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BRITAIN CORRUPT AS WELL...
John Christensen
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Mr John Christensen, an economist who is also the director of Tax Justice Network (taxjustice.net) has said Britain and other world leading economies are as corrupt as any of the corrupt African governments.
Delivering a paper at the Royal Geographical Society annual conference, Mr Christensen urged the world to treat the corruption issue in a holistic manner. "The elephant in the living room of the corruption debate is the role played by the global infrastructure of banks, legal and accounting businesses, tax havens and related financial intermediaries in providing an offshore interface between the illicit and the licit economies". |
According to one estimate, Mr Christensen said "US$1 trillion of dirty money flows annually into offshore accounts, approximately half of which originates from developing countries. Despite the plethora of antimoney- laundering initiatives the failure rate for detecting dirty money flows is astonishingly high. According to a Swiss banker, only 0.01 per cent of dirty money flowing through Switzerland is detected. It is unlikely that other offshore finance centres are any better".
"One study of 30 countries in sub-Saharan Africa (SSA) has estimated total capital flight from that region between 1970 and 1996 at about US$187 billion. The same study concludes that SSA is a net creditor to the rest of the world in the sense that external assets, i.e. the stock of flight capital, exceed external liabilities (i.e. external debt). The problem is that the assets are largely held in private hands, whilst the liabilities belong to the African public".
"As I commented in a recent essay in the London Review of Books: "the looting of (Nigeria's) resources, which reached its peak during Sani Abacha's presidency in the 1990s, happened with the active connivance of an extensive infrastructure of banks, lawyers and accountants who provided the means for tens of billions to be shifted offshore".
Mr Christensen continued that the aiders and abetters came from countries such as the UK, Switzerland, the United States etc. "They would have been aware of the source of the funds and must have profited magnificently from handling this stolen property."
"I would place the United Kingdom high on the list of most corrupt countries. This nomination is based on three aspects of British economic policy which undermine public confidence in the integrity of government policy and are ultimately harmful to national and international interests. These are: Britain's role as a tax haven, and as a defender of the tax haven activities of its overseas territories and Crown dependencies, including the continued abuse of European VAT rules by the Channel Island based fulfilment industry; Britain's extensive use of tax competition to gain international advantage; Britain's dismal role in undermining the effectiveness of the European Union's Savings Tax Directive by failing to advise the European Commission that the directive as agreed would allow interest paid to trusts to fall outside the tax deduction provisions. This omission appears to have been deliberate and has left a massive loophole in the Savings Tax Directive.
Furthermore, according to Mr Christensen, many of the legal subterfuges that play a part in the offshore interface have their origins in British law. This includes offshore trusts and shell companies, and the long standing concept of the separation of the place of incorporation of a company and the obligation to pay tax. The latter concept remains a key element of offshore tax planning. Britain, therefore, could play a major role in tackling the supply side of corruption, but successive governments have baulked at the task. We must ask ourselves why this been the case and, more generally, why: "The whole culture of Anglo-American finance is increasingly subversive of regulation, taxation and democratic values, even when it remains within the law."
The root of this problem might partly lie with the unhealthy proximity between major financial intermediary businesses and key Whitehall departments, including and especially the Treasury, and the extent to which the main political parties have become dependent on donations - including staff secondments - from major corporations. "FOLLOW
THE MONEY" - Click here to read Report in full
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