Category Archives: Tax Havens

Tax havens facilitate important types of harmful activity:  money obtained from crime, from corruption, money sent abroad to avoid taxes, and for corporate tax avoidance schemes which falsely but often legally enable corporations to transfer profits earned in higher tax destinations to these low tax destinations, thus reducing or avoiding taxes.  It is a vital part of these types of harm.

According the estimates of Gabriel Zucman (The Hidden Wealth of Nations), money in offshore destinations, with ownership obscured from the public, amounts to about 8 per cent of the global financial assets of households, equivalent to at least $7.6 trillion. The figure is much worse for developing countries. For Africa, Zucman estimates that tax havens hold about 30 percent of Africa’s financial wealth, and in Russia, 50 percent or more.

“A tax haven provides facilities that enable people, corporations and other entities escape (and frequently undermine) the laws, rules and regulations of other jurisdictions, using secrecy as a prime tool. Those rules include taxes, but also criminal laws, disclosure rules (transparency), financial regulation, inheritance rules, and more” (Tax Justice Network).  “A global industry has developed involving the world’s biggest banks, law practices, accounting firms and specialist providers who design and market secretive offshore structures for their tax- and law-dodging clients” (Tax Justice Network)

Tax havens 2020

The ominous rise of African financial centers: The case of Mauritius Pritish Behuria Review of African Political Economy December 1, 2020

Goldman Sachs Malaysia arm pleads guilty in 1MDB fraud Matthew Goldstein and Emily Flitter New York Times October 22, 2020
All told, Goldman will pay billions in penalties and disgorgement in Malaysia, the United States and Hong Kong for its role in the looting of the 1Malaysia Development Berhad fund.

Fincen Files: Thousands of secret suspicious activity reports offer a never-before-seen picture of corruption and complicity—and how the government lets it flourish Jason Leopold, Anthony Cormier, Jeremy Singer-Vine, Scott Pham, Richard Holmes, Azeen Ghorayshi, Michael Sallah, Tanya Kozyreva, and Emma Loop Buzzfeed News September 20, 2020
A huge trove of secret government documents reveals for the first time how the giants of Western banking move trillions of dollars in suspicious transactions, enriching themselves and their shareholders while facilitating the work of terrorists, kleptocrats, and drug kingpins. And the US government, despite its vast powers, fails to stop it.

Report documents criminality and corruption at heart of global banking system Barry Grey World Socialist Website September 22, 2020

Despite sanctions, the networks of Venezuela’s corrupt elite continue to reach the United States. Fresh revelations underscore the need to end anonymous companies, once and for all. Gary Kalman Transparency International July 2, 2020

Who is opening the gates for kleptocrats? Transparency International June 11, 2020

Dethroned Azerbaijani elites made big investments in Europe OCCRP May 30, 2020

The United Arab Emirates: A key piece in the global money laundering puzzle Transparency International May 11, 2020

Nothing to see here. Middle-men in the UK and Spain are falling short of anti-money laundering requirements. Theo van der Merwe Transparency International June 12, 2020

Rifaat al-Assad: Syrian President’s uncle jailed in France for money laundering BBC News June 17, 2020

Professional enablers of crime during crises Transparency International May 25, 2020 (Download the report from this page.)

How U.S. firms helped Africa’s richest women exploit her country’s wealth Michael Forsythe, Kyra Gurney, Scilla Alecci and Ben Hallman New York Times January 19, 2020

Doors Wide Open: Corruption and real estate in four key markets Maíra Martini Transparency International 2017 (40 page PDF file)
How the corrupt are able to purchase luxury real estate in Australia, Canada, the United Kingdom and the United States.

Bribery and money-laundering by Switzerland and Nordic countries

CPI 2019: Trouble at the top Transparency International January 20, 2020
Top scoring countries on the Corruption Perceptions Index (CPI) like Denmark, Switzerland and Iceland are not immune to corruption. Multiple scandals in 2019 demonstrated that transnational corruption is often facilitated, enabled and perpetuated by seemingly clean Switzerland and Nordic countries.

An Icelandic fishing company bribed officials in Namibia and used Norway’s largest bank to transfer 70 million dollars to a tax haven Ingi Freyr Vilhjálmsson Studin November 12, 2019

Cover of The Hidden Wealth of Nations Credit: University of Chicago Press

The Hidden Wealth of Nations: The scourge of tax havens by Gabriel Zucman

This book is essential reading for understanding tax havens. Chapter 1, “A century of offshore finance,” describes how Switzerland became a major country for those trying to hide their wealth and escape taxes, how other centers of offshore finance grew up after WWII, most with their own special contribution to secrecy, and how the combination of these centers insures even greater secrecy. Chapter II, “The missing wealth of nations,” estimates this missing wealth at about 8 percent of the global financial wealth of households and lost taxes at $200 billion, providing insights into financial structure and specifics on revenue loss as the estimates are developed.

Trillions of dollars have sloshed into offshore tax havens. Here’s how to get it back David Scharfenberg Boston Globe January 20, 2018

See the page The Hidden Wealth of Nations for further book reviews and informative slide presentations by Zucman.

Cover of The Hidden Wealth of Nations Credit: University of Chicago Press

Secrecy scores by country. Credit: Tax Justice Network

Financial Secrecy Index 2020

Tax Justice Network February 18, 2020

The Financial Secrecy Index ranks jurisdictions according to their secrecy and the scale of their offshore financial activities. A politically neutral ranking, it is a tool for understanding global financial secrecy, tax havens or secrecy jurisdictions, and illicit financial flows or capital flight.

The Financial Secrecy Index complements our Corporate Tax Haven Index, which ranks the world’s most important tax havens for multinational companies.

Shining light into dark places

An estimated US$21 to $32 trillion of private financial wealth is located, untaxed or lightly taxed, in secrecy jurisdictions around the world. Secrecy jurisdictions – a term we often use as an alternative to the more widely used term tax havens – use secrecy to attract illicit and illegitimate or abusive financial flows.

Illicit cross-border financial flows have been estimated at US$1-1.6 trillion per year, dwarfing the US$135 billion or so in global foreign aid. Since the 1970s, African countries alone have lost over US$1 trillion in capital flight, while combined external debts are less than US$200 billion. So Africa is a major net creditor to the world – but its assets are in the hands of a wealthy elite, protected by offshore secrecy; while its debts are shouldered by broad African populations.

Continue reading