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The Obama Presidential Victory Is a Big Problem for Offshore Financial
Centers
 By
Barry Randall
Caribbean Net News Editor, as posted on
http://www.belizenetnews.com
November 4, 2008. GEORGE TOWN, Cayman Islands.
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Stephen Platt |
According to Stephen Platt, an English barrister and Chairman of the
BakerPlatt Group, the Senator Barack Obama presidential victory on November
4, 2008, might be a particular threat to offshore centres, including several
in the Caribbean.
Obama-Victory-Problem-Offshore-Financial-Centers
Obama has vowed to do all he can to shut down offshore centres and, in
February 2007, co-sponsored a Bill titled the ‘Stop Tax Haven Abuse Act’
introduced by Senator Carl Levin.
The Bill contains provisions aimed at combating what Levin described as the
$100 billion per year drain on the US Treasury from offshore tax abuse.
Obama echoed this view on September 22 in a speech in Wisconsin, when he
said, “We lose $100 billion every year because corporations get to set up
mailboxes offshore so that they can avoid paying a dime of taxes in America.
Imagine if you got to do that… I will shut down those offshore tax havens
and corporate loopholes as President, because you shouldn’t have to pay
higher taxes because some big corporation cut corners to avoid paying
theirs.”
According to Platt, if Obama makes it to the White House in November, the
Bill may gather an unstoppable momentum.
The Bill’s prime target is “offshore secrecy jurisdictions”, defined as
jurisdictions which, in the judgment of the Treasury Secretary, have
‘corporate, business, bank, or tax secrecy rules and practices which…
unreasonably restrict the ability of the United States to obtain information
relevant to enforcement’.
As well as providing a statutory framework to determine what an ‘offshore
secrecy jurisdiction’ is, the Bill includes a list of 34 countries which
will, upon enactment, be automatically considered as such, including:
Anguilla, Antigua and Barbuda, Aruba, Bahamas, Barbados, Belize, Bermuda,
British Virgin Islands, Cayman Islands, Dominica, Grenada, Netherlands
Antilles, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, and
Turks and Caicos Islands.
“The Bill should ring alarm bells for all those that represent entities or
individuals who have dealings with the US and the blacklisted countries,
either directly or through subsidiaries,” said Platt.
“There is no doubt that the personal and corporate civil and criminal risk
exposure will rise if the Bill is passed into law,” he added.
Platt believes the Bill may well help to reduce the incidence of tax evasion
but that it goes too far.
“It is anti-competitive and will prevent legitimate individuals utilising
the services of legitimate financial services,” he said.
There is, Platt said, suspicion that the Bill is not in fact motivated by a
desire to stamp out the abuse of offshore financial services but by a need
for the US to begin to exercise control over large pools of development
capital.
“There again it could be a mere coincidence that the Bill has gathered
momentum as the US economy has bombed and Main Street holds more sway than
Wall Street,” he concluded.
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