The recently released HSBC scandal gives a glimpse of the industrial scale of money held in tax havens. Some of the biggest global banks have let tax evasion, money laundering and corruption happen under their watch. And if you’re like me, you’re probably feeling pretty angry.
As much as $20 trillion is held offshore. These jurisdictions provide secrecy that allows nefarious activity to flourish, despite the fact that legitimate financial transactions do occur. But dodgy activity can have grave impacts.
The Democratic Republic of Congo lost over $1.3bn – or almost twice its combined health and education budgets – between 2010 and 2012. This was as a result of just five dodgy mining deals struck by firms incorporated in the British Virgin Islands, and companies based in Bermuda, Jersey, Gibraltar and the UK.
That broken water pipe. That school where the classrooms don’t have desks. That clinic not stocked with life saving drugs. They can be traced back to the spoils to be hidden in Swiss Bank accounts, or even in prime real estate in London and New York.
Not only is money lost through illegal tax evasion, but financial secrecy can mean that countries own limited budgets are not used effectively – contracts are given to firms in return for bribes that end up in offshore accounts – even if those contracts are a bad deal for the country.
ONE members have been at the coal face of this fight for many years, taking on Big Oil to push for transparency in the extractives sector, or anonymous shell companies that help criminals stash their dirty cash, and encouraging governments to open up contracts and budgets.
Some say we shouldn’t push this issue too hard because we don’t have enough evidence that it’s a problem, or where the problem lies and what it takes to fix it. That’s a real issue. We want to make sure we are always fighting for the best quality solutions.
It’s here that we turn to the world’s oldest international financial organisation; one you’ve probably never heard of.
Swiss-based Bank for International Settlements (BIS) is a ‘central bank of central banks’. It has produced data on money held in tax havens, which would be invaluable in the fight against corruption. But they won’t make it public.
We are calling for BIS to release the data so that journalists, activists and governments can know how much money belonging to their citizens is held in each tax haven – by country.
This would help governments prioritise how to track down dodgy money, help researchers to understand the problem better, and would open up opportunities for activists to build these facts into their campaigns.
The organisation’s website says its mission is to “serve central banks in their pursuit of monetary and financial stability”. One way it does this is by carrying out research and policy analysis on issues of relevance for monetary and financial stability. We think that this call sits squarely with the mission of BIS.