Wednesday, August 27, 2008

International News - August 27

** Also see here for a permanent list of past story summaries; see here for the latest offerings, and Offshore Watch for more stories. **

In Africa, pay more attention to tax - IMF
Aug 25 (TJN) – The IMF makes the case for paying more attention to domestic taxation in Africa, and draws contrasts with foreign aid. Tax “creates pressure for more accountability, better governance, and improved efficiency of government spending,” it curbs “Dutch Disease” effects; it contributes to economic stability; it helps countries adapt to globalisation. And more.

Stiglitz calls for tax havens to be closed down
Aug 25 (TJN) - Germany's Suddeutsche Zeitung has carried an interview with Joseph Stiglitz, a former chief economist for the World Bank and controversial best-selling author. In an article entitled "Wall St. has lost the war of words", Stiglitz calls for coordinated worldwide action against tax havens because single actions against jurisdictions such as Liechtenstein or Monaco may simply make money move to other havens.

Fireworks at Jackson Hole
Aug 25 (TJN) - Stanley Fischer, a former IMF Deputy Managing Director and now Bank of Israel governor, made a dramatic gesture at the US Federal Reserve's annual symposium in Jackson Hole, after a hard-hitting speech by Professor Willem Buiter of the London School of Economics. "I asked the organizers for some technical assistance in dealing with this discussion,'' Fischer said, holding up a fire extinguisher.

Corruption and The American Interest - Part II
Aug 22 (TJN) - We recently highlighted a long article about corruption in The American Interest magazine, written by TJN's director John Christensen, Raymond Baker and Nicholas Shaxson, a consultant to TJN. We are now able to provide a link that will give readers access to the full article - http://www.the-american-interest.com/ai2/article-bd.cfm?Id=466&MId=21 .

Dr Doom and the offshore dictionary
Aug 20 (TJN) – A New York Times profile of Nouriel Roubini, economics professor and purveyor of gloomy economic predictions. But the predictions of this “permabear” are surprisingly close to the mark, and this may be due to the rise of “negotiable language,” or what the TJN terms offshore obfuscation. Featuring TJN’s expanding offshore dictionary.

Swiss close case against Zardari; $60 mln unfrozen
Aug 26 (Reuters) - Swiss judicial authorities said on Tuesday they had closed a money-laundering case against Pakistani presidential candidate Asif Ali Zardari and released $60 million frozen in Swiss accounts over the past decade.

Opportunity makes the thief
Aug 21 (TJN) – TJN’s John Christensen has been speaking at the high-level Alpbach Forum in the Austrian Tirol. He gave the key note speech at a panel discussion on Tax Havens and Tax Evasion, sharing the podium with Prinz Nikolaus von und zu Liechtenstein. See John’s speech here: http://www.taxjustice.net/cms/upload/pdf/Alpbach_0808_-_JC_speech.pdf

Secrecy jurisidictions are an abuse of the market

Aug 25 (Tax Research UK) – Richard Murphy muses on some right wing blogs, their somewhat loose grasp on reality, and their offensiveness.

Switzerland can’t have it both ways
Aug 25 (Tax Research UK) – Richard Murphy: don’t underestimate the significance of what is happening here: what is developing is a test of whether a country has the right to impose its tax law on its own citizens. If Switzerland refuses to co-operate we have a breakdown in international law and order. More than that, we have one OECD member states effectively declaring economic warfare on another.

Feeble Labour folds in the face of anti-tax paranoia
Aug 26 (Guardian) – The UK Labour party should be taking on the cheating and avoidance of the super-rich. Instead they cower in their caves. Even in high times, Labour had no backbone for facing down business interests or anti-tax lobbies. Massed ranks in the City warn that windfall taxes will frighten companies into relocating. Revenue & Customs, though, is more sanguine.

Siemens may settle with SEC in $1.9B bribery scandal
Aug 21 (CFA Institute Financial NewsBrief) - Siemens may be close to settling with the Securities and Exchange Commission after an investigation into a $1.9 billion bribery scandal. The investigation looked into possible illegal payments by the German electronics firm, mostly to gain foreign contracts.

The Institute for Fiscal Studies fisked
Aug 19 (Guardian) - A thinktank that claims to be unbiased is promoting dangerous tax policies that will widen the gap between rich and poor. By Richard Murphy.

Hogan's secret is out in tax probe
Aug 21 (Sydney Morning Herald) - Paul Hogan and his tax accountant have lost their battle to keep their identities secret in their legal stoush with the Australian Crime Commission. Hogan and Tony Stewart are the subjects of Operation Wickenby, an investigation into serious tax fraud and money laundering by wealthy Australians using offshore accounts.

Buiter Provokes Wrath at Jackson Hole, Says Fed Too Close to Wall Street
Aug 24 (Naked Capitalism) - The London School of Economics prof and former Bank of England and European Bank for Reconstruction and Development official has been saying for some time that the Fed suffer from s "cognitive regulatory capture" and has been far too responsive to the needs of Wall Street.

Repositioning of Labuan as IBFC set to gather steam
Aug 13 (The Edge) - An all-out effort is underway to reposition Labuan as the preferred offshore business and financial destination in the Asia-Pacific region for international investors.

Tax crackdown on offshore mortgages
Aug 23 (FT) - The once-popular practice of taking out interest-only mortgages offshore to purchase UK properties is losing its appeal for foreigners who have lived in this country for seven or more years, accountants say.

The global consensus on trade is unravelling
Aug 24 (FT) - With two wars still continuing and violence in Georgia dominating the foreign policy debate; and with the financial crisis and economic insecurity for families dominating the domestic debate, US international economic policy is receiving less attention in this presidential election year than usual.

"Wall Street has lost the war of words"
Aug 22 (Suddeutsche Zeitung) - Nobel laureate Joseph Stiglitz on the strong state, tricks of the investment banks - and a new licensing authority for financial markets. In German. An English translation appears below.

The return of the state: How government is back at the heart of economic life
Aug 21 (FT) - After the collapse of banks and against the current background of mounting speculation about the viability of Fannie Mae and Freddie Mac, the Anglo-American approach to capitalism appears badly flawed. So is a more intrusive state about to stage a comeback at the free market’s expense, emulating the 1930s?

Paul Perraudin, juge d’instruction fédéral, a annoncé sa démission pour le 31 octobre 2008. Il rejoint l’économie privée.
Paul Perraudin, a Swiss crime-fighting magistrate, is leaving his job to join the private sector. In French.

Tax evasion from Danone executives thought provoking
Aug 21 (People’s Daily Online) - According to a Xinhuanet report dated July 23: the NPC Financial and Economic Committee proposed to increase the individual income tax threshold and lower the interest tax. The news stirred up a widespread concern and discussion among main force of taxpayers.

Offshore search nets $50m in unpaid tax
Aug 14 (Sydney Morning Herald) - Tax audits of Australians who have held bank accounts in the tax haven of Liechtenstein have already netted $50 million in unpaid tax and penalties, the Australian Taxation Office has revealed.

How did Merrill Lynch miss the red flags?
Aug 21 (Finance Asia) - A look at Merrill’s role in the transfer of large amounts of money on behalf of family members of Taiwan’s former president Chen Shuibian into Swiss bank accounts.

Probe into Taiwan ex-president leads to Singapore: report
Aug 21 (AFP) — A Taiwanese prosecutor is due to head to Singapore to investigate alleged money-laundering by former president Chen Shui-bian and his family, a report here said Wednesday.

Uganda: Kampala Tops in Tax Fraud, Smuggling
Aug 19 (The Monitor – Kampala) - Central region and Kampala in particular have been identified as the most notorious for tax evasion and smuggling of goods. In an annual report ending June, Uganda Revenue Authority (URA) reports that of all the regions in the country, the central has 49 per cent revenue risk.

Interpol seeks Liechtenstein tax mole
Aug 19 (Telegraph) - A former Liechtenstein bank worker who sparked an international tax evasion probe after allegedly handing over stolen information on ex-clients is now wanted by Interpol himself.

Brit eyes change of domicile
Aug 18 (FT) - Brit Insurance, the Lloyd's of London insurer, has appointed Ernst & Young to advise it on a possible move out of the UK. Brit has been weighing up a move out of the UK for the past few months has has asked the accountancy firm to review a number of alternative jurisdictions that could offer a reduced rate of corporation tax.

Russian Finance Ministry plans to raise taxes and pensions
Aug 17 (IHT) - The Russian Finance Ministry presented Sunday a draft 15-year fiscal strategy that proposed to raise social security taxes from 2010 and reorganize the $162 billion oil wealth fund to back up the pension system.

Opinion: corruption as a popular culture
Aug 24 (San Fracisco Chronicle) - Impunity is a word that comes up over and over in Cambodia, but the blatancy at which corruption occurs is astonishing.

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