Fallout after the leaking of the “Panama papers”

Contribution by Marc

With the political fallout after the leaking of the “Panama papers”, in the UK, Prime Minster David Cameron received much criticism from the media for an initially slow admission of this  personal fortune tied up in an offshore trust in a tax haven set up by his late father.

The background was that the UK had been preparing for an international conference to be hosted next month on the issue of tax-havens and rooting out corruption, and now are making great fanfare of the assertion that they had already started preparation work for extending and deepening domestic measures they have brought in to clamp down on tax evasion since 2010 in the previous UK coalition government (45 different measures, they claim), including working with their oversea dependencies to encourage greater transparency — with the ultimate goal being to extend these measures out into a new global agreement. After eventually revealing details of his personal finances under pressure from the media over the last week after initial evasion, the UK prime minster revealed a three-pronged plan to attack offshore tax avoidance. These are:

1) UK law enforcement will have powers to investigate the beneficiaries of firms in all tax havens, except Anguila and Guernsey who are yet to agree to the deal.

2) A criminal offence will be introduced for ‘corporations who fail to protect their representatives from criminally facilitating tax evasion.’

3) A government task force will also be introduced to crack down on tax evasion.

However, the leaking of the Panama Papers — a leaked set of 11.5 million confidential documents that provide detailed information about more than 214,000 offshore companies listed by the Panamanian corporate service provider Mossack Fonseca, including the identities of shareholders and directors of the companies and five then-heads of state or government leaders from Argentina, Iceland, Saudi Arabia, Ukraine, and the United Arab Emirates  — may have pushed the UK government to go further than they were initially intending to in extending and deepening measures to crack down on tax evasion as media scrutiny has put them on the back foot.

This maybe the case because more than half of the 214,000 offshore companies set up by Mossack Fonseca were registered in UK overseas territories, with over 100,000 secret firms registered in the British Virgin Islands. The UK’s claim of ‘leadership’ in tackling the issue rings hollow. As revealed by Labour party leader Jeremy Corbyn in the House of Commons in response to Prime Minster Cameron’s statement on the Panama Papers on Monday 11 April 2016, the UK government opposed a European Union bid to impose sanctions on tax havens like Bermuda, where Google channels its overseas profits.

Angus Robertson of the Scottish Nationalist Party said in his response: “the UK and her dependent territories sit on the top of the Financial Secrecy Index of the Tax Justice Network; the UK did not fully cooperate with its EU partners on proposals to regulate overseas trusts”.

Off-shore tax havens are central to the liberalized international financial system, building into this system complex liability structures, which have allowed risks to build-up unseen, increasing vulnerability to sudden shocks. Tax-havens offer global capital ‘get out of regulation free-cards’, as well as freedom from tax. According to the IMF, elite corporations and individuals (popularly referred to as the one per cent) hold a third of total wealth on the planet with between £21-to- £32 Trillion estimated to be located untaxed or already taxed in tax haevens across the world (Angus Robertson, House of Commons, 11th April 2016). [The City of London operates in the same way, under the jurisdiction of a private corporation – the Corporation of London; Cameron’s opt-out of a EU agreement on invoking a transaction tax across Europe in 2012 appeared to serve the interests of his hedge-fund buddies and ruling-class constituency].

Under the ‘Crown’, with the territory owned by the Queen cited by writer Kevin Cahill amounting to about 6,600 million acres of land and sea area across the world, the Crown’s structure of elite privilege has as it’s foundation a jurisdiction of global reach that encompasses 3 crown dependencies and oversea territories with independent legislatures all of which host to an arrangement that is fundamental to the workings of a corrupt world financial system. However,’the Crown’ is a fusion of Monarch with body politics (the law), and the body politic in the UK and no doubt across the commonwealth is increasingly voicing objection to this cancerous arrangement upon which the whole of the global financial capitalist system is based.

Related Posts