Financial Transparency Coalition

In today’s issue, the Economist published a fantastic 14-page special report on the shadow financial system and the crime, corruption, and tax dodging that it facilitates. The report included numerous citations of Task Force members Tax Justice Network, Christian Aid, Global Witness and Global Financial Integrity, as well as strong arguments in favor of Task Force recommendations for automatic exchange of tax information and the elimination of anonymous shell companies. Money quote from the cover-page editorial:

Individuals have a right to financial confidentiality, but only as long as they set about their business lawfully. When it comes to tax crimes, money-laundering and the like, such confidentiality needs to be set aside. Some OFCs still make this difficult, and layering by service providers compounds the problem: try penetrating a Belize bank account fronted by nominees that is owned by a shell company in the British Virgin Islands (BVI) that in turn is owned by a foundation in Panama. Over the past decade the bigger OFCs have co-operated more with foreign law-enforcement agencies, but progress is patchy, and offshore structures still crop up regularly in corruption and money-laundering cases. A recent example is the alleged use of Cayman companies as conduits for bribes to Saudis by a subsidiary of EADS, a European aerospace and defence company.

We highly recommend reading the whole series. It speaks for itself:

Storm survivors
Enduring charms
The OFCs’ economic role: The good, the bad and the Ugland
Onshore financial centres: Not a palm tree in sight
Tax transparency: Automatic response
Company taxation: The price isn’t right
The merry enablers
Switzerland and its rivals: Rise of the midshores
Who’s the criminal?
Prospects: Sunshine and shadows