Nick Shaxson ■ Why should tax havens insist on ‘reciprocity’ from poor countries?
One of the many devious ploys used by the Swiss financial centre to protect its often illicit gains is to insist on ‘reciprocity’ in the exchange of information. Along the lines of: “If we’re going to share information with Nigeria, then they should share the same kind of information with us!”
Like so many things in this area, it seems so reasonable – right up to the point where you stop to think about it. But now consider this question in the context of two further questions:
- How many wealthy Nigerians will choose Switzerland as a place to stash their illicit loot?
- How many wealthy Swiss will choose Nigeria as a place to stash their illicit loot?
Now, from Mark Herkenrath of Alliance Sud, a useful little blog:
“For the purposes of introducing automatic information exchange it is insisting not only on the strictest possible data protection conditionalities, but also on the principle of reciprocity.
Should the Swiss demand for strict reciprocity prevail, the poorest developing countries would in fact be excluded from automatic information sharing. They would only have access to foreign bank records if they in turn were able to deliver such data. In many cases, however, the elaborate administrative apparatus they would have to put in place for the purpose would be simply too expensive. The costs could quickly outweigh the benefits of the automatic information exchange.
This begs the question as to whether the principle of reciprocity makes any sense at all in dealings with developing countries. Unlike Switzerland, most of these countries hardly harbour any undeclared offshore accounts. Why, then, should they be obliged to send their bank data abroad? It would make more sense for actual tax havens to offer to transfer information unilaterally to developing countries.”
And the rest of it is worth reading too.
For a history of how Switzerland became a tax haven, click here.
Indonesia launches investigation following ‘Macao Money Machine’ report
October 2021 Spanish language podcast, Justicia ImPositiva: Los Pandora Papers, el Bitcoin en El Salvador y crisis de la inmobiliaria en China #64
Pandora Papers shows transparency failure is an accountability failure
Isle of Man banking data leak reveals how sharing data can identify offshore strategies and improve beneficial ownership
Isle of Man banking leak: Analysing banking data to reveal offshore strategies
29 September 2021