Offshore finance

"This article discusses Offshore Finance Centres (OFCs) in islands using Jersey as its case study. Jersey has become an increasingly important conduit for the global circulation of capital, both for Transnational Corporations and wealthy individuals. The OFC dominates Jersey's economy, contributing an estimated 54 per cent of GDP; 20 per cent of employment and a major part of government revenue. Per capita GDP was £18,400 ($27,600) in 1994 making it one of the world's wealthiest small territories. Jersey's apparent success raises the question whether other small islands can also host OFCs. The emergence of Jersey as an OFC in the 1960s is examined, introducing the concept of four 'spaces' that international financial capital could exploit: regulatory space; fiscal space; secrecy space; and political space. Lessons for other islands are then discussed including positive economic impacts such as employment and government revenue generation, before turning to other impacts, particularly issues of external dependence, the ethics of offshore finance, the potential for corruption and whether OFCs are a form of "new piracy". Hosting OFCs may prove to be economically beneficial to some small islands, but not without incurring some costs. In the long-run island OFCs may prove to be one more example of small islands needing to be flexible and highly adaptive in a world of larger economic and political forces.

Key words: tax havens, offshore finance, small states, island economies"

This article explores the question of what happened to European assets in the process of decolonization. It argues that decolonization created a money panic of sorts that led white settlers, businessmen, and officials to seek to liquidate assets they owned and move funds out of the colonial world. Instead of being repatriated to metropolitan countries with high tax rates and exchange controls, money moved to tax havens. Decolonization thus provided an important share of early postwar tax haven business in a period when tax havens and offshore finance expanded during the 1950s and 1960s. In turn, the withdrawal of Euro-American investments from the decolonizing world set the stage for the politics of development and modernization in the coming decades. Ironically, the outflow of funds during decolonization and the subsequent return of some funds in restructured form as investments by multinational and other companies soon caused difficulties in newly independent developing countries. Companies soon found ways to rebook profits to have occurred in a tax haven rather than in the developing world, thus depriving low-income countries from tax revenue. The withdrawal of Euro-American investments from the colonial world during decolonization moreover had implications for the growth of portfolio investment, as funds removed from colonies were often invested through a tax haven onwards in US securities. All in all, decolonization was an economic and financial event that is only beginning to emerge in full detail.

Despite its reputation for the toughest anti-money laundering (AML) enforcement in the world, the United States remains the leading jurisdiction for the incorporation of anonymous shell companies used in grand corruption schemes. States like Delaware and Nevada have become notorious secrecy jurisdictions, frequently used by criminals and kleptocrats for money laundering. This thesis investigates why some U.S. states and not others have become the most secretive incorporation jurisdictions in the world. By employing the metrics from corporate secrecy scholars and NGOs and never-before-collected cross-sectional data on U.S. state incorporation fee revenue, this work reveals the correlates of U.S. state corporate secrecy. Moreover, through an interest group analysis of the corporate policymaking of two states (Delaware and Nevada) it posits a causal logic behind corporate secrecy in the most secretive U.S. states. It highlights how pro-secrecy interests in the United States have gained control over incorporation policymaking in Delaware and Nevada.

Taxation in general and tax evasion in particular are inherently geographical in nature but only a small number of geographers have focused on them. In this progress report I present geographers' research on offshore financial centres alongside the work of researchers from other disciplines to present an overview of what we know about the geographies of tax evasion and avoidance. It is argued that not only much regulatory work but also much research remains to be done on tax havens.
Keywords: offshore financial centre, taxation, tax avoidance, tax evasion, tax haven, economic geography, political geography

This article argues that a nexus exists between private profit-orienteded actors (privateers and hedge funds) — being only lightly regulated by their home countries (Britain and America) — and ‘offshore’ territories located in the Caribbean and elsewhere in the Anglo-Saxon world. This article argues that the ultimate reason for this nexus is the common ‘Lockean’ state/society complex of the UK and the US. The analysis of hedge funds as privateers reveals that both benefit at the expense of others, while the geographic regions in which they are based are virtually the same — London and New York/Boston. Furthermore, this article shows that the hedge fund ‘value chain’ is clearly dominated by the US and the UK. Most hedge funds are based in Offshore Financial Centres (OFCs). While this is commonplace, by introducing the OFC-Intensity Ratio we show that the most intensive OFCs are under the sovereignty of the US and the UK.

The Cayman Islands is a key node in contemporary global finance, yet it is severely under-researched. This paper compiles the first 'anatomy' of the Cayman offshore financial center (OFC), utilizing all sources of publicly available data about the three main segments: banking, direct investment, and portfolio investment. The analysis is performed both diachronically to see when large inflows occurred and geographically to determine what role certain countries play in different segments. This dissection of the Cayman OFC shows that the United States is the largest counterparty in all segments with Japan playing an important role too. In fact, when excluding long-term Treasuries, Cayman is the largest holder of US securities in the world. Hedge funds are the main factor for this strong Cayman-US link. About 60 percent of global hedge fund assets are legally domiciled in Cayman – an extraordinary spatial concentration in such a tiny jurisdiction. A novel contribution to the analysis of the Cayman OFC is the introduction of the Anglo-America/Anglosphere approach. This approach provides one plausible explanation for the unparalleled rise of the Cayman OFC by seeing this jurisdiction as one node in an Anglo-American triangle together with the US and the UK, Cayman's sovereign power.

Since the global financial crisis offshore finance centres (OFCs) have been faced with unprecedented and unremitting pressure from leading states, international organisations and civil society organisations to enhance the transparency of their tax regimes. Superficially the age of austerity, characterised by large and sustained public deficits and popular revulsion against multinational corporations and rich individuals abusing the tax system, appear to have vaporised the obstacles that previously stood in the way of attempts to deliver a robust global tax transparency regime. The G20s pledge to ‘end the era of banking secrecy’ and the OECD’s boast of orchestrating a ‘revolution’ a global tax transparency prompted excited talk of the ‘end of offshore’. Unfortunately this is considerably at odds with the empirical evidence which has seen OFCs continue to thrive in the era of austerity. This paper will seek to argue that the origins of the offshore financial system lie in demands by leading states, international financial institutions and corporate actors for instruments to manage the instabilities and contradictions intrinsic to the neo-liberal economic project. The resilience of offshore financial centres and tax havens reflects responses to the financial crisis, of which austerity is an integral part, that have perpetuated the neo-liberal model. Although many leading actors have made a rhetorical commitment to a clampdown the reality is that offshore financial instruments are central to the delivery of the austerity policies to which they are likewise pledged. The paper therefore predicts that offshore finance will continue to flourish in the age of austerity.

This paper presents the Offshore-Intensity Ratio – a simple and straightforward way to identify which countries and jurisdictions could be seen as offshore financial centres (OFCs). By setting the aggregated amount of external capital booked in a jurisdiction in relation to the size of its domestic economy, we get a ratio that expresses the strength with which the particular jurisdiction has acted as a magnet for foreign capital. Sixteen jurisdictions are identified as probable OFCs, including the Cayman Islands, the British Virgin Islands, Bermuda and Luxembourg, but also Ireland and the Netherlands. A novel visualization shows the role of the largest offshore centres in contemporary global finance.

Abstract This article investigates how recent attempts by the European Union (EU) and the Organisation for Economic Co-operation and Development (OECD) to clamp down on
harmful tax competition will affect small island economies with offshore financial centres (OFCs). It argues that although there are legitimate concerns about the initiatives, the likelihood that small island OFCs will disappear is remote. A confluence of factors have forced the EU and OECD to dilute their original proposals to the extent that while some marginal OFCs may be driven out of existence, more sophisticated OFCs will be unharmed and may even benefit from this supposed regulatory offensive.

Multinational corporations use highly complex structures of parents and subsidiaries to organize their operations and ownership. Offshore Financial Centers (OFCs) facilitate these structures through low taxation and lenient regulation, but are increasingly under scrutiny, for instance for enabling tax avoidance. Therefore, the identification of OFC jurisdictions has become a politicized and contested issue. We introduce a novel data-driven approach for identifying OFCs based on the global corporate ownership network, in which over 98 million firms (nodes) are connected through 71 million ownership relations. This granular firm-level network data uniquely allows identifying both sink-OFCs and conduit-OFCs. Sink-OFCs attract and retain foreign capital while conduit-OFCs are attractive intermediate destinations in the routing of international investments and enable the transfer of capital without taxation. We identify 24 sink-OFCs. In addition, a small set of five countries – the Netherlands, the United Kingdom, Ireland, Singapore and Switzerland – canalize the majority of corporate offshore investment as conduit-OFCs. Each conduit jurisdiction is specialized in a geographical area and there is significant specialization based on industrial sectors. Against the idea of OFCs as exotic small islands that cannot be regulated, we show that many sink and conduit-OFCs are highly developed countries.

El autor desarrolla la actual coyuntura de las regulación panameña para las acciones al portador. Luego de comentar la inclusión de Panamá a la lista gris del GAFI, el autor describe la Ley 47/2013 y sus principales implicancias legales, así como los riesgos tributarios asociados. Posteriormente, comenta la reciente Ley 18/2015, entrada en vigencia el 4 de mayo de 2015 y que, en esencia, redujo los plazos para la aplicación del denominado régimen de "inmovilización de acciones". Finalmente, el autor se plantea el futuro de Panamá como centro de estructuras internacionales y los nuevos retos para continuar usando sus compañías, sin perder la confidencialidad de la propiedad accionarial.

This article addresses how global art markets are becoming an outlet of choice for those wishing to hide assets. Recent efforts by the OECD and the U.S. Treasury have made it more difficult for people to avoid taxes by taking money "offshore". These efforts, however, do not cover physical assets such as fine art. Citing data collected in Luxembourg-a jurisdiction angling to become a worldwide leader in "art finance"-I discuss the characteristics of this emerging system of opaque economic activity. The first of these is a "freeport", a luxurious and securitized warehouse where investors can store, buy, and sell art tax free with minimal oversight. The second element points to the work of art-finance professionals, who issue loans using fine art as collateral and develop "art funds" linked to the market value of certain artworks. The final elements cover lax scrutiny by enforcement authorities as well as the secrecy techniques typically on offer in offshore centers. Combining these elements in jurisdictions such as Luxembourg can make mobile and secret the vast wealth stored in fine art. I end the article by asking whether artworks linked to freeports and opaque financial products have become the contemporary version of the numbered Swiss bank account or the suitcase full of cash.

This tellmap shows the real size and intensity of (offshore) financial centers. We combine data on foreign securities (Coordinated Portfolio Investment Survey by the International Monetary Fund) and on foreign deposits/loans (Locational Banking Statistics by the Bank for International Settlements) at the end of 2011. Capturing the two by far most important components allows a reasonable approximation of the real size of international (and offshore) financial centers while avoiding double counting.

At first sight, Mexico appears to be a textbook example of a state affected by offshore finance. Offshore financial services allow corporations and the wealthy to plan taxes, avoid regulations or to launder money. The literature holds that large, developing, open economies, with geographical proximity to offshore centers and problems of crime and corruption are particularly affected by offshoring. By this logic, we should expect Mexico to show a significant demand for offshore financial services. Yet, new empirical evidence derived from interviews and banking statistics suggests otherwise. Mexican firms and individuals make only limited use of offshore finance. The article explains why. Building on a Weberian notion of the state, the article shows that the historically exclusive nature of Mexico’s state concentrates political and economic power such that the onshore economy offers similar rents for economic elites as offshoring. Moreover, in instances where economic actors use offshore services it is driven by banking, not taxation. These findings have two theoretical implications. First, they confirm that institutions matter, though differently than hitherto thought. Second, we must look beyond taxation to include banking into our analyses.

Multinational corporations use highly complex structures of parents and subsidiaries to organize their operations and ownership. Offshore Financial Centers (OFCs) facilitate these structures through low taxation and lenient regulation, but are increasingly under scrutiny, for instance for enabling tax avoidance. Therefore, the identification of OFC jurisdictions has become a politicized and contested issue. We introduce a novel data-driven approach for identifying OFCs based on the global corporate ownership network, in which over 98 million firms (nodes) are connected through 71 million ownership relations. This granular firm-level network data uniquely allows identifying both sink-OFCs and conduit-OFCs. Sink-OFCs attract and retain foreign capital while conduit-OFCs are attractive intermediate destinations in the routing of international investments and enable the transfer of capital without taxation. We identify 24 sink-OFCs. In addition, a small set of five countries – the Netherlands, the United Kingdom, Ireland, Singapore and Switzerland – canalize the majority of corporate offshore investment as conduit-OFCs. Each conduit jurisdiction is specialized in a geographical area and there is significant specialization based on industrial sectors. Against the idea of OFCs as exotic small islands that cannot be regulated, we show that many sink and conduit-OFCs are highly developed countries.

Despite its reputation for the toughest anti-money laundering (AML) enforcement in the world, the United States remains the leading jurisdiction for the incorporation of anonymous shell companies used in grand corruption schemes. States like Delaware and Nevada have become notorious secrecy jurisdictions, frequently used by criminals and kleptocrats for money laundering. This thesis investigates why some U.S. states and not others have become the most secretive incorporation jurisdictions in the world. By employing the metrics from corporate secrecy scholars and NGOs and never-before-collected cross-sectional data on U.S. state incorporation fee revenue, this work reveals the correlates of U.S. state corporate secrecy. Moreover, through an interest group analysis of the corporate policymaking of two states (Delaware and Nevada) it posits a causal logic behind corporate secrecy in the most secretive U.S. states. It highlights how pro-secrecy interests in the United States have gained control over incorporation policymaking in Delaware and Nevada.

In this article, I bring ontological anthropology into a register that is recognizably political and critical in orientation. My intention is to apply the powerful conceptual approach of the “ontological turn” in order to address a contemporary politico-economic problem of acute importance: offshore finance. Drawing from archival and ethnographic data collected in Luxembourg, I argue that officials from this country’s offshore financial center have employed ontology in particular ways in the service of a drastically imbalanced global capitalist system. In doing so, I contend that anthropologists are not the only people at present engaged in an “ontological turn”; so too are the thousands of bankers, lawyers, fund administrators, and accountants currently at work in Luxembourg. Thus, in exposing anthropologists to a set of concurrent “ontologies,” I move away from how the turn’s proponents within the discipline have to date thought of their ontological explorations as pointing to a somehow more desirable and progressive future.

Multinational corporations use highly complex structures of parents and subsidiaries to organize their operations and ownership. Offshore Financial Centers (OFCs) facilitate these structures through low taxation and lenient regulation, but are increasingly under scrutiny, for instance for enabling tax avoidance. Therefore, the identification of OFC jurisdictions has become a politicized and contested issue. We introduce a novel data-driven approach for identifying OFCs based on the global corporate ownership network, in which over 98 million firms (nodes) are connected through 71 million ownership relations. This granular firm-level network data uniquely allows identifying both sink-OFCs and conduit-OFCs. Sink-OFCs attract and retain foreign capital while conduit-OFCs are attractive intermediate destinations in the routing of international investments and enable the transfer of capital without taxation. We identify 24 sink-OFCs. In addition, a small set of five countries - the Nethe...

This article examines the relationship between nationalistic mobilisations, hidden funds and undisclosed campaign contributions, commonly known as dark money. Contextualising Brexit alongside the Icelandic economic crash of 2008 shows how nationalist mobilisation and racism can secure economic and political interests for a small minority and thus create space for what Zygmunt Bauman has called 'evasion' or 'slippage' as a primary technique of power in the present. Both the build-up to Brexit and the Icelandic economic crash were characterised by a strong national-centred rhetoric of 'us-the-nation' versus 'others' that diverted attention from massive minority interests, which had access to hidden funds. The Panama Papers showed that many of the same people celebrated in Iceland as the embodied representation of the country were simultaneously moving money into tax havens. Exposés have also revealed the way that dark money secretly funded campaigns using anti-migrant racism to facilitate the Brexiteers' longer-term interests.

Despite the emergence of the International Business Sector as a strong contributor to employment, government revenues and foreign exchange earnings in Barbados, the paucity of timely, comprehensive and accurate industry data has constrained detailed academic research into the sector and its attendant dynamics. This paper therefore attempts to fill the gaps in the understanding of the sector and its importance to Barbados by analyzing both the international business environment and the inter-temporal performance of the sector. The authors find that, in general, Barbados’ offshore sector is well-regulated and provides an attractive environment for offshore business. This is reflected in the performance of some sub-sectors, in particular, the banking and financial services and general business sub-sectors, which have performed relatively well compared to other offshore centres. However, the performance of the broad international business sector still lags behind that of other major offshore centres. We find that general stability in the political, legal and economic environment is a necessary but perhaps insufficient condition for attracting offshore firms and it appears that a heterogeneous approach to the sub-sectors within the industry is necessary to ensure their individual success.

This article examines the relationship between nationalistic mobilisations, hidden funds and undisclosed campaign contributions, commonly known as dark money. Contextualising Brexit alongside the Icelandic economic crash of 2008 shows how nationalist mobilisation and racism can secure economic and political interests for a small minority and thus create space for what Zygmunt Bauman has called ‘evasion’ or ‘slippage’ as a primary technique of power in the present. Both the build-up to Brexit and the Icelandic economic crash were characterised by a strong national-centred rhetoric of ‘us-the-nation’ versus ‘others’ that diverted attention from massive minority interests, which had access to hidden funds. The Panama Papers showed that many of the same people celebrated in Iceland as the embodied representation of the country were simultaneously moving money into tax havens. Exposés have also revealed the way that dark money secretly funded campaigns using anti-migrant racism to facili...

This article brings together trends in Critical Discourse Analysis dating from the 1980s – which examine how language use and ideologies (re)produce social inequality – with current research in the social sciences on neoliberalism and other emerging politico-economic formations. The article addresses such a problematic with an empirical case: the language strategies, dubbed langue de bois, that people affiliated with Luxembourg’s offshore financial center employ to justify their practices. The contribution herein surveys the political rationality of the country’s financial center by analyzing the langue de bois that its representatives and boosters use. These language strategies, furthermore, enable Luxembourg’s finance elites to socialize the domestic public’s understanding of their activities.

This blog post, discusses existing research on the still rather opaque topic of offshore finance. Subsequently, it is outlined how the CORPNET team is going to shed some new light on this crucial topic by analyzing transnational ownership ties of multinational corporations utilizing complex networks methods and the 'big data' provided by the Orbis database. Offshore finance is no longer the small and peripheral phenomenon it once was. During the last four decades, offshore finance has become a crucial element of the contemporary international political economy. Today, offshore financial centers (which can also be called tax havens or regulatory havens) constitute central nodes within global financial markets. Gabriel Zucman has recently estimated that financial wealth to the tune of almost US$8 trillion is held offshore – a sum that amounts to almost 50% of the GDP of the EU or the US. This causes a global tax revenue loss of approximately US$200 billion. Estimates for offshore wealth by the Tax Justice Network even range between US$21 and US$32 trillion. Arguably, high-net-worth individuals (HNWIs) and big multinational corporations (MNCs) hold the vast majority of this offshore wealth, which leads directly to questions of increasing economic inequality. The impact of offshore finance not only pertains to economic inequality but also to questions of corporate accountability and transparency – both of which are pivotal to the proper functioning of any market economy. For this reason, the Tax Justice Network does not use the term offshore financial centers or tax havens, but instead calls them secrecy jurisdictions, because secrecy and opacity are major reasons why foreign economic actors use these countries and territories. With this secrecy and lack of accountability come big risks. The corporate scandals of Enron, Olympus and Parmalat as well as the near-collapse of the large hedge fund LTCM all involved subsidiaries in tax havens. In addition, these secrecy jurisdictions have functioned as legal domiciles for the creation of complex structured financial products, such as collateralized debt obligations (CDOs) and other asset-backed securities (ABSs). According to Photis Lysandrou and Anastasia Nesvetailova, these opaque financial products have contributed to the development of the global financial crisis, or at least have aggravated it significantly.

Özet
Vergi devletin en önemli gelir kaynağıdır. Kamu hizmetlerinin aksamadan yürütülerek, kalitesinin artırılabilmesi en temelde iyi işleyen bir vergi sistemine bağlıdır. Bu bakımdan devletin vergi hasıla-tını azami düzeye çıkarabilmesi, beraberinde vatandaşların kamu hizmetlerinden elde ettiği fayda düzeyini de yükseltecektir. Ancak vergi hasılatının artırılmak istenmesi çeşitli ekonomik kesimlerde zaman zaman olumsuz tepkilere de yol açabilmektedir. Örneğin mükellefler vergiye uyum konusunda isteksiz davranarak, vergiden kaçınma veya vergi kaçırma fiillerinde bulunabilirler. Bu noktada vergi cennetleri, devletlerin önemli ölçüde gelir kaybına uğramasına yol açabilmektedirler. Zira özellikle kıyı ötesi finansal işlemlerin yoğunlaştığı küreselleşme sürecinde, vergi cennetleri, vergi yükümlülü-ğünden kurtulmanın önemli bir aracı haline gelmiştir. Bu çalışmada, vergi cennetleri sorunu 2016 yılında yaşanan " Panama belgeleri skandalı " temelinde ele alınacaktır. Çalışmanın amacı, vergi cen-netlerinin ekonomik ve sosyal etkilerinin, yaşanan bu güncel deneyim ışığında incelenmesidir. Abstract Tax is the most important revenue search of the state. Executing of public services without disruption and increasing its quality fundamentally depends on a well functioning tax system. In this respect maximizing the state's tax revenue will also increase utility level of citizens from public goods. But when the state desires to increase tax reveneue sometimes it can also lead to negative reactions in several economic segments. For example, taxpayers can be reluctant for tax compliance and they act tax avoidance or tax evasion behaviour. In this context, tax havens can lead to loss the state's income significantly. Because, especially in the globalization process which offshore financial transactions is intensified, tax havens have become an important tool of getting rid of tax liability. In this paper tax havens issue will be dealed on the basis of the " 2016 Panama papers scandal ". Aim of the study is to examine the economic and social effects of tax havens in this current experience.

Luxembourg, Liechtenstein, Switzerland, Delaware, Jersey, The City, the Cayman Islands: have you ever wondered what the landscapes of a tax haven might look like? When a state accommodates more holding companies than inhabitants, when just one of its buildings houses the mailboxes of 300,000 companies, including Google, Apple, Coca-Cola and some 378 firms belonging to Donald Trump, what is the resulting atmosphere? What is the reality behind the addresses mentioned in the Panama Papers? It is with this kind of question in mind that the Paris-based collective RYBN embarked on a series of documentary trips to certain countries which have made tax evasion the basis of their economy…

The repayment of British wartime debt to India Egypt and other countries was long delayed and ultimately repaid only in nonconvertible sterling; thereby delaying the modernisation of these economies, even as it enabled London's role as an international financial centre, and the home of laundered money from all over the world.

"This paper addresses why the relatively unknown island of Jersey emerged as a major Offshore Finance Centre (OFC) during the 1960s. Was the OFC purely the result of the context of the 1960s and the significant changes in intemational banking, especially in London, i.e. was Jersey just a child of its times, or was there more to it than that?
Orthodox intemational banking theory would suggest that the location of OFCs is based upon issues of taxation or regulatory differentials, bank secrecy and political stability. However, this paper uses a materialist, fractions of capital approach to
analyse the political economy of the onshore state and its specific relationship to its dependent island territories. This paradoxical political relationship underpins the feasibility of OFCs. Arguably, UK financial capital had reached hegemony by
the 1960s, giving it the effective regulatory and fiscal 'space' for banking innovation as first manifested in the London offshore currency markets (Eurocurrencies), and then later in the concomitant emergence of small island OFCs such as Jersey.

Key words: tax havens; offshore finance; intemational banking; financial services; island economies, small states"

"The Jersey island Offshore Finance Center (OFC) model may be used for other small island economies (SIEs) wishing to exploit offshore finance as a development option. Although the Jersey model can not be copied precisely by other SIEs, the key factors of political stability, minimal regulation, secrecy, low tax, proximity to a large developed economy and basic communication links could allow certain islands to host OFCs. The benefits of hosting an OFC outweigh the costs, and the increasing global offshore market indicates potential income generation for some OFCs located near the emerging supraregional blocs.

key words: offshore finance, tax havens, small states, island economies"