Friday, April 19, 2013

'Secrecy for sale' offshore bank leaks draw global responses



By Emily Menkes, Michael Hudson and Kimberley Porteous of the ICIJ


The International Consortium of Investigative Journalism (ICIJ) investigative series on offshore secrecy – which draws from a cache of 2.5 million leaked secret records – has ignited reactions around the globe, including the Pacific.

Since the initial release of stories by the ICIJ and its media partners across the world, public officials have issued statements, governments have launched investigations, and politicians and journalists have been debating the implications of the records and the reporting.

Among reactions and responses:
  • Bayartsogt Sangajav: resigned his post after offshore account revelation: Bayartsogt Sangajav, deputy speaker of the Mongolian Parliament, has reportedly resigned from his post following ICIJ's revelations about his undeclared offshore company and bank account. In a parliamentary session he was asked to explain his actions. Several MPs called for further disciplinary action, including expelling him from Parliament entirely.
  • Santosh Kumar Agarwal (Kedia), a member of the board of directors for the Antwerp World Diamond Centre, has resigned from the organisation after his offshore dealings were revealed: “In the interest of the integrity of the Antwerp World Diamond Centre as [an] organisation and the industry as a whole, Kedia has taken the initiative to withdraw from the AWDC's board of directors, awaiting the outcome of a potential investigation,” said a statement released by the company.


  • French President Francois Hollande has published the personal financial details of  government ministers on the official government website, following the Jerome Cahuzac and Jean-Jacques Augier offshore assets scandals. The list of assets includes details of bank accounts, life insurance, property and other expensive items such as cars, art works and antiques. Various properties in Paris and the south of France have already been itemised by ministers, as well as designer lounge chair (Industrial Renewal Minister Arnaud Montebourg) and a David Beckham t-shirt (Culture Minister Aurelie Filippetti).
  • European Council President Herman Van Rompuy announced that tax evasion will be discussed at the next European Council in May, saying "we must seize the increased political momentum to address this crucial problem".
  • BVI government officials have announced they are opening a new business headquarters in Hong Kong, with Orlando Smith, BVI Premier and Finance Minister, confirmed to officiate the opening: Executive director of BVI International Finance Centre, Elise Donovan, said the data obtained by the ICIJ was "a small fraction" of the total number of BVI firms. She later added, "We want to reassure clients in Hong Kong and the region that this is an isolated incident. We remain committed to clients' privacy and confidentiality."
  • The Swiss and US governments are investigating a possible solution to the dispute over wealthy Americans using Swiss banks to hide their money. These talks come at time when Switzerland’s banking sector is under increased pressure to surrender personal information about suspected tax evaders. Swiss Finance Minister Eveline Widmer-Schlumpf said all countries should be treated equally in the drive for bank transparency. "We consider it very important that rules must apply to all and are engaging ourselves for a level playing field in multilateral forums," Widmer-Schlumpf said. 
  • German Chancellor Angela Merkel urged UK's PM David Cameron to crack down on tax havens during talks in Berlin, following a public outcry in Germany over the "offshore leaks." Sources "close to Cameron" claim he was actually the first to raise the issue, spelling out how his government was cracking down on tax avoidance in places such as Jersey and Guernsey.
  • Russian Deputy Prime Minister Igor Shuvalov: Russian Deputy Prime Minister Igor Shuvalov is moving his offshore assets back to Russia after ICIJ's revelations that Shuvalov's wife Olga Shuvalova was either a shareholder or owner of several secretive offshore entities. The Shuvalovs had a declared income of $12.7 million in 2011, most of which was earned by Olga.
  • Spanish political party Unión Progreso y Democracia submitted written questions to the Spanish Congress today in the wake of French President Hollande's announcement that French banks had to declare their tax haven subsidiaries. The questions read: Is the government going to present in the European institutions any initiative to eradicate the tax havens within the Member States? and Is the government going to force banks to disclose the subsidiaries they have in tax havens and what are their activities?
  • President Hollande called for tax havens to be "eradicated": "French president François Hollande called for "eradication" of the world's tax havens and told French banks they must declare all of their subsidiaries. He also announced the creation of a special prosecutor to pursue cases of corruption and tax fraud. French government ministers have been ordered to declare their assets publicly within days.

  • Luxembourg's Prime Minister Jean-Claude Juncker announced his country plans to lift bank secrecy rules for European Union citizens who have savings based in the country, ending decades of bank secrecy in Luxembourg. "We are following a global movement," Juncker told Parliament in a state-of-the-nation address. The new transparency regime would begin in January 2015. Austria is now the only EU country not sharing data about bank depositors. In a recent interview, Austrian Vice Chancellor and Finance Minister Spindelegger Fekter said: “How much money someone has in the bank is a matter between the bank and the customer and is no one else’s business."
  • Algirdas Semeta, European Union Tax Commissioner stated in a recent interview that it is time to move “quicker and harder” against tax evasion. He said the “growing willingness to act” increases the likelihood of a more coordinated EU stance against tax havens.
  • Europe’s five biggest economic powers — Britain, France, Germany, Italy and Spain — announced they would begin regularly exchanging banking and tax information as a way of identifying tax dodgers and other financial wrongdoers.
  • Meanwhile, the British Virgin Islands (BVI) authorities are not fans of the ICIJ investigation. The BVI premier and Finance Minister Orlando Smith told the South China Morning Post that "BVI authorities are actively investigating how this private information has been illicitly obtained and used to attack the BVI financial services industry, which operates compliantly within international guidelines and the law."
Republished from the ICIJ open-source public integrity website known as the Global Muckraker.

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