From the FT:
Thaksin Shinawatra, Thailand's controversial former prime minister, has divorced his wife Potjaman after 32 years of marriage.
The Nation, one of Thailand's leading English language newspapers, suggested that the divorce was motivated by financial considerations because many of the couple's assets are believed to be in Mrs Potjaman's name. However, a spokesman for Mr Thaksin denied this.
NB: for those in doubt, tax evasion is always money laundering.
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tax evasion is always money laundering.
Except of course in the Cayman Islands, where tax evasion is still not recognised as a crime. (which I agree with you, needs to be changed)
Creg
I do apologise to happy to correct you again, but it appears necessary.
As I have noted on this site, I do not doubt that most offshore structures are well regulated in the place where they are incorporated. Of course Caymans structures do not result in tax evasion in Cayman. First of all there is no income tax there, second there is no trading there in the vast majority of cases – as Maples and Calder have evidenced with regards to their clients in Ugland House. But let’s also a serious: the criminal money that is laundered through tax havens does not arise because of crimes committed there either. The criminal offence takes place somewhere else. But that does not stop the relocation of the laundered funds to Cayman being a money laundering offence in that place. In exactly the same way, the relocation of funds that have been derived from tax evasion activity outside Cayman when relocated to Cayman become money laundered funds that must be notified to the money laundering authorities in that place even though there is no tax offence committed inside the island, per se.
Those who persuade themselves otherwise are simply making themselves liable to criminal prosecution for failure to comply with local money laundering rules.
But that is what most professional people do when they turn a blind eye to tax evasion by their clients in jurisdictions outside the one in which they work.
Richard
And I disagree with you.
There is a thing called Dual Criminality. For example gambling is illegal in Cayman, but not in many countries. So where Cayman will not accept proceeds from gambling, the US will. Does that mean the US is guilty of money laundering….no, the crime has to be illegal in both countries (hence dual criminality).
In fact many of the offshore centers have better providnce of funds checks than onshore regulations. Even Brazil is thinking of Blacklisting a certain US state.
And as for the majority of money laundering, where to you think the placement takes place? Onshore of course.
Creg
As ever, I think you’re wrong.
Money laundering is now a universal offence due to the work of the FATF, and tax evasion is money laundering in whichever state it arises and is therefore captured in all other states.
And for the record, do you think we don’t talk about onshore issues either? But then, what do you maan by onshore? I suspect you’re referring to geography and that’s not right at all. Offshore has nothing to do with geography.
Richard
Semantics, I was using onshore for the US and UK, I know offshore is a term generally where your not.
You do the same when discussing tax havens wuile not including the US or UK, which are also both tax havens.
I have to say when you start talking semantics it really doesn’t improve your case it belittles it.
Back to the argument;
In January 1999 the Cayman Islands government bowed to pressure from the UK and passed the Proceeds of Criminal Conduct (Amendment) (Foreign Offences) Law which introduces fiscal crime as a reason for enforcing foreign blocking and freezing orders – but only if a crime has been committed in Cayman, which has no concept of fiscal crime.
Creg
Let’s be clear, semantics are important. I’m very happy not to talk tax havens, for example, but to refer to secrecy jurisdictions instead. There is good reason. The UK may be a tax haven. I am not convinced it is a secrecy jurisdiction. The Isle of Man is both.
But let me deal with your argument on Cayman. You really are digging a hole for yourself. If Cayman does not recognise tax evasion as a money laundering offences which must be reported inside its jurisdiction then it is clearly not complying with the FATF money laundering requirements and is not properly regulated. For such a major tax haven this would of course be absolutely disastrous. As far as I am aware that I have not had time to check this I do not think you are right in this respect.
Alternatively, if they do have the legislation and they are not enforcing it, it is also disastrous for Cayman.
Which option would you prefer?
Richard
I thought I said in my first post that it was wrong, as usual I’m not defending their position but stating fact
Hi there
Are you seriously suggesting that “offshore” jurisdictions such as the Cayman Islands should police the differential between tax evasion and tax avoidance for the flight of funds from every other country around the world! Surely not!
I have a suggestion! How about the “onshore” jurisdictions police the flight of funds from their shores and do not allow them to leave unless the remitter can provide evidence that they are not illegally evading tax!
This is essentially a non-issue as the act of tax evasion will involve fraud and fraud is illegal in the Cayman Islands.
And as for FATF, the Cayman Islands met more of the 40+9 recommendation than the USA for many years ! Just try getting due diligence documentation from any corporation formed in Delaware!
Suzanne
And just another point as you mentioned gambling….. as you say, gambling is illegal in the Cayman Islands…. lets reverse the scenario suggested, that Cayman should criminalise tax evasion when it has no fiscal system…. should every jurisdiction around the world where gambling is legal, criminalise it because Cayman does? Of course not!
Should every country around the world ascertain whether funds remitted from the Cayman Islands contain the proceeds of gambling, and if so, refuse to receive them?
The tax scenario suggested is as ludicrous and impossible as this one.
Suzanne: re point 8, I am saying that is exactly what a bank is required to do.
Or rather, and to be more precise: it is legally bound to question all transactions and report suspicion when it arises. It need do no more.
I very much doubt your banks are doing that. Having legislation to meet the 40+9 is one thing. Complying is something else.
And I agree with you: of course Delaware needs reform. But just as a murderer cannot justify their crime by saying someone else has murdered as well, nor can you justify your behaviour in this way. It is not an argument
Richard