I was going over an old(ish) copy of the Economist this morning and I came across an article that deserves more coverage.
The central point is easy to state – if you intend to do a spot of money laundering or tax evasion you do not need to go to somewhere sunny or somewhere in a recognised tax haven. It is more than easy enough to do in the US or the UK.
Excerpt:
The most egregious examples of banking secrecy, money laundering and tax fraud are found not in remote alpine valleys or on sunny tropical isles but in the backyards of the world’s biggest economies…
Take Nevada, for example. Its official website touts its “limited reporting and disclosure requirements” and a speedy one-hour incorporation service. Nevada does not ask for the names of company shareholders, nor does it routinely share the little information it has with the federal government.
This makes it fairly obvious that much of the finger pointing at the usual tax havens is just to cover up the simple fact that the bigger economies are doing even less.
It is also a good warning to others working with US and UK registered corporations – just because they come from an OECD country it does not remove, or even reduce, your obligations to check that the funds you are receiving or paying are from legitimate sources.
4 comments
17 April, 2009 at 18:17
Steve
Thanks for highlighting this article. I haven’t seen it mentioned around the traps very much, but I found it a real eye-opener.
19 April, 2009 at 09:00
Norris
Tax havens were just a cheap scapegoat. We cannot apportion them much blame for the current financial crisis.
20 April, 2009 at 08:50
Anthony
Norris – Except for the fact that the great majority of entities that have been involved in the current ‘correction’ were domiciled in tax havens. They must be doing something right.
20 April, 2009 at 11:20
Andrew
Anthony,
To the extent that New York and other cities in the US are tax havens, I would agree with you. AIG, Citibank, Morgans, Bear Stearns, Fannie Mae, Freddie Mac, Lehman’s…