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Exchange of infomation on requet is a charade

The British political-satirical magazine Private Eye has assessed the efficiency of the exchange of information"on request" for three tax havens (Jersey, Guernsey and the Isle of Man) in the last three years. Information was provited 17 times, which does not comply with the number of clients.


TJN observes that

1) a  back-of-the-envelope calculation puts this at 1.8 transfers of information per haven per year. Britain's revenue and customs authorities, in addition, made 141 requests - that is, 16 times a year from each haven - but we don't know the results.
2) Private Eye correctly notes how the secrecy jurisdictions like Jersey are using the OECD's appalling system of allowing anyone who signs 12 TIEAs to be put on their "white list."


In this context, what Angel Gurria recently said in the Guardian : "It seems almost unbelievable, but the era of banking secrecy for tax purposes will soon be over. In tomorrow’s world, there will be no more havens in which to hide funds from the taxman."


As Richard Murphy observes, Gurria’s statement feels horribly like that announcement by George W Bush on an aircraft carrier that the mission in Iraq had been accomplished – both horribly premature and horribly wrong. He suspects the causes are also common to both: a lack an understanding of what is happening on the ground and no strategic vision as to what to do about it.


As TJN observes, the tax havens (Jersey taking the lead again, ho-hum) are mounting a major public relations exercise to re-assure the public that the anti-tax haven mission is accomplished and everyone can go home safely to their families.



06:10 Posted in General | Permalink | Comments (0)

Offshore private banking model is dead after UBS probe, experts say

Reuters has reported that experts said that the U.S. tax probe against Swiss bank UBS has killed traditional offshore banking and wealth managers will have to improve their offers to survive, bankers and industry.

“The entire offshore banking model seems to be dead,” said Teodoro Cocca, a professor for Wealth and Asset Management at the Johannes Kepler University in Austria.

“Forget bank secrecy and focus on onshore or on tax compliant business,” he told an audience of Swiss private bankers.

05:43 Posted in General | Permalink | Comments (0)


Automatic information exchange v. bilateral treaties for tax information by request

John Christensen from Tax Justice Network last Sunday analysed the reason why the OECD tax model based on bilateral treaties for tax information by request was adopted by secrecy jurisdictions in the European Union that do not want to go further in the implementation of the Savings Directive.


The statu quo is promoted by Luxembourg, the tiny jurisdiction where there are so many red flags of frauds and bad governance that are emphasized by the small size all the more than these red flags are visible in public and official sources, which are the visible part of the iceberg. The ABBL (the Luxembourg bankers' Association) wrote: in light of Luxembourg’s decision to adopt OECD standards in tax matters, the government has demanded that the exchange of information upon request, as defined by the OECD Model Tax Convention, becomes the only standard applicable within the European Union.



As John Christensen explains, The OECD’s standards for tackling tax evasion rely on complex, timeconsuming and ineffective bilateral treaties for tax information by request. G20 leaders must seize the current political opportunity to push for a more ambitious multilateral treaty process based on automatic information exchange on the model currently being used within the European Union.

Some will complain that automatic information exchange is too complex and detailed to provide the basis for a global standard for information exchange. We disagree. The OECD standard based on a ‘by request’approach, which they would like to have considered as the global standard, is weak and ineffective. One statistic alone demonstrates how weak they are: in the past three years the British Crown Dependencies of Guernsey, Isle of Man and Jersey have cooperated with only 17 exchanges of information across their entire network of treaty partners. That’s fewer than two exchanges a year for each jurisdiction. No wonder the tax evasion industry prefers the OECD exchange model to the European standard.

If anyone doubts the effectiveness of the European model they should note that a prominent British lawyer an adviser to tax havens, no less has urged these jurisdictions to cooperate with the OECD processes in order to resist pressure for the alternative automatic exchange process.

The tax avoidance industry knows that automatic exchange works. It is what the tax avoidance industry is afraid of, and with good reason.



18:03 Posted in General | Permalink | Comments (2)