At the United Nations, Tax Justice Network has been urged to coordinate global efforts to end overseas tax evasion and corruption as markets worry that Britain is continuing to warn of sequestering its overseas territories from fiscal transparency.
Commenting on the Japan Finance and Insurance Index’s ranking of the size and secrecy of its offshoring industry in 2018, its chief executive, Alex Cobham, said large financial centers have shown no willingness to voluntarily reform.
He said: “The 2018 release confirms the long-term situation that the richest and most powerful countries continue to pose the largest risk in the world – Switzerland and the United States have been identified as key promoters of illicit financial flows.”
“If we are to end tax evasion, corruption, fraud and money laundering, the world’s major financial centers need to clean up their behavior, and because they are unwilling to do so, the United Nations should make a global convention to end the financial secrecy.”
According to the survey, Switzerland, the United States and the Cayman Islands are the biggest contributors to global financial secrecy and are released every two or three years.
Britain is not featured in the top 10 confidential jurisdictions. However, TJN warned that it is continuing to discourage measures to increase transparency by protecting its overseas territories, the former colonies, some of which have become tax havens, as part of the reform.
TJN acknowledged that Britain made progress domestically, including the introduction of a register of beneficial ownership for domestic enterprises, but said the government’s efforts to encourage British overseas territorial reforms have stalled since the 2017 election.
Instead, it actively protects them from international scrutiny, such as lobbying to remove them from the EU tax shelters released in 2017.
A spokesman for the UK Ministry of Finance said: “Overseas territories are independent jurisdictions and their own elected government determines their own financial affairs.
“Thanks to our leadership, all of our Crown Dependencies and Overseas Territories and Financial Centers are committed to all global tax transparency standards, including common reporting standards, which make it difficult for companies and individuals to keep their funds overseas.
The ranking of TJN in the United States rose from the third in 2015. The group said the increase was mainly due to the “substantial increase in the market share of offshore financial services” and the lack of confidentiality.
The United States also refuses to participate in international initiatives to combat financial secrecy, such as the automatic exchange of information between countries. Instead, it has taken its own course by imposing fines on overseas financial institutions and detaining the information of U.S. taxpayers.