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Pandora Papers Show True Face of Global Britain

October 5, 2021

Pandora Papers Show True Face of Global Britain

Through its network of tax havens, the U.K. is the fulcrum of a system that benefits the rich and powerful writes Adam Ramsay. 

Cherie and Tony and Blair in 2003. The former U.K. prime minister and his wife are among those mentioned in the Pandora Papers. (Kremlin.ru, CC BY 4.0, Wikimedia Commons)

Perhaps more than anything else, the Pandora Papers — the tranche of documents published Sunday night, which reveal the secret wealth of the world’s rich and powerful — tell a story about Britain.

There’s the role, for instance, played by the British Virgin Islands, an overseas territory of the U.K. that functions as a tax haven. Czechia’s multimillionaire prime minister used the territory to hide his ownership of a chateau in France. Others, including the family of Kenyan President Uhuru Kenyatta and Vladimir Putin’s PR man, have made similar use of the islands to conceal wealth — while Tony and Cherie Blair reportedly saved £312,000 in stamp duty when they bought a London property from a company registered in the British Virgin Islands in 2017.

Then there’s London itself. The leaked documents show how the King of Jordan squirrelled personal cash away in the capital’s property market, as did key allies of Imran Khan, Pakistan’s president.

More details will emerge in the coming days. But one thing is already clear. This isn’t a story about countries on the periphery of the world economy. It is a story about how the British state drives a global system in which the richest extract wealth from the rest.

British Through & Through

Cayman Islands government administration building. (Kmanian345, CC BY-SA 4.0, Wikimedia Commons)

…click on the above link to read the rest of the article…

How Canada got into bed with tax havens

June 18, 2016

How Canada got into bed with tax havens

1980 treaty with tiny Barbados paved way for billions to legally flow offshore

Canadian companies have flocked to Barbados with their cash for decades in order to legally avoid paying Canadian taxes.

Canadian companies have flocked to Barbados with their cash for decades in order to legally avoid paying Canadian taxes. (The Associated Press)

On a cold December afternoon in 1980, with MPs’ voices echoing in the mostly empty chamber, the House of Commons debated a piece of legislation that has altered Canada’s economy profoundly.

Bill S-2 aimed to ratify a series of taxation treaties between Canada and countries like Spain, Korea, Austria and Italy. Also on the list: the tiny Caribbean island country of Barbados, population 250,000.

Before the final vote was called, a fresh-faced Bob Rae, at the time the NDP’s finance critic, rose to speak against it. Necktie askew, he warned that there had been precious little study of the consequences of signing a treaty that, like the one with Barbados, would drastically cut the tax rate for Canadian companies operating abroad.

Bob Rae in the House of Commons in 1980

A fresh-faced Bob Rae, the federal NDP’s finance critic at the time, rose in the House of Commons in December 1980 to warn about tax treaties Canada was signing. (CPAC)

“The government is entering into these tax treaties without being fully aware of the impact they will have on domestic taxation in Canada,” Rae said. “Money that is income and is not being taxed at the corporate level, on which the government receives no revenue, has the unfortunate effect of increasing the load of taxation on the average citizen.”

His protestations didn’t stop the bill. After another hour of tepid debate, with a quick murmur of assent from the Liberal and Conservative MPs, the House passed it and it was signed into law the next week.

…click on the above link to read the rest of the article…

Response to Tax Dodging by Rich Will Show Trudeau’s True Colours

May 14, 2016

Response to Tax Dodging by Rich Will Show Trudeau’s True Colours

CRA ties to industry, special deals demand Liberal action.

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Cartoon by Greg Perry.

Note to Prime Minister Justin Trudeau:

We will not be distracted forever by your explanation of quantum computers and yoga poses. Or even by the admittedly impressive list of low-hanging fruit (most recently, the return of the long-form census) you have picked thanks to Stephen Harper.

It’s a comforting distraction to think that we might actually have a government that isn’t totally in the thrall of Bay Street billionaires and transnational corporations. But everything we know about your party suggests that nothing fundamental has changed. The litmus test will be how you deal with KPMG over an outrageous tax-avoidance scheme, and with the giant firm’s apologists in the Canada Revenue Agency.

By now most people are familiar with the KPMG tax “sham”uncovered by CBC News. The scheme involved at least 26 wealthy clients (minimum contribution, $5 million) for whom KPMG set up shell companies in the Isle of Man, one of many tax havens for the rich and large corporations.

The Canada Revenue Agency initially said the scheme was “grossly negligent” and “intended to deceive.”

Secretive ‘amnesty’ deals

But 15 of the 26 participants would end up getting special treatment. Some of the first ones caught were assessed huge penalties, but later KPMG clients were offered a secret deal. The “amnesty” agreement granted rich KPMG clients immunity from civil and criminal prosecution and freedom from any penalties, fines or interest as long as they paid the taxes they had dodged. Secrecy was written into the agreement: “The taxpayer agrees to ensure the confidentiality of the offer and will not inform any person of the conditions of the offer…”

Dennis Howlett of Canadians for Tax Fairness [disclosure: I am on the board] said KPMG should be charged with facilitating tax evasion. Other tax experts said a criminal investigation is warranted.

…click on the above link to read the rest of the article…

Panama and the Criminalization of the Global Finance System

April 18, 2016

Panama and the Criminalization of the Global Finance System

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Sharmini Peries:  Within a week the 11 million documents called the Panama papers, published by the International Consortium of Investigative Journalists, has become a household name. The documents are connected to the Panama law firm Mossack Fonsesca that helped establish offshore accounts for some of the wealthiest and most powerful leaders to launder money and evade taxes.

On Tuesday the police in Panama raided the Mossack Fonseca law firm to search for more documents linked to illicit activities. But what are they expecting to find, since we have already known for some time now that offshore accounts are being used to evade taxes by the banking sector, essentially white-collar crooks, at institutions such as Credit Suisse and others? But who is really behind the creation of these mechanisms and loopholes for tax evasion?

Economist Michael Hudson says Panama was created as a tax haven by certain sectors of our economy for this purpose. Hudson is a distinguished research professor of economics at the University of Missouri, Kansas City, and he’s a former balance of payments economist for Chase Manhattan bank. He is the author of many books, and the latest among them is Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.

Michael, let’s begin with a short history of the creation of Panama and how it was bought from Colombia by the United States, and its relevance today vis-a-vis the Panama papers.

HUDSON: Well, Panama was basically carved off from Colombia in order to have a canal. It was created very much like Liberia. It’s not really a country in the sense that a country has its own currency and its own tax system. Panama uses U.S. dollars. So does Liberia.

…click on the above link to read the rest of the article…

Avoiding the Issue

April 14, 2016

AVOIDING THE ISSUE

In the wake of the so-called ‘Panama Papers’ furore, the push-button issue of the One Percent being found able – OH! THE HORROR! – to shield some of its wealth from the taxman, regardless of the jurisdiction in which its members have chosen to set up shop, has predictably called forth bad economics, dubious legal opinion, and strident political point-scoring in almost equal measure.

All of this has been carefully marshalled to serve the deeper purpose of exploiting our outrage and of suckering us into calling for the ever-eager Revenue Man to be given even more power over the livelihoods and liberties not just of the Music Hall villain ‘mega-rich’, but also of those of us hoi Polloi who have been inveigled into brandishing our torches and waving our pitchforks against the cast-iron railings surrounding the mansions of the moustachio-twirling plutocrats whom we have been so readily prompted to revile.

So, in an attempt to redress the balance a little, let’s go right back to first principles and start with the shocking premise that what you earn honestly in free exchange is a sign that your efforts have added some quantum to the sum total of human happiness (or at least marginally reduced its burden of woe) – a contention which is proven simply by the transaction having taken place at all.

Let’s move to another radical concept: that what you so earn and what you have come to own is, in the first instance, yours and yours alone to dispose of as you see fit.

Next, let us imagine that We, the People, have agreed between ourselves that there are certain desirable activities which we (perhaps unimaginatively and usually at the cost of much efficiency) do not trust to the market mechanism – matters such as dispute resolution, the provision of security at home and at our borders, the co-ordination of large-scale projects, a smattering of welfare functions, etc.

…click on the above link to read the rest of the article…

The Panama Papers: Oozing Slime

April 8, 2016

The Panama Papers: Oozing Slime

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The Panama Papers, a one-year investigation by over 100 reporters worldwide (The International Consortium of Investigative Journalism) of offshore money hiding/laundering/taxation avoidance, is a cause célèbre of underhandedness seldom, if ever, revealed to the world’s public. It is comparable to lifting a rotting log in the woods and finding an active nest of millipedes, red worms, and cockroaches scampering about to escape the bright sunlight. They can’t stand the sunlight because darkness is their life.

“It’s the biggest leak in history, dwarfing the data released by the Wikileaks organization in 2010. For context, if the amount of data released by Wikileaks was equivalent to the population of San Francisco, the amount of data released in the Panama Papers is the equivalent to that of India,” (BBC News, April 5th).

Remarkably, it may only be the tip of an iceberg, a big one, as the incident references the Panamanian law firm Mossack Fonseca & Co. There are likely many more in the world of behind the scenes finance.

The Panama Papers, containing info on thousands of shell companies set up to avoid taxes and hide assets for over four decades from 1977 to 2015, are all about millionaires and billionaires and the politically connected “sticking it to” average citizens of the world by hiding money from fellow countrymen’s taxation policies and/or theft of state funds and laundering money. It is outrageously heinous and deserving of criminal incrimination and/or tarring and feathering whilst run out of town on a rail. It also begs the question of how many more rich pillagers are out there.

Already, major worldwide figureheads, like the PM of Iceland, have fallen. “As much as $21 trillion in global wealth is hidden behind largely-untraceable shell companies such as those exposed in the Panama Papers, according to watchdog group Financial Accountability and Corporate Transparency Coalition,” (NBC News, April 6, 2016.).

…click on the above link to read the rest of the article…

Panama partners in crime

April 8, 2016

Panama partners in crime

“We have broken no laws and cooperated with the government at all times.”

Variations of that statement seem to be the default defence of everyone from bankers to politicians when their names come up in the Panama Papers.

In the UK the latest to resort to some version of it, was first Downing Street on behalf of the Prime Minister David Cameron, and then HSBC on behalf of it’s notorious Swiss subsidiary.  The former because his father who lived in the UK, set up an off-shore company which has never paid any taxes in the UK, and the latter because it turns out HSBC has once again been handling dirty money, this time holding and moving money for off-shore companies owned by relatives of Syrian President Bashar al-Assad.

Now HSBC is a well known money laundering bank. They have been indicted and convicted of money laundering so many times in so many different countries.  The best known case was in 2012 when HSBC were found guilty of  laundering drug money out of Mexico. HSBC were tried in the US and fined $1.9 billion. They paid and said how sorry they were, and their group Chief Executive Stuart Gulliver accepted responsibility for their past mistakes, but assured everyone they had now put all that behind them and had even,

spent $290m on improving its systems to prevent money laundering,

That was 2012. In 2015 HSBC all that was found to be blather. HSBC were caught laundering  – again. This time it was HSBC’s Swiss subsidiary which had laundered

the proceeds of political corruption and accepted deposits from arms dealers while helping wealthy people evade taxes.

…click on the above link to read the rest of the article…

Here Is Rothschild’s Primer How To Launder Money In U.S. Real Estate And Avoid “Blacklists”

April 7, 2016

Here Is Rothschild’s Primer How To Launder Money In U.S. Real Estate And Avoid “Blacklists”

Anyone closely following the Panama Papers tax haven story, is by now familiar with the role that Rothschild plays in providing virtually identical services right inside the US by the Rothschild Trust, as explained in our recent article “Rothschild Humiliates Obama, Reveals That “America Is The Biggest Tax Haven In The World.”

They are also probably familiar with the name Andrew Penney profiled in January by Bloomberg as follows:

Rothschild, the centuries-old European financial institution, has opened a trust company in Reno, Nev., a few blocks from the Harrah’s and Eldorado casinos. It is now moving the fortunes of wealthy foreign clients out of offshore havens such as Bermuda, subject to the new international disclosure requirements, and into Rothschild-run trusts in Nevada, which are exempt.
* * *
For financial advisers, the current state of play is simply a good business opportunity. In a draft of his San Francisco presentation, Rothschild’s Penney wrote that the U.S. “is effectively the biggest tax haven in the world.” The U.S., he added in language later excised from his prepared remarks, lacks “the resources to enforce foreign tax laws and has little appetite to do so.”
So for all those now former Mossack Fonseca, or their “Panamanian” peers who have not been rooted out yet, or for anyone else who wishes to open a domestic “trust”, here is the primer straight from Rothschild Trust.

Key highlights:

-In the year since we opened Rothschild Trust North America in Reno, Nevada, we have discovered the versatility of Nevada trusts and their usefulness within the context of our international business.
-Rothschild Trust has long embraced clients with US connections and the complexity this brings to planning. Our new US offering has enabled us to offer creative solutions not only to anticipated situations, but also to unusual or complex scenarios that require bespoke structures.

…click on the above link to read the rest of the article…

Royal Bank and BMO defend Canada’s banking sector amid Panama Papers and Fintrac fine

April 7, 2016

Royal Bank and BMO defend Canada’s banking sector amid Panama Papers and Fintrac fine

Bad week for big banks as tax haven discussion hits at same time as fine levied for lack of disclosur

It has been a rough week, reputationally for Canadian banks, but fundamentally they remain among the world's best.

It has been a rough week, reputationally for Canadian banks, but fundamentally they remain among the world’s best. (Mark Blinch/Reuters)

The heads of Canada’s biggest banks say they are confident they are doing enough to fight money laundering and tax evasion amid the release of the Panama Papers and other stories that have cast doubt on the sector’s gold-plated reputation this week.

Royal Bank of Canada CEO David McKay said at the bank’s annual general meeting in Montreal on Wednesday that the bank is currently combing through its records to see what ties the bank may have to Panamanian law firm Mossack Fonseca, which is at the heart of the current banking secrecy scandal.

On Monday, RBC was implicated in the Panama Papers scandal when documents in the leak unearthed that the bank had created at least 370 foreign corporations on behalf of its clients via Mossack Fonseca over the years.

While there’s nothing illegal in and of itself from setting up a foreign bank account, such vehicles can be used to evade taxes, as opposed to avoiding and minimizing them via legitimate means.

McKay said he is unhappy the bank’s name has been “dragged into” the controversy involving offshore tax evasion allegations, especially considering that there is no evidence to suggest the company has done anything illicit.

“As a CEO, I have to be concerned about our brand and reputation, particularly in a situation where there’s absolutely no allegation of wrongdoing,” McKay said.

“We just happen to have a couple hundred files, going back 40 years, that are attached to this legal firm,” he said. “That’s all that’s been reported.”

 

Rothschild Humiliates Obama, Reveals That “America Is The Biggest Tax Haven In The World”

April 6, 2016

Rothschild Humiliates Obama, Reveals That “America Is The Biggest Tax Haven In The World”

In his speech yesterday, following the Treasury’s crack down on corporate tax inversions, Obama blamed “poorly designed” laws for allowing illicit money transfers worldwide. Since the speech came at a time when the entire world is still abuzz with the disclosure from the Panama Papers, Obama touched on that as well: “Tax avoidance is a big, global problem” he said on Tuesday, “a lot of it is legal, but that’s exactly the problem” because a lot of it is also illegal.

There is one major problem with that: of all the countries in the world, it is none other than the country of which Obama is president, the United States, that has become the world’s favorite offshore “tax haven” destination.

As Bloomberg, which first broke the story about Nevada’s use as a prominent tax haven early this year, writes, “Panama and the U.S. have at least one thing in common: Neither has agreed to new international standards to make it harder for tax evaders and money launderers to hide their money.”

Over the past several years, amid increased scrutiny by journalists, regulators and law enforcers, the global tax-haven landscape has shifted. In an effort to catch tax dodgers, almost 100 countries and other jurisdictions have agreed since 2014 to impose new disclosure requirements for bank accounts, trusts and some other investments held by international customers — standards issued by the Organization for Economic Cooperation and Development, a government-funded international policy group.

In short: while Obama is complaining about corporate tax avoidance and slamming Panama, he is encouraging it in the U.S.

Places like Switzerland and Bermuda are agreeing, at least in principle, to share bank account information with tax authorities in other countries. Only a handful of nations have declined to sign on. The most prominent is the U.S. The other ona is, of course, Panama, and we just saw what happened there.
…click on the above link to read the rest of the article…

 

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