Ethics and governance in the European Financial centers

Last 25 September 2007 , HMRC held a meeting with representatives of up to 100 financial institutions in connection with offshore evasion by UK bank customers holding offshore accounts.

HMRC’s pursuit of suspected offshore evasion by UK bank customers with offshore accounts is now expanding in scope, beyond the five major UK banks targeted hitherto

PwC has reported the meeting and especially the fact that HMRC accepted the legal constraints faced by some banks with subsidiaries in countries with banking secrecy laws, such as Switzerland, Austria, Belgium and Luxembourg and that the Isle of Man also has laws which could impede disclosure and the fact that there has been doubt as to whether HMRC could override foreign secrecy laws and force banks to disclose information held by a foreign subsidiary.

As Richard Murphy observed, when bank secrecy is used to assist crime (and tax evasion is a crime) then those countries that provide it are parties to that crime, and so are those who defend the secrecy arrangements that they offer?

In October 1 st 2007, the rules relating to encryption under the Regulation of Investigatory Power Act (2000) came into force. These give the police powers to demand decryption keys as part of an investigation.


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A recent press release from the Metropolitan Police states that two men have been sentenced to a total of six years' imprisonment and a woman given a suspended sentence for laundering in excess of £15 million, believed to be the proceeds of drugs.

Detective Superintendent Trevor Shepherd, Met's Economic and Specialist Command, said:

"This case demonstrates once again the potential of the Proceeds of Crime Act 2002. The driving force behind drug trafficking and supply is the generation of wealth. This legislation enables police and other law enforcement agencies to hit criminal networks where it hurts most, in their pockets.

"This cash is now removed from criminal circulation and is prevented from causing future harm to our communities. Under 'incentivisation' a significant proportion will also be returned to police to fund future investigations."




See press release