Results tagged “money laundering”

A suitcase containing $1 million in shrink-wrapped bills, hand-carried into New York by the former president of Gabon for his daughter to buy a Manhattan apartment. Purchases of a stretch Hummer H2 armored limousine and C-130 Hercules military transport planes for a civil war in Angola. And a shell company named Sweet Pink used to funnel millions of dollars into the United States from Equatorial Guinea. These and other deals and money transfers took place in recent years because of inadequate controls on money laundering at large American banks and unregulated American lawyers, real estate agents and lobbyists, according to a Senate report released late Wednesday, Lynnley Browning reports in The New York Times.

Continue reading: U.S. Report Details Money Laundering

We are by now used to hearing rhetoric about "pledges" to end bank secrecy and an end to tax havens, as if forcing another country to change its legal code were a natural course of action.

But what do the so-called tax havens think about all this? Here's an interesting article from Uruguayan newspaper El Pais (Uruguay was one of the 4 countries originally placed on an OECD "blacklist"). The author, respected Uruguayan economist Ignacio De Posadas, makes the case for Uruguay keeping it's bank secrecy law. Now of course he cannot speak for a country of 3 million people, but its revealing nonetheless to hear their story, not often represented in the Western press. The article is written article in Spanish; here are some of his arguments in translation.

- The issue isn't about when people use bank secrecy to commit serious crimes, nobody disputes that.

- Uruguay doesn't have any obligation to enforce the collection of French or British taxes (nor would those countries give them anything in return).

- What right do "powerful" countries have to pressure smaller countries into changing their internal laws - an action which will benefit the more powerful and result in a loss for the smaller country?

- The OECD text says that tax havens should bring themselves in line with "international standards" for tax-information sharing, as if it were a UN convention or some other multilateral agreement signed by Uruguay, when really it's an OECD convention, of which Uruguay is not a member and has nothing to do with.

- Why are they doing this? Because over several decades OECD countries have been expanding and complicating their systems of taxation - out of all proportion with the return these administrations give to taxpayers. In other words - it's their problem. What does Uruguay have to do with it?

- How does bank secrecy benefit Uruguay? In reality the question isn't being put in the right way. Bank secrecy is consecrated in the constitution. Of course there are limits and norms to bank secrecy, but these aren't pre-requisites. In other words..it doesn't matter if it benefits Uruguay or not, it's a right. Full stop.

The war on tax havens is about strong and powerful countries using force to impose themselves on smaller nation states. There are no guns but the principle is the same.

More on bank secrecy.

, Jason Sharman, armed with little more than google and a $10,000 dollar budget, set out to form anonymous companies and offshore bank accounts worldwide - with interesting results (see economist article). Where were the places with the most lenient due diligence requirements?

In his 45 attempts to open anonymous shell companies and secret bank accounts Jason was successful in 17 cases, of which 13 were OECD countries. Britain earned top honours. In 45 minutes Jason was able to form an anonymous bearer -share company without identification, complete with nominee directors and a secretary for just  £515.95 ($753).

But when he tried to open accounts in Switzerland and Bermuda, he was asked for documents like a notarized copy of his birth certificate!!

It just goes to show that high-tax governments aren't interested in where the money's coming from - as long as they get a slice of the pie..

Lets see what theatrics tomorrow brings.

PriceWaterhouseCoopers updated an analysis of lost tax revenue from On-line Gambling (originally published in 2007) and released the updated findings yesterday through the Safe and Secure Internet Gambling Initiative, a Washington DC lobby group. The latest report indicates that the Unlawful Internet Gambling Enforcement Act of 2006 has done very little to slow the growth of i-Gaming in the U.S. More glaringly evident however, are the facts and figures related to the loss of potential tax revenue. The lost dollars are mounting to the point where, given the current economic situation, it's becoming irresponsible for Congress to not seriously consider regulating and taxing Internet Gambling.

Internet Gambling Regulation Provides Opportunity to Generate Tens of Billions for Government Programs - Projections Reflect Increased Gambling by Americans Despite Attempts to Prohibit the Activity

An updated analysis found that the U.S. could receive as much as $51.9 billion in federal revenue over the next decade if Internet gambling is regulated as proposed in legislation introduced by Representatives Barney Frank (D-Mass.) and Jim McDermott (D-Wash.). The new revenue estimates are approximately 22 percent larger than those of an earlier analysis prepared by PricewaterhouseCoopers in 2007, reflecting the increased online gambling activities of Americans despite attempts to prohibit activity through passage of the Unlawful Internet Gambling Enforcement Act of 2006.

"This analysis further illustrates that the U.S. is missing the opportunity to collect billions of dollars in federal revenues," said Jeffrey Sandman, spokesman for the Safe and Secure Internet Gambling Initiative. "We are optimistic that the Obama Administration and Congress will pay closer attention to this issue as they seek to find new revenues that can be generated without raising taxes for critical federal, state and local government programs. Regulation is also needed to ensure there are safeguards to protect against compulsive and underage gambling, money laundering, fraud and identity theft."