George Turner ■ The Offshore Wrapper – Friday 18 August


The Offshore Wrapper is our weekly roundup of news from the world of tax justice. If you want to receive the wrapper every week in your inbox, you can subscribe here.

Gaming the Lottery

The last couple of weeks have seen a series of articles uncovering the darker practices of lottery companies around the world. The investigation is part of a global collaboration of investigative journalists which is looking into the $300bn industry.

Of particular interest to us is the story of IGT, one of the world’s largest lottery operators. IGT has over 400 lottery licences and revenues of $6bn a year.

According to Khadija Sharif and Jeff Kelly Lowenstein, writing for eNCA, the company also appears to be involved in some classic tax avoidance structures involving tax haven UK.

In 2013 the company merged with an Italian company GTECH, allowing it to perform a corporate inversion and move its headquarters out of the United States. The entity then set up in the UK, which has a much lower corporation tax rate than both the US and Italy.

But did the UK benefit from this deal? Probably not, all that was happening was a shuffling of paper at the top. The vast majority of the company’s economic activity remains in the United States, and the company is stashing $2bn offshore.

Trumps deals in Georgia raise money laundering concerns

The New Yorker this week has published a long report looking into Trump’s deals in Georgia. There is a lot to question too. In 2011 Donald Trump granted a licence for a new luxury tower in Batumi, a town on the Black Sea. The deal allowed the new development to use the Trump brand, and the future president visited the country, extolling the virtues of Michael Saakashvili the then president. The town had no market for luxury housing, and many thought the investment insane.

But as far as Trump was concerned the deal was just for show. As part of the deal Trump would not be responsible for any of the investment, all he was doing was selling his name to add international credibility to the deal. The money, including Trump’s fee, would come from elsewhere.

Where is the interesting question, with much of the money coming from a Kazakh bank linked to a close Putin ally. With offshore companies playing a leading role of course.

The deal provokes some serious questions for the president’s financial ties to the Kremlin, as well as what appears to be his rather lax attitude to money laundering regulations.

Benny Steinmetz in trouble in Romania

Israeli Billionaire Benny Steinmetz has been arrested in Israel on charges relating to fraud and money laundering. And surprisingly, it appears the arrest has nothing to do with any of the billionaire’s controversial deals in Africa!

Instead, according to Haaretz, who quotes Romania’s ‘Rise Project’, the arrest has been made on charges relating to a case in Romania where Steinmetz is accused of financing a criminal gang in an unlawful land deal. The purchase was effected via the British Virgin Islands, using companies set up by Mossack Fonseca, naturally!

Belgian companies shifting billions offshore

New data from the Belgian government has revealed that Belgian companies made €221 billion in payments to tax havens. Under Belgian law companies are obliged to report when they send over €100,000 over the course of a year to bank accounts resident in a list of tax havens. The Belgian list includes Monaco, the British Virgin Islands, Cayman Islands and Bermuda. The actual amount sent to tax havens will be much higher, as the list does not include countries like Singapore and Panama.

The image of tax havens

The British Journal of Photography have published a short 8 minute film on the making of Havens, a photographic project by Gabriele Galimberti and Paolo Woods.

The pair travelled the world for two years photographing tax havens trying to commit to film what is in large part an intangible trade.

The film can be viewed here:

More on the project can be found on the dedicated website here:

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