Tuesday, July 10, 2012

598 Singapore to replace Switzerland as top Tax Haven, as the West (but not Asia) clamps down on tax avoidance & money laundering

Singapore to replace Switzerland as top Tax Haven, as the West (but not
Asia) clamps down on tax avoidance & money laundering

Newsletter published on 16 July 2013

(1) Singapore is a Tax Haven where Asia launders its dirty money - the
Switzerland of South East Asia
(2) Singapore will replace Switzerland as Wealth Capital, as the West
clamps down on Tax Havens
(3) Swiss parliament votes on a bill which would end years of banking
(3) Switzerland forced to abandon Bank Secrecy
(4) Singapore has the highest percentage of millionaire households in
the world
(5) Swiss central bank opens S'pore office
(6) Report: Singapore to eclipse Switzerland as tax haven by 2020
(7) Singapore Fights Image as Tax Haven
(8) Banks in Singapore jettison rich clients in tax evasion crackdown
(9) French President promises to eliminate tax havens “in Europe and
around the world”
(10) Canada's banks help money move in and out of tax havens;  have 75
subsidiaries operating offshore
(11) David Cameron crusade at G8, against Tax Havens & anonymous ownership
(12) News Corp pays no tax to IRS; has 152 subsidiaries in tax havens;
gets money FROM Tax Dept (2011)
(13) When it comes to taxes, instead of rendering unto Caesar, Murdoch
has Caesar rendering unto him (2011)
(14) The offshore trick: "nominee director" (offshore) cf the Real Owner
(15) Kofi Annan: Africa plundered. Mining Companies pay lower rates of
tax than Workers
(16) Offshore Tax Havens rocked by Bank account Leaks
(17) Covert companies & Bank accounts exposed by Investigative
Journalists (including Michael Hudson)
(18) Tax Havens: How & Where the Wealthy Stash Their Cash Around the World
(19) Tax havens explained: How the rich hide money - CBC interactive
(20) Billionaires Flee Havens as Trillions Pursued Offshore
(21) Russia’s 20 Biggest Billionaires Keep Riches From Putin
(22) Billionaire Tax Haven Liechtenstein Loses on Bank Reforms
(23) EU agrees to end Tax Haven system; Oxfam calls for Tax Havens to be

(1) Singapore is a Tax Haven where Asia launders its dirty money - the
Switzerland of South East Asia

    douglas schorr <douglas.schorr@gmail.com> 19 March 2013 19:18
To: M C Foong <mcfoong@gmail.com>, anita murray <anitajmurray@hotmail.com>

Singapore is the place where Malaysians launder all their ill gotten
wealth. It's the Switzerland of South East Asia.

(2) Singapore will replace Switzerland as Wealth Capital, as the West
clamps down on Tax Havens


Singapore Will Replace Switzerland as Wealth Capital

Published: Monday, 22 Apr 2013 | 8:26 AM ET

By: Robert Frank | CNBC Reporter & Editor

Thanks in part to its generous tax regime, Singapore has been a
millionaire haven for years. But a new report says the tiny island state
may soon overtake Switzerland as the world's largest offshore wealth hub.

The report, by WealthInsight, a London-based research firm, says
Singapore is the fastest growing wealth center in the world, with $550
billion in assets under management – up from $50 billion in 2000. About
$450 billion of that is offshore.

Switzerland has $2.8 trillion in assets under management, with $2.1
trillion of that coming from offshore wealth. Switzerland accounts for
34 percent of the $8.15 trillion in total global wealth.

Yet the report said Singapore could overtake Switzerland in offshore
assets under management by 2020. It said Swiss offshore assets could
fall below $2 trillion by 2016, while Singapore's assets could more than
quadruple by then.

It seems the rich are country hopping, reports CNBC's Wealth Editor
Robert Frank. Rich Russians are moving to London; rich Americans are
moving to Singapore. A look at the reasons why.

The reason: Switzerland may be falling out of favor with the wealthy,
while Singapore is attracting more of the new wealth from Asia. Recent
offshore wealth scandals and prosecutions in the United States and
Europe have pierced the veil of Switzerland's vaunted bank secrecy laws.
Western countries are also tightening their tax codes and chasing tax
shelters more aggressively.

"The Swiss wealth management model is under intense pressure," the
report states. "Offshore centers have suffered significant reputational
damage in the past four years and advanced economies are increasing
their oversight of cross-border banking and tax havens."

While the West is cracking down on wealth in Switzerland, however,
Singapore is opening its arms to all the new rich from Asia.
Millionaires and billionaires in Asia, especially China, are pulling
hundreds of billions of dollars out of their country to stash overseas.

Much of that is going to Singapore and Hong Kong. More than half of
Singapore's offshore assets come from China, WealthInsight says.

"Rapid growth in Asian economies such as China, India, Indonesia and
Malaysia will continue to see new investments in the years ahead," the
report stated.

(3) Swiss parliament votes on a bill which would end years of banking


‘American dictate’: Swiss Parliament split on banking secrecy law

June 14, 2013 10:23

The Swiss parliament has only a week left to vote on a bill which would
end years of banking secrecy and allow Americans access to tracking
account information. Now a parliamentary committee has recommended the
lower house ditch the debate.

The US is pressing the world’s largest offshore financial center, with
an estimated $2 trillion in equities and assets, to come clean with
their banking secrecy or face up to $10 billion in claims.

Earlier this week a lawmaker likened the decision to a “choice between
the plague and cholera”, Reuters reported.

If the lower house follows the recommendation, and doesn’t debate the
draft law, or, even rejects it before the summer session adjourns on
June 21, the US may take criminal action against Switzerland for
allowing tax evasion.

Lawmakers often follow committee advice, but it wouldn’t be
unprecedented if they reject it.

On Wednesday, the bill stayed alive after the upper house voted in favor
24 to 15, with one abstention.

The legislation, which has been dubbed by some Swiss media outlets as
the ‘American dictate’, is a strong demand by the US for Switzerland to
end banking secrecy and bring transparency to their banking secrecy
practices which have been written into law since 1934.

Swiss Finance Minister Eveline Widmer-Schlumpf leaves the Council of
State for a break during a debate on the tax agreement between
Switzerland and the U.S. in Bern June 12, 2013. (Reuters / Ruben Sprich)

Over a dozen Swiss banks are currently under formal investigation by the
US, including Credit Suisse, Julius Baer, and the Swiss branch of HSBC.

The US pressure mounted in 2009, when Switzerland’s biggest lender, UBS,
admitted to helping 52,000 American clients avoid taxes. The bank
narrowly escaped prosecution in exchange for handing over 5,000 client
names and paying a $780 million fine.

Luxembourg announced its plans to end banking secrecy in mid-April, but
the obstacles in the Swiss Parliament indicate the small alpine nation
won't follow suit.

On the Luxembourg news, President Ueli Maurer defended Swiss banking
secrecy, telling reporters he saw "no need to change strategy".

In January Switzerland’s oldest private bank, Wegelin & Co, said it
would close down for good after over 250 years of service, following its
guilty plea to charges of helping prosperous Americans hide more than
$1.2 billion from the Internal Revenue Service through secret accounts.

Last week members of the lower house halted their vote on the
legislation, unprepared to pass legislation they deemed too ‘vague’.

Swiss Finance Minister Eveline Widmer-Schlumpt has voiced her support of
the bill.

"This is both a good and a practical solution," Widmer-Schlumpf told
reporters after a cabinet meeting approved the draft accord.

(3) Switzerland forced to abandon Bank Secrecy


Swiss banks can reveal client data to US tax authorities

Switzerland's highest court ruled Friday that Credit Suisse could reveal
data on suspected tax dodgers to US authorities, rejecting an appeal
from the bank's clients and ending a long series of legal challenges to
Switzerland's bank secrecy laws.

By News Wires (text)

Switzerland's highest court ruled on Friday that Swiss bank Credit
Suisse was free to transfer data to US authorities concerning clients
suspected of tax dodging, ending a long series of legal challenges.

In its decision, the Alpine country's Federal Supreme Court rejected an
appeal by Credit Suisse clients and gave its blessing to a request made
in 2011 by Washington for data on clients suspected of evading US taxes.

At the time, Swiss tax authorities gave the go-ahead to temporarily
circumvent Switzerland's long-sacrosanct bank secrecy laws, but the
clients in question have been challenging the decision through the Swiss
court system.

The federal court on Friday ruled that Washington's broad request "was
not a fishing expedition" even though the request did not specifically
name the suspected clients.

It said the US demand was "detailed enough to show grounds for
suspecting tax fraud or similar offences and to allow the identification
of the wanted persons."

The US request for assistance concerned a company with an account
declared to Swiss tax authorities, but whose beneficiaries all lived in
the United States.

The court ruled that the clients' decision to open an account through a
firm not subjected to US taxation could be considered an attempt to
dodge US taxes.

A spokesman for the Swiss finance ministry, which has been sitting on
the bank data while waiting for the final court ruling, told AFP Friday
that the information "can now be transmitted" to the Americans.

Swiss banks are believed in the past to have accepted billions of
dollars belonging to American citizens who have not declared these
assets to US tax authorities, though they now refuse such money.


(4) Singapore has the highest percentage of millionaire households in
the world


Singapore: Full disclosure

Oct 17th 2012, 12:42

by R.C

FEW were surprised when Boston Consulting Group (BCG), a consultancy,
revealed earlier this year that Singapore has the highest percentage of
millionaire households in the world. The affluence of the tiny, densely
populated city-state is palpable, from the myriad of luxury-goods shops
to the ever more swanky condominiums.

The free-market environment, ease of doing business and concentration of
banks has made Singapore into one of the major centres for offshore
wealth. Yet at the same time, Singapore has also earned somewhat of a
reputation as a tax haven, as a good place to park your money without
being asked too many questions. Singapore’s authorities have always
insisted that they are as tough on financial crime as anywhere else, but
all the same they are now cracking down even further.

On October 14th Singapore signed a new deal with Germany, with which it
already has an Avoidance of Double Taxation Agreement (ADTA), to
strengthen measures against tax evasion. At the moment Singapore’s
banking secrecy rules restrict access by German authorities to Singapore
tax and banking records. From now on, however, “banking secrecy will not
constitute an obstacle to exchanging information”. Thus Singapore's
authorities will be expected to hand over any information requested by
the German government in cases where it is investigating tax evasion in

This promise of more transparency and international co-operation follows
an earlier announcement from the Monetary Authority of Singapore (MAS)
that it is pushing ahead with plans to amend the existing
money-laundering laws to, in effect, criminalise tax evasion. From July
2013 financial institutions will be legally obliged to alert authorities
to any overseas customer who they suspect of bringing in funds to evade
taxes at home, just as they are expected to report on other offences.
Equally, the authorities have been sending out stern circulars to all
the banks warning them to monitor their customers better, follow the
existing guidelines more closely and generally get their houses in order.

The flurry of activity is partially a consequence of the debt crisis in
Europe and America. Cash-strapped governments have been ramping up
tax-collection efforts. Inevitably, attention has therefore turned
towards those countries perceived to be offshore havens.  Just as
Switzerland has become a target for European tax authorities, so has

The Germans, for one, have been concerned by the number of rich Germans
supposedly moving their money to Singapore. The MAS insists that “tales
of large inflows of funds from Europe into Singapore are vastly
exaggerated.” Nonetheless, European worries over Singapore’s lack of
transparency in its banking system has been a sticking-point in
negotiations of a Free Trade Agreement (FTA) between the European Union
and Singapore. The new measures should allow the FTA to go through
fairly smoothly.

Likewise, the new laws and regulations will go some way towards
appeasing sentiment in America, where there is also concern about
Singapore’s lax regulations. America does not even have a full
double-taxation agreement with Singapore. The new measures are in line
with the latest recommendations against tax evasion from the
Organisation for Economic Co-operation and Development, a think-tank of
mainly rich countries.  This has not always been the case in the past.

The Singapore government realises that the “tax evasion issue has become
politically sensitive”, especially in Europe, and so it has acted,
argues Edmund Leow, a senior tax lawyer at the Singapore firm of Baker &
McKenzie, Wong & Leow. “This issue is seriously affecting Singapore’s
reputation, so it has to show that it’s clean.”

(5) Swiss central bank opens S'pore office


Fiona Chan

The Straits Times

Publication Date : 12-07-2013

Singapore and Switzerland have much in common, including the challenges
facing their central banks, said the head of the Monetary Authority of
Singapore (MAS) yesterday.

Calling the two countries "kindred spirits", Ravi Menon welcomed the
opening of the first overseas branch office of the Swiss National Bank
(SNB) and said it would help strengthen bilateral relations.

"We are doubly pleased that SNB has chosen to come to Singapore, because
our two countries are like kindred spirits," said Menon, who is the
managing director of MAS.

Both "are small trading nations, with a shared interest in promoting
free trade and maintaining an open, rules-based global economy", he noted.

He said SNB and MAS are confronting similar challenges as central banks
in the post-financial crisis world.

"The openness, financial soundness and strong fundamentals of our two
countries have made us highly attractive to global capital, with
implications for monetary and exchange rate policies, on which we
exchange views," he said.

"Our two institutions also have to manage a growing pool of official
foreign reserves in a global market that is becoming increasingly

Indeed, the need to efficiently manage SNB's Asian assets - which exceed
US$50 billion (S$64 billion) in total - is one reason the bank decided
to set up an office in Singapore, said SNB chairman Thomas Jordan.

Moreover, an Asian presence would enable SNB to trade its assets in the
appropriate time zone, and to understand Asian markets better, he said.

Singapore was chosen because of its dominance in Asian bond trading and
its role as one of Southeast Asia's largest financial marketplaces, he said.

Singapore's "outstanding infrastructure and stable legal environment"
were perks, he added.

Switzerland is Singapore's fifth-largest trading partner in Europe,
while Singapore is Switzerland's fourth-largest trading partner in Asia,
Menon said.

(6) Report: Singapore to eclipse Switzerland as tax haven by 2020


By Georgia McCafferty

May 14, 2013 -- Updated 0115 GMT (0915 HKT)

(CNN) -- As regulations tighten in Europe and the world's wealth moves
to Asia, Singapore is tipped to overtake Switzerland to become the
largest global offshore wealth center in terms of assets by 2020,
according to London research firm, WealthInsight.

Although Switzerland easily retains its offshore banking crown with $2.8
trillion in assets under management, or 34% of the global private
banking industry, Singapore is now the world's fastest growing market
with $550 billion under management at the end of 2011, up from just $50
billion in 2000.

With $450 billion belonging to offshore clients, Singapore has grown to
become the fourth largest offshore banking center globally.

The UK and Channel Islands is the world's second largest hub with $1.8
trillion under management at the end of 2011, followed by the Caribbean
and Panama with $800 million.

A loss of confidence among wealthy American and European investors in
bank secrecy laws and independence in traditional banking hubs, combined
with increasingly stringent banking regulations, are playing in
Singapore's favor, analysts say.

"A lot of the benefits of being in Switzerland have fallen away in terms
of secrecy, therefore if you look at a convenient market, particularly
for a wealthy Asian individual, Singapore fits the bill," said Chris
Wheeler, a bank analyst with Mediobanca.

"It's got a stable government, transparent legal system, a history of
investment management, having English as the first language is really
very helpful and therefore it's the obvious place to go to."

The increasing numbers of wealthy Chinese, Indians and Indonesians are
helping fuel the shift to low-tax Asian centers, according to the
report, with Hong Kong in a strong position to benefit from the Chinese
government's moves to free-up international trade in China's yuan and
the growing number of Chinese millionaires looking for a safe place to
invest their money.

European currency movements have also contributed to the shift, with the
value of the Swiss Franc rising more than 20% against the U.S. dollar
last year due to ongoing concerns over Europe's debt crisis.

"The European crisis undoubtedly has had a big impact on Switzerland
because all the European nations now are looking to get back as much as
tax as they possibly can from anywhere, and anyone," said Wheeler.

"We've seen Switzerland fall away as a secret cross border location and
just become somewhere which is convenient to put your money with a
reasonably good tax rate."

Many investors in the Asian markets prefer to invest offshore for risk
diversification, or are forced to look overseas due to a lack of
experienced and reputable wealth managers in their home markets,
according to the report.

Assets under management in Singapore could quadruple by 2016 as a
result, while offshore assets in Swiss bank accounts are predicted fall
by nearly a third to below $2 trillion in the next three years.

CNN's Isa Soares contributed to this report.

(7) Singapore Fights Image as Tax Haven



Published: October 15, 2012

SINGAPORE — Australian billionaires buying exclusive condominiums.
Germans moving money from Swiss accounts. Secretive banking laws. The
premier Asian wealth management center. Low tax rates.

As Singapore revels in its reputation as an open economy with one of the
world’s highest concentrations of millionaires, the tiny city-state of
5.3 million people is also facing accusations in the German media and
from lobby groups of being a magnet for tax evaders — an image it is
vehemently seeking to change.

Amid German concerns that its wealthy citizens are moving funds from
Switzerland before a new German-Swiss tax treaty takes effect next year,
Singapore and Germany said Sunday they had agreed to bolster their
double-taxation agreement with internationally agreed standards on
information sharing.

“Banking secrecy will not constitute an obstacle to exchanging
information,” said the joint statement, which came at the end of the
weekend visit to Singapore by the German finance minister, Wolfgang

Media reports have put the amount of German money moving to Singapore in
the double-digit billions.

“The perception is that Swiss banks have concluded Switzerland is
unlikely to remain a tax haven for much longer, and Singapore is the new
place to do business,” said Ronen Palan, a professor at City University
London who has conducted numerous studies on offshore finance.

Swiss banks could see assets from Western European clients fall 28
percent to 623 billion Swiss francs, or $668 billion, by 2014 because of
the deals to tax undeclared accounts, the Boston Consulting Group said
in a report in May.

Singapore and its rival, Hong Kong, look set to benefit.

Together, the two Asian hubs manage $1 trillion in offshore funds, with
about 75 percent of that coming from within the region. But Singapore
and Hong Kong may overtake Switzerland — now the largest global offshore
wealth center, with assets of about $2.1 trillion — in 15 to 20 years,
Boston Consulting said.

Singapore, with tax rates that top out at 20 percent and no capital
gains tax, is already synonymous with wealth. BMW and Mercedes were the
top two brands among all cars sold in the first eight months of this
year, according to bestsellingcarsblog.com.

Safe and clean, the city-state bills itself as a tropical refuge with
exclusive residential enclaves, a marina for superyachts, two casinos,
fine dining, high-end boutiques and an annual Formula One race that
brings in the global jet set.

Rich residents include Eduardo Saverin, the co-founder of Facebook, who
has called Singapore home since 2009.

The Brazilian-born Mr. Saverin, who renounced his U.S. citizenship this
year, was in the eighth spot on a Singapore rich list published by
Forbes magazine, with an estimated net worth of $2.2 billion.

Locals who made fortunes in real estate, finance and trading figured
prominently, but the list also included immigrants like the investor
Richard Chandler, born in New Zealand, who had $2.9 billion, and the
property developer Zhong Sheng Jian from China, with $1.4 billion.

A 10 percent property duty imposed on foreigners, part of efforts to
cool the housing market, has done little to dissuade the ultrawealthy —
many of them Chinese, Indian, Malaysian and Indonesian — from plowing
money into Singapore real estate.

Australian mining tycoons are also moving in. Gina Rinehart paid 57
million Singapore dollars, or $47 million, for two units at Seven Palms
Sentosa Cove, a luxury beachfront condominium, according to Singapore’s
Business Times newspaper, while Nathan Tinkler recently moved his family
to Singapore.

But the authorities bristle at any suggestion of tax evasion. A short
paragraph in an Indian government document on “black money” relating to
Singapore was inflammatory enough to prompt Singapore’s prime minister,
Lee Hsien Loong, to make a formal complaint in July to his Indian
counterpart, Manmohan Singh.

The paper did not directly call Singapore a tax haven, but it suggested
that figures showing it accounted for nearly 10 percent of foreign
direct investment in India could be the result of Indian nationals’
routing of money through the city-state to avoid taxes.

“We have demarched the Indian government on this matter to put this
record straight and explain why this is not true and it has been
mistaken,” Mr. Lee said during a visit to New Delhi.

Over the past three years, Singapore has revised half of its 70 tax
treaties with other countries to make it easier to exchange information
on possible tax dodgers.

Starting next year, bankers who help clients evade taxes will risk
ending up in court on money laundering charges.

The new rules are part of “efforts to protect the integrity and
reputation of Singapore as a trusted international financial center,”
the Monetary Authority of Singapore, the central bank and financial
regulator, said last week. ...

A version of this article appeared in print on October 16, 2012, in The
International Herald Tribune.

(8) Banks in Singapore jettison rich clients in tax evasion crackdown




Published Sunday, May. 05 2013, 8:04 PM EDT

Last updated Sunday, May. 05 2013, 8:50 PM EDT

Banks in Singapore are urgently scrutinizing their account holders as an
imminent deadline on stricter tax evasion measures forces them to decide
whether to send some of their wealthiest clients packing.

The Southeast Asian city-state has grown into the world’s fourth-biggest
offshore financial centre but, with U.S. and European regulators on the
hunt for tax cheats, the government is clamping down to forestall the
kind of onslaught from foreign authorities that is now hitting
Switzerland’s banks.

Before July 1, all financial institutions in Singapore must identify
accounts they strongly suspect hold proceeds of fraudulent or willful
tax evasion and, where necessary, close them. After that, handling the
proceeds of tax crimes will be a criminal offence under changes to the
city-state’s anti-money laundering law.

“Because of banking secrecy, Singapore used to be an attractive place to
put money if you didn’t want the authorities back home to know about
it,” said Erik Wilgenhof Plante, head of compliance at Germany’s DZ
Privatbank in Singapore.

“That has left legacy problems for some banks.”

Singapore officials have said the city-state’s secrecy rules were aimed
at safeguarding investors’ legitimate interest in privacy and did not
mean it was a haven for illicit funds. The tighter rules are intended to
fall in line with new global standards announced last year that treat
tax crimes as a money-laundering offence.

Bankers may now feel compelled to give up some of the lucrative accounts
that have fuelled a boom in Singapore’s assets under management to more
than $1-trillion (642.05 billion pounds), with 50 per cent growth in the
five years to 2011, according to the latest government data.

But as the centre for managing wealth in fast-growing Asia, and with
more millionaires per capita than any other country, Singapore’s pain
from the purge is likely to be short-lived and the gains long-lasting. ...

Singapore sees a cautionary tale in Switzerland, where an image as
catering to tax evaders and a zealous drive by cash-strapped Western
governments to track down unpaid taxes set the stage for a witch hunt
against its banks.

“Because of the exponential growth of the number of private banks in
Singapore, the MAS is stepping up and making sure it is ahead of the
curve and does not become a haven for illicit money,” said Andrew Chow,
a partner at local law firm Wong Partnership.

Industry professionals expect the banks to take the effort at ferreting
out tax dodgers seriously and to start flagging them to the authorities
from July 1.

“As banks trawl through their existing client base, I suspect there will
initially be a spike in the number of suspicious transaction reports
being filed,” said Eric Chan, a partner at law firm Drew and Napier.

New foreign clients may find that banks become far more picky and
inquisitive as the change in mindset takes hold.

“The good old times in Singapore are over,” said the European banker.
“We don’t need that dirty money any more.”

(9) French President promises to eliminate tax havens “in Europe and
around the world”


Cash-strapped governments take aim at tax havens


The Globe and Mail

Published Friday, Apr. 12 2013, 9:12 PM EDT

Last updated Wednesday, May. 01 2013, 4:42 PM EDT

Tax havens seem to have multiplied as thousands of people sock away
billions of dollars in exotic locations and infuriate tax collectors. To
find the origin of these tax shelters don’t look to Switzerland, the
Cayman Islands or even Cyprus. Check out New Jersey.

The first building block for today’s tax havens dates back to the late
1880s, when New Jersey governor Leon Abbett came up with a novel way to
boost his state’s revenue. Mr. Abbett had been looking longingly at his
neighbour New York, which was rapidly becoming a business and financial
centre. Urged on by corporate lawyers in New York, the governor hit upon
an idea: Why not make it easier for companies to incorporate in New
Jersey and then charge them a relatively lower tax rate? The plan worked
and it was soon followed by Delaware and then a poor canton in
Switzerland called Zug and, finally, Zurich.

 From there the idea of luring companies and rich individuals – with the
promise of low taxes, light regulation and secrecy – blossomed and tax
havens are now estimated to hide up to $1-trillion annually from tax
officials around the world. Countries as diverse as Ireland, Singapore
and Dubai offer some form of incentive to attract foreign investors
eager to find somewhere to put their cash. Using a tax haven isn’t
necessarily illegal, and many multinational corporations have been
shifting profits around the world legally for years in a bid to pay
lower taxes. But cash-strapped governments are becoming increasingly put
off by citizens who use havens to avoid paying taxes and many countries
are now cracking down.

“Until just a few years ago there had never been any serious attention
paid to this,” said Nicholas Shaxson, a British investigative journalist
and author of Treasure Islands, a history of tax havens. “What had been
growing without really any checks at all, without anybody really
questioning it, now is facing its biggest challenge ever.”

Tax havens have been around in one way or another for centuries. The
ancient Romans opened a tax-free port to undermine competition from a
port in Rhodes, and some of the immigration from Europe to the New World
in the 1600s was driven by the attraction of paying lower taxes in
America. Modern tax havens combined elements of government policies that
were originally designed to boost economic growth, like in New Jersey.

“The history of [tax havens] is not of somebody who thought, ‘Let’s set
up a tax haven,’” said Ronen Palan, a professor of international
political economy at City University London, who has studied the history
of tax havens. “Nobody had the foresight to understand that that can
work as a policy, as a way of developing a financial centre. The history
is more of different elements introduced in different countries and
slowly, slowly people began to understand that [the elements] can work

Decades after New Jersey cleared the way for liberalized incorporation,
Switzerland provided the next key building block: secrecy. In 1934, as
the Nazis were taking control in Germany, the Swiss government
introduced strict privacy provisions in its Bank Law. The move was done
at the behest of local bankers who were wary of losing their thriving
business of keeping private accounts for wealthy Europeans. Under the
provision, banks were prohibited from disclosing any information, even
to government officials. London became a global financial centre in the
1950s thanks to several court rulings and regulatory changes that cut
taxes on foreign companies and left currency trading largely unimpeded.

When many countries began hiking up individual and corporate taxes –
with tax rates soaring as high as 70 per cent – incentives to avoid
paying tax increased as well. Suddenly offering foreigners a secret,
low-cost place to put their money became a thriving business,
particularly in places that largely followed British law, such as former
colonies in the Caribbean, Singapore and the Channel Islands. By the
1990s, the number of tax havens was estimated to be around 100 and new
players had emerged in the former Soviet republics, Ireland, Cyprus and
across the Pacific islands.

But public attitudes are changing. The financial crisis and subsequent
recession across much of the world has increased scrutiny on tax havens.
And pressure to do something about them has been heightened by the
recent disclosure of thousands of offshore trusts and individual account
details by the non-profit, investigative journalism organization, the
Center for Public Integrity. The United States has introduced
legislation requiring any foreign bank doing business in the United
States to provide detailed information on their American clients.
Several major European Union countries, including Britain, France and
Germany, have also recently announced plans to exchange information to
help identify tax dodgers.

This week, France became the latest country to signal all-out war on tax
havens. French President François Hollande announced the creation of a
special prosecutor to pursue tax evasion and promised to eliminate tax
havens “in Europe and around the world.”

Prof. Palan said some of the measures look good on paper but there are
few signs they actually work. “So far, we haven’t seen any decline in
the overall signs of these offshore havens,” he said.

(10) Canada's banks help money move in and out of tax havens;  have 75
subsidiaries operating offshore


How Canada's banks help money move in and out of tax havens

Canada's banks have 75 subsidiaries operating offshore from Switzerland
to Singapore

By Nicole Reinert and Zach Dubinsky, CBC News

Posted: Jun 25, 2013 5:11 AM ET  Last Updated: Jun 25, 2013 12:46 PM ET

The murky world of offshore finance physically resides mainly in
tropical islands, but it is not a world unto itself. As the recent leak
of secret tax-haven files attests, offshore havens rely for their
existence on the financial infrastructure of the big wealthy countries.

And in Canada, our banks play a role.

Scotiabank's name appears 1,839 times in the leaked offshore files.
Royal Bank comes up more than 2,000 times. CIBC is named in 1,347 leaked

The leaked records are full of examples of money moving into and out of
offshore havens via Western-world banks, or of those same banks setting
up accounts for offshore companies, or providing essential assistance to
do so.

Canada's big banks have, as a group, 75 subsidiaries in locales
considered to be offshore havens. There are CIBC and Scotiabank branches
in the British Virgin Islands, Royal Bank affiliates in Jersey, an arm
of the Bank of Montreal in Luxembourg and a TD presence in Bermuda and
Barbados, for example.

Here are four ways big banks can help move money offshore:

Reference letters

Tax havens aren't entirely a financial Wild West. Over the years,
they've brought in measures in response to concerns about money
laundering (though those rules are often easily circumvented). In many
jurisdictions, someone setting up an offshore corporation or account
must provide a reference letter from their bank at home. Sometimes
called a "letter of good standing," it's a document that typically
confirms that a person has satisfactorily had an account for a number of

Canadian banks say such letters are routinely requested for a host of
reasons, most having nothing to do with offshore dealings. "Signing
letters of good standing has nothing to do with where the money is
going," said CIBC spokesman Kevin Dove. "It's just stating that you are
a client or this individual is a client and not in default."

But CBC News has found cases amid the leaked offshore records where it's
clear the banks were providing reference letters to be used for offshore
dealings. CIBC, TD and Bank of Montreal officials signed those letters,
all addressed to a firm that sets up offshore corporations in the
British Virgin Islands. The wording of all three letters is nearly
identical, and appears to have come from a template found among the
leaked files, authored by offshore services agency Portcullis TrustNet.

"We write in connection with [our client], whom we understand wishes to
utilize your services as a company service provider," all three letters
start off.

In other cases, banks provided reference letters, apparently
unwittingly, that were used for offshore businesses that ran into
trouble. RBC wrote one such letter in 2008 for a director of Future
Growth offshore mutual funds, months after the funds were the subject of
a cease-trading order from the Ontario Securities Commission. TD Bank
provided a statement of good standing in 2002 to Greg Cyr, a B.C. man
who was wanted on a 14-year-old charge of narcotics possession and who
set up an offshore company to quietly buy real estate in Victoria before
he disappeared the following year, amid evidence of underworld connections.

In a statement, Royal Bank said it could not comment on individual
cases. But in general, "when requested, we may provide a letter of
account in good standing," the bank said. "Clients may require such
letters for a variety of reasons.… Letters of good standing attest to
our relationship and dealings with an individual client, to the best of
our knowledge."

Wire transfers

The leaked files show a company controlled by big-time Toronto swindler
Peter Sabourin sent funds in 2004 from a Scotiabank account to the
British Virgin Islands to set up an offshore corporation.

Wiring money has never been easier — even to and from a tax haven — and
it helps that Canada's big banks have so many subsidiaries in
jurisdictions considered to be offshore centres. Amounts of $10,000 or
more are recorded by a federal tracking program, but the program's
mandate is to curtail money laundering and terrorist financing, not tax

The leaked tax-haven records are full of examples of clients wiring
money between offshore and Canadian bank accounts. In other cases, money
is wired between two offshore locales via Canadian financial
institutions, which serve as an intermediary or "correspondent bank."

In one example, a company controlled by big-time Toronto swindler Peter
Sabourin sent funds in 2004 from a Scotiabank account to the British
Virgin Islands to set up an offshore corporation. At the time, it was
publicly known that Sabourin was being sued for millions of dollars in
fraud (the plaintiffs won in 2007).

The money that goes through tax havens is not necessarily illicit. But
Michael Hudson, a senior editor at the International Consortium of
Investigative Journalists, said that "dirty money often goes through big

CIBC's Caribbean subsidiary has two branches and a wealth-management
centre in the British Virgin Islands. (CBC)

"There are many rules that require banks to know their customers and to
do anti-money-laundering checks," he said. "The question is, how
aggressively they do this and how often they turn a blind eye?"

Asked about the various ways it plays a role in the offshore world,
Scotiabank said in a statement that it has "well-established
know-your-customer practices, as well as processes to monitor accounts
for unusual activity and report suspicious activity to the proper
authorities." The statement continued: "Scotiabank operates with
integrity and is committed to operating at Canadian compliance standards
or higher in every country where we operate."


Canada's big banks are well placed to supply the documents needed to
open an offshore bank accounts or to wire money into them. And because
the banks have so many branches in offshore jurisdictions, they
sometimes provide the offshore accounts themselves. ...

In a separate case, clients using offshore credit cards furnished by a
different Canadian bank came under scrutiny. In the late 1990s and early
2000s, the U.S. Internal Revenue Service named RBC clients, and those of
several other global banks, in an investigation into use of offshore
credit cards. RBC had advertised its accounts as "a safehold" providing
"confidentiality and financial advantage."

If you have more information on this story, or other investigative tips
to pass on, please email investigations@cbc.caWith files from Sophia
Harris, Asher Greenberg and Alison Crawford

(11) David Cameron crusade at G8, against Tax Havens & anonymous ownership


David Cameron: 'G8 summit is a chance to recover national self-confidence'

Exclusive: reforming creaking tax system and Syria will be prime
minister's big targets for meeting in Northern Ireland

Patrick Wintour and Nicholas Watt

The Guardian, Saturday 15 June 2013 06.28 AEST

There was a perception that David Cameron is not a natural "global
governance" man, and finds international summitry tiresome – unlike, for
instance, Gordon Brown who relished it. But the PM, before his critical
chairmanship of the G8 summit next week in Northern Ireland, dispels the
impression. ...

Cameron explains that he has been thinking deeply for months about how
he hopes to shape a distinctive British agenda: "What is exciting about
this G8 is that it is a good opportunity for British leadership and to
recover some of our national self-confidence". ...

He accepts the summit in Fermanagh itself will be far from the final
word, but argues he already has made some big breakthroughs. "The EU for
the first time has agreed proper tax exchange and information, something
that was held up by Austria and Luxembourg for year after year. The
Crown Dependencies and Overseas Territories – often Britain has been
criticised for not doing enough [but] we have real action and real
progress on that front. So before even the G8 leaders arrive in Northern
Ireland, we have got really big steps forward on tax and transparency".

Cameron is pinning his hopes for real action from the UK's notorious tax
havens on a pre-G8 summit mini-summit today with the sometimes highly
prickly, and unpredictable heads of the Crown Dependencies and Overseas
Territories – the likes of Jersey, Guernsey, Bermuda and the British
Virgin Islands. As if to remind the world that these havens are a
British responsibility, their flags fluttered in Parliament Square on
Friday, each festooned with a union flag. ...

But he wants to push the agenda further, and says the UK will show a
lead. He argues that it is necessary to know more about who owns which
offshore company – the beneficial owner – because that is how a lot of
people and a lot of companies avoid tax, using secretive companies in
secretive locations. And so he promises: "Every one of the Crown
Dependencies and Overseas Territories are going to have an action plan
on beneficial ownership".

And in an announcement likely to be welcomed by campaign groups he says:
"Here in the UK we are going to have a register of beneficial ownership,
and we are going to consult on whether it should be public or not. I
know in the end everyone would like total transparency and total
publicity about everything, and I have a huge amount of sympathy for
that. But the most important thing is the tax authorities have got to
have access to this information so a central registry of beneficial
ownership in the UK is a real step forward and we are leading by example."

Campaigners want these registries that reveal the identity of shell
companies to be available to the public, and not just worldwide tax
authorities. But it may not be quite so simple.

Cameron has a four stage diplomatic process: "Step one – everyone admits
there is a problem. Step two – everyone agrees to action plans for
beneficial ownership. Step three – Britain takes the lead to say our
answer is a register of beneficial ownership. Step four would be
everyone doing that and then making it public." He says that is where he
would like to end up, but adds he would not "disadvantage Britain" by
doing something other countries are not prepared to do.

He explains why the issue of real, beneficial ownership is so critical.
"I have been hugely influenced by the work of Paul Collier. I have been
a follower of his for many years. What he writes about this issue is
hugely powerful. Oil exports from Nigeria are many times the aid flows
that go to many African countries. The extractive industry payments to
developing countries dwarf the amount of aid they receive. We have got
to make sure these minerals are a blessing and not a curse. Obviously
you need honest government in those countries, but in the west we have a
role to play. If you can still have shady secretive companies, we are
simply not playing our part." ...

(12) News Corp pays no tax to IRS; has 152 subsidiaries in tax havens;
gets money FROM Tax Dept (2011)


Over The Past 4 Years News Corp Generated $10.4 Billion In Profits And
Received $4.8 Billion In "Taxes" From The IRS

Submitted by Tyler Durden on 07/12/2011 12:25 -0400

Call it the gift that keeps on giving (if one is a corporation that is):
the US Tax system, so effective at extracting income tax from America's
working class, is just as "effective" at redistributing said income tax
at the corporate level. Case in point: News Corp, which after generating
$10.4 billion in profits over the past 4 years, and which would have
been expected to pay the IRS $3.6 billion at the statutory corporate tax
rate, instead received $4.6 billion back from Uncle Sam. Bottom line:
Murdoch's corporation had a cash paid tax rate of -46% between 2007 and
2010. The culrpit: two little somethings called Deferred Tax Assets and
Net Operating Loss Carry-forwards.

The chart below shows News Corp's profits and annual cash tax receipts.

Is it all just such IRS tax loopholes as deferred tax assets and NOL
carryforward? Not entirely. Reuters explains:

How does Murdoch make money off the tax system? There are three basic
elements, disclosure statements show.

One is the aggressive use of intra-company transactions that globally
allocate costs to locations that impose taxes -- and profits to areas
where profits can be earned tax-free.

For that Murdoch can thank laws and treaties that treat multinational
corporations much more generously than working stiffs, such as those who
make up the audience for his New York Post and for his British tabloids
with bare-breasted women. Working stiffs have their taxes taken out of
their pay before they get it, while Murdoch gets to profit now and pay
taxes by-and-by.

News Corp. has 152 subsidiaries in tax havens, including 62 in the
British Virgin Islands and 33 in the Caymans. Among the hundred largest
U.S. companies, only Citigroup and Morgan Stanley have more tax haven
subsidiaries than News Corp., a 2009 U.S. Government Accountability
Office study found.

News Corp. had nearly $7 billion permanently invested offshore in 2009,
money on which it does not have to pay taxes unless it brings the money
back to the United States. Meanwhile, it can use that money as
collateral for loans in the United States, where interest paid is a
tax-deductible expense. ...

Buying companies with tax losses is a second way Murdoch can pocket,
rather than pay, taxes. ...

Murdoch's tax lawyers are expert at maximizing the benefits of
deferrals. Incurring a tax today, but paying it by-and-by can be
profitable. A dollar of tax deferred for 30 years, and invested at 8
percent real growth while inflation runs 3 percent, is worth more than
$10 at the end of the period, while the real value of the tax when it is
ultimately paid is just 40 cents. ...

(13) When it comes to taxes, instead of rendering unto Caesar, Murdoch
has Caesar rendering unto him (2011)


It pays to be Murdoch. Just ask US gov't: DCJohnston

Tue Jul 12, 2011 10:39am EDT

By David Cay Johnston

(Reuters) - Rupert Murdoch may not garner as much attention for his
financial savvy as he does for his journalistic escapades, which last
week led to the shuttering of Britain's oldest tabloid. But that doesn't
make his money management any less impressive.

Indeed, when it comes to taxes, instead of rendering unto Caesar,
Murdoch has Caesar rendering unto him. See graphic: r.reuters.com/haf62s

Over the past four years Murdoch's U.S.-based News Corp. has made money
on income taxes. Having earned $10.4 billion in profits, News Corp.
would have been expected to pay $3.6 billion at the 35 percent corporate
tax rate. Instead, it actually collected $4.8 billion in income tax
refunds, all or nearly all from the U.S. government.

The relevant figure is the cash paid tax rate. This is the net amount of
corporate income taxes actually paid after refunds. For those four
years, it was minus 46 percent, disclosure statements show.

Even on an accounting basis, which measures taxes incurred but often not
actually paid for years, News Corp. had a tax rate of under 20 percent,
little more than half the 35 percent statutory rate, company disclosures
examined by Reuters show. News Corp. had no comment. ...

(14) The offshore trick: "nominee director" (offshore) cf the Real Owner


The offshore trick: how BVI 'nominee director' system works

David Leigh, Harold Frayman and James Ball

The Guardian, Sunday 25 November 2012 20.00 GMT

How the nominee director system works. Graphic: Guardian

To see a larger version, click on the image

Nominee directors are not illegal and can sometimes be useful, for
example in preparing "off-the-shelf" ready-made companies. But the legal
conjuring trick behind the British Virgin Islands nominee system opens
the way to abuses. It depends on three pieces of paper:

1. A promise by a nominee director only to do what the real owner tells

A characteristic "nominee director declaration", used in 2010 by the
Vanuatu-based Taylor organisation, reads like this: "I, Ian Taylor,
Director BRAD LAND LTD, having agreed to the appointment as Director of
a company duly incorporated under the laws of the British Virgin Islands
[BVI] … hereby declare that I shall only act upon instruction from the
beneficial owners."

2. A "general power of attorney".

The nominee secretly hands back all control to that real owner.
Typically, "To transact, manage and do all and every business matter …
To open any bank account and to operate the same … To enter into all
contracts … To collect debts, rents and other money due."

That example, signed by a Nevis-resident nominee director in 2005, gives
back control of a BVI offshore company, Kordwell Holdings, to its secret
Russian owner, Vladimir Bugrov, in Moscow. One typical agency, the
Haslemere-based accountants Fletcher Kennedy, explicitly advertise:
"Both the power of attorney and nominee director agreement are
confidential documents designed to ensure our clients' privacy." They
told us that the website was "a historic one dropped by us some time ago".

The more brazen nominees favour residence in self-ruling havens such as
Vanuatu or Nevis because they aim to be beyond the reach of the
developed world's tax and legal authorities. But they avoid the BVI
itself. Because the BVI recognises British law, local residents could in
theory be vulnerable to claims of legal liability from creditors and
others. One offshoring agency owner told Russians, his biggest customers
according to our sources, that the only people prepared to provide such
secret general powers of attorney were those Britons who had emigrated
from Sark to more far-flung jurisdictions.

3. A signed, but undated, director's resignation letter.

This supposedly enables a nominee to duck liability in the event of any
trouble. Ted Cocks and Joseph Sparks, for example, who share a flat in
the East End of London, say this was the only one of the three documents
they ever signed, as nominee directors of more than 200 Russian firms,
and that they were never involved with the more exotic nominee practices.

(15) Kofi Annan: Africa plundered. Mining Companies pay lower rates of
tax than Workers


Kofi Annan: Africa plundered by secret mining deals

BBC News

10 May 2013 Last updated at 10:52 GMT

Tax avoidance, secret mining deals and financial transfers are depriving
Africa of the benefits of its resources boom, ex-UN chief Kofi Annan has

Firms that shift profits to lower tax jurisdictions cost Africa $38bn
(£25bn) a year, says a report produced by a panel he heads.

"Africa loses twice as much money through these loopholes as it gets
from donors," Mr Annan told the BBC.

It was like taking food off the tables of the poor, he said.

The Africa Progress Report is released every May - produced by a panel
of 10 prominent figures, including former Nigerian President Olusegun
Obasanjo and Graca Machel, the wife of South African ex-President Nelson

'Highly opaque'

African countries needed to improve governance and the world's richest
nations should help introduce global rules on transparency and taxation,
Mr Annan said.

The report gave the Democratic Republic of Congo as an example, where
between 2010 and 2012 five under-priced mining concessions were sold in
"highly opaque and secretive deals".

This cost the country, which the charity Save the Children said earlier
this week was the world's worst place to be a mother, $1.3bn in revenues.

This figure was equivalent to double DR Congo's health and education
budgets combined, the report said.

DR Congo's mining minister disputed the findings, saying the country had
"lost nothing".

"These assets were ceded in total transparency," Martin Kabwelulu told
Reuters news agency.

The report added that many mineral-rich countries needed "urgently to
review the design of their tax regimes", which were designed to attract
foreign investment when commodity prices were low.

It quotes a review in Zambia which found that between 2005 and 2009,
500,000 copper mine workers were paying a higher rate of tax than major
multinational mining firms.

Africa loses more through what it calls "illicit outflows" than it gets
in aid and foreign direct investment, it explains.

"We are not getting the revenues we deserve often because of either
corrupt practices, transfer pricing, tax evasion and all sorts of
activities that deprive us of our due," Mr Annan told the BBC's Newsday

"Transparency is a powerful tool," he said, adding that the report was
urging African leaders to put "accountability centre stage".

Mr Annan said African governments needed to insist that local companies
became involved in mining deals and manage them in "such a way that it
also creates employment".

"This Africa cannot do alone. The tax evasion, avoidance, secret bank
accounts are problems for the world… so we all need to work together
particularly the G8, as they meet next month, to work to ensure we have
a multilateral solution to this crisis," he said.

For richer nations "if a company avoids tax or transfers the money to
offshore account what they lose is revenues", Mr Annan said.

"Here on our continent, it affects the life of women and children - in
effect in some situations it is like taking food off the table for the

(16) Offshore Tax Havens rocked by Bank account Leaks


Published 04 April 2013, updated 08 April 2013

The offshore financial industry has been hit by the leak of 2.5 million
secret bank accounts of companies and nationals in 170 countries to 86
journalists worldwide, under the leadership of the International
Consortium of investigative journalism. Publication began this week.

The leak of two million emails and other documents, mostly from the
offshore haven of the British Virgin Islands is expected to cause global

An estimated $32 trillion (€25 trillion) is locked up in the accounts,
which are used by plutocrats, heads of state, and celebrities to avoid
paying income tax.

The revelations come shortly after the resignation of the French Finance
Minister Jérôme Cahuzac on 19 March, apparently over a secret bank
account he held in Switzerland. Jean-Jacques Augier, President François
Hollande's campaign co-treasurer and close friend, has also been forced
to publicly identify a Chinese business partner.

Mongolia's former finance minister and deputy speaker of its parliament
has reportedly said that he may have to resign from politics as a result
of the investigation.

In Belgium, a first batch of revelations is expected later today on the
website of the daily Le Soir.

According to initial information, the leak has enabled investigators to
trace the “disappeared” fortunes of dictators, such as Ferdinand Marcos
in the Philippines and Robert Mugabe in Zimbabwe.

The Guardian, the BCC and other international media will jointly publish
the results of their investigations over the course of the week.
According to the Guardian newspaper, the investgative project could
prove extremely damaging for confidence in tax havens, used by the
world's wealthiest people.

Activity by an extraordinary array of government officials and rich
families across the world has been identified, from the UK, Canada, the
US, India, Pakistan, Indonesia, Iran, China, Thailand and former
communist states.

Asked to comment if the apparent blow to tax havens was good news for
the EU, Commission spokesperson Olivier Bailly seized the occasion to
remind that the EU executive urges member states to take up the issue of
tax evasion, including by adopting a common definition of what a tax haven.

He also said that tax evasion cost "more than €1,000 billion" per year
in the EU. ...


(17) Covert companies & Bank accounts exposed by Investigative
Journalists (including Michael Hudson)



Secret Files Expose Offshore’s Global Impact

By Gerard Ryle, Marina Walker Guevara, Michael Hudson, Nicky Hager,
Duncan Campbell and Stefan Candea

April 3, 2013, 6:00 pm


-  Government officials and their families and associates in Azerbaijan,
Russia, Canada, Pakistan, the Philippines, Thailand, Mongolia and other
countries have embraced the use of covert companies and bank accounts.

-  The mega-rich use complex offshore structures to own mansions,
yachts, art masterpieces and other assets, gaining tax advantages and
anonymity not available to average people.

-  Many of the world’s top’s banks – including UBS, Clariden and
Deutsche Bank – have aggressively worked to provide their customers with
secrecy-cloaked companies in the British Virgin Islands and other
offshore hideaways.

-  A well-paid industry of accountants, middlemen and other operatives
has helped offshore patrons shroud their identities and business
interests, providing shelter in many cases to money laundering or other

-  Ponzi schemers and other large-scale fraudsters routinely use
offshore havens to pull off their shell games and move their ill-gotten

Dozens of journalists sifted through millions of leaked records and
thousands of names to produce ICIJ’s investigation into offshore secrecy

A cache of 2.5 million files has cracked open the secrets of more than
120,000 offshore companies and trusts, exposing hidden dealings of
politicians, con men and the mega-rich the world over.

The secret records obtained by the International Consortium of
Investigative Journalists lay bare the names behind covert companies and
private trusts in the British Virgin Islands, the Cook Islands and other
offshore hideaways.

They include American doctors and dentists and middle-class Greek
villagers as well as families and associates of long-time despots, Wall
Street swindlers, Eastern European and Indonesian billionaires, Russian
corporate executives, international arms dealers and a
sham-director-fronted company that the European Union has labeled as a
cog in Iran’s nuclear-development program.

The leaked files provide facts and figures — cash transfers,
incorporation dates, links between companies and individuals — that
illustrate how offshore financial secrecy has spread aggressively around
the globe, allowing the wealthy and the well-connected to dodge taxes
and fueling corruption and economic woes in rich and poor nations alike.

The records detail the offshore holdings of people and companies in more
than 170 countries and territories.

The hoard of documents represents the biggest stockpile of inside
information about the offshore system ever obtained by a media
organization. The total size of the files, measured in gigabytes, is
more than 160 times larger than the leak of U.S. State Department
documents by Wikileaks in 2010.

To analyze the documents, ICIJ collaborated with reporters from The
Guardian and the BBC in the U.K., Le Monde in France, Süddeutsche
Zeitung and Norddeutscher Rundfunk in Germany, The Washington Post, the
Canadian Broadcasting Corporation (CBC) and 31 other media partners
around the world.

Eighty-six journalists from 46 countries used high-tech data crunching
and shoe-leather reporting to sift through emails, account ledgers and
other files covering nearly 30 years.

“I’ve never seen anything like this. This secret world has finally been
revealed,” said Arthur Cockfield, a law professor and tax expert at
Queen’s University in Canada, who reviewed some of the documents during
an interview with the CBC. He said the documents remind him of the scene
in the movie classic The Wizard of Oz in which “they pull back the
curtain and you see the wizard operating this secret machine.”

Mobsters and Oligarchs

The vast flow of offshore money — legal and illegal, personal and
corporate — can roil economies and pit nations against each other.
Europe’s continuing financial crisis has been fueled by a Greek fiscal
disaster exacerbated by offshore tax cheating and by a banking meltdown
in the tiny tax haven of Cyprus, where local banks’ assets have been
inflated by waves of cash from Russia.

Anti-corruption campaigners argue that offshore secrecy undermines law
and order and forces average citizens to pay higher taxes to make up for
revenues that vanish offshore. Studies have estimated that cross-border
flows of global proceeds of financial crimes total between $1 trillion
and $1.6 trillion a year.

ICIJ’s 15-month investigation found that, alongside perfectly legal
transactions, the secrecy and lax oversight offered by the offshore
world allows fraud, tax dodging and political corruption to thrive.

Offshore patrons identified in the documents include:

   Individuals and companies linked to Russia’s Magnitsky Affair, a tax
fraud scandal that has strained U.S.-Russia relations and led to a ban
on Americans adopting Russian orphans.

   A Venezuelan deal maker accused of using offshore entities to
bankroll a U.S.-based Ponzi scheme and funneling millions of dollars in
bribes to a Venezuelan government official.

   A corporate mogul who won billions of dollars in contracts amid
Azerbaijani President Ilham Aliyev’s massive construction boom even as
he served as a director of secrecy-shrouded offshore companies owned by
the president’s daughters.

   Indonesian billionaires with ties to the late dictator Suharto, who
enriched a circle of elites during his decades in power.

The documents also provide possible new clues to crimes and money trails
that have gone cold.

After learning ICIJ had identified the eldest daughter of the late
dictator Ferdinand Marcos, Maria Imelda Marcos Manotoc, as a beneficiary
of a British Virgin Islands (BVI) trust, Philippine officials said they
were eager to find out whether any assets in the trust are part of the
estimated $5 billion her father amassed through corruption. ...

The records obtained by ICIJ expose how offshore operatives help their
customers weave elaborate financial structures that span countries,
continents and hemispheres.

A Thai government official with links to an infamous African dictator
used Singapore-based TrustNet to set up a secret company for herself in
the BVI, the records show. ...

Documents obtained by ICIJ show how two top Swiss banks, UBS and
Clariden, worked with TrustNet to provide their customers with
secrecy-shielded companies in the BVI and other offshore centers.

Clariden, owned by Credit Suisse, sought such high levels of
confidentiality for some clients, the records show, that a TrustNet
official described the bank’s request as “the Holy Grail” of offshore
entities — a company so anonymous that police and regulators would be
“met with a blank wall” if they tried to discover the owners’
identities. ...

Contributors to this story: Mar Cabra, Kimberley Porteous, Frédéric
Zalac, Alex Shprintsen, Prangtip Daorueng, Roel Landingin, François
Pilet, Emilia Díaz-Struck, Roman Shleynov, Harry Karanikas, Sebastian
Mondial and Emily Menkes

(18) Tax Havens: How & Where the Wealthy Stash Their Cash Around the World


Posted by Editor Lorimer Wilson

Monday, April 8th, 2013

 From wealthy citizens trying to pay less tax, to savvy swindlers and
drug lords with riches to hide, people have spent decades stealthly
shifting money into the tax havens of European principalities, Caribbean
archipelogos and Pacific islands. Unravel the mystery of how they do it
in this exclusive interactive.

So says the introduction to an exclusive interactive post* on Canada’s
CBC News website (www.cbc.ca) entitled Tax havens explained: How the
rich hide money.

This post is presented compliments of
www.FinancialArticleSummariesToday.com (A site for sore eyes and
inquisitive minds), www.munKNEE.com (Your Key to Making Money!) and the
Intelligence Report newsletter (It’s free – sign up here) and may have
been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and
bold/italics emphases) for the sake of clarity and brevity to ensure a
fast and easy read. Please note that this paragraph must be included in
any article re-posting to avoid copyright infringement.

The post goes on to say:

“Recent leaks of secret banking information have helped authorities
around the world crack down on tax cheats who go offshore, resulting in
billions of dollars recovered for the public purse. Now, in one of the
biggest ever leaks of financial data, the International Consortium of
Investigative Journalists has released data on a whopping 120,000 secret
offshore entities in 10 different jurisdictions.

Read more about how unscrupulous investors hire high-priced lawyers and
financial advisers to move money offshore in this interactive. (Select
the blue button to make choices and move through each step.)”[The
interactive covers the tax havens of:

Central America: Panama; Belize

Caribbean: Bahamas; Barbadoes; Bermuda; British Virgin Islands; Cayman
Islands; Nevis

Europe: Channel Islands (Guernsey & Jersey); Cyprus; Isle of Man;
Liechtenstein; Switzerland

Pacific: Cook Islands; Vanuatu]

*Original Source

Another interactive post** from CBC News entitled 38 media outlets
probing one of biggest ever leaks of financial data says “A massive leak
of financial data to media outlets around the globe has spurred a series
of investigations into offshore banking and tax havens. Documents
detailing secret accounts were leaked to the Washington, D.C.-based
International Consortium of Investigative Journalists. The non-profit
group granted 38 media organizations access to the database. Corporate
moguls, property tycoons, lawyers and politicians are under scrutiny in
the international investigation. [Go here and] select the red marker to
open a window to read more about the investigations in each country.”

**Original Source[If you want to keep abreast of all the latest global
news and analysis on tax havens and corruption you won’t hear anywhere
else visit Taxcast – the Tax Justice Network’s monthly podcast: 15-20
minutes - here.]

The CBC post concludes by saying, “No one knows for certain how much of
the planet’s private wealth is parked in tax havens. One estimate is
that there’s $32 trillion stashed offshore; a more conservative
calculation puts it at a minimum of $8 trillion. Either way, that means
tens – if not hundreds – of billions of dollars in lost tax revenues for
the world’s governments.”

Editor’s Note: The author’s views and conclusions in the above article
are unaltered and no personal comments have been included to maintain
the integrity of the original post. Furthermore, the views, conclusions
and any recommendations offered in this article are not to be construed
as an endorsement of such by the editor.

(19) Tax havens explained: How the rich hide money - CBC interactive


Tax havens explained: How the rich hide money

Super wealthy have vast array of options to take cash offshore

CBC News Last Updated: April 3, 2013

Recent leaks of secret banking information have helped authorities
around the world crack down on tax cheats who go offshore, resulting in
billions of dollars recovered for the public purse. Now, in one of the
biggest ever leaks of financial data, the International Consortium of
Investigative Journalists has released data on a whopping 120,000 secret
offshore entities in 10 different jurisdictions.

Read more about how unscrupulous investors hire high-priced lawyers and
financial advisers to move money offshore in the interactive below.
Select the blue button to make choices and move through each step. Read
more of CBC's coverage of the massive leak of offshore data and how tax
havens sell secrecy in our special series.

(20) Billionaires Flee Havens as Trillions Pursued Offshore

By David de Jong & Robert LaFranco - 2013-04-29T21:04:51Z

Bloomberg Opinion

Billionaire Dmitry Rybolovlev, Russia’s 14th-richest person, and his
wife, Elena Rybolovleva, have been brawling for almost five years in at
least seven countries over his $9.5 billion fortune.

In a divorce complaint originated in Geneva in 2008, Rybolovleva accused
her husband of using a “multitude of third- parties” to create a network
of offshore holding companies and trusts to place assets -- including
about $500 million in art, $36 million in jewelry and an $80 million
yacht -- beyond her reach.

She has brought legal action against the 48-year-old Rybolovlev in the
British Virgin Islands, England, Wales, the U.S., Cyprus, Singapore and
Switzerland, and is seeking $6 billion.

The suits provide a window into the offshore structures and secrecy
jurisdictions the world’s richest people use to manage, preserve and
conceal their assets. According to Tax Justice Network, a U.K.-based
organization that campaigns for transparency in the financial system,
wealthy individuals were hiding as much as $32 trillion offshore at the
end of 2010. Fewer than 100,000 people own $9.8 trillion of offshore
assets, according to research compiled by former McKinsey & Co.
economist James Henry.

“For a lot of people, it’s not just the objective of not paying taxes,”
Philip Marcovici, an independent Hong Kong-based tax lawyer and board
member of Vaduz, Liechtenstein-based wealth adviser Kaiser Partner
Group, said in a telephone interview. “It’s the objective of obtaining
the human right to privacy and seeking confidentiality about their
financial affairs.”

Van Gogh

More than 30 percent of the world’s 200 richest people, who have a $2.8
trillion collective net worth, according to the Bloomberg Billionaires
Index, control part of their personal fortune through an offshore
holding company or other domestic entity where the assets are held
indirectly. These structures often hide assets from tax authorities or
provide legal protection from government seizure and lawsuits.

Rybolovlev, who lives in Monaco, made most of his fortune from the sale
of two potash fertilizer companies for a combined $8 billion in 2010 and
2011. He held both companies -- OAO Uralkali and OAO Silvinit -- through
Cyprus-based Madura Holding Ltd.

Some of his art -- including works by Van Gogh, Monet and Picasso -- is
now held in Xitrans Finance Ltd., a British Virgin Islands-based
company, and stored in Singapore. Rybolovlev bought a New York City
apartment for $88 million in 2011 using a trust associated with his
daughter, Ekaterina. The penthouse was purchased from the wife of former
Citigroup Inc. chairman Sandy Weill, according to divorce documents
filed in New York. ...

Singapore, the heart of Asia’s banking and offshore industry, will make
laundering of profits from tax evasion a crime under a law taking effect
on July 1. Luxembourg announced on April 10 that it would end its bank
secrecy policy in 2015.

Cyprus was bailed out of its financial troubles in March by the European
Union, which required the nation to impose a tax on bank deposits of
more than 100,000 euros. That month, the country lost $2.4 billion in
deposits, according to data from the European Central Bank.

The shift toward transparency has led many of the world’s wealthiest to
reassess how and where they hold their assets, according to Goran
Grosskopf, a Lausanne, Switzerland-based economist who has advised
several billionaires, as well as the Russian government.

Li, Lee

Li Ka-Shing and Lee Shau Kee, Asia’s two richest men, control parts of
their fortunes through offshore structures. Li owns his 43 percent stake
in Hong Kong-based property developer Cheung Kong Holdings Ltd (1).
through namesake trusts and companies in the Cayman and British Virgin
Islands, according to regulatory filings. Lee holds his shares in
Henderson Land Development (12) Co. through 10 firms set up in the two
British island territories and Panama, filings show.

Bloomberg Billionaires Index

Li ranks 15th on the Bloomberg index with a net worth of $27.5 billion,
while Lee is No. 18 with a $25.1 billion fortune.

Alisher Usmanov, Russia’s richest man, earlier this year restructured
the way he holds his $19.7 billion fortune, moving the majority of his
assets -- including his two most valuable, Metalloinvest Holding Co. and
OAO MegaFon (MFON), worth $12.7 billion combined -- under the control of
British Virgin Islands-based USM Holdings.  ...

‘Get Out’

Those wealthy individuals should stop searching for new tax havens to
hide their assets, said tax adviser Marcovici.

“We live in a world where you only have two choices: play by the rules
of the country you live in, or get out if you don’t want to play by the
rules,” he said.

The Bloomberg Billionaires Index takes measure of the world’s wealthiest
people based on market and economic changes and Bloomberg News
reporting. Each net worth figure is updated every business day at 5:30
p.m. in New York and listed in U.S. dollars.

To contact the reporters on this story: David De Jong in New York at
ddejong3@bloomberg.net; Robert LaFranco in London at

To contact the editor responsible for this story: Matthew G. Miller at

(21) Russia’s 20 Biggest Billionaires Keep Riches From Putin


By Robert LaFranco & Alex Sazonov - 2013-05-01T14:15:44Z

Alisher Usmanov, Russia’s richest person, moved control of most of his
$20 billion fortune last year to a holding company based in the British
Virgin Islands, a collection of more than 60 isles 5,600 miles away from

The company, USM Holdings, controls the billionaire’s most valuable
asset, Metalloinvest Holding Co., Russia’s largest iron ore producer,
through two Cyprus-based subsidiaries, USM Steel & Mining Group Ltd. and
USM Investments Ltd., according to Metalloinvest’s annual report.

“Offshores are the main tool for Russian businessmen to protect their
assets from state authorities, rivals and all kinds of raiders,” Valery
Tutykhin, an attorney with John Tiner & Partners, a Geneva-based law
firm that specializes in wealth management, said in a phone interview.

All of Russia’s 20 richest people -- who have a combined net worth of
more than $227 billion, according to the Bloomberg Billionaires Index --
control a portion of their fortune through holding companies registered
outside of their home country.

The billionaires, most of whom built their fortunes during the violent
and unpredictable post-communist economic environment, use the entities
to manage, preserve and conceal their wealth -- a tactic that has drawn
the ire of Russian President Vladimir Putin.

Vekselberg, Deripaska

Viktor Vekselberg, 56, holds the majority of his $14.8 billion fortune
through Bahamas-based Renova Holdings. Among the company’s assets is a 7
percent stake in United Co. Rusal, the world’s largest aluminum producer.

Vladimir Lisin, 56, controls his 85 percent stake in publicly traded OAO
Novolipetsk Steel, Russia’s most valuable steelmaker, through a
Cyprus-based holding company, Fletcher Group Holdings Ltd. Mikhail
Fridman, 49, controls his banking, retail and telecommunications assets
through Moscow-based Alfa Group, which is owned by Gibraltar-based CTF

Putin has vowed to bring some of the money home. Last year, he took
control of the Federal Financial Monitoring Service, an executive body
aimed at combating money laundering. The State Duma, Russia’s lower
house of parliament, introduced a series of amendments to existing laws,
tightening control over companies’ financial transactions.

During his campaign for a third term last year, Putin, 60, said that he
was considering a one-time tax on entrepreneurs who acquired state
assets at “unfair” prices in the 1990s.

In a speech to the nation in December, Putin criticized the country’s
legal system and the elements that led to accusations of wrongdoing,
vowing to eliminate the factors that have turned “economic disputes into
score-settling.” ...

Russian billionaires create companies in the British Virgin Islands
because they find its legal system, which is based on British law, more
attractive than their own, according to Steven Philippsohn, a senior
partner at PCB Litigation, a London-based firm that helps banks track
offshore assets held by Russians.

Cyprus-based entities allow them to benefit from lower tax rates
available under the double-tax avoidance treaty signed by the
Mediterranean island nation and Russia in 1998. Cyprus also caps
taxation of dividends paid from Russia at 5 percent and allows tax-free
cash transfers to the British Virgin Islands, according to Artem
Toropov, a senior associate at Goltsblat.

The transfer of wealth from the Russian state to individuals began when
President Boris Yeltsin kick-started Russia’s privatization era,
declaring in an April 1992 speech a future with “millions of owners, not
hundreds of millionaires,” according to “The Oligarchs,” a book by
journalist David Hoffman published in 2003. ...

(22) Billionaire Tax Haven Liechtenstein Loses on Bank Reforms


By David de Jong & Robert LaFranco - 2013-05-02T04:00:01Z

Liechtenstein, a principality once fabled for its banking secrecy laws,
is losing its perch as one of the world’s top tax havens for the richest
people on Earth.

The Alpine nation eliminated its banking secrecy laws four years ago
under pressure from the U.S. and the European Union, sending clients to
other jurisdictions and forcing one of Europe’s oldest banking hubs to
recast its image.

“We’re not a tax haven, we’re a safe haven,” said Mario Gassner, chief
executive officer of Liechtenstein’s Financial Market Authority, from
his office on Landstrasse, the main street that cuts through the
country’s capital city of Vaduz. “In the past, clients came to
Liechtenstein to bring their money. Since 2008, our financial
intermediaries have had to go to the clients.” ...

A global shift in the movement of capital and the laws that govern it
has followed the crackdown on financial secrecy. Assets under management
at Western Europe’s private banks and offshore structures have declined
by 2 percent since 2008, while Asia’s assets have grown about 15 percent
to $8 trillion, according to a 2012 report by consultancy McKinsey & Co.

The Tax Justice Network, a U.K.-based organization that campaigns for
transparency in the financial system, said wealthy individuals were
hiding as much as $32 trillion offshore at the end of 2010. Since 2001,
assets under management in Singapore, the heart of Asia’s private
banking industry, have quintupled to S$1.4 trillion ($1.1 trillion),
according to figures from the Monetary Authority of Singapore.


Singapore is now following Liechtenstein’s lead, and will make
laundering of profits from tax evasion a crime under a law taking effect
July 1.

“There are plenty of Europeans -- Germans for example -- who a number of
years ago shifted money that was undeclared to Singapore and now have a
major problem given the rules that are coming into effect this July,”
Philip Marcovici, an independent Hong Kong-based tax lawyer and board
member of Vaduz-based wealth adviser Kaiser Partner Group, said in a
telephone interview.

Governments are hoping for a piece of what the European Commission
estimates is 1 trillion euros ($1.3 trillion) of lost tax revenue as
many nations struggle to narrow budget deficits. In April, the European
Union moved closer to an agreement that would clamp down on tax evasion
by sharing bank details across borders, as Luxembourg and Austria became
the last countries in the 27-nation region to give up blocking the efforts.

Luxembourg Prime Minister Jean-Claude Juncker also said the country
would end its bank secrecy policy in 2015.


Countries are also responding to the implementation of the U.S.
anti-tax-evasion law, the Foreign Account Tax Compliance Act, or Fatca,
which took effect Jan. 1. The legislation requires financial
institutions based outside the U.S. to obtain and report information
about income and interest payments accrued to the accounts of American

More than a decade ago, Liechtenstein and 34 other countries were
branded by the Organization for Economic Cooperation and Development as
being uncooperative tax havens. Faced with a need for revenue following
the 2008 global financial crisis, governments of the major economic
powers were no longer comfortable with the kind of hands-off banking
provided by the principality and began to demand transparency, said
Katja Gey, director of Liechtenstein’s Office for Financial Affairs.


Yielding to the pressure in 2009, the country eliminated its banking
secrecy laws. The 2008 financial crisis had further damaged
Liechtenstein’s economy, cutting assets under management at the
principality’s banks from 171 billion Swiss francs ($141 billion) in
2007 to 117 billion francs ($125 billion) in 2011, according to the
Liechtenstein Bankers Association. ...

Tethered to the Swiss currency and boasting stable banking and judicial
systems, Liechtenstein allows for the rapid creation of foundations and
trusts that are controlled by boards and professional trustees and are
owned by unidentified individuals or families.

Liechtenstein was further encouraged to change its stance on client
secrecy after data was stolen from its largest bank, LGT Group, which is
owned by the principality’s ruling family. The data was used by Germany
to prosecute tax evaders in 2008. Former Deutsche Post AG (DPW) Chief
Executive Officer Klaus Zumwinkel was convicted of tax evasion and
received a two-year suspended prison sentence and a penalty of 1 million
euros ($1.25 million). ...

The U.S. began a crackdown on Swiss banking secrecy in 2008, when the
IRS issued a summons for information from UBS AG, Switzerland’s largest
bank. UBS had to pay a $780 million fine and hand over details on 4,700
accounts held by U.S. citizens in 2009 to settle proceedings that could
have led to the loss of the bank’s operating license in the U.S.

Wegelin & Co., the oldest Swiss private bank, pleaded guilty in
Manhattan federal court in January of conspiring to help hide more than
$1.2 billion in assets from the IRS, while opening undeclared accounts
for at least 70 U.S. taxpayers who were former UBS clients. The bank,
which paid $74 million to resolve the investigation, closed its doors
after 272 years.

“The Swiss made too much easy money from this business for too many
years,” said Marcovici. “They’re like a dying man grasping for its last

To contact the reporters on this story: David De Jong in New York at
ddejong3@bloomberg.net; Robert LaFranco in London at

To contact the editor responsible for this story: Matthew G. Miller at

(23) EU agrees to end Tax Haven system; Oxfam calls for Tax Havens to be


EU agrees to end ‘dangerous’ tax evasion and bank secrecy

May 22, 2013 15:58

In a period of record recession and unemployment, the EU has decided to
recover a reported €1 trillion in tax revenue lost in loopholes and
fraud, and has set a one year deadline to end banking secrecy.

Parliament Officials meet in Brussels to address the burden the €1
trillion tax evasion is having on the EU economy, and have again called
to end fraud and ‘offshore’ zones.

The European Parliament agreed to halve the 1 trillion figure by 2020
through an aggressive dismantling of tax loopholes and havens.  The
MEP’s also approved state resources to go after and prosecute tax
evaders, in hopes of recovering lost assets.

"At a time when finances are tight and taxpayers are squeezed, it's only
right that we crack down on those who pursue illegal means to avoid
making any contribution to public coffers, and who put smaller
competitors at a disadvantage,” said Conservative MEP Martin Callanan,
in a direct challenge to British PM David Cameron to make tax evasion a
priority in the UK

Austria, notorious for its banking secrecy, has joined its EU partners
in the quest against tax fraud, and supports the one year banking
secrecy deadline. According to Tax Research UK, a blog maintained by an
“anti-poverty campaigner and tax expert” according to the Guardian.

The blog’s owner also is involved with Tax Justice Network and is the
director of Tax Research LLP.

The poverty charity Oxfam said on Tuesday that the EU has missed out on
£100 billion from individual tax scammers.

Oxfam has called for a blacklist of tax havens and believes EU member
states should impose sanctions on members who provide platforms for such

Ireland has vehemently denied it is a tax haven and on Wednesday called
for an international clampdown on multinationals, yet sits at the center
of the controversy. On Monday, it became known that Apple Inc. paid just
2 percent on $74 billion overseas income, which was mostly facilitated
by a loophole in Ireland’s tax code.

The ‘Irish double dip’ allows a company to file two subsidiaries in
Ireland with a corporate tax rate of 12.5 percent, which is far less
than the 35 percent rate in the US, for example.

This ‘legitimate tax abuse’ by high-profile corporates such as Amazon,
Google, and Apple hijacked the EU summit agenda. ...

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