With just days remaining until Britain decides on its EU membership, the UK is at a crossroads. It has a historical choice to make, with various consequences attached to the decision on the 23rd of June on whether it becomes the first ever country to leave the EU. Those consequences could include undermining the leading role that Britain has taken in the global fight against corruption and transforming Britain into an even greater tax haven for multinationals.
“ICE has long recognized the misuse of corporations and limited liability companies (LLCs) formed under State law as a serious threat to the ongoing effort to combat international criminal activities. The lack of corporate transparency has allowed...
By Heather Lowe, May 29, 2015
This was a very exciting week for lawyers who are sports enthusiasts – the Department of Justice indicted fourteen FIFA officials, alleging that they are part of what one could conclude from reading the indictment is a massive, multifaceted, bribery ring. Informal allegations have been made before, and the whispers that FIFA is synonymous with bribery and corruption have been growing louder over the years. But this week the Department of Justice shouted it from the mountain top (or, perhaps more accurately, in front of a lot of the international press corps, which was probably more effective).
There are a number of interesting facets to the case that is now before us. The first is that for a case about bribery, a charge of bribery seems to be conspicuously absent. The Defendants were indicted for a “pattern of racketeering activity,” including charges of violating the Travel Act in aid of racketeering, money laundering, money laundering conspiracy, wire fraud, wire fraud conspiracy, and other charges that do not expressly include bribery. Why is that?
By Koen Roovers, February 18, 2015
The SwissLeaks Scandal around the HSBC Bank Subsidiary There Has Highlighted How Globalization Can Facilitate Tax-Dodgers. Only a Bright Spotlight of Information Can Deter Them.
A major leak of incriminating HSBC records last week resulted in print and television news coverage around the globe, trended on Twitter for several days and prompted several governments to start long-anticipated investigations. Through its Swiss entity, the British banking juggernaut helped customers from around the world to hide their money for tax evasion or other nefarious purposes without any questions asked. In fact, in several of the ‘scripts’ which accompany the accounts, banking personnel are seen to be very willing to accommodate dubious requests—from allowing cash withdrawals worth millions of dollars to setting up sham legal entities to obscure the ownership of the funds.
The ‘Lagarde list’, as the files have come to be known, has been around for a couple of years and so many have been asking: ‘Why do we only see government action once a group of reporters put the spotlight on this?’ Another frequent question has been whether the bank has really (as it claims) cleaned up its act.
Relatively few commentators have asked: how do we prevent this in the first place?
By Joshua Simmons, November 10, 2014
Until Global Financial Crime Punishments include Individual Prosecutions, Rogue Banks Will Continue to Do as They Please, Writes GFI’s Joshua Simmons
After the recent spate of massive money-laundering, sanctions-busting, and tax-evasion scandals involving large international banks, sometimes it seems more difficult to name a single bank that has not been exposed for wrongdoing than list all those that have. One might think that, having worked their way through so many financial institutions, investigators and prosecutors would be at a loss for what to do next. The banks, though, seem more than willing to provide more work, with many either failing to meet their ends of their settlement agreements, continuing to move money for criminals and tax-evaders, or both.
Standard Chartered, which settled charges in mid-2012 related to its widespread activities violating U.S. sanctions on Iran, Burma, Libya, and Sudan, paid an additional fine this summer for failing to uphold its obligations under the settlement. The bank may now be in line for even more punishment, after new information seems to indicate additional transactions with Iranian entities that weren’t disclosed or admitted in the original settlement. It’s not presently clear whether Standard Chartered retained a relationship with Iranian customers after its settlement in 2012, but it certainly continued to take their money after the initial investigation began.
By Max Heywood, August 12, 2014
Lionel Messi’s Tax Troubles Should Increase Pressure on Politicians to Curb the Abuse of Anonymous Companies
The ongoing prosecution of football super star Lionel Messi for alleged tax evasion made global headlines last week. Messi and his father Jorge are accused of evading 4.2 million euros (US$5.6m) in tax on sponsorship earnings in court documents submitted by the prosecutor.
The alleged tax evasion scheme was based on using a web of anonymous shell companies registered in tax havens such as Belize and Uruguay, as highlighted by our colleagues at Global Witness. These shell companies were linked to other anonymous companies in what the prosecutor calls “convenience jurisdictions” such as the UK and Switzerland.
By Clark Gascoigne, July 17, 2014
Thomson Reuters Foundation Seeks Applications from African Media for Illicit Finance Training and Assistance Program by July 28th
Are you an ambitious journalist in Africa with an interest in probing illicit finance, money laundering, and tax related abuses? Or, perhaps, you represent an outstanding, independent media organization based in Africa with a desire and reputation for exposing financial crime and corruption?
Either way, the Thomson Reuters Foundation is launching a new three-year program assisting African media on the reporting of illicit finance and tax abuse, and they are hoping that you will apply. According to the TR Foundation:
African economies lose huge sums of money every year through practices such as tax evasion and avoidance, often carried out by large companies. However, this phenomenon receives little attention and is rarely the subject of in-depth investigation.
Thomson Reuters Foundation believes that African media has a vital role to play in bringing this issue to light and exposing tax abuse where it is taking place. We also believe that collaboration between journalists and media organisations across borders is essential when reporting on money flows between countries.
We are seeking outstanding journalists and ambitious, independent media organisations to join us in this new project.
By Michele Fletcher, July 17, 2014
Reforms at the Vatican Bank Should Pave the Way for Transparency Improvements at Larger Financial Institutions
Last week, Pope Francis announced that French investor Jean-Baptiste de Franssu will head the Institute for Religious Works (IOR). Franssu’s appointment, as well as the appointment of an entirely new board, signals a new phase in the Holy See’s project to restore faith in the scandal-ridden bank.
Franssu’s predecessor, German Ernst von Freyburg, is credited with initiating the process of freezing and blocking suspicious accounts at the bank, having blocked 3,000 of the 19,000 total accounts. Cardinal George Pell, the Vatican’s top finance official, hopes to continue this legacy, saying “our ambition is to become something of a model in financial management rather than a cause for occasional scandal.”
This transition, however, has generated substantial losses for the bank. The closed accounts accounted for between 60 and 70 million dollars of assets leaving the bank. An audit by Promontory Financial also added to the price tag.