
financière ne devrait avoir le droit de se soustraire.
Pour combattre l’anonymat Il n’est pas nécessaire de demander l’abolition globale du secret
bancaire.
La nécessité de sanctionner les actions financières illicites n’implique pas la mise sur la place
publique des informations.
Elle exige simplement l’obligation légale, pour toutes les places financières d’imposer aux
structures financières impliquées dans des mouvements financiers que leurs statuts permettent de
garantir l’identification des intervenants:
-
du « Donneur d’ordre réel » comme point d’entrée
au « Bénéficiaire réel »
opérations intermédiaires effectuées
en
fin
d’opération
et
la
traçabilité
des
La « déclaration volontaire des bénéficiaires effectifs et des donneurs d’ordre réels » lors de la
création de ces entités juridiques, serait satisfaisante, à condition de la compléter par des
contrôles à posteriori.
14
IL est essentiel que ce contrôle puisse s’appuyer sur un libre accès des autorités mandatées aux
informations du clearing international.
On ne peut qu’insister sur l’importance des informations stockées dans ces instances: « les
Notaires du nouveau monde » comme les nommait lui-même l’ancien PDG de Clearstream en
réponse à une interview du journaliste Denis ROBERT (4)
Ces dispositions doivent rendre accessibles, (en se limitant bien sur aux seuls agents investis
d’une mission d’enquête par le pouvoir exécutif ou le pouvoir judiciaire de leur Etat: les
informations nécessaires à l’exécution de leur mission.
L’entrave à ces exigences constitue une complicité qui devrait être lourdement sanctionnée.
Le domaine d’application de ces dispositions ne doit pas être limité aux critères officiels de
criminalité (terrorisme, drogue, proxénétisme, vente d’armes, ).
Il devrait être étendu à toutes activités de délinquance financière:
- évasion fiscale détruisant le principal outil d’équilibre social
- transfert de coût notamment dans les groupes industriels
- corruption: mise en place de dictature pour appropriation indirecte de richesses naturelles ou de
biens communs essentiels
L’apparente Hypocrisie Politique (9)
Comment qualifier l’écart entre les déclarations velléitaires de lutte contre les Paradis fiscaux des
responsables politiques, et leurs décisions réelles sur les dossiers en cours à l’échelle nationale
ou Européenne.
S’agit il d’hypocrisie politique ou d’une soumission incontournable aux exigence d’une logique
financière mondiale déshumanisée.
Evoquons quelques exemples:
Création en France des Fiducies
La France: « Pour rendre sa place financière plus attractive a créé un statut de « fiducie » en
2007. Ci après le commentaire d’un ex Garde des sceaux pourtant fort honorable, publié au
journal officiel:
« Même si nous ne nous en rendons pas assez compte - qu'aujourd'hui il existe en France un
véritable marché du droit et que, si certaines places sont attractives, d'autres le sont moins. Il faut
y penser, car, du point de vue économique, l'importance de ce marché du droit est considérable.
15
Négliger l'attractivité de ce que j'appellerai la place juridique de Paris est une erreur, même si
cette tendance est en quelque sorte enracinée dans nos traditions. Il faut avoir le courage de le
dire: la mondialisation existe, à nous de la maîtriser, d'en tirer les profits et faisons en sorte, ce
qui est essentiel, que les avantages qui en sont tirés soient répartis conformément à la justice
sociale. La répartition constitue, selon nous, la clef de voûte. »
Cet extrait en dit long sur la réelle finalité de ce texte de loi.
Affaire Liechtenstein
Les services secrets Allemands obtiennent (Février 2008)contre rémunération une liste de 1400
évadés fiscaux dans la banque LGT du Liechtenstein 600 seulement sont Allemands. 1 milliards
d’euros d’évasion fiscale pour la France
En l’état de nos informations seulement 2 Allemands et aucun Français sont actuellement
sanctionnés
. Une impunité certainement peu dissuasive, et il ne semble bien sur pas être question de
pénaliser le Liechtenstein
L’Europe
Dérogations de la Directive Européenne sur l’épargne
L’Europe s’est dotée d’une directive pour « harmoniser » la taxation de l’épargne à l’intérieur de
son périmètre.
Une dérogation a été accordée à la Belgique, l’Autriche et le Luxembourg pour rester compétitif
avec la SUISSE ….belle harmonisation ?
Le Président de la République Française a vivement interpellé Mr Junker sur la position du
Luxembourg.
Il devait avoir oublié que la même interpellation par son prédécesseur s’est conclue par
l’élévation de Mr Junker au titre de grand Croix de la Légion d’honneur de la République
Française ?
Etrange façon de lutter contre des Paradis fiscau
Pas de volonté politique pourquoi?
Citons Jean de Maillard:
« Les grands Etats sont incapables d’enrayer une dérive illicite des échanges internationaux mais
ils la favorisent directement. A l’extérieur de leurs frontières, les Etats en coulisse élargissent
toutes les zones de non droit. On ne jugule plus les flux d’argent sale, ceux-ci sous-tendent,
16
complètent et soutiennent avantageusement les flux d’argent propre avec lesquels ils se
mélangent »(4)
Les capacités de financement des prédateurs financiers leur confèrent un fort pouvoir
d’intervention. La déréglementation de leurs actes leur permet d’imposer des objectifs de taux de
rendement financiers élevés et conduit à un « siphonnage »de la finance productive vers la
finance spéculative, ce qui dans un système de « concurrence libre et non faussée » provoque des
faillites industrielles et L’Impuissance Politique
La marge de manœuvre des responsables politiques s’étiole:
Comment risquer de déplaire à des fonds pirates alors qu’il faut faire face à des déficits de
trésorerie créés par ces mêmes pirates?
Comment relancer une activité productive qui ne peut dégager que du 4 à 5%de retour sur
investissement alors que des circuits financiers hors contrôle propose 10% en court-circuitant
toute participation aux charges de la vie collective.
Nos responsables Politiques vont-ils comprendre à quel point ils sont asservis ?
- Seront-ils en capacité d’imposer les menaces qu’ils annoncent contre le piratage financier?
- Auront-ils la volonté de reprendre le Contrôle et d’appliquer les solutions proposées?
- Prendront- ils enfin le risque d’affronter ceux dont ils se sont servis
Ou laisseront ils se développer
Le piratage financier mondial
Ce qu’il adviendra de cette situation relève d’options politiques fondamentaales:
L’avenir nous dira, comme l’évoque Mr Vincent Peillon,(6) si cette agitation sur le thème des
paradis fiscaux « dépassera quelques jours de déclarations commerciales pour vendre de la peur
à des opinions publiques déboussolées. »
Nous pouvons le craindre
Nous sortons du périmètre « technique » de notre intervention.
Nous avons pu découvrir ensemble les différentes facettes des dispositions qui conduisent à la
situation actuelle.
17
Il serait hypocrite de notre part de faire croire qu’il ne s’agit que de dispositions fortuites et qu’il
suffit de les comprendre …pour les corriger.
Une nouvelle forme de terrorisme s’est développée sur notre planète:
Le piratage financier: il gangrène le monde
Ses Actions ont des répercussions mondiales.
Elles devraient être soumises à des
Réglementations mondiales auxquelles aucun Etat n’auraient le droit de se soustraire
Il faudrait aller bien au delà des propositions du G 20 et obtenir des dispositions planétaires
Cela suppose de dépasser le cadre de choix politiques et impose de bouleverser des échelles de
valeurs, d’interroger la pluralité de nos pulsions humaines internes pour refonder nos convictions
dans une démarche de nature:
« Philosophique »
Voudrons nous et Serons nous capables:
D’enrayer ces dérapages éthiques
De mettre les valeurs économiques à leur place et de redonner leur priorité aux valeurs humaines
Saurons-nous remettre de l’enthousiasme dans nos projets de vie ?
Il faudra une remise en cause mondiale des valeurs essentielles
Remplacer la logique exclusive et mortifère de la domination financière agressive par la
prise de conscience d’une solidarité a minima nécessaire
Bibliographie
1) Un monde sans loi – La criminalité en image. Texte de Jean de Maillard 1998 Edition Stock
18
2) 40 recommandations du GAFI (http://www.fatf-gafi.org/NCCTfr.htm)
3) http://www.oecd.org/documentprint/0,2744,fr_2649_34727_2673181_1_1_1_1,00html
4) La Boite Noire – Denis ROBERT Edition les Arènes ….
5) Le rapport censuré –Critique non autorisée d’un monde déréglé. Jean de Maillard Flammarion
Enquête
6) Article de Mr Vincent Peillon Député Européen dans le journal LIBERATION
19
▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀
THE ENGINES OF CHAOS: SECRECY JURISDICTIONS AND GLOBAL CRISIS
JOHN CHRISTENSEN
1
(Director of Tax Justice Network, UN advisor)
Welcome to the Shadow Economy
Writing in another period of social and economic crisis, Marx and Engels observed how
financiers are "like the sorcerer who is no longer able to control the powers of the nether world
whom he has called up by his spells."
De-regulation of the financial markets from the 1970s onwards unleashed the powers of the
nether world, and political leaders are now struggling to contain the consequences of those
spells. In their frantic efforts to maximise profits, financiers have created innovative instruments
of devilish complexity; they have played a fiendish game of “pass-the-parcel” involving sliced,
diced and re-packaged debts with unknown risks attached to them; they have created a shadow
banking system designed to operate beyond regulatory control; they have perpetrated massive
frauds and looted on an awesome scale; they have become accomplices to criminal activity,
including insider dealing, money laundering and tax evasion.
With patience and stealth they have created a shadow economy from which they can operate
beyond democratic accountability and regulation. Few people know about this shadow economy.
You will not learn about it at universities, or read about it in political economic texts. But it is
real nonetheless. Over half of world trade is transacted on paper through this shadow economy.
Almost all cross-border investment flows are routed through it. At least one-third of global
wealth is managed from the shadow economy. But despite the immense scale of its operations,
next to nothing is known about how this economy actually works.
Does the shadow economy have a name? Can we find it on a map? The answer to both of these
questions is yes. The shadow economy is widely called "offshore", and it is located in the 72
secrecy jurisdictions (often called tax havens) dotted across the face of the Earth.
1
John Christensen is a development economist and director of the Tax Justice Network International Secretariat
www.taxjustice.net . He has worked as a practitioner in offshore financial services, and for 11 years was economic
adviser to the States of Jersey –- a tax haven. His contact details are: international telephone +44 79 79 868 302
email [email protected]
20
Secrecy jurisdictions have played a major part in the current crisis. They have been used for a
variety of purposes, including:
•
•
•
•
•
to create complex securitised instruments (mostly collateralised debt obligations) to mix
packages of risk that have been marketed indiscriminately around the world;
to register 'off-balance sheet' entities that have been used to withhold materially sensitive
information from investors, regulators, rating agencies, journalists and others;
to degrade the regulatory regimes of other nation states;
to create complex and opaque structures criss-crossing multiples of jurisdictions in order
to confuse investigation and fragment regulatory effort;
to evade and avoid tax on an industrial scale.
In other words, these secrecy jurisdictions have become engines of chaos in the financial
markets, serving the dual purposes of helping financiers to 'get-out-of taxation-free' and also 'getout-of regulation-free.'
In a world of global banks and 24 hour financial markets, regulation is only as effective as the
weakest link in the chain: secrecy jurisdictions are the weakest link. This explains why so much
of the 'financial innovation' of the past two decades can be traced back to these places. The
majority of hedge funds are located in London, the Cayman Islands and the British Channel
Islands. Ditto the private equity industry; the issuance of securitised debt; the re-insurance
industry, and the structured investment vehicles at the heart of the shadow banking system.
The current crisis does not result solely as a result of the sub-prime mortgage market failure in
the United States: it arose because financiers have created a shadow economy that is so opaque
in its operations, so complex in its structure, and so blatantly corrupt in its attitude towards
democracy, regulation and taxation, that no one can and should trust any of its activities.
De-regulation of financial markets opened the door for tax and regulatory competition. Tax
competition has been used to increase returns to capital, and by lowering government revenues,
to force privatisation of strategic assets. De-regulation has greatly increased profitability, but at
massive cost to workers, consumers and the environment. Secrecy jurisdictions have been used
as mechanisms for catalysing both processes, acting as termites which hollow out the structures
designed to protect society from predatory practices.
To all intents and purposes, secrecy jurisdictions represent a financial world without rules, where
criminality can prosper. My own experiences of working within a secrecy jurisdictions suggest
that the secrecy they provide facilitates not just tax evasion, but also insider dealing, market
rigging, payment of illicit political donations, non-disclosure of conflicts of interest, facilitation
of bribery, and all sorts of other corrupt practices. And this happens day in day out on an
industrial scale.
In a few days the G-20 leaders will convene in London for an emergency summit. UK Prime
Minister Gordon Brown wants a return to business as usual as fast as possible. His interest lies
with protecting the City of London and its infernal progeny in the Cayman Islands, the Channel
21
Islands and elsewhere. Civil society must insist that there will be no return to business as usual.
We must demand comprehensive reform which will eradicate all of the mechanisms that the
financiers, lawyers, accountants and their clients use to take advantage of secrecy jurisdictions.
This will include demands for:
•
•
•
•
•
•
•
comprehensive disclosure of ownership data;
the closure of bank subsidiaries located in secrecy jurisdictions;
adoption of a country-by-country reporting standard for multinational companies;
abolition of the use of 'off-balance' sheet accounting vehicles;
effective steps to tackle trade mispricing;
taxation of hedge fund profits as income rather than capital gains;
a multilateral tax information exchange treaty based on automatic exchange;
Taken as a package, these measures will severely restrict the use and abuse of secrecy
jurisdictions. Many can be expected to collapse and might need transitional support to restructure
their economies. These measures will reduce the amount of grand corruption. They will restore
the ability of democratically elected governments to tax on a progressive basis. And they will
start the process of re-balancing a system that has created wild inequality of wealth and income
distribution.
The detailed reforms proposed by the Tax Justice Network and presented to the G-20 team in
March 2009 are given in full in Appendix 1 of this paper. For many civil society organisations
the extent to which the G-20 leaders sign-up to these proposals will be a key litmus test of their
commitment to rectifying the architectural weaknesses to the current financial system. Judging
from the measures that have been promoted in early March 2009, the issue of what to do about
secrecy jurisdictions will be a major theme around the G-20 Summit, but there appears to be
little political will to take effective actions against them.
Secrecy Jurisdictions and the Globalisation of Disorder
The phenomenon known as the offshore financial economy began to emerge in the 1960s after
the creation of the London-based Euromarket. Large sums of financial capital accumulated
outside the country of residence of individual and corporate owners, providing a basis for the
emergence of transnationalism.2 This capital was managed by financial specialists operating
from a variety of jurisdictions, many of them microstates, which purposefully set themselves up
as secrecy jurisdictions: that is autonomous or semi-autonomous jurisdictions offering a
combination of lax regulation, low or zero taxation on income and capital of non-residents,
secrecy facilities for banking or corporate ownership, and an absence of effective information
exchange with the authorities of third party countries.
2
Nairn, T., (1997) Faces of Nationalism, Verso, London
22
Scant attention has been paid to the activities of these secrecy jurisdictions, even though it was
recognised as early as 1961 that they attract “all sorts of financial wizards, some of whose
activities we can well believe should be controlled in the public interest.”3 Almost fifty years
later, it is increasingly clear that secrecy jurisdictions have become major players in the global
financial markets: over half of all international bank lending and approximately one-third of
foreign direct investment is routed via secrecy jurisdictions; 50 percent of global trade is routed
on paper via secrecy jurisdictions even though they only account for some 3 percent of world
GDP4; over two million international business corporations and hundreds of thousands, possibly
millions, of secretive trusts and foundations have been created in secrecy jurisdictions; personal
wealth totalling $11.5 trillion has been shifted offshore by the super-rich (known in banking
circles as High-Net Worth Individuals, or Hen-Wees), evading taxes of over $250 billion
annually.5 Secrecy jurisdictions have also played a major role in the sub-prime banking crisis
that emerged in 2007, providing an environment of lax regulation which, combined with the
opacity and complexity of structured investment vehicles and collateralised debt obligations, has
undermined the efficiency of the capital markets.6
Crucially, however, the secretive legal instruments used by the Hen-Wees and MNCs for tax
dodging purposes are also used for a wide variety of other criminal activities, including market
rigging, insider trading, making illicit political donations, embezzlement, fraud, and payment of
bribes and commission kickbacks. It has become increasingly apparent that secrecy jurisdictions
provide a supply side stimulus that encourages and enables grand scale corruption by providing
an operational base used by legal and financial professionals, and their clients, to exploit
legislative gaps and lax regulation.
The United Kingdom has a key responsibility for taking action against the secrecy jurisdictions:
as Nairn pointed out in 1997, “Most of these (secrecy jurisdictions) were former British colonies.
Unquestionably it has been the collapse of the British Empire which has bequeathed most microstates to the New International Order or Disorder.” 7
The role of the pinstripe infrastructure in promoting the use of secrecy jurisdictions for nefarious
purposes was highlighted by a 2006 U.S. Senate report which noted how:
A sophisticated offshore industry, composed of a cadre of international professionals
including tax attorneys, accountants, bankers, brokers, corporate service providers, and
trust administrators, aggressively promotes offshore jurisdictions to U.S. citizens as a
means to avoid taxes and creditors in their home jurisdictions. These professionals, many
3
Extract from a memorandum concerning the Bahamas dated 3rd November 1961 submitted by Mr W.G. Hulland of
the Colonial Office to Mr B.E.Bennett at the Bank of England: seen by the author in the Bank of England archive.
4
French finance minister D Strauss-Kahn, in a speech to the Paris Group of Experts, March 1999. Quoted in
Christensen, J. and Hampton, M.P. (1999) All Good Things Come to an End, The World Today, vol.55, no.8/9
(Royal Institute of International Affairs)
5
See http://www.taxjustice.net/cms/upload/pdf/Price_of_Offshore.pdf accessed 20 August 2006
6
See, for example, Mathiason, N, (2008) Spotlight falls on the dark dealings of secrecy jurisdictions, The
Observer, page 4, Business Section, 20 July
7
Nairn (1997), op cit
23
of whom are located or do business in the United States, advise and assist U.S. citizens
on the opening of offshore accounts establishing sham trusts, and shell corporations,
hiding assets offshore, and making secret use of their offshore assets here at home. 8
A number of international initiatives have been attempted to control the activities of secrecy
jurisdictions, but with remarkably little success. The most important of these, the OECD-led
project to tackle harmful tax competition, launched in 1998, set out to radically transform
secrecy jurisdictions through increased transparency and improved information exchange
between national authorities. This initiative ran into the sands in 2001, when the new
administration in Washington withdrew its support. Even progress on improving information
exchange has been modest. Other attempts to tackle illicit financial flows through secrecy
jurisdictions have been timid and unproductive, largely because the international organisations
charged with tackling illicit financial flows have taken too narrow a definition of what
constitutes money-laundering.9
Corruption is widely recognised as harmful to the sustainable development of poorer countries. It
is less well recognised how secrecy jurisdictions contribute to the impoverishment of these
countries by encouraging and enabling capital flight, tax evasion, and facilitating illicit financial
flows originating from the proceeds of corrupt activities. Unless this supply side for corruption is
tackled there is little prospect for an end to aid dependency or the creation of economically
stable, democratic states able to provide food security, education and healthcare to their citizens.
Capital Flight, Tax Evasion and the Undermining of Development
The elephant in the living room of the development debate is the role played by the global
infrastructure of secrecy jurisdictions, banks, legal and accounting businesses, and related
financial intermediaries in providing an offshore interface between the illicit and the licit
economies.10 This interface facilitates capital flight and tax evasion, distorts global markets to
the disadvantage of innovation and entrepreneurship, slows economic growth by rewarding freeriding and mis-directing investment, and increases global inequality. The offshore interface
functions through collusion between private sector financial intermediaries and the governments
of secrecy jurisdictions which host offshore financial centres.
Despite the evocative images conjured up by the term ‘offshore’, it would be wrong to think of
secrecy jurisdictions and the offshore economy as disconnected and remote from mainstream
U.S. Senate Permanent Sub-Committee on Investigations (2006) Tax Haven Abuses: The enablers, the tools, the
secrecy, issued 1st August.
9
Christensen, J. and Spencer, D. (2008) Stop this timidity in ending tax haven abuse, Financial Times, Comment,
5th March, p.13
10
For a detailed analysis of the origins of secrecy jurisdictions and their linkages with the global economy see:
Hampton, M, (1996) The Offshore Interface: Secrecy jurisdictions in the Global Economy, MacMillan,
Basingstoke.
8
24
nation states. Geographically, many secrecy jurisdictions are located on small island economies
dispersed across the spectrum of time zones – see table 1, but politically and economically the
majority of secrecy jurisdictions are intimately linked to major OECD states, and the term
‘offshore’ is strictly a political statement about the relationship between the state and parts of its
related territories.11 In the case of the United Kingdom, itself a tax haven, the bulk of offshore
transactions are controlled by the City of London, albeit that many City financial intermediaries
operate from offices located on UK Overseas Territories and Crown Dependencies. These
jurisdictions project the impression of autonomy, but in practice many, though not all, of these
secrecy jurisdictions act simply as booking centres for instructions issuing out of the City of
London and other major financial centres. They are primarily of use to the City because they
offer regulatory regimes which are more permissive than those prevailing onshore, and zero or
minimal tax rates combined with secrecy arrangements - including non-disclosure of beneficial
ownership of companies and trusts.
Most reasonable observers might have expected that governments of major states, e.g. the G-7
nations, would act collectively to prevent regulatory degradation and tax evasion, but the rise of
secrecy jurisdictions and the offshore economy is closely linked to the liberalisation of global
capital markets and, more broadly, with policy measures generally associated with the neoliberal agenda: deregulation, tax cutting, liberalisation of trade and investment flows, and
privatisation. Influential Washington-based interest groups closely associated with neo-liberal
policies, including the Cato Institute, Americans for Tax Reform, the American Enterprise
Institute and the Center for Freedom and Prosperity, publicly support secrecy jurisdictions and
have lobbied strenuously against international initiatives to regulate their activities. Grover
Norquist, the Friedmanite lobbyist closely associated with the administration of President
George W. Bush, who has famously declared his goal as being to reduce government “to the size
where I can drag it into the bathroom and drown it in a bathtub”, publicly promotes the United
States as a tax haven: “The U.S. is a tax haven, and this policy has helped attract trillions of
dollars of job-creating capital to America's economy.”12 Secrecy jurisdictions have played a
major role in advancing the neo-liberal agenda, and have been strongly supported in this process
through what Naomi Klein identifies as “the intimate cooperation of powerful business figures,
crusading ideologues and strong-arm political leaders.” 13
Capital market liberalisation has stimulated an extraordinary increase in cross-border financial
flows, which have increased eightfold since 1990 to US$8.2 trillion in 2006.14 Illicit financial
flows constitute around one fifth of this amount, but by and large governments and multilateral
agencies have downplayed concerns about dirty money except when drugs and terrorism are
concerned. James Wolfensohn provides an exception: during his presidency of the World Bank
he suggested that illicit financial flows might partially explain why the bank had failed in its
mission to tackle poverty. For the most part, however, anti-corruption initiatives have focused on
bribery of public officials and politicians, and looting by despots and their cronies, rather than on
Palan, R., (1999) Offshore and the Structural Enablement of Sovereignty, in Hampton, M.P., & Abbott, J.P., .
(eds) Offshore Finance Centres and Secrecy jurisdictions: The Rise of Global Capital, MacMillan, Basingstoke.
12
http://www.freedomandprosperity.org/press/p04-07-05/p04-07-05.shtml accessed 17-July-2008
13
Klein, N. (2007) The Shock Doctrine, Penguin Books, p.445
14
McKinsey Global Institute 2008 Mapping global capital markets : fourth annual report. San Francisco
11
25
the workings of a global financial system that encourages and facilitates the laundering of dirty
money. Astonishingly, neither the World Bank nor the IMF has tried to investigate or quantify
capital flight and tax evasion.
In practice key actors, notably Switzerland, the UK and the USA, have acted to thwart efforts to
enhance global cooperation in tackling illicit financial flows. The UK, for example, allows its
Crown Dependencies to persist with facilitating tax evasion, despite the fact that it is ultimately
responsible for ensuring the good governance of those islands. Notwithstanding the ‘smoke and
mirrors’ appearance of quasi independence, all domestic laws enacted by the governments of the
Bailiwicks of Guernsey and Jersey need prior approval from the Privy Council. It is therefore
safe to conclude that the UK Department for Constitutional Affairs, which is responsible for
government relations with the Crown Dependencies, would resist any laws it considered contrary
to UK interests. Approximately half of all enumerated secrecy jurisdictions are directly linked to
Britain, either through Overseas Territory or Crown Dependency status, or through membership
of the Commonwealth. When asked at the conclusion of her enquiries into the Elf scandal
whether corruption on a similar scale could occur in the United Kingdom, the Norwegian anticorruption campaigner Eva Joly singled out London as the tax haven she found particularly
obstructive to investigators: “The City of London, that state within a state which has never
transmitted even the smallest piece of usable evidence to a foreign magistrate.”
Eva Joly refers to secrecy jurisdictions as the principal target in the emerging phase of the anticorruption debate, arguing that: “There is nothing more important for those who want to tackle
poverty in the world than to make it possible to trace dirty money flows and impose sanctions on
those territories which don’t cooperate with this process.”15 Joly is not alone in pinpointing the
City of London and its offshore satellites as important players on the supply side of the grand
corruption equation. In its report on the UK and corruption in Africa, the UK Africa All Party
Parliamentary group commented that:
“The international financial system is riddled with loopholes. Poor enforcement of
laundering regulations leads some experts to suggest there is as much as $1 trillion of
illicit cross border flows annually. Unfortunately the UK, including the City of London
and Overseas Territories and Crown Dependencies, has been implicated in this
practice.” 16
These illicit flows persist despite the elaborate and very expensive follow-the-money strategy
introduced in the 1980s to tackle narcotics trafficking but subsequently broadened in an attempt
to pre-empt terrorist attacks through tracking related financial flows. The logic of this strategy,
which began with the creation of a new offence called money-laundering, was to bring financial
institutions and intermediaries into the fray by handing them responsibility for identification of
Quoted from “Pour Eva Joly, “le G8 ne lutte pas vraiment contre la corruption”, Interview in La Tribune, 6
June 2007
16
Africa All Party Parliamentary Group (2006) The Other Side of the Coin, London
15
26
the originators and beneficiaries of financial transactions through the ‘know-your-client’ rules,
whilst also requiring bankers to inform the authorities of currency transactions exceeding a
certain level (Currency Transaction Reports) and any transaction or transactor that raised
reasonable suspicion in the minds of the banking personnel involved (Suspicious Transaction
Reports).
Notwithstanding these anti-money laundering initiatives, however, the failure rate for detecting
dirty money flows is astonishingly high. According to a Swiss banker, only 0.01 per cent of dirty
money flowing through Switzerland is detected.17 It is unlikely that other secrecy jurisdictions
perform any better. This is partly because of the narrow focus on the wars on drugs and terror,
which account for only a small proportion of cross-border illicit financial flows, but also because
of the extraordinary lax attitude in many countries towards commercial trade mispricing and
fraudulent invoicing, which account for the majority of such flows. This laxity also extends to
tax evasion (typically an outcome if not a motive for trade mispricing), which is treated as a
predicate crime in some countries, but not others, and is an area where developing countries are
particularly vulnerable. It is hard, however, to judge the success or otherwise of the follow-themoney strategy. One commentator concludes:
The result is a cumbersome and increasingly intrusive regulatory framework which has
imposed heavy cost on innocent parties. Yet, amazingly, to this day there exists no
sensible and defensible criteria by which its success or failure can be judged. 18
The Profits of Secrecy
A defining characteristic of secrecy jurisdictions is the provision of conditions of secrecy, either
created through banking secrecy laws or through de facto judicial arrangements and banking
practices. This ‘secrecy space’ creates an effective barrier to investigation of activities booked
through the tax haven,19 and facilitates the laundering of proceeds from a wide range of criminal
and unethical activities, including fraud, embezzlement and theft, bribery, narco trafficking,
illegal arms trafficking, counterfeiting, insider trading, false trade invoicing, transfer mispricing,
and tax dodging. Elaborate schemes are devised to ‘weave’ dirty money into commercial
transactions and to disguise the proceeds of crime and tax evasion using complex multijurisdictional structures. According to one expert investigator:
Table 1: Secrecy jurisdictions of the World
17
Baker, R. (2005) op cit, p174
Naylor, R.T. (2007) Criminal Profits, Terror Dollars and Nonsense, paper given at the Transnational Institute,
June 2007
19
Christensen, J. and Hampton, M.P. (1999) A Legislature for Hire: The Capture of the State in Jersey’s
Offshore Finance Centre, in Hampton, M.P. & Abbott, J.P, op cit
18
27
The Caribbean and Americas
Frankfurt
Anguilla
Gibraltar
Antigua and Barbuda *
Guernsey
Aruba *
Hungary *
The Bahamas
Iceland *
Barbados
Ireland (Dublin) *
Belize
Ingushetia *
Bermuda
Isle of Man
British Virgin Islands
Jersey
Cayman Islands
Liechtenstein
Costa Rica
Luxembourg
Dominica *
Madeira *
Grenada
Malta *
Montserrat *
Monaco
Netherland Antilles
Netherlands
New York
Sark
Panama
Switzerland
Saint Lucia *
Trieste *
St Kitts & Nevis *
Turkish Republic of Northern Cyprus *
Saint Vincent and the Grenadines *
Turks and Caicos Islands
Middle East and Asia
Uruguay *
Bahrain
US Virgin Islands *
Dubai *
Hong Kong
Africa
Labuan
Liberia
Lebanon
Mauritius
Macau *
Melilla *
Singapore
The Seychelles *
Tel Aviv *
28
São Tomé e Príncipe *
Taipei *
Somalia *
Indian and Pacific Oceans
South Africa *
The Cook Islands
Europe
The Maldives *
Alderney *
The Marianas
Andorra
Marshall Islands
Belgium *
Samoa *
Campione d’Italia *
Tonga *
City of London
Vanuatu
Cyprus
Source: tax us if you can, Tax Justice Network, 2005
Note: This list excludes territories with some tax haven features but which are not commonly used as
such.
-----------------------
"Methods to launder money vary dramatically from low-level, relatively simple to highlystructured and complex business scenarios for transfer of money offshore. What is being
increasingly identified is the infiltration of criminal identities into otherwise legitimate
business interests. None of these people could get away with a lot of what they were
doing if it wasn't for lawyers, accountants, financial advisers, and the like, knowingly
assisting them to launder and hide assets."20
US$1.6 trillion of dirty money21 flows annually into offshore accounts, approximately half of
which originates from developing countries.22 Crucially the techniques used for tax dodging and
laundering dirty money involve identical mechanisms and financial subterfuges: multijurisdiction structures, offshore companies and trusts, foundations, correspondent banks,
nominee directors, dummy wire transfers, etc. Legal institutions granted special status and
privilege by society have been subverted to purposes for which they were never intended. For
example, the original purpose of trusts was to promote the protection of spouses and other family
20
Detective Superintendent Des Bray, of the Commercial and Electronic Crime Branch, interviewed in the Adelaide
Advertiser, Lawyers helping to launder money, 4 June 2007
21
Dirty money is defined as money that is obtained, transferred or used illegally.
22
Baker, R. (2005) Capitalism’s Achilles Heel, John Wiley & Sons, Hoboken, New Jersey
29
members who are unable to look after their own affairs, and to promote charitable causes.
Incredible as it must appear to those not familiar with the operations of secrecy jurisdictions,
charitable trusts are regularly set up for the purposes of owning ‘special purpose vehicles’ used
for international tax planning and for hiding both assets and liabilities ‘off-balance sheet’, as
happened with Enron and the collapsed British bank Northern Rock.23
Tax haven facilities are actively marketed by financial intermediaries to potential clients
throughout the world. Mainstream newspapers carry advertisements promoting offshore
structures and tax efficient wealth-managements schemes. These advertisements are an open
invitation to capital flight and tax evasion. They reveal a major fault line in the financial
liberalisation process. Whilst capital has become almost totally mobile, the ability to police
cross-border dirty money flows remains largely nationally based. The vast majority of dirty
money flows are laundered via complex multi-jurisdictional ladders operating through the global
banking system. Huge sums are involved, particularly for developing countries prone to capital
flight: Africa is estimated to have suffered a net accumulated outflow, including loss of interest
earnings, amounting to over US$600 billion since 1975.24 Most analysts agree that the outflows
of illicit money originating in Africa tend to be permanent, indicating that between 80 – 90 per
cent of such flows remain outside the Continent.25 Another study concludes that sub-Saharan
Africa is a net creditor to the rest of the world in the sense that external assets, i.e. the stock of
flight capital, exceed external liabilities (i.e. external debt). 26 The problem is that the assets are
largely held in private hands, whilst the liabilities belong to the African public.
It is time to turn the current focus on corruption and development on its head. Who could
disagree with African anti-corruption campaigners who, whilst deploring domestic corruption
involving bribe-taking, fraud and embezzlement, are puzzled by the way in which the corruption
debate has focused on the demand side of the equation whilst largely ignoring the crucial role of
supply side agents: “the looting of (Nigeria’s) resources, which reached its peak during Sani
Abacha’s presidency in the 1990s, happened with the active connivance of an extensive
infrastructure of banks, lawyers and accountants who provided the means for tens of billions to
be shifted offshore. Some of these aiders and abetters came from Jersey. They would have been
aware of the source of the funds and must have profited magnificently from handling this stolen
property.”27
It is disturbing, to put it mildly, that the prevailing corruption discourse remains largely focused
on pointing fingers at petty officials and ruling kleptomaniacs. In terms of orders of magnitude,
the proceeds from bribery, drugs money laundering, trafficking in humans, counterfeit goods and
currency, smuggling, racketeering, and illegal arms trading account in aggregate for 35 per cent
of cross-border dirty money flows originating from developing and transitional economies. In
23
Brittain-Catlin, W., (2005) Offshore: The Dark Side of the Global Economy, Farrar, Strauss and Giroux, New
York, pp55-76
24
See http://www.taxresearch.org.uk/Blog/2008/05/10/africa-has-lost-607-billion/ accessed 22 July 2008
25
Raymond Baker from the Center for International Policy, Washington, quoted from oral evidence given to the UK
Africa All Party Parliamentary Group in January 2006.
26
Boyce, J.K. and Ndikumana, L. (2005) Africa’s Debt: Who Owes Whom? In Epstein, G.A. Capital Flight and
Capital Controls in Developing Countries, Edward Elgar, Cheltenham
27
Christensen, J. (2005) ‘Hooray Hen-Wees’ London Review of Books, vol.27, no.19, 6th October
30
contrast, the proceeds from illicit commercial activity, incorporating mis-pricing, abusive
transfer pricing and fake and fraudulent transactions account for 65 per cent of such flows.28 At
the very least, equal emphasis should be given to corruption in both private and public spheres;
greater prominence should be given to how corruption can reduce tax revenues by as much as 50
per cent;29 and the activities of offshore financial centres should be more carefully scrutinised to
ascertain their harmful impacts on the functioning of global markets and on the integrity of the
rule of law. As Baker notes in the concluding chapter of Capitalism’s Achilles Heel:
“Illicit, disguised and hidden financial flows create a high-risk environment for
capitalists and a low-risk environment for criminals and thugs. When we pervert the
proper functioning of our chosen system, we lose the soft power it has to project values
across the globe. Capitalism itself then runs a reputational risk. As it is now, many
millions of people in developing and transitional economies scoff at free markets,
regarding the concept as a license to steal in the same way as they see other others
illicitly enriching themselves.”
Regrettably, Transparency International, despite its commendable role in putting corruption
onto the political agenda, has undermined the efforts of reformers through its publication of the
Corruption Perception Index (CPI) which reinforces stereotypical perceptions about the
geography of corruption. Year in, year out, since 1995 the CPI has identified Africa as the most
corrupt region of the world, accounting for over half of the ‘most corrupt’ quintile of countries
in the 2006 index. African countries account for about one half of the countries identified as
most corrupt, with Chad, Cote d’Ivoire, Democratic Republic of Congo, Equatorial Guinea,
Guinea and Sudan ranking amongst the bottom ten of the 163 countries surveyed. Ghana fares
relatively well, ranking at joint 70th position in 2006, though the ranking score of 3.3 out of a
possible 10 still places Ghana at the low end (i.e. more corrupt) of Transparency International’s
corruption spectrum. But despite the attention given to the CPI in the African and global press,
these statistics provide a very partial and biased perspective. A more critical examination of the
index reveals that over half of the countries identified by the CPI in 2006 as ‘least corrupt’ are
secrecy jurisdictions, including major centres such as Singapore (ranked 5th overall),
Switzerland (7th), United Kingdom and Luxembourg (joint 11th), Hong Kong (15th), Germany
(16th), USA and Belgium (jointly 20th). For good measure Barbados, Iceland, Malta, New
Zealand and the United Arab Emirates (all secrecy jurisdictions) also fall into the ‘least corrupt’
quintile. Not a single African nation is ranked in the ‘least corrupt’ quintile.
What do these rankings tell us about the current politics of corruption? And who would disagree
with the prominent Nigerian politician who, during protracted negotiations to secure the
repatriation of assets stolen by former Nigerian President Sani Abacha, commented that: “It is
rather ironical that the European based Transparency International does not think it proper to
28
Baker (2005) op cit, p369
The Other Side of the Coin: The UK and Corruption in Africa, report by the Africa All Party Parliamentary
Group, March 2006, p12
29
31
list Switzerland as the first or second most corrupt nation in the world for harbouring,
encouraging and enticing all robbers of public treasuries around the world to bring their loot for
safe-keeping in their dirty vaults.30”
The perversity of the CPI’s rankings reflects the general confusion and inadequacy of the current
corruption discourse. In focusing on the activities of players employed in the public sector, and
in largely basing its index on the perceptions of actors with conflicting interests, TI has
highlighted only part of the corruption issue and has evaded the wider issue of how the ‘supply
side’ incentivises and protects high level corruption. This proclivity to point fingers at petty
officials and ruling kleptomaniacs has resulted in insufficient attention being paid to the (largely)
Western financial intermediaries who facilitate the laundering of the proceeds of corruption
through offshore companies, trusts and similar subterfuges. Ditto the role of the governments of
secrecy jurisdictions which actively collude in the process of encouraging illicit capital flight and
tax evasion by providing lax regulation combined with secrecy and an absence of effective
information exchange.
The secrecy space offered by the offshore interface, which currently comprises approximately 72
secrecy jurisdictions clustered near the major onshore economies,31 represents a glaring flaw in
the global financial architecture. This flaw is routinely exploited by financial intermediaries for
the simple reason that this is the most profitable fee-earning activity. Senator Joe Lieberman
summed up these degraded values when he commented to the U.S. Senate Committee that:
“ranks of lawyers and financial accountants have abused the law and their professional ethics
simply for the sake of huge sums of money to be made helping their clients evade taxes.”32
The distorted geography of corruption mentioned above may well arise from TI’s definition of
corruption as “the misuse of entrusted power for private gain.” Operationally, this has led to an
obsessive focus on public officials (politicians and state employees) and a lack of attention to
other elites, including company directors or financial intermediaries. Now the focus must shift to
the enablers on the supply side,33 including:
•
governments of jurisdictions (not exclusively those categorised as secrecy jurisdictions)
which supply the secrecy spaces where corruption can take place;
30
Education Minister Professor Aliya Babs Fafunwa quoted in This Day, 6th June 2005
TJN’s map of secrecy jurisdictions is at: http://www.taxjustice.net/cms/upload/pdf/mapamundi.pdf accessed 14
August 2006
31
32
http://hsgac.senate.gov/index.cfm?FuseAction=PressReleases.Detail&Affiliation=R&PressRelease_id=580&Month
=11&Year=2003 accessed 14 August 2006
33
See, for example, The Other Side of the Coin: The UK and Corruption in Africa, a report by the Africa All
Party Parliamentary Group, March 2006
32
•
private sector agents, including and especially professional intermediaries such as
bankers, lawyers, accountants, company formation agencies and trust companies, whose
activities facilitate (or overlook) corrupt financial practices34;
•
company directors responsible for illicit transactions that contribute to capital flight, tax
evasion and tax avoidance.
Public understanding of what constitutes corruption needs to be radically shifted to encompass
“all activities that contribute to undermining the integrity of the rules, systems and institutions
which govern societies.”35 Insider-trading, tax evasion and avoidance, market-rigging, nondisclosure of pecuniary involvement, embezzlement, and trade mis-pricing, all of which
activities happen in the private sector and are disguised through offshore structures, are highly
damaging to market economies and should be unequivocally identified as corrupt practices
within the scope of the United Nations Convention Against Corruption.
There is no shortage of evidence to illustrate how secrecy jurisdictions go about their task of
supporting corruption. My native island of Jersey, for example, introduced a new trust law in
May 2006 that allows for the creation and operation of ‘sham’ trusts which can only serve the
purposes of tax evaders.36 Jersey is, of course, a dependency of the British Crown, and this law
will have been presented to the Privy Council for approval prior to its enactment. Since these
‘sham’ trusts will largely be created on behalf of tax evaders from outside the island, it is clear
that the UK government is not serious about tackling the tax dodging industry.
The United Kingdom merits being placed high on the list of most corrupt countries. This
nomination is based on four aspects of British economic policy which undermine public
confidence in the integrity of government policy and are ultimately harmful to national and
international interests. These are:

London’s role as a tax haven, and Britain’s role as defender of the tax haven activities of its
overseas territories and Crown dependencies;

Britain’s dismal role in undermining the effectiveness of the European Union’s Savings Tax
Directive by failing to advise the European Commission that the directive as agreed would
allow interest paid to trusts to fall outside the tax deduction provisions. This omission
appears to have been deliberate and has left a gaping loophole in the Savings Tax Directive.37

Many of the legal subterfuges that play a part in the offshore interface have their origins in
British law. This includes offshore trusts and shell companies, and the long standing concept
34
US Senate (2006) Tax Haven Abuses: The Enablers, the Tools and Secrecy, Permanent SubCommittee on
Investigations.
35
Christensen, J. (2007) Mirror, Mirror on the Wall, Who’s the Most Corrupt of All, conference paper given at the
World Social Forum in Nairobi, January 2007
36
For further detail and analysis see: www.taxresearch.org.uk/Blog/2006/06/15/jersey-passes-law-allowing%e2%80%98sham%e2%80%99-trusts-for-use-by-tax-evaders/ accessed 22 July 2008
37
Christensen, J., and Murphy, R., (2006) The Tax Avoider’s Chancellor, Red Pepper, August, pp24-26
33
of the separation of the place of incorporation of a company and the obligation to pay tax.
The latter concept remains a key element of offshore tax planning.

Britain’s extensive use of tax competition to gain international advantage, for example
through the preferential tax treatment given to the London based Eurobond market;
In many respects the UK experience illustrates how international tax competition collides headon with democratic processes. In 2007, the City of London demonstrated its political muscles by
overturning proposed reform of the non-domicile rule, which was effectively neutered by
extensive lobbying. In July 2008 the British government was forced to withdraw important
reform proposals relating to the tax treatment of foreign income of multinational companies
headquartered in Britain: this backdown having been forced by very public threats from MNCs
to shift their headquarters to Ireland or the Netherlands. To all intents and purposes, the UK
government has lost the ability to tax capital located in the UK, but continues to hinder efforts to
strengthen international cooperation, which is the only viable means of retaining national
sovereignty in taxing capital.
The idea of tax competition, which conflates the micro economic theory of the firm with political
economics of the state, is a fallacious notion used to justify tax cuts for powerful companies and
rich individuals. The fact that governments do not compete with one another to provide defence,
health, education and other public services to their citizens has not inhibited prominent
economists from supporting the concept. Milton Friedman, a leading member of the ‘Chicago
Boys’ who advised Augusto Pinochet during his dictatorship, has said:
“Competition among national governments in the public services they provide and in the
taxes they impose, is every bit as productive as competition among individuals or
enterprises in the goods and services they offer for sale and the prices which they offer.”
38
Such thinking is manna from heaven for rich people and powerful businesses who don’t want to
pay taxes, but according to Financial Times columnist Martin Wolf: “The notion of the
competitiveness of countries, on the model of the competitiveness of companies, is nonsense.”39
It seems not to have occurred to Mr Friedman that when businesses fail they are replaced by
more efficient businesses, whereas when governments fail the international community is called
in to rescue the situation. Furthermore, mounting empirical evidence has shown that tax
competition, particularly between low income countries, does not yield a Laffer effect arising
from lower taxes stimulating economic growth, and indeed indirect subsidies, which is
effectively what tax holidays and special exemptions are, can cause severe market distortions. As
Charlton and Stiglitz note:
38
39
http://www.freedomandprosperity.org/ accessed 14 August 2006
Wolf, M., (2005), Why Globalization Works Yale Nota Bene, p258
34
“The main beneficiary of that (tax) competition is international business, and often
countries suffer large fiscal losses without commensurate gains to either their domestic
economy or to the efficiency of the location of international production.” 40
Unfortunately, the fallacy of tax competition has proved enormously influential amongst
politicians and has initiated a race to the bottom, not least in the UK. Speaking at the Mansion
House in 2006 the UK Chancellor said: “We will succeed if, like London, we think globally . .
(and) invest in . . . a competitive tax environment.”
“Only the little people pay taxes”
Secrecy jurisdictions encourage capital flight, exacerbate financial crises, and impose economic
costs in the form of reduced investment, slower economic growth and higher unemployment.
Many orthodox economists overlook the role of the offshore economy in their analysis, which
arguably underlies their inability to explain the ‘uphill’ movement of capital from poor to rich
nations – above all to the USA and Europe – despite the predictions of their economic theories.41
The prospect of financial crises might be a primary cause of capital flight, but tax free status
creates a strong incentive for wealthy domestic asset holders in developing countries to retain
their assets offshore. Doing this on an anonymous basis enables them to protect their wealth
from potential currency devaluation and from taxes. But not all the capital that flees developing
countries stays out. Some returns disguised as foreign direct investment. This is the consequence
of the flight money being re-cast offshore during the laundering prior to reinvestment in the
country of origin. This is a process known as ‘round tripping’. The preferential treatment
accorded to many foreign investors provides an incentive to round trip. For example, many
governments offer foreign investors lower tax rates, favourable land use rights, convenient
administrative supports and a variety of direct and indirect subsidies. They also enjoy superior
property rights protection. These investment incentives are discriminatory in so far as they
provide a significant financial advantage to external investors (even when in practice the
investors are locals who have round-tripped capital to take advantage of these fiscal subsidies)
and put local businesses at a financial disadvantage. Round tripping also occurs when investors
see opportunities to buy domestic assets at bargain prices, for example during privatisation
programmes and after a devaluation. Round tripped capital is also involved in illicit funding of
political parties, bribery of public officials, market rigging, insider dealing, and other corrupt and
illegal activities. The fact that ultimate ownership of the capital is disguised through offshore
secrecy arrangements provides a very high level of immunity from investigation by revenue and
40
Stiglitz, J.E. and Charlton, A. (2005) Fair Trade for All, Oxford University Press, p.133
Guha, K. (2006) GLOBALISATION – A share of the spoils: why policymakers fear ‘lumpy’ growth may
not benefit all, Financial Times, 28 August, p11
41
35
law enforcement agencies, and in most cases even the major international commercial
investigation agencies find it difficult if not impossible to penetrate the multi-jurisdictional
structures created to perpetrate such crimes.
An inevitable outcome of this massive rupture of capital heading northwards is that developing
countries lose both their investment capital and the tax revenues that would otherwise flow from
this capital being invested in the domestic economy. They also lose out to tax evasion in the
domestic context (often from activities in the informal economy), from tax avoidance on crossborder trade, and from the pressures to compete for investment capital through offering
unnecessary tax incentives. In combination these issues are estimated to cost developing
countries approximately $385 billion annually in tax revenues foregone.42 This clearly represents
a massive haemorrhaging of the domestic financial resource of many developing countries,
which undermines sustainability in a number of ways:

Declining tax revenue income from the wealthy and high income earners forces
governments to substitute other taxes (typically indirect) with a consequent regressive
impact on wealth and income distribution;

Falling tax revenues force cutbacks in public investment in education, transport and other
infrastructure, reducing investment and slowing growth;

Tax dodging corrupts the integrity of tax regimes and creates harmful economic
distortions which penalise those who follow ethical practice and benefits those who bend
the rules;

Tax dodging undermines public respect for the rule of law and the integrity of democratic
government.
Declining tax revenues in developing countries have stimulated a vicious circle of decline in
investment in the human capital necessary to create an attractive environment for both domestic
and foreign investors. In its 2006 on Latin America, the World Bank argued that governments
must give higher priority to spending on infrastructure likely to benefit the poor and increase
expenditure on education and healthcare. In practice a large proportion of government spending
in Latin America is skewed in favour of the well off, and governments are collecting far too little
tax, especially from the wealthy. The World Bank report concludes that: “on the tax front, first
items in the agenda would be strengthening anti-tax evasion programs and addressing the high
levels of exemptions.”43
The Suppliers of Corruption Services
Cobham, A. (2005) Tax Evasion, Tax Avoidance and Development Finance Queen Elizabeth House Working
Paper Series No. 129, Oxford
43
Lopez, J.H. et al (2006) Poverty Reduction and Growth: Virtuous and Vicious Circles, The World Bank, p101
42
36
Tax dodging corrupts the revenue systems of the modern state and undermines the ability of the
state to provide the services required by its citizens. It therefore represents the highest form of
corruption because it directly deprives society of its legitimate public resource. Tax dodgers
include institutions and individuals who enjoy privileged social positions but see themselves as
an elite detached from normal society and reject “any of the obligations that citizenship in a
normal polity implies”.44 This group comprises wealthy individuals and high income earners,
plus a pinstripe infrastructure of professional bankers, lawyers, and accountants, with an
accompanying offshore infrastructure of secrecy jurisdictions with quasi-independent polities,
judiciaries and regulatory authorities. This type of corruption therefore involves collusion
between private and public sector actors, who purposefully exploit their privileged status to
undermine national tax regimes by facilitating activities which straddle the border line between
the legal and the illegal, the ethical and the unethical.
Despite the fact that many of its practitioners hold professional status, the culture of the tax
dodging industry is wholly subversive of democratic norms. The attitudes I encountered whilst
working in the offshore financial industry in the 1980s and 90s were perfectly captured in the
following quote given to a national newspaper in response to the 2004 financial statement by the
UK Chancellor of the Exchequer: "No matter what legislation is in place, the accountants and
lawyers will find a way around it. Rules are rules, but rules are meant to be broken."45 No matter
how this statement is spun, it is clearly intended to convey the message that some classes of
society are beyond compliance with social norms. Incredibly, none of the professional
institutions of lawyers of accountants promote ethical codes of conduct on the marketing of noncompliant taxation behaviour or the use of secrecy jurisdictions by their members. Accountants
enjoy a privileged status in most societies, but they, along with lawyers and bankers, have played
a lead role in shaping and promoting offshore facilities for their clients. They typically justify
their tax avoidance activities on the basis that it promotes economic efficiency. Some
practitioners argue that directors have a duty to avoid tax:
“Tax is a cost of doing business so, naturally, a good manager will try to manage this
cost and the risks associated with it. This is an essential part of good corporate
governance.”46
This statement needs careful unbundling to understand its underlying politics. Firstly, a tax on
profits is not a business cost but a distribution to society. This much is clear from how tax is
reported on the profit and loss account alongside distribution to shareholders. Second, the use of
the word risk is revealing. What risks arise from tax other than those involving a legal challenge
to an avoidance or evasion strategy? Third, directors wanting to pursue ethical corporate
practices would generally not regard tax avoidance as acceptable practice, and are therefore
likely to resent pressures from competitors who abandon ethics in favour of higher short term
44
Reich, R., (1992) The Work of Nations, New York
Guy Smith, tax adviser, Moore Stephens, quoted in The Guardian, 18th March 2004
46
P.J. Henehan, senior tax partner of Ernst & Young, in an article published in the Irish Times on 7th May 2004
45
37
profits. Finally, there is no requirement under company law – anywhere in the world – for
company directors to minimize their tax payments, especially when this involves actions that
might infringe national laws and hiding these actions from the scrutiny of shareholders and
national authorities.
Another frequently heard justification for tax avoidance is that tax policies are overly complex
and therefore impose unnecessary burdens on business. The reality is that tax rules have become
complex partly in response to the increasingly elaborate tax planning strategies used to avoid
paying taxes. This is a chicken and egg situation which has added unnecessary costs to both tax
planning and tax collection. A blanket anti-avoidance principle enshrined in law and
accompanied by purposive statements in tax laws would cut through this particular Gordian knot.
In practice, much offshore tax planning involves practices which many would not regard as good
corporate governance. Hence the secrecy in which these practices are conducted. In the words of
the report on secrecy jurisdictions published by the U.S. Senate in August 2006:
“Utilizing tax haven secrecy laws and practices that limit corporate, bank and financial
disclosures, financial professionals often use offshore tax haven jurisdictions as a ‘black
box’ to hide assets and transactions from the Inland Revenue Service, other U.S.
regulators and law enforcement.” 47
Another recent U.S. Senate report on the accountancy industry revealed internal communications
from accounting multinational KPMG which contained a warning from one senior tax adviser
that, were the company to comply with the legal requirements of the Inland Revenue Service
relating to the registration of tax shelters, the company would place itself at a competitive
disadvantage and would “not be able to compete in the tax advantaged products market.”
KPMG was undeterred and went ahead with: “knowingly, purposefully and wilfully violating the
federal tax shelter law.”48 During its enquiries the US Senate Committee discovered that KPMG
had devised over 500 ‘active tax products’, some of which may have been illegal. Just four of
those 500 products cost the US Treasury US$85 billion annually in lost tax revenues, whilst
KPMG booked US$180 million in fees. Speaking after the conclusion of the Senate Committee’s
enquiries, senior ranking Democrat Senator Carl Levin said that: “our investigations revealed a
culture of deception inside KPMG’s tax practice.”
The United States is ahead of the game in investigating and condemning the activities of offshore
secrecy jurisdictions. This is not just because of the systemic problems revealed by the Enron
and WorldCom debacles. There seems to be a wider recognition in the U.S. that secrecy
jurisdictions are fundamentally anti-market and undemocratic, even to the extent that they
47
US Senate Permanent Subcommittee on Investigations (2006) Tax Haven Abuses: The Enablers, the Tools, the
Secrecy, August, p2
48
US Senate Permanent Committee on Investigations (2003) The Tax Shelter Industry: the role of accountants,
lawyers and financial professionals, Washington DC, US Senate, p13
38
represent an active assault on the national sovereignty of democratic states. Significantly the
Senate report mentioned above was produced by a Subcommittee chaired by a prominent
Republican and supported by a prominent Democrat. Nothing similar has been produced by
either the European Commission or Parliament. The Commission’s attempt at combating tax
evasion through the Savings Tax Directive, which came into force in July 2005, was rendered
virtually impotent by extensive lobbying and political shenanigans (not least on the part of the
UK government – see below). When it was disclosed in March 2008 that the Commission was
planning to revise the Directive to close existing loopholes, Mr Jean-Claude Junckner, the prime
minister of Luxembourg (a tax haven) was quoted in the press as saying: “I’m looking forward
to many years of fascinating and fundamental discussions.”
Both the World Bank and the International Monetary Fund have developed their own anticorruption agendas, but significantly neither have greatly concerned themselves with offshore
banking secrecy other than where it impacts on their rigidly restricted anti-money laundering
programmes. The Financial Action Task Force formed by G-7 heads of state in 1989 to
spearhead global anti-money laundering programmes, has resolutely turned a blind eye to capital
flight and tax evasion, and has probably worsened the situation by appearing to legitimise
secrecy jurisdictions which have cooperated with its efforts to track the proceeds of narco
trafficking and terrorist funding.
In addition to corrupting financial systems by encouraging and facilitating illicit activities, tax
haven secrecy corrupts the capitalist system more generally by enabling company directors to
engage in aggressive tax planning to raise short term profitability (thereby enhancing share
option values), and gain a significant advantage over their nationally based competitors. In
practice, this bias favours the large business over the small, the long established over the startup, and the globalised business over the local.49 In every respect this bias works against the
operations of fair trade, fair competition and ethical enterprise, but until now the use of secrecy
jurisdictions has scarcely registered on the Corporate Social Responsibility debate.50 Indeed, a
business symposium hosted by transnational accounting firm KPMG in 2006 concluded that:
"tax avoidance does not damage corporate reputations and may even enhance them".51
Conclusion
According to Senator Karl Levin, ranking senior Democrat in the U.S. Senate, “tax havens are
engaged in economic warfare against the United States”.52 The Senator chose his words
carefully. Secrecy jurisdictions set out to undermine national sovereignty and democratic forms
of government. Their governments purposefully allow the creation of an asymmetric supply of
49
See ‘tax us if you can – the true story of a global failure’, Tax Justice Network, 2005
See for example Christensen, J. & Murphy, R. (2004) The Social Irresponsibility of Corporate Tax Avoidance:
Taking CSR to the bottom line, Development, volume 47, number 3, (37-44)
51
http://www.taxresearch.org.uk/Blog/category/kpmg/ accessed 28 August 2006
52
Opening statement of Senator Karl Levin before the U.S. Senate Permanent Sub-Committee on Investigations on
Secrecy jurisdictions and U.S. Tax Compliance, 17th July 2008
50
39
economic and legal information that harms the efficiency of global markets. They knowingly
encourage and facilitate grand corruption, embezzlement and fraud. Secrecy jurisdictions
contribute towards creating extremes of wealth concentration, which can trigger economic
instability and prolonged recessions.53
Secrecy jurisdictions persist in a world of globalised financial markets solely because they have
been supported by powerful political allies. Most of the problems posed by secrecy jurisdictions
could be remedied by strengthening international cooperation. Transfer pricing abuses could be
largely overcome through the introduction of an international country-by-country reporting
standard, which the Tax Justice Network is lobbying for in conjunction with the Publish What
You Pay coalition. Effective automatic information exchange between national authorities would
go a long way towards overcoming the problems of capital flight and tax evasion. The barriers
posed by banking secrecy could be overcome by over-ride clauses built into information
exchange treaties. The secrecy of offshore trusts would be reduced by requiring registration of
key details relating to the identity of the settlor and beneficiaries. There is no reason why those
who benefit from the privileges conferred by using companies and trusts should not accept the
obligation of providing basic information about their identity. Global frameworks could be
agreed for taxing multinationals on the basis of where they actually generate their profits.
Policies such as those proposed above could be implemented in a relatively short time frame.
The principle barrier standing in the way of progress towards achieving these goals is the lack of
political will on the parts of the governments of the leading OECD nations, most notably the
USA and the UK, both of which are leading tax haven states. The reality of their commitment to
‘globalisation’ is that they want liberalised trade on their own terms but continue to use lax
regulation, secrecy and fiscal incentives to distort the trade system in favour of their domestic
businesses and to attract capital from developing and emerging countries.
The debates around development, accountability, corruption and persistent poverty are
undergoing a major shift. Increasingly, campaigners are looking beyond dependence on aid and
debt relief, and all the associated conditionalities, and asking questions about the domestic
resources of developing countries. The issues of capital flight and tax evasion, which have gone
largely ignored for so long, are moving to the centre stage. At the same time the corruption
debate is shifting to focus on the role of enablers and the secrecy jurisdictions through which so
much dirty money is shifted en route to the mainstream capital markets. Connections are being
made between money laundering, corruption, financial market instability, rising inequality and
poverty. And secrecy jurisdictions are being identified as a common denominator in each of
these problems.54 Addressing this issue in March 2007, anti-corruption campaigner Eva Joly
spoke of the need to shift the corruption debate to Phase Two, in which the role of accountants,
bankers, lawyers and offshore financial centres in enabling corrupt practices comes under far
Batra, R. (1987) An ominous trend to greater inequality, New York Times, 3rd May
See, for example, TJN-UK, (2008) Secrecy jurisdictions: Creating Turmoil, evidence submitted to the Treasury
Committee of the House of Commons, June
53
54
40
greater scrutiny.55 Tackling the tax haven monster is set to become a major set piece struggle
during and after the G-20 summit next month.
Africa Confidential (2007) Secrecy jurisdictions: Financial secrecy – profits from the laundry, Vol 48, No.6,
16 March.
55
41
APPENDIX 1: ENDING THE OFFSHORE SECRECY SYSTEM
An Action Programme to Strengthen International
Financial and Fiscal Regulatory Cooperation
Presented to G-20, March 2009
It is now widely understood that any serious efforts to improve international cooperation and
coordination of supervision of the international financial system must include a determined
crackdown on the use of `offshore’ entities. This should include action to end the ways in which
major international financial centres also collaborate in the offshore system, which indeed they
themselves originally devised and have helped to maintain.
Offshore entities are extensively used to maintain secrecy which undermines the effectiveness of
regulation in the public interest. The strict secrecy provided by tax havens and the offshore
system enables in particular abusive avoidance and evasion of both taxation and financial
regulation. They have contributed to the current financial crisis in two main ways. First, the
opportunities for tax minimisation have greatly increased the volume of funds available for
financial speculation, and distorted the international allocation of capital by reducing the cost of
capital for financial operations, e.g. by hedge funds, as opposed to real investment. Secondly, the
secrecy they provide has contributed to the opacity which has destroyed confidence in the assets
and balance sheets of multinational banks and financial institutions, inflicting great damage on
the world economy.
International tax avoidance and evasion create a major obstacle for developing countries seeking
to generate domestic finance for development, and hence reduce their dependence on aid. It is
now time to end the use of artificial legal persons formed in jurisdictions of convenience which
distorts and sullies legitimate business activities.
To that end, TJN proposes the following Action Programme.
IMPROVING COORDINATION BETWEEN FISCAL AND FINANCIAL REGULATORS
The Compendium of Standards and Codes compiled by the Financial Stability Forum (FSF)
should include appropriate standards for International Cooperation in Tax Matters ( see below).
The FSF itself should be reformed both to include a wider range of countries, especially
developing countries, and to provide opportunities for input by civil society organisations.
The Reports on the Observance of Standards and Codes (ROSCs) of international financial
centres conducted through the International Monetary Fund (IMF) and World Bank should be
made more transparent and provide an opportunity for input by civil society organisations
(following fundamental governance reform of the IMF and World Bank to enhance transparency
and accountability). It should include assessments of each jurisdiction’s compliance with
42
international tax cooperation standards, conducted by expert reviewers appointed by the UN Tax
Committee. No financial centre should be judged compliant unless it has established adequate
and transparent mechanisms for comprehensive cooperation in tax matters. Counter-measures for
non-compliance with tax co-operation standards are dealt with separately (see below).
Each jurisdiction should establish adequate arrangements for cooperation between tax authorities
and regulators responsible for financial supervision, including bodies responsible for fighting
money-laundering, corruption and other criminal activities. There should be adequate
arrangements within each country, and internationally, subject to proper safeguards, for
exchange of information between fiscal and financial regulatory authorities. This should include
access by tax authorities to transaction reports related to money-laundering.
INTERNATIONAL COOPERATION IN TAX MATTERS
An international standard for cooperation in taxation should be established, providing for
comprehensive exchange of information for assessment and collection of taxes, including
automatic, on request and spontaneous exchanges of information. This should be based on
existing instruments, such as the Council of Europe/OECD Convention of 1988 on Mutual
Cooperation in Tax Matters, and the EU Savings Directive. The Council of Europe/OECD
multilateral Convention should be made open for signature by all states. Council of Europe and
OECD member states should accede to it, making no significant reservations, and those which
have such reservations should withdraw them. Its provisions on automatic exchange of
information should be made operational by all participating states. They should also extend its
provisions to all their dependent territories.
The European Union should enact the revised version of its EU Savings Directive proposed in
November 2008 whilst withdrawing the option for tax to be withheld at source on income paid to
non-resident taxpayers in some participating jurisdictions, so that automatic information
exchange occurs in all circumstances whilst extending the range of payments covered by the
Directive to include dividends and capital gains. The European Union should engage in
negotiation with non-member states to extend the geographic scope of the EU Savings Tax
Directive to additional jurisdictions, with a particular emphasis upon extension to the USA and
the principal current non-participating tax havens of Dubai, Singapore, Hong Kong and Panama,
and to developing countries which may have suffered from capital flight.
The OECD Centre for Tax Policy and Administration should accelerate its long-standing work
on technical standards for automatic exchange of tax information in electronic form, in
conjunction with other appropriate bodies such as the European Commission, the IMF Fiscal
Affairs Department and the World Bank. These standards should be internationally agreed and
implemented as soon as possible.
The international standard should include rules for obtaining information from both individual
nationals and residents, and legal persons formed under the laws of, or resident in, each country.
It should include in particular a requirement that all banks and other financial, legal and
corporate service providers collect information, which should be available for regulatory
43
purposes to the appropriate supervisors or regulators (including tax authorities), on the beneficial
owners of all payments made, whether to residents or non-residents, individuals and legal
persons. It should prohibit legal provisions specifically designed for non-residents, such as legal
entities formed to conduct activities exclusively outside the jurisdiction. Compliance should
mean actually establishing satisfactory arrangements for exchanging information with other
states multilaterally, and not just making non-binding `commitments’ or bilateral deals.
Progress towards compliance with this standard should be monitored by an appropriate panel of
experts, with input from civil society, according to a timetable with a relatively short transition
period. Those states which have achieved a satisfactory level of compliance with this standard
should then take appropriate defensive measures within their laws to deny recognition to
transactions involving entities in non-compliant jurisdictions. This could include, for example,
subjecting taxpayers with links to such jurisdictions to special scrutiny, treating entities formed
in such jurisdictions as abuses of law, refusing deductibility of interest or other payments to
entities taking advantage of secrecy in such jurisdictions, and prohibiting banks from having
branches or affiliates in such jurisdictions. Such measures should as far as possible be
coordinated.
The UN Committee of Tax Experts should be mandated as a high priority to work on a Unitary
approach for taxation of transnational corporations. This should be done in conjunction with the
work of the EU on development of a Common Consolidated Corporate Tax Base, and taking
account of the experience of the Multistate Tax Commission in the USA with unitary taxation
and formula apportionment, and it should draw on the support of the OECD Committee on Fiscal
Affairs.
IMPROVED CORPORATE FINANCIAL TRANSPARENCY
The International Accounting Standards Board (IASB) should include within its International
Financial Reporting Standard on segment reporting a requirement that multinational corporate
groups report on a country by country basis on all their transactions (both third-party and
intragroup), labour costs and number of employees, finance costs (third-party and intragroup),
profits before tax, provisions for tax and tax actually paid, and tangible and intangible asset
investments, without exception for any jurisdiction. This would provide a comprehensive view
of each group for investors, stakeholders and tax authorities, with the objective of reducing the
cost of capital, ensuring the efficient allocation of resources, eliminating transfer mispricing
abuse, and facilitating a more effective and transparent international allocation of the tax base.
The constitution of the IASB should be reformed so that this organisation ceases to be a privately
owned company with its finances controlled by the large firms of accountants and the financial
services community and instead becomes an international agency as a specialist Commission of
the United Nations Economic and Social Council, with appropriate provision for input by
business and civil society organisations. The IASB project for a revised conceptual framework
should be comprehensively reconsidered to reflect the lessons of the current crisis, which show
that the IASB’s approach has been one-sided in the priority it has given to the information needs
44
of mobile financial investors. Hence, IASB standards should also evaluate the going concern in
terms of its socially embedded use of a society's economic resources and thus contribute to a
more socially fair and sustainable economy.
Those national and international bodies producing reporting standards for Corporate Social
Responsibility should recognise that payment of the proper level of tax due is the ultimate
corporate social responsibility of any company, and should include an obligation to disclose
financial and taxation data on a country-by-country basis in the form noted above, which could
be based on the IASB standard- if and when an adequate standard is produced.
Professional bodies regulating the activities of financial intermediaries should create Codes of
Conduct that their members should be required to comply with as a condition of their
membership that promote transparency and responsibility in relation to regulatory and tax
compliance. Such Codes should specifically prohibit the promotion of financial obfuscation and
abusive tax avoidance. These could be based on the Code of Conduct which is being prepared by
the UN Tax Committee. For these purposes: (i) tax compliance means that the correct amount of
tax is paid in the correct place at the correct time, on the basis that the economic substance of
transactions is properly reflected by the form in which it is reported for taxation purposes; and
(ii) abusive tax avoidance means that a transaction is constructed for the main or sole purpose of
securing a tax advantage which it was not intended that the law provide.
45
INTEG
GRATED CYCLE
C
OF
F MOVIES DEBATES
S AND CO
ONFERENC
CES AT FE
EUC
2008-20009
GLOBAL
L ECONOM
MY, COMMO
ODIFICATIO
ON, AND PUB
BLIC INTER
REST:
PERSON
NS, COMMO
ODITIES, EN
NVIRONMEN
NT AND TAX
X HEAVENS
S
(DOC TA
AGV / FEUC
C)
http://ww
ww4.fe.uc.pt//ciclo_int/2008_2009_eng.h
htm
--------------------------------------------------------------------------------------------------SESSION
N8
WORLD
D ECONOMY
Y, THE AUT
TONOMY OF
F NATIONAL
L POLICIES
S AND TAX H
HEAVENS
MARCH
H 25, 2009
--------------------------------------------------------------------------------------------------Time: 16.00
Room: Keynes Room
m, Faculty of Economics, FEUC
F
Opeening
Jooão Sousa Andrade
A
(Ecoonomics Courrse Coordinattion/Faculty of
o Economicss, University of Coimbra,,
FE
EUC, Coimbraa, Portugal)
Con
nferences by::
Jeean De Maillaard (Sciences Po, Paris, Fraance)
Le capitalism
me est-il criminnel?
Beernard Bouzoon (ATTAC France)
F
Hypocrisy annd paradises
Joohn Christenssen (Director of Tax Justicee Network, UN
N advisor)
The Engines of
o Chaos: Seccrecy Jurisdicttions and Global Crisis
Com
mments by:
Joosé da Silva Lopes
L
(formerr Minister of Finance
F
and fo
ormer Governoor of the Portuuguese Centraal Bank)
An
ntónio Martins (Faculty off Economics, University off Coimbra, FE
EUC, Coimbraa, Portugal)
Time: 21.15
2
Room: Academic Thheatre of Gil Vicente
V
Opeening
AC, Coimbraa, Portugal)
Nu
uno Ferreira (Students Unnion of Econom
mics, Coimbra Academic Association-A
A
Preesentation of the
t Documen
ntary The Greeat Escape
Frrédéric Brunn
nquel (Film director)
d
Film
m/Documentaary: The Greaat Escape
byy Frédéric Brrunnquel
20008
Com
mments by:
Jeean De Maillaard
Beernard Bouzoon
Joohn Christenssen
Joosé da Silva Lopes
L
An
ntónio Martins
Deb
bate
Note: This
T session iss integrated inn the assessmeent method of International Finance
-------------------------------------------------------------------------------------------------------------------------------------------------Organizeed with the su
upport of: