{"id":15429,"date":"2012-05-07T21:29:54","date_gmt":"2012-05-07T20:29:54","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=15429"},"modified":"2012-05-07T21:29:54","modified_gmt":"2012-05-07T20:29:54","slug":"paradigms-can-shift","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2012\/05\/07\/paradigms-can-shift\/","title":{"rendered":"Paradigms can shift"},"content":{"rendered":"

There was an article in the New York Times this weekend t<\/a>hat\u00a0showed\u00a0that paradigms can shift.<\/p>\n

As I've just noted<\/a> - the OECD's attack on tax havens is not, unfortunately, working. That's because it is working in an old paradigm. It's the paradigm of tax havens. But the OECD needs to move on. Only then can it beat this curse.<\/p>\n

That shift is possible. I'll give an example.\u00a0In 2008 I, and\u00a0colleagues in the Tax Justice Network,\u00a0were starting work on the first Financial Secrecy Index. I was at the same time\u00a0working\u00a0with Ronen Palan and\u00a0Christian\u00a0Chavagneux on\u00a0our\u00a0book\u00a0'Tax Havens: How Globalization Really Works<\/a>'. We struggled with the tax haven problem - and just what it was. In the end I gave up with defining a tax haven and the book (without using the term\u00a0secrecy jurisdiction) and\u00a0the\u00a0TJN (by\u00a0explicitly\u00a0using the term) moved towards\u00a0redefining\u00a0the language of offshore. My\u00a0exploration\u00a0of that issue, written in 2009, is her<\/a>e. I'd venture to\u00a0suggest\u00a0you really won't understand what the offshore issue is really all about unless you read it.<\/p>\n

The important point was that we pretty much gave up on the term 'tax haven' that no one could adequately define and replaced it in most of our work with the term\u00a0secrecy jurisdiction. I offered then what I'm told by others is now pretty much the standard definition of the term which is:<\/p>\n

Secrecy jurisdictions are places that intentionally create regulation for the primary benefit and use of those not resident in their geographical domain. That regulation is designed to undermine the legislation or regulation of another jurisdiction. To facilitate its use secrecy jurisdictions also create a deliberate, legally backed veil of secrecy that ensures that those from outside the jurisdiction making use of its regulation cannot be identified to be doing so.<\/p><\/blockquote>\n

Notice how often tax is mentioned? Not once.<\/p>\n

Low tax is offered by these places but is just another\u00a0regulation\u00a0that can only be used if secrecy permits it. The point is a\u00a0critical\u00a0one: secrecy is key.<\/p>\n

Now in 2008 we began to say that, but had no idea if the world would respond as we wanted it to, but that response was critical if we were to explain it was not low tax per se that we objected to in the\u00a0places\u00a0often called tax avens; it was the fact that the secrecy they created permitted criminal use of those low tax rates that we objected to in the main (but not solely:\u00a0corporates\u00a0abuse these places legitimately, albeit\u00a0secretly).<\/p>\n

In 2012 I can\u00a0confidently\u00a0say the world has\u00a0responded. That NYT article was by a friend of tax justice, Robert Morgenthau, but that's not the sole point. He said:<\/a><\/p>\n

[S]ecrecy makes offshore tax fraud almost impossible for law enforcement to detect. When I was the Manhattan district attorney, we learned of offshore accounts only through whistle-blowers, cooperators and serendipity.<\/p><\/blockquote>\n

That's the point we've\u00a0made\u00a0key. And as he added:<\/p>\n

Offshore secrecy jurisdictions provide the perfect cover to funnel money and arms to rogue states and non-state actors.<\/p><\/blockquote>\n

There's that phrase, now in common use. Pascal St Amans of the OECD used it last week.<\/p>\n

We've changed the\u00a0language\u00a0for a reason. It's not tax information\u00a0exchange\u00a0that we need to crack offshore abuse. It's shattering\u00a0secrecy\u00a0that is key to that. And only\u00a0automatic information exchange<\/a> will do that job. The OECD haven't shifted paradigms yet although even some in Switzerland have.<\/a><\/p>\n

The OECD will catch up with us. Then we'll see the\u00a0consequence\u00a0of the paradigm shift. And\u00a0given\u00a0what UBS now know that may take less time than many think.<\/p>\n

Have no doubt: paradigms can be shifted.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

There was an article in the New York Times this weekend that\u00a0showed\u00a0that paradigms can shift. As I’ve just noted – the OECD’s attack on tax
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[80,1],"tags":[],"class_list":["post-15429","post","type-post","status-publish","format-standard","hentry","category-secrecy-jurisdictions","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/15429","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=15429"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/15429\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=15429"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=15429"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=15429"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}