Wednesday, 31 July 2013

Release of offshore records draws worldwide response

.... and this one didn't get directed to me in time to make the previous article.... but was so good I wanted to get it out to you guys.

Release of offshore records draws worldwide response

ICIJ’s investigative series on offshore secrecy – which draws from a cache of 2.5 million secret records – has ignited reactions around the globe.
Since the initial release of stories by the ICIJ and its media partners across the world, public officials have issued statements, governments have launched investigations, and politicians and journalists have been debating the implications of the records and the reporting.
Among the latest reactions and responses:  
  • Australian tax authorities said they are stepping up efforts to crack down on corporate tax dodging and taking a hard look at wealthy Australians and small companies with offshore holdings following “Offshore Leaks”The Australian Tax Office’s plan includes 680 reviews and 115 audits of individuals and small businesses suspected of using offshore hideaways help them avoid taxes.
  • India’s Finance Minister said government probes into the offshore holdings of hundreds of Indians have made significant headway. “I am reviewing the progress every fortnight and can say that not a single case will go unpursued,” Finance Minister P Chidambaram said. The government’s effort was sparked by a joint investigation by ICIJ and The Indian Express.
  • Philippine authorities said the launch of ICIJ’s Offshore Leaks Database will prompt them to review the tax records of Philippine residents whose names appear in the data. Kim Jacinto-Henares, commissioner of the country’s Bureau of Internal Revenue said she welcomes the public release of the database, saying it can aid the agency’s efforts to gather information that could lead to tax investigations and cases. “We will look into it and match (the information on Philippine residents in the database) with income tax returns,” Henares told the Philippine Center for Investigative Journalism, an ICIJ reporting partner.
  • Algirdas SemetaAlgirdas Semeta: wants ICIJ and partners to keep digging.EU Commissioner Algirdas Semeta says the Offshore Leaks investigation by ICIJ and its partners has transformed tax politics and amplified political will to tackle the problem of tax evasion.

    "I personally think Offshore Leaks could be identified as the most significant trigger behind these developments ... It has created visibility of the issue and it has triggered political recognition of the amplitude of the problem", he told EU Observer. He added that tax transparency overrides the principle of data privacy.
  • South Korean financial regulators have opened an investigation into possible illicit fund transfers by hundreds of Koreans whose names are included in ICIJ’s “Offshore Leaks” database.  “We will investigate every one of them,” a top regulator said. “When doing capital transactions, they’re required to report to the authorities prior to the trades, so now we are investigating whether they violated the law.” ICIJ’s investigative partner, the Korea Center for Investigative Journalism, revealed that it had identified at least 245 Koreans who established companies in the British Virgin Islands, Cook Islands and other offshore havens.
  • Canadian Senator Vern White has called for a probe into a fellow legislator’s role in her husband’s use of an offshore hideaway in the South Pacific.  The conservative Senator said he has asked the Senate's ethics officer to look into Liberal Senator Pana Merchant's role in the matter, saying there are "serious questions" to be dealt with.  The Senate ethics office said in a statement that will give Merchant a chance to respond before deciding whether to launch a formal investigation. CBC News and ICIJ revealed last month that Merchant's husband, famed class-action lawyer Tony Merchant, had shifted some CA$1.7 million (US$1.1 million) into a Cook Islands trust while he was locked in battle with Canadian tax authorities. 
  • After meeting with President Barack Obama at the White House, British Prime Minister David Cameron made a strong call to tackle what he called “the scourge of tax evasion,” one of the key topics in next month’s G8 meeting in Ireland. “We need to know who really owns a company, who profits from it, whether taxes are paid.  And we need a new mechanism to track where multinationals make their money and where they pay their taxes so we can stop those that are manipulating the system unfairly,” Cameron said.
  • British, U.S. and Australian tax authorities
    that they are pursuing tax evasion investigations based on a cache of offshore documents that link to the Cook Islands, Singapore and the Cayman Islands, among other jurisdictions. The secret records are believed to include those obtained by ICIJ 
    and that are the basis of the Offshore Leaks investigation. British tax authorities said the files “reveal extensive use of complex offshore structures to conceal assets by wealthy individuals and companies.” The three agencies plan to share the information with their counterparts from other countries in what could be the beginnings of one of the largest tax investigations in history.  

  • Canada's revenue minister Gail Shea announced a $30 million commitment to fight tax evasion and target the practice of hiding money in offshore accounts, and the formation of an international tax expert "SWAT team". Asked if her department now has the list of 450 Canadian names contained within the documents obtained by ICIJ, Shea said: "We currently don’t have the list and I can assure you that we’re looking at all of our options. We’re working with our international partners to get that list."
  • The UK Treasury announced that following the lead of the Cayman Islands, all British overseas territories – including Bermuda, the British Virgin Islands, Anguilla, Montserrat and the Turks and Caicos Islands  have agreed to share information about individuals holding bank accounts in their jurisdictions with the UK, France, Germany, Italy and Spain. 
  • The South China Morning Post reported that the new information exchanges will have real implications for Hong Kong and China companies, which do significant business through the Cayman islands, the British Virgin Islands and other offshore locales.
  • European finance ministers may reach an agreement to eradicate tax havens on May 13, after a meeting in Helsinki between finance ministers from Finland, Luxembourg, Greece, Slovakia, and Lithuania as well as the European Commissioner on Taxation  to discuss measures against tax evasion.
  • The European Commissioner on Taxation Algirdas Šemeta  and Irish Finance Minister Michael Noonan sent a letter to all EU Finance Ministers, setting out 7 key areas for immediate action in improving the fight against tax fraud, evasion and avoidanceMember States were asked to agree on these actions at the ECOFIN in May. The letter credits the offshore leaks investigation with "sharpening the focus" on tax fraud, and says it will ask ICIJ to supply names and details of European citizens from its data. 
  • Finance ministers and central bankers at the G20 meeting in Washington said in a communiqué that automatic exchange of tax-relevant bank information should be adopted as the global standard to overcome international tax evasion. Skeptical European leaders reportedly "became more enthusiastic" after the public outcry over ICIJ's offshore leaks revelations.

  • Bayartsogt Sangajav, deputy speaker of the Mongolian Parliament, has been dismissed from his post following ICIJ's revelations about his undeclared offshore company and bank account. In a parliamentary session he was asked to explain his actions. Several MPs called for further disciplinary action, including expelling him from Parliament entirely.
  • Santosh Kumar Agarwal (Kedia), a member of the board of directors for the Antwerp World Diamond Centre, has resigned from the organization after his offshore dealings were revealed. “In the interest of the integrity of the Antwerp World Diamond Centre as [an] organization and the industry as a whole, Kedia has taken the initiative to withdraw from the AWDC's board of directors, awaiting the outcome of a potential investigation,” said a statement released by the company.”
  • French president Francois Hollande has published the personal financial details of  government ministers on the official government websitefollowing the Jerome Cahuzac and Jean-Jacques Augier offshore assets scandalsThe list of assets includes details of bank accounts, life insurance, property and other expensive items such as cars, art works and antiques. Various properties in Paris and the south of France have already been itemized by ministers, as well as designer lounge chair (Industrial Renewal Minister Arnaud Montebourg) and a David Beckham t-shirt (Culture Minister Aurelie Filippetti).
  • European Council president Herman Van Rompuy announced that tax evasion will be discussed at the next European Council in May, saying "we must seize the increased political momentum to address this crucial problem."
  • BVI government officials have announced they are opening a new business headquarters in Hong Kong, with Orlando Smith, BVI Premier and Finance Minister, confirmed to officiate the opening. Executive director of BVI International Finance Centre, Elise Donovan, said the data obtained by the ICIJ was "a small fraction" of the total number of BVI firms. She later added, "We want to reassure clients in Hong Kong and the region that this is an isolated incident. We remain committed to clients' privacy and confidentiality."
  • The Swiss and U.S. governments are investigating possible solution to the dispute over wealthy Americans using Swiss banks to hide their money. These talks come at time when Switzerland’s banking sector is under increased pressure to surrender personal information about suspected tax evaders. Swiss Finance Minister Eveline Widmer-Schlumpf said all countries should be treated equally in the drive for bank transparency. "We consider it very important that rules must apply to all and are engaging ourselves for a level playing field in multilateral forums," Widmer-Schlumpf said.
  • German Chancellor Angela Merkel urged UK's PM David Cameron to crack down on tax havens during talks in Berlin, following a public outcry in Germany over the "offshore leaks." Sources "close to Cameron" claim he was actually the first to raise the issue, spelling out how his government was cracking down on tax avoidance in places such as Jersey and Guernsey.
  • Igor ShuvalovRussian Deputy Prime Minister Igor Shuvalov.Russian Deputy Prime Minister Igor Shuvalov is moving his offshore assets back to Russia after ICIJ's revelations that Shuvalov's wife Olga Shuvalova was either a shareholder or owner of several secretive offshore entities. The Shuvalovs had a declared income of $12.7 million in 2011, most of which was earned by Olga.
  • Spanish political party Unión Progreso y Democracia submitted written questions to the Spanish Congress today in the wake of French president François Hollande's announcement that French banks had to declare their tax haven subsidiaries. The questions read: Is the government going to present in the European institutions any initiative to eradicate the tax havens within the Member States? and Is the government going to force banks to disclose the subsidiaries they have in tax havens and what are their activities?
  • Francois Hollande: called for tax havens to be "eradicated."Francois Hollande: called for tax havens to be "eradicated."French president François Hollande called for "eradication" of the world's tax havens and told French banks they must declare all of their subsidiaries. He also announced the creation of a special prosecutor to pursue cases of corruption and tax fraud. French government ministers have been ordered to declare their assets publicly within days.
  • Luxembourg's Prime Minister Jean-Claude Juncker announced his country plans to lift bank secrecy rules for European Union citizens who have savings based in the country, ending decades of bank secrecy in Luxembourg. "We are following a global movement," Juncker told parliament in a state-of-the-nation address. The new transparency regime would begin in January 2015. Austria is now the only EU country not sharing data about bank depositors. In a recent interview, Austrian Vice Chancellor and Finance Minister Spindelegger Fekter said: “How much money someone has in the bank is a matter between the bank and the customer and is no one else’s business."
  • Algirdas Semeta, European Union Tax Commissioner stated in a recent interview that it is time to move “quicker and harder” against tax evasion. He said the “growing willingness to act” increases the likelihood of a more coordinated EU stance against tax havens.
  • Europe’s five biggest economic powers — Britain, France, Germany, Italy and Spain — announced they would begin regularly exchanging banking and tax information as a way of identifying tax dodgers and other financial wrongdoers. 
  • Meanwhile, the British Virgin Islands (BVI) authorities are not fans of the ICIJ investigation. The BVI premier and Finance Minister Orlando Smith told the South China Morning Post that "BVI authorities are actively investigating how this private information has been illicitly obtained and used to attack the BVI financial services industry, which operates compliantly within international guidelines and the law."
  • Athens’ district attorney Panayota Fakou has started a preliminary probe to find out if Greeks who own offshore companies unearthed by the ICIJ investigation have evaded taxes or laundered money. According to the Greek newspaper Ta Nea, prosecutors will send information requests to British Virgin Islands’ financial authorities asking them to turn over records of 107 entities connected to Greek citizens.
  • An investigation by Finnish State Televisionand ICIJ exposing the offshore connections of state-owned postal company Itella has been received with surprise by the Finnish Finance Minister, Jutta Urpilainen. The minister said that “state owned companies should be an example for other companies. That is why it is especially unacceptable that Itella owns a company in a tax haven.” Urpilainen said the Finnish government should adopt clear rules on the use of offshore jurisdictions by state-owned corporations and called tax havens “one of the biggest threats to the Finnish welfare state.”
  • The Mongolian Deputy Speaker, Bayartsogt Sangajav, admitted to an "ethics failure" over his undeclared million-dollar Swiss bank account. He told a press conference: “It is true that there is 1,658 Euros or 2.9 million MNT in a Swiss bank account. I opened the account to trade in international stocks with three other acquaintances in 2008. My failure of responsibility is that I did not include the company in my declaration of income. I have admitted my ethic failure and I am ready to take responsibility."
  • Philippine government officials said they will investigate evidence that Maria Imelda Marcos Manotoc, a provincial governor and daughter of the late dictator Ferdinand Marcos, was the beneficiary of a secret BVI offshore trust.
  • George Mavraganis, the Deputy Finance Minister of Greece announced that the Greek government is moving to address offshore-driven tax dodging. Greek members of parliament asked Mavraganis what he planned to do about the 103 offshore companies that ICIJ found hadn’t been registered with Greece’s tax authorities.
  • George Sourlas from Greece’s Ministry of Justice said the revenue loss caused by offshore was huge. “By the actions of offshore companies in Greece, the revenue loss to the Greek government is in the order of 40% or more of the debt of our country,” Sourlas said. “The offshore companies cast a shadow at this time of great crisis, when some get rich and many get poor.”
  • In France, President Francois Hollande denied knowledge of the offshore accounts held by his 2012 campaign manager, Jean-Jacques Augier, asserting that it’s up to the tax administration to monitor Augier’s private activities. Reports about Augier’s offshore dealings by Le Monde, the BBC and other ICIJ partners came in the wake of news about tax fraud charges against Hollande’s ex-budget Minister, Jerome Cahuzac.
  • The office of Azerbaijani President Ilham Aliyev asserted there was nothing unusual about the information in the leak – which showed that his two daughters were shareholders of three offshore companies. The statement said the President’s daughters “are grown up and have the right to do business.”  A spokesperson for Azersun – a holding company controlled by Hasan Gozal, a corporate mogul who was listed as the director of the daughters’ companies – said the report was biased and based on inaccurate information. “I regret that authority of Press Council doesn't go beyond Azerbaijan and there is no such institution worldwide to fight racketeer journalists,” the spokesman said.
  • Ex-Colombian President Álvaro Uribe Vélez publicly defended his sons’ involvement in offshore business. Uribe stated that his sons Tomás and Jerónimo are entrepreneurs and “have participated in business dealings since they were children” and “they are not tax evaders.”
  • In the UK, David Cameron is facing renewed pressure to take action over Britain’s entanglements within the offshore world. Lord Oakeshott, a senior Liberal Democrat said that the secrecy haven of the British Virgin Islands “stains the face of Britain.” Oakeshott and others are questioning whether Cameron will raise the issue in June of at the G8 summit of wealth nations. "How can David Cameron keep a straight face calling for the G8 to make big business pay tax when we let the BVI use British law and British protection to suck in billions in dirty money?" Oakeshott asked.
  • German Finance Minister Wolfgang Schäuble stated on public radio that he was “pleased” with the ICIJ reports. He went on to say, “I think that such things as have been made known will increase the pressure internationally, and we will be able to increase the cooperation with those who have been more reticent,” a sentiment reflected in Germany’s previous lobbying to stamp out tax avoidance.
  • Canadian Federal Revenue Minister Gail Shea called the released of offshore banking information as “good news” for Canadians and bad news for tax evaders. Ms. Shea urged ICIJ or anyone else with information on tax cheats to come forward.
  • Pascal Saint-Amans, director of the Organization of Economic Cooperation and Development, said: "Secrecy is no longer acceptable. We need to get rid of it. If the rules make it possible, then we'll change the rules.”

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