Thursday, July 31, 2008

Tax Havens / Offshore Financial Centers / Crime Commission Havens

Tax Havens / Offshore Financial Centers / Crime Commission Havens

Call Them What You Will .....
Fighting Terrorism and International Crime Means Catching All of the Big Fish -
not just Allen Stanford and Bernard Madoff!

We already have examples of the pathetic
Small Fry who have tried to profit financially from the Terrorist Attacks including 9/11. Now We want Answers about the Big Fish and details of the transactions made by the Real Organizers of Mass Casualty Incidents including 9/11 and 7/7. We Know where Funds have flown and we know how they would be Disguised....

Which countries and people refuse to help and/or have obstructed the road to full disclosure and transparency of foreign account holders and financial transactions in Tax Havens/Offshore Financial Centers/Crime Commission Havens? Non-disclosure of Foreign Account Holders is Collusion.

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Introduction to Tax Havens, Offshore Financial Centers and Crime Commission Havens....
A tax haven is a place where certain taxes are levied at a low rate or not at all. Individuals and/or firms can find it attractive to move themselves to areas with lower tax rates. Different jurisdictions tend to be havens for different types of taxes, and for different categories of people and/or companies.

Most economic commentators suggest that the first "true" tax haven was Switzerland, followed closely by Liechtenstein. During the early part of the twentieth century, Swiss banks had long been a capital haven for people fleeing social upheaval in Russia, Germany, South America and elsewhere. However, in the years immediately following World War I, many European governments raised taxes sharply to help pay for reconstruction effort following the devastation of World War I. By and large, Switzerland, having remained neutral during the Great War, avoided these additional infrastructure costs and was consequently able to maintain a low-level of taxes. There was a considerable influx of capital into the country for tax related reasons.

An offshore financial centre (or OFC), although not precisely defined, is usually a low-tax, lightly regulated jurisdiction which specializes in providing the corporate and commercial infrastructure to facilitate the use of that jurisdiction for the formation of offshore companies and for the investment of offshore funds.

Offshore financial centres are often (but not always) current or former British Colonies or Crown Dependencies, and often refer to themselves as offshore jurisdictions. An "offshore financial centre" in regarded as a politically correct term for what used to be called a tax haven.

The IMF considers the following to be characteristics of an offshore financial centre:
  1. Jurisdictions that have relatively large numbers of financial institutions engaged primarily in business with non-residents;
  2. Financial systems with external assets and liabilities out of proportion to domestic financial intermediation designed to finance domestic economies; and
  3. Centres which provide some or all of the following services: low or zero taxation; moderate or light financial regulation; banking secrecy and anonymity.

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The 2008 Liechtenstein tax affair is a series of tax investigations in numerous countries whose governments suspect that some of their citizens may have evaded tax obligations by using banks and trusts in Liechtenstein; the affair broke open with the biggest complex of investigations ever initiated for tax evasion in the Federal Republic of Germany. It is seen also as an attempt to put pressure on Liechtenstein, one of the remaining uncooperative tax havens — along with Andorra and Monaco — as identified by the Paris-based Organization for Economic Cooperation and Development in 2007.

Millions of Euros belonging to hundreds of citizens living in Germany were channeled into the
LGT Bank and other banks in Liechtenstein. According to the prosecutor's office these trusts “have been created apparently only to evade paying taxes.”

According to the lead prosecuting office responsible for economic crime in Bochum, Germany, which is supported by prosecuting offices in other towns as well as the criminal police, currently about 600 to 700 individuals are suspected in the investigations.

The affair became known on February 14, 2008, when a raid was conducted against
Klaus Zumwinkel, the former chief executive of Deutsche Post AG, under the suspicion that he evaded about 1 million € ($1.46 million) in taxes.

According to a report by the Süddeutsche Zeitung, Heinrich Kieber, a bank computer technician, sold a CD with incriminating bank information to the Bundesnachrichtendienst (BND), which handed the material over to the tax investigation office in Wuppertal. Kieber was paid €4.2 million by the Federal Ministry of Finance for the data on which the investigation is based.

The informant also had sold data to the government of the United States. In July 2008 the U.S. Subcommittee determined that offshore tax haven supported tax cheats to the cost of about $100 billion per year for the U.S. taxpayer. Specifically mentioned were Switzerland's UBS AG and Lichtenstein's LGT Group.

On 24 February 2008 it became apparent that secret bank information had also been sold to the British tax authorities and that about 100 individuals in the UK are at risk for investigations for tax evasion. The informant also provided the governments of Australia, Canada, and France with data.

On February 26 it became known that the German government was willing to share relevant data of the about 4,500 accounts with other governments; two third of these accounts belong to accounts of non-German individuals or entities. Fiscal authorities in Ireland, Finland, Italy, the Netherlands, Norway, and Sweden indicated interest, and while the Danish government initially declined - it considered the material to have been stolen - it appears to have reverted its position. The governments of the Czech Republic and Spain have also announced investigations derived from Germany's list. India, however, has thus far not considered Germany's offer despite reports that many wealthy Indian citizens might have accounts in the bank.

The principality of Liechtenstein is directly affected by the affair as the LGT Bank is owned by the ruling royal family.

Liechtenstein Affair - Further Reading
Tax haven probe targets rich Britons - 22 July 22 2008 - Financial Times
About 300 wealthy Britons who secretly salted away more than £1bn ($2bn, €1.26bn) in the tax haven of Liechtenstein are facing investigation and possible criminal prosecution by the UK tax authorities.

Revenue in £1bn tax haven probe - 22 July 2008 - Financial Times

IMF set to end offshore ‘stigma’ - 14 July 2008 - Financial Times
The distinction between “offshore” and “onshore” financial centres has been dropped by the International Monetary Fund, in a victory for more than 40 small countries that complained they had been unfairly stigmatised in the fight against financial crime.

Europe vs the Super-Rich - 4 March 2008 - The Independent
The European Union will declare war today on Liechtenstein, Monaco, Andorra and Switzerland. Weary of losing billions of tax euros, the EU's 27-strong high command of economics and finance ministers, Ecofin, is meeting in Brussels to agree a strategy aimed at bringing the continent's tax havens under control. Their weapon of choice will be a strengthened version of the EU's 2005 savings tax directive, which has proved pathetically easy for armies of accountants, lawyers and specialist tax planners to outflank.

Much of the money that winds up in them is tied into the illegal international trade in drugs, corruption and embezzlement – and terror. Tax havens launder money, much to the annoyance of other governments, and grant terrorists current account facilities. Michel Camdessus, a former managing director of the IMF, put the amount of cash laundered globally at about 2 per cent of its GDP, or about $2.1trn (£1trn). Kleptomaniac dictators from Mobutu to Mugabe have known where to stash the cash, as does al-Qa'ida.

"What are they going to do – send the tanks in?" asked one tax expert yesterday responding to the EU's plans. The answer to that, hopefully, is no; but official sanctions, levies and a general will to make life difficult for tax havens is defiantly there. Hostilities have begun.

Tax Havens of the World - 4 March 2008 - Global Policy Forum (Monitoring Policy Making at the United Nations)
Germany's crackdown on secretive bank accounts in Liechtenstein has put the spotlight on tax havens combining low taxes, strict banking secrecy rules and an unwillingness to cooperate with other countries. Around 40 countries are still widely viewed as tax havens, according to international organisations such as the Organisation for Economic Co-Operation and Development (OECD) and the IMF. The Tax Justice Network (TJN), an anti-tax haven lobby group, estimates that global tax authorities miss out on around $250 billion each year because people hold money off shore, calling that estimate "extremely conservative".

Many off-shore centres are small states, and several are dependent territories of the United Kingdom, the United States, New Zealand or the Netherlands. Most countries on the OECD's list of tax havens have promised to adopt the organisation's standards for tax transparency. But Liechtenstein, Monaco and Andorra have not, and are therefore still on the OECD's list of uncooperative havens. A proposed new law in the United States, the Stop Tax Havens Abuse Act, also targets a large number of countries, while the IMF has its own list of off-shore centres in different stages of the Fund's monitoring process. Tax consultancies such as, which works closely with TJN, have their own lists.

A table of countries that are on the respective lists of these organisations.

OECD reports progress in fighting offshore tax evasion, but says more efforts are needed
12 October 2007 - Organisation for Economic Co-operation and Development

Many financial centres, both onshore and offshore, are making progress in improving transparency and international co-operation to counter offshore tax evasion, but some still fall short of international standards that have been developed over the last seven years, according to OECD assessments.

Significant restrictions on access to bank information for tax purposes remain in three OECD countries (Austria, Luxembourg and Switzerland) and in a number of offshore financial centres (e.g Cyprus, Liechtenstein, Panama and Singapore). Moreover, a number of offshore financial centres that committed to implement standards on transparency and the effective exchange of information standards developed by the OECD’s Global Forum on Taxation have failed to do so.

Two newly published OECD reports highlight both what has been achieved so far and what still remains to be done. Improving Access to Bank Information for Tax Purposes – the 2007 Progress Report describes developments in OECD countries and six others (Argentina, Chile, China, India, the Russian Federation and South Africa) with respect to access for tax authorities to bank information. Tax Co-operation: Towards a Level Playing Field – 2007 Assessment by the Global Forum on Taxation compares the legal frameworks for international tax co-operation of 82 OECD and non-OECD economies. It is the second in a series of factual reports by the OECD’s Global Forum on Taxation, which was formed as part of the OECD’s efforts to curb harmful tax practices.

“No one country or even a small group of countries can address the issue of harmful tax practices on their own,” commented Paolo Ciocca, chair of the OECD’s Committee on Fiscal Affairs and co-chair of the Global Forum. “This is a global challenge which requires a global response. In co-operation with partner financial centres, that is what OECD is seeking to achieve.”


Tax Justice Network

The TJN - Tax Justice Network promotes transparency in international finance and opposes secrecy. We support a level playing field on tax and we oppose loopholes and distortions in tax and regulation, and the abuses that flow from them. We promote tax compliance and we oppose tax evasion, tax avoidance, and all the mechanisms that enable owners and controllers of wealth to escape their responsibilities to the societies on which they and their wealth depend. Tax havens lie at the centre of our concerns, and we oppose them. Tax havens and offshore financial centres have created an interface between the illicit and licit economies, corrupting national tax regimes and onshore regulation.

ATTAC - The World is Not For Sale
What is Attac? - As financial markets and the profit motive increasingly take over society, Attac seeks to be a source of alternatives. Attac was founded in 1998 and its first concrete proposal was the taxation of financial transactions in order to create a development fund and to help curb stock market speculation. This is what gave A T T A C its name: the Association for the Taxation of Financial Transactions to Aid Citizens. Today, the Attac network is present in many countries and is active on a wide range of issues: the WTO and international financial institutions, debt, taxation of financial transactions, tax havens, public services, water, free-trade zones (Mediterranean, American, European etc.). In each country, the association has groups working on various themes. All of these groups are involved in national and international campaigns whose aim is to propose concrete alternatives to neoliberal orthodoxy, based on solidarity.

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