London is among the top 10 most secretive tax havens in the world, according to a new league table compiled by Christian Aid and the Tax Justice Network.
The UK is among the world’s 10 most secretive tax havens in a new list published by Christian Aid and the Tax Justice Network.
The Financial Secrecy Index (FSI) has been compiled by the organisations in a bid to increase the transparency of offshore finance centres.
It gives each country an ‘opacity score’ according to the level of secrecy of each haven and the extent of their reluctance to co-operate with other countries tax authorities. The opacity score is combined with a weighting that reflects the scale of the cross-border financial activity the haven hosts to determine the ‘financial secrecy’ ranking.
The index ranks the US as the most secretive haven, followed by Luxembourg, Switzerland, the Cayman Islands and the UK, bucking the stereotype of tax havens as palm fringed islands.
John Christensen, director of the Tax Justice Network’s International Secretariat, said trusts and certain kinds of companies were often used to provide “more devious” forms of secrecy than could be achieved with bank privacy alone.
“Secrecy is a core feature of the global financial system. Jurisdictions compete with each other to provide it in order to attract financial flows,” he said.
“But this comes at a price. Financial secrecy provides cover for all manner of crimes and abusive practices: money laundering, tax evasion and avoidance, insider trading, terrorist financing, embezzlement, Ponzi schemes, illicit financial flows, fraud and much more.
“The Financial Secrecy Index shows just how entrenched the problem of financial secrecy is. The index is an important tool that highlights the desperate need for new rules in international finance that would make the disclosure of information between different tax jurisdictions automatic.
He added: “Many other barriers to the flow of information exist. None of this would be possible without the legal framework the havens provide.”
