{"id":23032,"date":"2013-11-07T07:23:53","date_gmt":"2013-11-07T07:23:53","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=23032"},"modified":"2013-11-07T07:28:53","modified_gmt":"2013-11-07T07:28:53","slug":"what-is-a-secrecy-jurisdiction","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2013\/11\/07\/what-is-a-secrecy-jurisdiction\/","title":{"rendered":"What is a secrecy jurisdiction?"},"content":{"rendered":"

The\u00a0Tax Justice Network has published its new Financial Secrecy Index this morning<\/a>.<\/p>\n

One of the issues on which it is surprisingly vague is just what a\u00a0secrecy jurisdiction is<\/a>. In the supporting narrative they say:<\/p>\n

We use the term \u2018secrecy jurisdiction\u2019 interchangeably with the term \u2018tax haven\u2019 \u2014 depending on which aspect of a jurisdiction we want to emphasise. So for this project we generally prefer the term \u2018secrecy jurisdiction.\u2019<\/p>\n

There is no generally agreed definition of what tax havens or secrecy jurisdictions are:\u00a0the phenomenon has many different aspects and no definition captures them all. So we do not offer our own formal definition - though we do take a broad view of the phenomenon.\u00a0Loosely speaking, a secrecy jurisdiction provides facilities that enable people or entities\u00a0escape<\/strong>\u00a0(and frequently undermine) the laws, rules and regulations of other jurisdictions\u00a0elsewhere<\/strong>, using secrecy as a prime tool.<\/p><\/blockquote>\n

I admit I think that this is wrong. First of all there is a\u00a0definition of\u00a0secrecy jurisdictions. I offered it for the Tax Justice Network\u00a0when creating the methodology for the Financial Secrecy Index in 2009 in a paper I wrote then entitled 'Defining the Secrecy World:\u00a0Rethinking the language of \u2018offshore\u2019<\/a>\u00a0'. The use of the term\u00a0secrecy jurisdiction since that time is pretty much down to the work I did in that paper which said that there are two parts to the\u00a0definition of a\u00a0secrecy jurisdiction:<\/p>\n

Firstly, secrecy jurisdictions create regulation that they know is primarily of benefit and use\u00a0to those not resident in their geographical domain.<\/p>\n

Second, secrecy jurisdictions create a deliberate, and legally backed, veil of secrecy that\u00a0ensures that those from outside that jurisdiction making use of its regulation cannot be\u00a0identified to be doing so.<\/p><\/blockquote>\n

I said then that these characteristics in combination define a secrecy jurisdiction.\u00a0That remains my view now. I am not sure why the\u00a0Tax Justice Network is no longer sure.<\/p>\n

What I am now quite certain about is that the term does not mean a place is a tax haven, although in many cases it will be. So, for example, Ireland comes 47th on the FSI but has a low secrecy score of just 37. That does not, in my view make it a\u00a0secrecy jurisdiction. But it has massive financial flows. That's because it is very obviously a tax haven. The two are distinct and very obviously different on occasion, and that now needs to be said.<\/p>\n

It is undoubtedly true that in most (but not all) of the top\u00a0secrecy jurisdictions listed by TJN<\/a> secrecy is fundamental to their being a tax haven - and that is true of all the UK's\u00a0Crown Dependencies and Overseas Territories, for example - but to suggest the terms are synonymous is, as experience has shown, just wrong. I am sorry that this impression is now being given because I do not think it correct.<\/p>\n","protected":false},"excerpt":{"rendered":"

The\u00a0Tax Justice Network has published its new Financial Secrecy Index this morning. One of the issues on which it is surprisingly vague is just what
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