Time to end secret accounts

Diane Francis
National Post

Along-overdue crackdown on dirty-money havens such as Switzerland, Hong Kong, Singapore, the Caribbean and others has finally begun. Liechtenstein, Andorra and Switzerland this week caved in to demands by G20 members which are designed to catch tax evaders, crooks and terrorists who hide their money in numbered bank accounts protected by secrecy laws.

Ironically, one of the G20 members — Britain — includes the Channel Islands, among the worst culprits for tax fraud and money laundering. There are also other European Union members with secrecy laws, such as Belgium, Austria and Luxembourg, implicated in many criminal cases.

What’s being demanded is secrecy laws protecting depositors be rescinded or suspended if bona fide governmental or police authorities request information as part of their investigations into tax evasion, money laundering or the proceeds of crime cases.

For years, Swiss, Singaporean and other dirty-money hosts have refused to co-operate or open such accounts to others upon request or even if petitioned to do so within their own court systems.

There is no justification for this. They have been aiding and abetting crimes. They have ignored protestations by nations that cannot collect taxes, or find evidence of theft, because they are hidden offshore.

I have specialized in exposing white-collar crimes in my career, and these countries have been the biggest single problem when it comes to bringing such crooks to justice. Or terrorists. Or corrupt officials.

Countries that aid and abet should be the subject of severe sanctions, a recommendation that the OECD has adopted after years of foot-dragging, studying ad nauseam, as well as heated conflicts among members.

What has changed is that UBS AG was caught and exposed as the money-laundering organization it has mostly been for decades. What’s also changed is the world’s governments are now in charge of the world’s economy, forced in concert to spend trillions to bail out banks and businesses. This has made most realize that global governance is needed to bridle a global economy.

This crackdown will also help deal with other global problems: No secrecy havens means no more Swiss bank accounts for hedge-fund managers who steal; for African dictators who divert billions from their impoverished populations; for drug cartels or for terrorists.

The OECD has led this charge for years, without success, and it’s wonderful something is happening at last.

This week, three capitulated. Those that continue to balk at pressure — such as Singapore, Austria, Panama, Monte Carlo, Hong Kong or the Channel and Caribbean islands — should be punished with economic sanctions as well as travel bans or requirements that anyone travelling to these countries must register and pay an exorbitant exit visa fee to go there.

Sanctions must be global, and national audits must be ongoing. To do this, a World Tax Evasion Organization should be established with multi-lateral legitimacy such as the World Trade Organization. Every nation should be pressured or forced to sign an international extradition treaty, which will include, for the first time, tax evasion as an extraditable offence.

Ottawa and the EU should also revise their income-tax laws and require Canadians and Europeans to pay taxes irrespective of their residency and retroactively. The world’s dirty-money havens are populated by Canadians and Europeans who have taken their homegrown wealth offshore. This practice is not tax evasion but avoidance. It is definitely immoral and should be illegal.


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