Third of EU financial secrecy comes from inside its borders: report

LONDON (Reuters) - People or firms in the European Union that wish to keep their financial affairs secret more often find the services they require inside the EU than in one of the tax havens blacklisted by the bloc, the Tax Justice Network (TJN) said on Sunday. Such services include shell companies and banking secrecy and a third used by individuals or entities inside the EU are sourced from within it, the report said, while just 1 percent stem from places the EU has blacklisted as tax havens

Reuters September 24, 2018 00:05:09 IST
Third of EU financial secrecy comes from inside its borders: report

Third of EU financial secrecy comes from inside its borders report

LONDON (Reuters) - People or firms in the European Union that wish to keep their financial affairs secret more often find the services they require inside the EU than in one of the tax havens blacklisted by the bloc, the Tax Justice Network (TJN) said on Sunday.

Such services include shell companies and banking secrecy and a third used by individuals or entities inside the EU are sourced from within it, the report said, while just 1 percent stem from places the EU has blacklisted as tax havens.

"It is hard to call the EU's tax haven blacklist an effective firewall against economic threats when it fails to detect 99 percent of the financial secrecy threatening member states," said Markus Meinzer, a director at TJN, which uses its research to advocate for changes to the tax system.

A European Commission spokesman said all EU member states comply with the criteria laid out for the blacklist, and are bound by EU legislation that requires them to go further than international standards.

"That is not to say that we claim everything is perfect in the EU," he continued. "There is always room for improvement, and the commission is busy addressing this through a mix of hard law, soft law and state aid cases."

Europe is wrestling with the case of Danske Bank which is engulfed in a money laundering scandal over 200 billion euros ($235 billion) in payments, many of which the Danish bank says were suspicious, channelled through its Estonian branch.

Danish, Estonian and British authorities are investigating the Danske Bank case, with Britain's National Crime Agency examining the role played by UK-registered companies.

The TJN said the single largest source of financial secrecy to the EU was the United States, which supplied 4.7 percent of such services - five times more than all seven countries on the EU's blacklist combined.

The U.S. Treasury did not immediately have a comment.

Four of the top ten suppliers of financial secrecy to the EU are members of the bloc themselves, with The Netherlands the second largest supplier ahead of Luxembourg, the TJN said.

Germany was sixth on the list, supplying twice as much as Panama, while France was eighth, the research, which is based on the TJN's own financial secrecy rankings and International Monetary Fund data, said.

Rather than a having a blacklist, the TJN said the EU and its member states should work to secure agreements enabling automatic information sharing with financial secrecy jurisdictions, and impose a tax on those that refuse.

($1 = 0.8516 euros)

(Reporting by Emma Rumney; Editing by Alexander Smith)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.