Facebook  Twitter  Youtube  ISSUU  RSS  Email

Media Contacts

Press Office
+ 44 (0)20 3096 7695
Out of hours: Weekends; Weekdays (17.30-21.30): +44 (0)79 6456 0340


TransparencyUK Bribery isn’t something done by faceless companies, it’s something done by people. Without individual prosecutions… https://t.co/aOL1HJ19Iu
TransparencyUK Tips for compliance officers during #COVID19 https://t.co/9BgdiMpe5V
TransparencyUK We can’t cut corners in the race to find a #COVID19 treatment or vaccine to avoid any possibility of data misrepres… https://t.co/8eF4DJGKBb

Tag Cloud

Allegations anti-bribery anti-corruption summit AntiCorruption anti money laundering bribery BSkyB Cabinet Office companies conflict Corporate Cooperation corrupt capital Corruption corruption in the uk employment film financial secrecy Governance Government health Home Office journalists Letter Leveson Inquiry London Merkel metropolitan police moneylaundering money laundering offshore tax open governance pharmaceuticals PHP police ethics Prime Minister Register of Interests Research safe havens Social Accountability Trustees UK Unexplained Wealth Orders unmask the corrupt UWO vacancies

Stay Informed

Sign up for updates on Transparency International UK's work,corruption news from around the world and fundraising and events updates.

Secrecy, tax, and corruption: Will Britain tackle tax evasion?

Written by Guest on Monday, 8 October 2012

Pressure on what are alternatively called ‘offshore havens’, ‘tax havens’ or ‘secrecy jurisdictions’ is reaching an unprecedented level. There are more than fifty such havens world-wide, and governments are finally coming around to the idea voiced by activists that tougher regulation is needed.


Pressure on what are alternatively called ‘offshore havens’, ‘tax havens’ or ‘secrecy jurisdictions’ is reaching an unprecedented level.

There are more than fifty such havens world-wide, and governments are finally coming around to the idea voiced by activists that tougher regulation is needed.

The economic crisis has lent urgency to the cause. Britain’s Chancellor of the Exchequer, George Osborne, is searching for new sources of revenue. Meanwhile, there are calls for some form of wealth tax in both France and the UK.

So when it comes to the tax dodging that can undermine these budget-balancing efforts, we need to know what is legal and illegal, what is offshore and onshore.

Nine of the fifty tax havens are nominally under the sovereignty of the Crown or the UK government. They constitute a major responsibility for Britain, one which is largely avoided.

The Bank of International Settlements reported in 2009 that total funds in all the UK connected jurisdictions accounted for 55 per cent of the global total – at that time estimated by the Bank at $ 6.5 trillion (though other estimates are much higher). This year they issued a report showing that this total figure had not shifted much since the G20 promised to “end bank secrecy”.

Recent analyses notably from Global Financial Integrity, have shown how these deposits mix the fruits of bribery, organised crime and ‘mispricing’ by companies trading internationally.

However the arguments about the role of these ‘havens’ and regulation have become more nuanced in the recent past. There are two key arguments to disentangle:

Do havens hold funds for unidentified people and companies?

The nine UK Offshore Financial Centres all score badly in Christian Aid’s Financial Secrecy Index. However a 2011 World Bank report The Puppet Masters found ‘Trust and Company Service Providers’ who form companies in OECD countries actually carry out less intensive security checks (“due diligence”) than those who form companies in offshore centres. .

The ownership of assets therefore, is more likely to be obscured before it reaches the tax haven, with the US particularly at fault. In the same vein, the recent Tax Justice Network report by James Henry (The Price of Offshore) showed that complex corporate structures designed to hide the real beneficial owners, are vehicles with many tentacles and are as likely to have one based in London or New York as in the Caribbean. In this case the focus of change has to be on dismantling the legality of such structures.

Do ‘offshore’ tax regimes attract individuals and companies who would otherwise pay tax in the other countries where they operate?

Barclays Bank informed a House of Commons Committee in 2009 that it had 315 subsidiaries in various tax havens.

The British Virgin Islands hosts 800,000 ‘international resources-resources-business companies’ (a specific type of company). The Caymans host 18,000 ‘resources-resources-business companies’ many of them Foreign Sales Corporations – a major corporate tax dodging vehicle for US companies.

A survey carried out by Deloitte’s for the Foot report, commissioned by the UK Government in 2009, found that these tax regimes were often characterised by ‘the absence or near absence of certain forms of taxation’.

Will something be done?

Ironically, it seems likely that the long awaited attack on corruptly gained funds, deposited ‘offshore’, will be sustained by an attack on the more effective taxation of major international companies.

But progress will not be uniform: in 2008 Barack Obama vowed to dismantle the tax regime US companies benefit from in the Caymans.
In his 2012 campaign there has barely been a reference to such an obvious loophole.

The G20 needs to sustain its attack on these issues.

Laurence Cockcroft is a board member of Transparency International UK and author of ‘Global Corruption: Money Power and Ethics in the Modern World’ (see www.laurencecockcroft.co.uk)



Read 27025 times Last modified on Tuesday, 24 November 2015 11:47


The TI-UK blog features thought and opinion from guest writers as well as TI staff. Any opinions expressed by external contributors do not necessarily reflect the views of Transparency International UK.

Leave a Reply

Contact Us | Sitemap | Privacy

UK Charity Number 1112842

Transparency International UK is a chapter of