1. Welcome to a world without rules
23rd October 2008, NCVO, London
Welcome to a world without rules
How tax havens and secrecy contributed to the financial crisis
Financial liberalisation proceeded despite concerns about major loopholes
The loopholes enabled mobile capital – mainly portfolio investment – to circumvent regulation and tax
Micro-states competed to attract capital by offering preferential treatments – legislatures for hire
An enabling infrastructure has emerged to provide offshore financial services – especially to facilitate tax evasion
Tax competition threatens national sovereignty, undermines comparative advantages, and shifts the tax burden
Offshore secrecy arrangements have created a global criminogenic political economy – subversive of democracy and supportive of corruption
Major nations, including and especially UK, US and Switzerland – base their policies on beggar-my-neighbour processes, and baulk international efforts to remedy the situation
Plenty of remedies are at hand – by pursuing this issue with the same vigour as debt relief and aid, we could shift the political agenda – we have allies in surprising places
John Christensen
director, tax justice network

2. “
The sheer complexity, opaqueness and the systemic risks embedded in the new markets – complexities and risks little understood even by most of those with management responsibilities – has enormously complicated both official and private responses to this current mother of all crises.
Simply stated, the bright new financial system – for all its talented participants, for all its rich rewards – has failed the test of the market place. ”
Paul Volcker, former chair of the US Federal Reserve

3. a very British affair City of London
Commonwealth countries, Crown Dependencies and Overseas Territories identified as tax havens:
Alderney - Antigua - Anguilla - Bahamas - Barbados British Virgin Islands - Bermuda - Belize - Cayman Islands - Cook Islands - Cyprus -Dominica – Ghana - Gibraltar - Grenada - Guernsey - Isle of Man - Jersey - Labuan - Mauritius - Monserrat - Nauru – New Zealand - Nieu - St Kitts and Nevis - St Lucia - St Vincent & Grenadines - Samoa - Sark - Seychelles - Singapore - Turks and Caicos Islands - Vanuatu
City of London

4. “
Tax havens undermine effective democratic government and deny the supply of information that markets need if they are to operate properly. So significant is the challenge they pose to global economic and social stability that the risk cannot be assessed within the financial domain alone; it permeates the infrastructure of our society
The political ascendancy of financial capitalism ---
The capture of tiny island legislatures enables the elites to shape their own laws and regulatory instruments
Non-disclosure of ownership provides immunity from investigation and challenge
Offshore companies are ideal mechanisms for perpetrating crimes like insider trading, market rigging, illicit funding of political parties, bribery, tax evasion, etc ”
Tax Havens: Creating Turmoil
Submission by TJN-UK to the Treasury Inquiry into Offshore Financial Centres and their role in causing market instability – June 2008

5. “living of lax regulation”
insider trading
market rigging
avoiding disclosure of conflicts of interest
illicit arms trading
illicit political donations
contract kickbacks
bribery
fraudulent invoicing, trade mispricing and tax evasion
“living of lax regulation”
Wall Street Journal
17th September 1996
The political ascendancy of financial capitalism ---
The capture of tiny island legislatures enables the elites to shape their own laws and regulatory instruments
Non-disclosure of ownership provides immunity from investigation and challenge
Offshore companies are ideal mechanisms for perpetrating crimes like insider trading, market rigging, illicit funding of political parties, bribery, tax evasion, etc

6. Financial Times - 26 September 2003
Global top-10 countries by GDP per capita
The political ascendancy of financial capitalism ---
The capture of tiny island legislatures enables the elites to shape their own laws and regulatory instruments
Non-disclosure of ownership provides immunity from investigation and challenge
Offshore companies are ideal mechanisms for perpetrating crimes like insider trading, market rigging, illicit funding of political parties, bribery, tax evasion, etc
Source: Central Intelligence Agency, 2007

7. “ ” MEMORANDUM From: W.G. Hullard, Colonial Office
To: B.E. Bennett, Bank of England
Date: 3rd November 1961
Subject: Financial regulation in the Bahamas
We feel that this (lack of provision of an effective regulatory system) might be a grave omission, since it is notorious that this particular territory, in common with Bermuda, attracts all sorts of financial wizards, some of whose activities we can well believe should be controlled in the public interest.
half a century of inaction!!! “ ”

8. Financial Times - 26 September 2003
“Protected Cell companies have - in concert with other entities - been used to construct what has been called "an impenetrable wall" against creditors and prying eyes. Whilst these claims can only be tested by time, this novel use of a PCC for asset protection and financial privacy is an interesting approach and a valuable piece of intellectual property.”
accessed 26th June 2007
The political ascendancy of financial capitalism ---
The capture of tiny island legislatures enables the elites to shape their own laws and regulatory instruments
Non-disclosure of ownership provides immunity from investigation and challenge
Offshore companies are ideal mechanisms for perpetrating crimes like insider trading, market rigging, illicit funding of political parties, bribery, tax evasion, etc

9. “
Corruption always corrodes institutions, worsens poverty and inequality, and ultimately undermines faith in the rules and systems that are supposed to protect public interest. Thus a better basic definition of corruption would go something like this: Corruption is the abuse of public interest and the undermining of public confidence in the integrity of rules, systems and institutions that promote the public interest.
Catching up with Corruption
Raymond Baker, John Christensen, & Nicholas Shaxson
The American Interest, Volume IV, No. 1, Autumn 2008 ”
The political ascendancy of financial capitalism ---
The capture of tiny island legislatures enables the elites to shape their own laws and regulatory instruments
Non-disclosure of ownership provides immunity from investigation and challenge
Offshore companies are ideal mechanisms for perpetrating crimes like insider trading, market rigging, illicit funding of political parties, bribery, tax evasion, etc