Banks, not tax havens, leading financial secrecy drive
Most tax havens work with the world’s largest international banks and accounting firms, so banks have a vested interest in maintaining them. And a lot can be done to deal with the banks, John Christensen, director at Tax Justice Network told RT.
RT:Your report has come down hard in Britain but how
much control does the British government really have over what is
happening in its overseas territories?
John Christensen: Britain is by far the largest of the
major tax haven economies - largest in the world - and it
controls some of the most secretive tax havens in the world as
well. Places like Bermuda, which are particularly secretive, the
Channel Islands, the Turks and Caicos - all of them come under
British control. Constitutionally all of these territories -
Cayman, Bermuda, Channel Islands, the Turks and Caicos, have the
Queen as the head of state. And the Queen’s government, in other
words, Prime Minister Cameron, is responsible in international
law for the good governance and has every possibility and every
power to intervene in their affairs to make sure they are
RT:What’s wrong with tax havens? Isn’t a certain
amount of financial secrecy vital for citizens to keep their
JC: First of all, the idea that financial secrecy and tax havens keep people’s money safe and those people are located in Africa, in Europe or in Russia, it’s quite wrong. But the important thing about secrecy is that it doesn’t just encourage tax evasion, which is illegal, let’s be clear about that, it also encourages fraud, embezzlement and a very wide range of other corrupt practices. And this is the reason why the world now needs to tackle secrecy because the tax haven economy has become so large.
RT:World money always finds a path of least
resistance. You know, you close one tax haven, but there is
somewhere else another one. For example, look at Switzerland,
which was regarded the best one in the banking secrecy, has now
signed the international convention that might lift the banking
secrecy. What is your view on this?
JC: Let’s be clear, most of these tax havens operate with
some of the world’s largest international banks, some of the
world’s largest international accounting firms and some of the
world’s largest law firms. So we know it isn’t the tax havens, it
is the banks that are leading this, and there’s lots that can be
done to tackle the banks.
The US government has shown its own efforts to tackle Swiss banks
and they have been very successful there. But as far as
Switzerland is concerned, lots of very, very fine words coming
out from the Swiss government, but when you look at the detail
what actually they are doing and have done in the last three
years, very little has changed. Switzerland remains one the most
secretive and the least cooperative jurisdictions in the world.
RT:Well, there is currently around 330 billion pounds (US$530 billion) in British banks that has been repaid from the UK overseas tax havens. So a lot of money does end up back in the economy. What is your view on these flows of finances? Wouldn’t it be an economic suicide to let this money go elsewhere?
JC: Not at all. If you take the example of London, which
attracts huge sums and hundreds of billions of pounds or dollars
every year from across the world, does this money actually
contribute in a positive way to the British economy? Very very
difficult to say yes, but there is plenty of evidence that this
money is simply inflating property prices in London and directly
harming the British economy. And would that money be better used
elsewhere, if for example, the money was retained in, let’s say,
Russia or Africa and invested in productive activity there? The
answer is almost certainly yes. It would be better if that money
stayed in the country of origin and was invested in the country
The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.