Canada and the World
Current Events with a Canadian Perspective
Last update
19 November 2010
Blacklisted Tax Havens
The Organization for Economic Cooperation and Development has published its list
of countries that help people evade taxes
For those who want to squirrel away money where nobody else can find it, the best hiding places are Costa Rica, Malaysia, the Philippines, and Uruguay.
This is revealed in a new list, which the Organization for Economic Cooperation and Development (OECD) made public in April 2009.
According to a BBC report, “Three of the blacklisted countries have said that they should be removed from the list. There is also a list of 38 places that have agreed to improve standards but not yet done so, such as Gibraltar, Liechtenstein, Andorra, and San Marino.”
The three saying they should not be on the list are Malaysia, the Philippines, and Uruguay.
Legendary Swiss Secrecy
Until recently, Swiss banks were noted worldwide for their discretion. Valuables could be placed in their vaults without fear that some nosy tax inspector might discover their existence.
Then, in 2008, scandal involving UBS Warburg broke. The company is based in Switzerland
and has been described by The Economist (July 2007) as “the world’s biggest manager
of other people’s money.”
As reported by Nick Mathiason in The Observer (June 2008), the Internal Revenue Service
(IRS) in the United States had long suspected that Russian émigré and real-
After a long and patient investigation, the IRS confronted Olenicoff with the evidence it had and offered a deal. The Russian could have a light sentence if he handed over the names of those who helped him evade taxes.
Olenicoff gave the IRS Bradley Birkenfeld who had been a senior banker in America with UBS from 2001 to 2006.
The Observer reported that Birkenfeld “signed a U.S. court statement detailing how he smuggled diamonds in toothpaste tubes, deliberately destroyed offshore bank records on behalf of clients, and helped Olenicoff evade taxes of $200 million on offshore assets worth $7.26 billion.”
UBS Warburg had 19,000 American clients, others of whom may have taken advantage
of UBS’s tax-
“The U.S. loses about $100 billion annually due to offshore tax evasion,” The Journal
reported on July 17, 2008, “according to a Senate probe that is taking aim at Swiss
bank UBS AG and Liechtenstein’s LGT Group for allegedly marketing tax-
Embarrassed Swiss May Change
As The Observer noted, “It is an understatement to say that Birkenfeld’s allegations
have sent shockwaves through the Swiss financial establishment, which prides itself
on selling secrecy to the world’s super-
Back at the BBC (February 2009), the broadcaster quotes the Zurich-
The BBC adds, “The former German Finance Minister, Hans Eichel, went further. Asked to put a time limit on how long banking secrecy could survive he said: ‘I give it a year and a half.’ ”
Image credit
Twicepix
Sources
“OECD Names and Shames Tax Havens.” BBC News, April 3, 2009.
“Tax Scandal Leave Swiss Giant Reeling.” Nick Mathiason, The Observer, June 29, 2008.
“Clock Ticking for Swiss Bank Secrecy.” Imogen Foulkes, BBC News, February 20, 2009.
© Canada and the World, September 2010
All rights reserved
Alan Cleaver
Some people treat income tax like a game and try to outwit the government collectors.
“Do a Google search for ‘Delaware’ or ‘Nevada’ plus ‘offshore’ and you’ll find more
tax avoidance schemes designed for Americans than you can poke a stick at -
James Nason of the Swiss Bankers Association quoted in The Observer