New leaked data from @ICIJorg provide more evidence how financial secrecy allows Russian elites to evade sanctions - and how prestigeous Western advisors enable this fraud.
The new leaks, from Alpha Consulting, an offshore services provider based in the Seychelles, confirm several trends we already knew:
1) Russian elites rely heavily on the opacity, and favourable tax rules, provided by company structures in Cyprus and the British Virgin Islands (alongside other jurisdictions) to conduct their 'offshore affairs'
2) Russian elites - just like other elites - have the help of prestigeous Western advisors in taking advantage of financial secrecy and favourable tax rules. PwC, EY, RBS, a host of well-known law firms, feature centrally here.
And that's important: This is *not* something that happens on far-off sandy beaches alone. These abuse are enabled, front and center, by power brokers in London, New York, Singapore etc.
Research on these "enablers" clearly shows their global reach, strong presence in secrecy jurisdictions, and yet centralised control - such as in this great mapping from @RichardJMurphy and @thesailaway_CPH:
.@EBHarrington's research on the offshore wealth advisory world has shown how these advisors play an ever-more-intricate "cat and mouse" game with authorities, all in the name of wealth preservation for global elites:
This is a key "double role" - professionals shaping globalization in their own interests *and* for the elites they serve. They are the "Lords of the Dance":
3) Financial secrecy is exploited *specifically* to avoid sanctions
Shuffling around company structures through shell companies, opaque ownership, makes it hard/impossible for authorities to identify true ownership of assets.
That's why discussion of radical new asset ownership transparency is now emerging. Otherwise, our current sanctions - like other regulation (e.g. tax) - will remain highly ineffective.
What has the last decade of tax haven leaks revealed about Russian offshore wealth?
A comprehensive 🧵:
Before we begin, it must be said that Russian elites are not alone in hiding wealth offshore. Offshore wealth is a prevalent, global phenomenon, estimated in the magnitude of 10% of global GDP - per @annette_als@gabriel_zucman and N. Johannesen:
In this thread, I'll be collecting resources that can help us understand the just-leaked #PandoraPapers, including on the underlying dynamics and what we might do in response:
A massive trope of leaked from offshore service provides from several countries - the Seychelles, Panama, Hong Kong, Belize, BVI, Cyprus, Switzerland and Dubai
More like the #PanamaPapers than the #ParadisePapers, the #PandoraPapers reveal offshore investments and ownership structures of wealthy individuals, high-profile politicians and celebrities.
Logan Wort talks about US pressure for mandatory binding arbitration in the new global tax deal (which will be elective for countries with low capacity):
"That is not the best situation, but that was the best we could get out of it."
I understand why some NGOs and critical commentators have framed the new OECD Inclusive Framework deal as a disappointment and a shameless revenue grab by rich countries.
But I think there's some risks to that framing. 🧵...
There is certainly some truth to that: The revenue impacts of the reforms are skewed in the favour of (some) rich countries (because more power was exercised on behalf of their interests than of e.g. lower-income countries, undoubtedly).
130 countries just agreed a *historic* (yes, actually!) two-pillar global tax reform with a global minimum tax of at least 15% and reallocation of taxing rights to market countries:
Going to collect assorted initial thoughts in this thread (probably).
As per my heavy rotation the last month: It won't get as much press as the June G7 communique, but this is much more significant, both for its more developed technical details and the much stronger political power behind it.
This is obviously an important political result for Rishi Sunak, and the narrative will easily be one of hypocrisy - but there are some principled reasons financial services could/should be carved out from the deal