The Scalphunters

From the ICIJ:

The Council of the European Union issued a statement May 14 calling for efforts at the national, EU and international levels “to combat tax fraud and tax evasion” and “aggressive tax planning.” The statement noted that the council’s presidency plans to ask ICIJ to supply EU member states “with the names and details regarding all EU citizens on the ‘offshore leaks’ list.”

ICIJ has said that it will not turn over the data to government agencies, but that it is exploring the possibility of publicly releasing some entity ownership data.

The International Consortium of Investigative Journalists, the BBC and the Guardian have been on a bit of a moral crusade, or so it seems.  They have launched into David Cameron for having written to the EU to propose further discussions on disclosures regarding Trusts.  Apparently only he, in secret, opposed, or tried to water down the proposals.  But that’s not true as I point out below.  Many countries, such as Germany, opposed public disclosure of trust information, as did the EU Council itself.  Why no mention of that in the BBC reports as they target Cameron?  The BBC mention Cameron’s letter as if this was a secret ploy by him personally to undermine tax evasion legislation when in fact it was merely the very public evidence of the government position which everyone knew anyway……it had after all been discussed in Parliament and the House of Lords…many Labour Lord’s taking part and the LibDem Lord Newby, the Treasury spokeman in the Lords, defending the government position (see below for more on this).

The reporting, the mis-reporting of this, has been devastingly effective in manipulating public perceptions about Cameron personally and has been instrumental in whipping up a public storm of discontent…but is in fact based upon lies and misinformation which the BBC has helped propagate.  The protests outside Downing street were organised by a pro-Labour, pro-Corbyn, activist who says she was motivated by Cameron’s letter to the EU…

She clearly does not have any idea about what was really going on but has managed to catch the headlines and create yet more bad publicity for Cameron based upon a story that is total nonsense….as others have noted…

Ironically her latest tweet is this article on political journalism…an Australian article but it looks like journos are the same the world over…..maybe it’s talking about the BBC’s Jon Donnison……

Why Political Coverage is Broken

How often the Australian press reframes politics as entertainment, seizing on trivial episodes that amuse or titillate and then blowing them up until they start to seem important.

 In politics, our journalists believe, it is better to be savvy than it is to be honest or correct on the facts. It’s better to be savvy than it is to be just, good, fair, decent, strictly lawful, civilized, sincere, thoughtful or humane.  Savviness is what journalists admire in others. Savvy is what they themselves dearly wish to be.

On that note…..who has genuinely been blocking investigations into tax avoidance and criminality?  Who has been refusing to hand over information that would enable governments to tackle such issues?  Step forward the ICIJ, the BBC and the Guardian.

What are their motives for reporting on tax evasion?  Is it to bring into the open a potential area of criminality and tax abuse, is it a politically motivated targeting of those in government they do not like, or is it merely the journalistic imperative to get a scoop, to reveal an ‘exclusive’ and if possible bring down a politician?  Are they looking for a big political scalp?  Iceland’s PM has gone…..who are they after next?

You be the judge….this is what the ICIJ said about a similar ‘bombshell’ disclosure of information in 2014….

Why we are not turning over the offshore files to government agencies

One of the many reactions from our series on offshore tax havens has been government agencies from Germany, Greece, South Korea, Canada and the U.S. asking for access to the 2.5 million files that form the basis of our reporting.

We are declining to do so.

The long-standing policy of the International Consortium of Investigative Journalists, and our parent organization, the Center for Public Integrity, is not to turn over such material.

The ICIJ is not an arm of law enforcement and is not an agent of the government. We are an independent reporting organization, served by and serving our members, the global investigative journalism community and the public.

Once we have finished publishing a planned series of stories over a two-week period, our attention will turn to countries where we still have investigative work to do. A number of other media organizations have reached out to us offering help and support, and we welcome these new offers of collaboration.

If there are more stories to find, we want to find them.

It does rather look like they are more interested in getting a major story than in ‘tax justice’.  The latest leaked documents, the Panama Papers, haven’t been made available to the authorities either…nor have they been released to the public.  Now that’s a bit of an irony when you consider that the big rumpus now is that Cameron supposedly blocked public disclosure of trust beneficiaries.  Let’s have some public disclosure of everything in the Panama Papers.

But of course the ICIJ, the BBC and the Guardian don’t want that because they then lose control of the story and the Public may find out what they have been hiding….where are the big disclosures about Labour politicians for instance?  Why does it seem to be mostly Tories that are in the headlines?  Targeting?  The BBC and its mates are stage managing the release of information for effect…and you have to question the timing…just before local elections and the EU referendum…..we are being told that the EU is cracking down on tax abuse but the UK is blocking it…therefore if you want to stop tax abuse vote to stay in the EU.   Is that too cynical?….the BBC and friends have had the information for over a year and the fact about the government’s position on trusts and the EU has been public knowledge for years…just that no one made a fuss about it before now…so why now?

Speaking of which here’s the BBC report on Cameron and his letter to the EU…….

Panama Papers: Cameron faces questions over trust letter

David Cameron is facing questions about his attempt to exclude offshore trusts from an EU crackdown on tax avoidance.

The PM wrote to EU officials in 2013 to say trusts should not automatically be subject to the same transparency rules as companies.

Labour said this showed he did not take tax avoidance seriously.

But the government said he had felt forcing trusts to reveal who gained financially from them would “distract” from action in more pressing areas.

Critics have said trusts can also be used to hide wealth, with one Dutch MEP saying Britain’s efforts to exclude them from transparency legislation had created a “huge loophole”.

In a letter to former European Council president Herman Van Rompuy in November 2013, Mr Cameron expressed reservation about extending such regulations, designed to reduce secrecy and limit the scope for abuse, to trusts, both those registered offshore and in the UK.

Here the BBC reports a Today programme interview…an interview in which only one side was put and we got no context or opposing voices……

Asked whether a loophole remained Dutch MEP Judith Sargentini, who led the European Parliament’s work on the draft law, told the BBC: “Oh most definitely. Not only in Britain but elsewhere in Europe where they use trusts.”

The British government was, she said, at the “forefront” of the lobbying.

German Green MEP Sven Giegold said the British government had been vital in securing the EU-wide beneficial ownership register for companies.

But he said the exemption for trusts meant “wealthy corporations are able to use this loophole so that poor people have to make up for the missing tax payments”.

So let’s look at that letter and the government position.  Read the letter and you will see that it is hardly controversial and in fact lays out the government’s position as determined to crack down on tax abuse.

Back in 2013 the ICIJ praised the UK government’s position…

The United Kingdom has vowed to push ahead with its plan for a new public register on company ownership to track beneficial owners of British companies. The move, first announced by Prime Minister David Cameron in mid-2013, will force companies to provide details about individuals with an interest in more than 25 percent of shares or with voting rights or control of how a company is run. The information would need to be updated at least once every 12 months, and would include details such as the name, date of birth, and nationality of the owners. New legislation will also limit situations where corporate entities can be listed as directors of other companies. British business secretary Vince Cable said the register will end “the darker side of capitalism”.

So far, only the UK has formally pledged to create a public ownership registry of companies.

Unlike the UK, neither the United States nor the European Union has announced plans to require public disclosure of company ownership.

But is it just the UK government that is reluctant to implement open disclosure measures for trusts?

 

The Germans weren’t keen as Tax Justice points out……

This got close to being a real breakthrough until the UK opposed the proposed wide scope of registration of trusts; and countries led by Germany resisted the public nature of the registry.

Here they are writing to the German government pleading with them not to block the legislation…and not just the Germans and other countries but the EU Council wanted to block the move by the EU Parliament……

Dear Bundesfinanzminister Schäuble – please don’t block public registries

European transparency and anti-corruption campaigning organisations have sent the following letter to German finance minister Wolfgang Schäuble requesting that his government should support demands by the European Parliament that information about the ultimate beneficial owners (the true, warm-blooded humans hiding behind shell companies with nominee directors and nominee shareholders) should be made available on public registry.  The German government is apparently resisting this move.

Last week during negotiations the European Parliament called unequivocally for the introduction of such a register, and demanded that there should be no watering down of the proposal, as the European Council and particularly the German government have been proposing.

And here’s another report on that….

Federal government blocks EU Money Laundering Reform
A very worthwhile article in the Tagesspiegel and Zeit.de informed us today on a new chapter in the history of Germany’s less than credible efforts to combat money laundering and tax evasion.

In contrast to full-bodied rhetoric Tagesspiegel explains the true attitude of the Federal Government.

What about the EU….does it actually facilitate ‘tax efficiency’ measures and offshoring?  Why did companies like the one that Cameron’s dad owned, and indeed Pimco, now the employer of Gordon Brown, move to Ireland?  Because the EU passed legislation that encouraged such companies to come into the EU, the EU tax haven……

The fund was redomiciled in 2012, moving from Panama to Ireland.

A spokesperson for Smith & Williamson said the move came after the introduction of new rules in Europe governing retail investment funds known as Ucits.

These rules enabled funds that were registered in offshore tax havens such as the Cayman Islands, Bermuda and Panama, to move to an onshore European country, typically Luxembourg or Ireland, and adopt the Ucits structure.

Ucits funds have become one of the most popular investment structures for retail and institutional investors globally in recent years as they are considered safe and transparent. The industry has grown rapidly in size to around €8tn of assets globally today.

The Tax Justice Network  tells us…….

The EU is planning to make it easier to own offshore shell companies

Just as the Panama papers reveal the mayhem that can be caused by secret shell companies, the European Union is set to relax ownership transparency requirements for shell companies in its forthcoming Fourth Anti-Money Laundering Directive.

So despite cracking down on tax abuse the EU is facilitating it.

What about that infamous Cameron letter?….who knew?  It was secret wasn’t it?……..Maybe not so much……

 

UK demands exemption from EU trust registry plan

Monday, 7 April, 2014

The UK government has confirmed that it will oppose clauses in the EU’s Fourth Money Laundering Directive that would force all trusts to identify their beneficiaries in publicly accessible registries.

 

And here we have the House of Lords discussion in 2014 on that very subject as Lord Newby lays out the government’s case for more discussions on trusts…….secret?  Perhaps not…..

EU: Money-laundering Directive

Lord Newby (LibDem) In September 2012, he was appointed Treasury spokesman in the House of Lords.

The EU’s fourth money-laundering directive is an opportunity to build on that momentum. The directive seeks to implement the revised standards of the Financial Action Task Force and the European Commission’s review of the implementation of the third money-laundering directive. We are committed to ensuring that the directive implements the FATF standards in full. As the Prime Minister wrote to European Heads of Government last year, our first collective step should be to mandate public central registries of company beneficial ownership as the benchmark for transparency of ownership and control. At the same time, the UK recognises that it is equally vital to prevent the potential misuse of trusts and similar legal arrangements.

The FATF sets the global standards to improve the transparency of the beneficial ownership of corporate and legal entities, including companies, and legal arrangements such as trusts. In setting those standards, the FATF recognises that preventing the misuse of trusts is critical but also explicitly recognises that trusts are different from companies. In particular, it is vital to understand that, unlike companies, common law trusts, such as those established under English and Welsh law, are not created by the state. Furthermore, trusts, unlike companies, are used for a range of purposes, such as benevolence, inheritance, protecting vulnerable people and family support. As such, the implications for privacy are far greater, and trusts therefore warrant different treatment.

Measures placed on trusts must therefore be different from those that apply for companies in order to be proportionate and effective. The Government support a mandatory requirement for trustees to know the beneficial ownership of their trusts. That, together with tax reporting to HMRC, to which the noble Lord, Lord Willoughby de Broke, referred, and future automatic exchange of tax information agreements, will offer more transparency on trusts than ever before. In particular, through automatic exchange agreements, financial institutions will report information to national tax authorities on trusts holding accounts with them where the beneficiary is a resident of a partner jurisdiction. That information is then automatically shared with ​the partner jurisdiction. There are already 44 signatories to this international standard on automatic exchange, which creates a web of information exchange that will provide greater transparency on trusts than ever before.

This approach provides a proportional and effective means of enhancing transparency on trusts holding financial assets, given that they pose the greatest money- laundering risk. The Government oppose the mandatory registration requirement for trusts, which, together with the creation of central registries of trusts, was recently adopted as the European Parliament’s position on the directive. Given the transparency afforded by automatic transfer of information agreements, we consider registration of trusts to be a disproportionate approach and, in particular, one which undermines the common-law basis of trusts in the UK. As such, we continue to work with other member states, civil society and the private sector to ensure effective treatment of trusts.

In response to the question from my noble friend Lord Dykes, trusts would not become default alternatives to companies because there are the requirements to report financial information to HMRC and to pay tax where appropriate and also for the automatic exchange of information where the beneficiary is a foreign national.

To sum up, given that my time is very brief, the UK is leading from the front on an agenda that places a practical emphasis on transparency and accountability. ​The Government are working to ensure that the EU shows similar ambition on what is a cross-border issue, with serious implications for developed and developing countries alike. We want the outcome to be fair and proportionate, but we also require it to be effective. That is what we are working towards and what I am optimistic that we will achieve.

So to sum up…the ICIJ, the BBC and the Guardian are blocking information that would help the EU tackle tax evasion, Cameron’s letter wasn’t secret and nor was it an attempt to block regulations, he wanted more discussions and different methods that might be more effective.  Germany, the EU council and other EU countries wanted to block the regulation, the UK government’s position was well known and widely talked about, and the EU itself has facilitated tax avoidance creating an EU tax haven.

And yet Cameron is to blame for everything.   Merely bad reporting or is something else going on?