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G20: Oops We Forgot to Ask Who Owns Those Accounts.

10 September 2013

Canadians for Tax
Fairness is a member of the Global Tax Justice Network – and one of its most
active and outspoken leaders is economist and researcher James Henry. We asked him
for his take on the G20:

From the New
York Times
to the Globe
and Mail
, there’s been a fair bit of reporting and editorializing
commending the G20 for  “tackling tax
avoidance” by adopting “automatic information exchange” (AIE) as a global
standard,.

From the standpoint of global tax justice campaigners, this
is a step forward – especially with G20 members pledging to implement it by
2015.

But there is a lot to be cautious about and much more work
for us to do.

Like this summer’s G8, the G20 leaders made little real
progress on a measure that will be critical if AIE is to work.  This is the mandatory registration of the so-called
“beneficial ownership” – enabling the transparent and efficient reporting of
the ultimate owners of haven companies and trusts.

Here’s a glaring example: The tiny state of  Delaware  is home to more than 900,000  shell corporations and thousands of trusts –
some of them Canadian, no doubt.  But none
of them are required to register their beneficial owners with tax or law
enforcement authorities. As one leading Panamanian attorney responded when I
asked where he keeps his money: “Oh, Delaware. Great laws, cheap because
there’s so many companies -- and by far the best secrecy.”

So there’s the rub: 
Prime Minister Harper, Finance Minister Jim Flaherty and other key
members of the G20 have to recognize that without strict requirements on
beneficial ownership registration, there won’t actually be much useful
information to exchange. And the real owners of the $170
billion Canadian dollars in tax havens
will remain a convenient mystery.

 

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