Ethics and governance in the European Financial centers

Prem Sikka today wrote an article that demonstrates that without better reform of the UK's political institutions for taming corporate power, a durable regulatory system cannot be developed.

Read article

HM Revenue & Customs has dramatically escalated attempts to compel banks to release the names of thousands of customers with offshore accounts as part of its fight against tax evasion despite fears that it may be overstepping its legal powers.

Know more

Mr. Austin Mitchell: To ask the Chancellor of the Exchequer if he will commission research on the levels of use of offshore tax havens by UK banks and the economic effects of that use. [175531]

Jane Kennedy: There are no plans to commission research on the levels of use of offshore tax havens by UK banks and the economic effects of that use.

Source

Revenue & Customs officers investigating a suspected £20 million VAT missing trader and money laundering fraud swooped in early morning raids today making six arrests in Scotland. Codenamed Operation Vaulter, today's action is the result of a 24-month long investigation and follows the arrest of 17 persons in North West England last September.

Know more

Having a code of conduct and communicating in an appropriate way about Corporate Responsibility do not prevent drifts.
PricewaterhouseCoopers has been urged to give back its audit fees for Northern Rock work.

"You've audited and provided comfort letters for the biggest banking disaster in 150 years"' Tory MP Michael Fallon said.

The difference is the culture of the center where the auditor works wants analysing. In the UK there is the anglosaxon culture to investigate and tighten up the ship, which mitigates risks in a way for the brands because of the dissuasive effect.
In Luxembourg everyone - politicians, professionals, media - to hush up issues, which actually emphasize risks for the brands in a world of transparency and communication all the more than there is no dissuasive effect.

But I think that PwC UK should communicate and in a general rule firms must communicate when they face issues. In another sector this is what Total is doing about the sinking of the tanker ERIKA (read in French) which is positive from a CSR point of view no matter what will be the conclusion of the trial mid January 2008.

Know more
F. McKenna's analysis
Accountancy Age
Guardian
Telegraph

A former investment banking analyst working for Morgan Stanley in the UK faces up to 4½ years’ jail for grand larceny

Know more

US corruption investigators have gone behind the back of Downing Street to fly a British witness to Washington to testify about Saudi arms deals with the UK arms firm BAE Systems.

Know more

A corrupt solicitor allegedly helped to launder £28m of "dirty money" from a bootlegging empire run by a jailed gangster from his cell

Know more

KPMG recently published a paper that examines the relationship between a company ’s approach to its tax liabilities and its attitude to corporate social responsibility (CSR).

As explained in the abstract, the paper adopts the view that CSR is a legitimate interest of business. It argues that, because CSR is a way of doing business rather than an ‘add on ’ to normal business processes, companies should consider how their chosen approach to CSR applies to all aspects of their activity,including the management of their tax liability. They should then be in a position to give a reasoned justification of their approach to key tax issues such as the use of tax minimisation techniques,which is consistent with their approach to other CSR issues. Possible challenges to this approach are also considered.
Quantum is the only significant variable when assessing a company ’s tax contribution; in contrast to many other aspects of its business activity, the relevant question as regards its tax liability is not how it pays it, but only how much it pays. Accordingly the paper goes on to consider how CSR principles might be applied to the principal means by which a company may reduce its tax payments: ie, broadly, tax avoidance and tax planning (which are defined for the purpose of the discussion). While tax evasion is another means by which companies sometimes reduce their payments, CSR factors are not considered to be relevant in this context because such behaviour is already ruled out on more fundamental ethical grounds.

The paper sometimes sounds strange.

Read paper

As the Finantial Times wrote today, foreign banks may face a "public perception that they have something to hide" if they do not co-operate with a new offensive to prise open secret offshore accounts of wealthy Britons, Revenue & Customs has warned.

Know more

Read article from The Herald