“If Cameron thinks he can intimidate us, he better think
again. If the UK tries to make us report the real names of foreign account holders,
we’ll cut off Britain’s air travel and Internet service, and of course
terminate all banking relations. And that’s just a start. There’s more we can
do. Be afraid, David.”
So said Largesse de Trop, the Cayman Islands’ Minister of Ongoing
Fraud, in a press release responding to the anti-corruption summit now being
held in London. It seems the entire Cayman Islands’ government is defiant, and
ready to punish the UK and other countries if they try to force the mighty
Caribbean nation into compliance with international banking and fraud reporting
standards.
You think this quote is made up? Well, it is. But the
sentiment is real. Britain and the other western nations participating in the
anti-fraud effort describe themselves as being unable to get the Cayman Islands
and other tax havens to comply with essential reporting standards.
Cameron, the UK government tells us, has been trying for a
year or so to force into compliance the various British dependencies that
represent half or so of all fraud. But they’ve defied him. And what more can the
PM do than send a few more angry letters? I mean, these places are incredibly
powerful, right?
The situation is absurd. Large, powerful nations are
pretending they can’t do anything about the criminal activities of small
countries whose entire military might is essentially a bunch of old guys
driving taxis.
If Cameron really did care about resolving the
multi-trillion dollar fraud that offshoring banking represents, he and his
partners could simply say, “Comply by July 1 or we’ll cut off all air service,
banking connections, and Internet. And we’ll be watching financial transfers in
and out in the meantime.”
The UK government can be unflinchingly tough on small scale benefits
fraud. Why not be equally determined
with criminals whose activities undermine the global economy and make it harder
for every honest taxpayer to make ends meet?
And the other members of the EU shouldn’t get a free pass
just because they don’t have a bunch of criminal entities masquerading as crown
dependencies. The EU, individually and collectively, has for decades been
complaisant in the face of tax fraud.
When leaks showed that the Swiss branch of HSBC was actively
engaged in helping people evade taxes, people in Brussels expressed surprise.
Really? HSBC had been actively soliciting wealthy clients for many years. And
no one in the political or bureaucratic system knew about this? Nonsense.
The same is true about massive corporate tax avoidance. The release
of the Lux Leaks papers in 2014 told the public something all the leaders
already knew but had decided to ignore.
And those same leaders know, but the public doesn’t, that
the vast and growing scourge of Internet fraud is made possible by offshore
banking secrecy. When someone raids your bank account, or imprisons your
computer until you pay ransom, the authorities are powerless to trace the funds
because they go through one or more anonymous accounts, accounts held in banks
that are protected by a country that profits from your misery.
If the anti-corruption summit fails to take concrete,
immediate action to shut down anonymous offshore banking and reform international
taxation, the public will know for sure that the real centers of fraud aren’t
in offshore dependencies but at 10 Downing Street, in the Bundeskanzleramt , the Elysee, the
Palazzo Chigi, and the White House.
