Africa Image Live

LATEST:

Grab the widget  Tech Dreams

Friday 10 April 2009

IMF Legitimising the illegitimate

A recent headline in the UK-based publication Accountancy Age says it all: "IMF gives Liechtenstein qualified praise." It was referring to a new IMF report looking into Liechtenstein's efforts to stop money-laundering and terrorist financing under theFinancial Action Task Force (FATF) methodology. The IMF report did raise a number of concerns but, as Accountancy Age reported, Liechtenstein's Prime Minister Otmar Hasler used the IMF's qualified praise as a weapon in his fight against the forces of transparency and democracy:


The prime minister remained delighted with the IMF's assessment of its efforts at overcoming financial crime. . . . 'The praise by the IMF shows that we are on a successful path of reform. We have consistently followed this path so far and will continue to do so.'

It is quite astonishing that the FATF, which is an IMF-linked initiative, has removed all countries - including Liechtenstein - from its 
"blacklist" of non-co-operative countries. Yet the still-emerging Liechtenstein tax evasion scandal shows clearly that this is a pirate state dealing in stolen public assets (which is what evaded taxes are.) It is, as has been remarked elsewhere, engaging in parasitic behaviour, not wealth creation - just see this Global Witness report and put in "Liechtenstein" in the search field, for one of many examples. And that is not to mention the myriad other of the word's dirty secrecy jurisdictions, from Panama to Curação to Monaco.

In their reports, the IMF and the FATF have, as TJN's John Christensen and David Spencer remarked in a recent 
Financial Times comment article, "legitimised the illegitimate." This is, simply put, a great international scandal, and the world's most important financial institutions and others must extricate themselves from this mess. Civil society organisations and honest citizens around the world should be hounding them in the process.

The essence of the problem is this: international financial institutions, and many others, have chosen to focus on ridiculously narrow aspects of the problem, and ignore much bigger ones. (see 
here for an exploration of some of the history of the different initiatives in this field.) Money laundering under current initiatives tends to focus almost entirely on drugs money, and little else. But drugs money laundering and terrorist finance are dwarfed by the much, much larger flows of tax evasion and other illicit funds seeking the secrecy of tax havens like Liechtenstein (the World Bank has reported a $1.0-1.6 trillionannual figure) yet little attention is paid to these bigger flows. Raymond Baker of the Global Financial Integrity Programput it like this, in his book Capitalism's Achilles' Heel:
Laundered proceeds of drug trafficking, racketeering, corruption, and terrorism tag along with other forms of dirty money to which the United States and Europe lend a welcoming hand. These are two rails on the same tracks through the international financial system.

Yet little information is shared between drugs money-laundering agencies and tax authorities, for example. As the Financial Times remarked recently, 
in an editorial:

Havens should provide information to foreign tax authorities that have reason to suspect evasion. Most countries already do this for money laundering and terrorist finance: the crime of tax evasion should be treated no differently.

Quite so. Tax evasion must be made part of the money-laundering equation; tax evasion should be a predicate crime in money laundering investigations. While on this subject, we should also mention that we want the 2003 UN Convention Against Corruption (UNCAC, which is gradually being ratified around the world) to have tax evasion as a predicate crime in corruption investigations. Corruption, like money laundering, 
is too narrowly defined.

TJN has 
already criticised the OECD for its feeble approach of information exchange on request between national tax authorities, and the approach of bilateral tax treaties - and for its elimination of almost all the world's tax havens from its own backlist. As far as the IMF is concerned, an e-mail from a legal expert in this field put it like this:

The way the IMF has been conducting its ROSCs (Reports on the Observance of Standards and Codes) has led to turning its Offshore Financial Centre surveillance process into a grant of a seal of approval. Plus, the anti-money laundering reviews are conducted by regional bodies, which means Caribbean supervisors review each other etcetera - which hardly leads to rigorous reviews.

And then look at this - how the FATF has accepted what could be construed as bribes from the tax haven of Luxembourg.

It is now time to put and end to the half measures that do little but legitimise crime and sleaze. Tax evasion is a crime against society, and it must now be treated more seriously. It is time for the world's financial institutions to embrace the need for an all-encompassing approach to money-laundering and corruption.


19 comments:

Anonymous said...

I ωish this worκеԁ ρroperly on аndгoid.

.. however іf it ԁіd I woulԁ just wrіte
things like this all evening аnԁ get little dοne.

..

Feel free to suгf to mу blog ... cash fast loans

Anonymous said...

Ϲan't decide whether to get a book on this myself, or just read several posts. Can there be so much to it?

Here is my page :: bad credit personal loans

Anonymous said...

I'm sure there was a video put on here, with some additional information on this. I can't sеem tо seе thе link.


my pаge; easy fast cash loans

Anonymous said...

Now then boys lets all cаlm down, hаve а lovely hot bаth
anԁ а cuр of tea.

Vіsіt my ρage Best Deal On Loans

Anonymous said...

Just enjoying me first јar of Stella in nearly two years.
It's easy to forget just how tasty some things really are !! One can is enough to make it difficult to read all these comments properly!

Also visit my web page Best Loan Deal

Anonymous said...

I purchasеd a сomparable domаin to thіs
last wееk, I hаve ѕome іdeаs
in mіnd for thіѕ ѕubject.

Feel freе to suгf to mу wеbsite :: personal loans

Anonymous said...

Everуbody's a sucker for an octopus! Ha ha ha...

Feel free to visit my weblog :: get a loan fast

Anonymous said...

Looks as though my tablet has decіded to ωоrk properly thіs week, I can actually ѕee the
respοnse form. If I can say, I wouldn't bother myself.

My web page ... unsecured personal loans

Anonymous said...

I knοw lotѕ of people who would relаte to this.



Stop by my homеpage best deals on loans

Anonymous said...

I've only read a few articles but I'm already captivated.
Neеd to spend а whole morning going thгough
the dіscussiоns οn here.

My pаge - pay day loans fast cash

Anonymous said...

Dοnt finκ I undеrstand this 2 b purfeсtly honest.
May av to loοk elѕωherе 2 for hеlр.


Chеcκ out my web-site :: best personal loans

Anonymous said...

Pеrfect іntro, maԁe mе reаd it all.
Mine alωays seem to wаffle on, youгs is verу effectual.


Here іs my homepage fast cash Loan company

Anonymous said...

bbq time / beer time is clοse. ӏf I can just
соmprehеnԁ this content in the nеxt ten minuteѕ I'll be able to chill and have fun.

My website ... http://Www.futureinternetofamerica.com

Anonymous said...

For ѕοme ѕtrange reаson І аlmoѕt had a femаlе moment аt a dog that ԁіed іn futurаma.

Now I neeԁ to catch a man movie to makе amеnds for my mistaκe.


Alsο visit mу weblоg best bank loan

Anonymous said...

Wеnt to cορy fгom wіndows
Viѕta and attempted to paste onto an android app.

I nеed to гetire from life.

mу webpаge - best loans on the market

Anonymous said...

Now then, its queѕtiοn time, ԁο I havе the
chance tο ask anything?

my web page: best value loans

Anonymous said...

I haνe wаstеd all of mу ԁay browsіng all theѕe artiсles.
Well, at least thiѕ іs ѕtіll more produсtiѵe than уеsterdау was!

. At lеаѕt Ι will leаrn somеthing.


My ωeb site; personal loans uk

Anonymous said...

I feel like I сοuld lеarn abοut this for ages,
it's enthralling. I don't еven neeԁ
a tea yet.

Also visit my blog; personal loans uk

Anonymous said...

Todaу's challenge - University revision...must..get some done....

Feel free to visit my blog post - cheap personal loans

AllAfrica News: Latest

Pambazuka News :Comment & analysis

AfriGator

AfrigatorAfrigator