As David Cameron was very clearly failing to deliver any change in the behaviour and practice of the UK's tax havens as a result of the Panama Papers Paris and Berlin were at least considering what needs to be done to face the threat posed to the world economy by tax havens, including those whose actions the UK protects. According to the FT:
Paris and Berlin are pressing industrialised nations to pull together a common blacklist of territories that breach transparency standards, in the toughest government responses yet to the Panama Papers affair.
Wolfgang Schäuble, Germany's finance minister, and Michel Sapin, his French counterpart, also emphasised the need for sharing and publishing the names of the ultimate beneficiaries of all corporate structures, including shell companies, trusts and foundations that can offer anonymity to their users.
I have my doubts about blacklists: we have seen so many, and they have not worked. They would only do so now if they were substantial in the demands they made, which would have to include:
- All accounts on public record, and none of the abbreviated accounting nonsense that is permitted within the EU at present;
- All beneficial owners on public record, proven by the anti-money laundering records of the bankers that supply services to these companies;
- The real identity of the directors of these companies on public record, again proven by the banks who supply services to these companies;
- Similar disclosure for charities, foundations and trusts.
Let me be clear, the UK would fail on this criteria present, and rightly so: our standards fall way below those required to ensure that we can close our own tax gap meaning that we have every incentive to improve our own performance on this issue, and yet there is a persistent refusal to do so.
If Germany and France want to promote such a standard of excellence, then I am in favour of it. Anything less will be a token gesture and I have no time for those any more: we know that they simply provide tax havens with an opportunity to crow that they are "fully compliant" and "transparent" and "consistent with international standards" when the reality has always been that they have continued to supply deliberate capacity intended to protect their customers from scrutiny with the intention of undermining the world's markets, democracies and tax revenues. We can do without providing them with another such opportunity.
I would, at the same time, remind France and Germany that they have the opportunity to evidence their commitment to tax transparency. The EU will be announcing its new plans for country-by-country reporting today. If France and Germany are serious then they must demand that this new requirement should be comprehensive, covering absolutely every jurisdiction in which a multinational company trades. I understand that we will get something less than that, and if that is the case then France and Germany, like the UK, will be acquiescing in the delivery of continuing opacity, and that is not good enough.
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If France and Germany – and indeed the EU generally – are serious about getting tough on tax abuse/tax havens then it’s way past time that something was done about the behaviour and actions of some of the EU’s key countries – namely Luxembourg and the Netherlands.
As we know, the City of London – and thus the UK – sits at the core of the institutional and ethical cesspool that supports avoidance and evasion and what Paul Mason yesterday so perfectly described as ‘terrorist finance’. But so to do Luxembourg and the Netherlands. And while we have this degree of corrupted action and culture at the heart of the EU who can ever believe anything meaningful will get done. Instead we see an endless PR campaign – as we’ve seen with Cameron’s bogus initiatives over the past five years – which are, in reality, simply distractions designed to buy time for the avoidance and evasion industry to adapt so that they can carry on business as usual.
Paul Mason’s superb article is here: http://www.theguardian.com/world/2016/apr/11/smash-uk-mafia-elite-treat-offshore-wealth-terrorist-finance-perugia
Paul is right
Germany’s Federal Printing Office (reponsible for German passports and ID cards) used Mossack Fonseca itself to set up subsidiaries off-shore, allegedly also to provide data-processing services to Venezuela. Euro 1.375m was transferred from the German Printing Office to one of the companies, Billingsley Global Corporation in 2009. This company did neither have offices, nor staff.
There is a strong suspicion that the money was used to try to bribe officials, as Der Spiegel alleges here.
http://www.spiegel.de/politik/deutschland/wie-wolfgang-schaeuble-eine-klebrige-affaere-aussitzt-kommentar-a-1086399.html
The Printing Office is under the ultimate control of the German Ministry of Finance and Wolfgang Schaeuble is the ultimate boss. The ministry, Der Spiegel says, has been stonewalling any further enquiries into this matter, despite the new evidence which has come to light.
So whether Germany is really more serious than Britain in tackling these tax havens remains to be seen.
There is no European country serious about tackling tax avoidance (and few with much determination to tackle tax evasion). They are all in hock to the world of corporate finance, both domestically and globally (plus their local drug barons and mafias in some cases)
So you can be sure that the loopholes they leave will be as big as barn doors for the coach and horses of the rich and wealthy (and mobsters) to continue to drive their tax avoiding chariots through.
All in the pretense that it would be “too difficult” to get a tougher agreement. Oh yes, really tough when they never had any intention of even trying!
I note the comment that “the UK would fail on this criteria present”, but is there a country in the world that wouldn’t fail based on your criteria?
Maybe not
But so what?
what’s wrong with aspiration?
There is nothing wrong with aspiration.
I just thought the comment singled the UK out, when it seems that nobody else could claim to be up to your standard either, or were you trying to make the point that the UK is currently the closest, but still hasn’t made it?
Both