June 29th, 2009
The government has published its
consultation document on the planned Code of Conduct of Banks.
It justifies targeting banks for these reasons:
Tax avoidance is not exclusive to banks, but banks are uniquely placed in that they:
- can seek to avoid their own tax liabilities, whether this involves increasing the recovery of VAT incurred on their transactions, reducing their profits liable to corporation tax or minimising their and their employees’ income tax and national insurance contributions;
- provide financial services to customers, many of which services are sensitive to tax and some of which...
June 22nd, 2009
More from the
Robert Morgenthau testimony to the Senate:
We also receive regular requests from foreign law enforcement seeking to trace money moved through accounts held by U.S. corporate entities. A case indicted in Brazil involved criminal proceeds sent to an account at a U.S. bank. Again, a U.S. shell corporation was created and used to open the account. In this case, the defendants discussed using a British Virgin Island company as the nominee director of the corporation. Consider the following communication from the U.S. incorporating agent to the Brazilian defendant:
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June 22nd, 2009
Robert Morgenthau, New York District Attorney of enormous repute, gave evidence to the hearing of the
Senate last week on the Bill requiring that the beneficial ownership of all US corporations be available to all regulatory authorities.
Amongst the classic comments he made are:
In so many areas of financial crime we see transparency as a simple solution to a host of problems. Systems promoting opacity and secrecy are the best friend of the money launderer, the child pornographer, the tax cheat, the fraudster, the corrupt politician, and indeed, the financier of networks of terror....
June 19th, 2009
I’ve published a discussion paper on information exchange today. The full report
is here (only 6 pages). The key question is what data do all countries but developing one in particular really need to receive, automatically, to ensure the smoking gun is available to ensure Tax Information Exchange Agreements work.
My answer is this:
The key concern when tackling capital flight is the illegal, disguised nature of the illicit fund flows. Ignoring transfer mispricing, the key mechanisms used for this illegal purpose are offshore financial structures such as trusts, companies and foundations.
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