Blog

EU must ensure tax haven blacklist is not a whitewash

The EU should resist political pressure and ensure its upcoming blacklist of tax havens objectively reflects the criteria it has itself set if it is serious about fighting tax avoidance, Oxfam said today.

The international organisation said that an honest appraisal of the role that different states play in facilitating tax dodging is crucial if European countries are to effectively tackle a problem that deprives them and poor countries of vital funds that could be used to fight poverty.

Oxfam’s new report, Blacklist or Whitewash?, names the 35 countries that should feature according to the EU’s definition of a tax haven, including six that are linked to the UK: the British Virgin Islands, Cayman Islands, Bermuda, Jersey, Gibraltar and Anguilla.

The EU has excluded member states from its blacklist. Oxfam is also urging the EU to act to reform the tax systems of countries like Ireland, Luxembourg, the Netherlands and Malta, which it found met the criteria for being tax havens.

The EU is expected to publish its blacklist next Tuesday after analysing 92 countries and jurisdictions against criteria including financial secrecy and facilitating profit shifting – but political pressure from inside and outside the EU means some of the world’s most notorious tax havens, such as Switzerland, may be left out.

Jim Clarken, Oxfam Ireland’s Chief Executive, said: “If the EU is serious about preventing tax havens from engaging in harmful practices that affect us all then it should stand up to political and corporate pressure and create a genuine blacklist, not a whitewash.”

Last year more than 300 top economists, including Nobel Prize winner Angus Deaton, warned there is no economic justification for tax havens and urged world leaders to take on the powerful vested interests that benefit from the status quo.

Oxfam is calling on the UK government to take responsibility for its own offshore backyard by requiring Britain’s overseas territories and crown dependencies to publish registers revealing the real owner of companies registered there. None has yet complied with the UK government’s request to do this, first made by David Cameron in 2013. Private registers are not an adequate substitute as they would not be open to full scrutiny, especially by authorities in poor countries.

Oxfam’s report highlights how multinationals are able to use the UK’s overseas territories to shift profits through interest payments on artificial loans between their subsidiaries. Income from interest represented 73 percent of GDP in the Cayman Islands and 40 percent of GDP in Bermuda.

Clarken added: "People are fed up with double standards that mean some companies and wealthy individuals can funnel money through tax havens to avoid paying their fair share of tax, while ordinary people in the UK and overseas are struggling to get by. With growing cross party consensus on this, the Government should not delay further action to end tax secrecy in UK-linked tax havens and to require UK-based multinationals to publish their tax payments in every country they operate."

The EU’s tax haven blacklist is being drafted in secret, which makes scrutiny impossible. Malta has publicly lobbied for an empty list and the Swiss government has announced it does not expect Switzerland to be included.

Oxfam believes the EU’s blacklist criteria are a step in the right direction but should be extended to address other harmful tax practices such as the race to the bottom on corporate tax rates.

To learn more about Oxfam Ireland’s tax justice campaign go to https://www.oxfamireland.org/tax

ENDS

For more information or interviews please contact: Phillip Graham, Oxfam Ireland on phillip.graham@oxfamireland.org / 07841 102535.

NOTES TO EDITORS

The report, Blacklist or Whitewash?, is published online.

Oxfam applied the EU’s own criteria to the 92 countries screened by the EU, and the 28 EU member states. According to Oxfam’s analysis, at least 35 non-EU countries should be included in the EU tax haven blacklist: Albania, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Bermuda, Bosnia and Herzegovina, British Virgin Islands, Cook Islands, Cayman Islands, Curaçao, Faroe Islands, Former Yugoslav Republic of Macedonia, Gibraltar, Greenland, Guam, Hong Kong, Jersey, Marshall Islands, Mauritius, Montenegro, Nauru, New Caledonia, Niue, Oman, Palau, Serbia, Singapore, Switzerland, Taiwan, Trinidad and Tobago, United Arab Emirates, US Virgin Islands, Vanuatu. And four EU member states: Ireland, Luxembourg, the Netherlands and Malta.

Oxfam’s new briefing paper Ending the Tax Scandals sets out five policy measures the UK Government needs to take in order to tackle tax avoidance.

Bermuda topped Oxfam’s list of the world’s 15 worst corporate tax havens, published last year, which also named three other UK-linked territories – the Cayman Islands, Jersey and the British Virgin Islands.

A recent YouGov poll found that almost three quarters of the public think the government should be doing more to tackle corporate tax dodging. There is cross party support for doing more to tackle tax avoidance, including greater transparency for companies and in UK-linked tax havens.

In May 2016, top economists wrote to world leaders to say that tax havens have no economic justification.

EU blacklisting criteria puts Ireland’s tax haven status beyond doubt

·         More royalties sent out of Ireland than rest of EU combined, equivalent to 26% of GDP in 2015

·         New Oxfam report urges EU to tackle tax avoidance within member states

Tuesday, 28th November 2017

A new report published by Oxfam today has identified Ireland as one of four EU countries which would be blacklisted1 as a tax haven if the EU were to apply its own criteria to member states.

The EU is currently drafting a blacklist for tax havens, analysing 92 non–EU countries and jurisdictions against a set of three criteria, which include tax transparency and policies that facilitate large-scale profit shifting. However, this process excludes EU member states, meaning that they will not be assessed.

For the first time, Oxfam has applied the EU’s own criteria to 92 countries worldwide as well as to the 28 EU member states. According to the analysis, at least 35 non-EU countries should be included in the EU tax haven blacklist.

Furthermore, four EU member states: Ireland, Luxembourg, the Netherlands and Malta also met the criteria for being listed as a tax haven.

Ireland fails to meet the second criterion on fair taxation and the facilitation of tax avoidance. For example, the report establishes that royalties sent out of Ireland were equivalent to 26% of the country’s gross domestic product in 2015. That is more royalties than are sent out of the rest of the EU combined, and makes Ireland the world’s number one royalties provider2.

Jim Clarken, Oxfam Ireland Chief Executive, said: “As Ireland fails the EU’s blacklisting criteria, it is clear that the Government has questions to answer with regard to its stated commitment to tackling tax avoidance. In the past, the case has been made that because Ireland’s tax arrangements fulfilled OECD standards there was no substantiation that Ireland matched the conditions associated with tax haven status. The OECD’s blacklisting process has been called into question due to the fact that it only listed one country Trinidad and Tobago as a tax haven.

“The analysis in this report uses the very measurements the EU is currently applying to 92 non-EU states to assess whether they should be blacklisted as tax havens. Sadly, this analysis places Ireland in an elite club with four other EU countries; Malta, Luxembourg and the Netherlands.”

The report, Blacklist or Whitewash: What a real EU blacklist of tax havens should look like, shows how financial flows are often completely out of proportion with the tax havens’ real economic activity. In the British Virgin Islands, foreign direct investment amounts to 90,000% of the country’s GDP. For the Cayman Islands, it represents 5,400% of the GDP, for Malta 650% and for Luxembourg approximately 400%.

Oxfam is concerned that, regardless of these clear findings, EU governments will come up with a weak or even empty blacklist. The blacklist is being drafted in secret, which makes public scrutiny impossible. The Maltese EU presidency has publicly advocated for an empty blacklist. Also, following a meeting with EU finance ministers, the Swiss government has openly declared it does not expect the country to be blacklisted.

Oxfam is also urging the EU to put rules in place to reform the tax systems of EU countries like Ireland, Luxembourg, the Netherlands and Malta which meet the EU’s criteria for being listed as a tax haven.

Mr Clarken continued: “An ambitious and objective list of tax havens with strong countermeasures is a concrete and powerful way to clamp down on tax avoidance which deprives countries of hundreds of billions of dollars, fueling poverty and inequality. If the EU is serious about preventing tax havens from engaging in harmful practices that affect us all then it should stand up to political and corporate pressure and create a genuine blacklist, not a whitewash.”

ENDS

CONTACT: For more information or interviews, please contact Alice Dawson, Oxfam Ireland, on +353 (0) 83 198 1869 or at alice.dawson@oxfamireland.org

1.     Blacklist: Establish a “blacklist” of countries that refuse to adhere to international taxation rules. Listed countries should face stiff penalties.

Oxfam applied the EU’s own criteria to the 92 countries screened by the EU, and the 28 EU member states. According to Oxfam’s analysis, at least 35 non-EU countries should be included in the EU tax haven blacklist: Albania, Anguilla, Antigua and Barbuda, Aruba, Bahamas, Bahrain, Bermuda, Bosnia and Herzegovina, British Virgin Islands, Cook Islands, Cayman Islands, Curaçao, Faroe Islands, Former Yugoslav Republic of Macedonia, Gibraltar, Greenland, Guam, Hong Kong, Jersey, Marshall Islands, Mauritius, Montenegro, Nauru, New Caledonia, Niue, Oman, Palau, Serbia, Singapore, Switzerland, Taiwan, Trinidad and Tobago, United Arab Emirates, US Virgin Islands, Vanuatu. And four EU member states, Ireland, Luxembourg, the Netherlands and Malta

2.     Passive income such as royalties for Intellectual Property (IP), which companies are known to use to avoid tax. High levels of these payments far above normal economic activity indicates that the jurisdiction is facilitating tax avoidance.

Notes to editors:

·          Read the full Oxfam report: https://oxfam.box.com/v/EUBlacklistReport

·          An interactive map shows the 39 countries listed in the report and explains why they fail to meet the EU’s blacklisting criteria: https://public.tableau.com/profile/oxfam.eu.office#!/vizhome/ShadowEUtaxhavenblacklist_0/ShadowEUtaxhavenblacklist-map

·          The EU committed to a blacklist process in the wake of scandals like the Panama Papers and Lux Leaks that showed how tax havens let the super-rich get away with billions in unpaid taxes. EU finance ministers are expected to publish the EU blacklist on 5 December at their meeting in Brussels.

·          The EU’s listing process uses three sets of criteria to identify tax havens: transparency, fair taxation, and participation in international fora on tax.

·          The EU’s blacklisting negotiations have taken place behind closed doors and countries participating in the talks have refused to answer questions. The process has been in the hands of one of Brussels’ most secretive working bodies, the so-called Code of Conduct Group, which insists on its work being confidential.

·          Last June the OECD released its own backlist, but the result was farcical and ended up naming only one country, Trinidad and Tobago.

·          Tax dodging costs developing countries $170 billion a year: $70 billion through tax dodging by super-rich individuals and $100 billion through corporate tax dodging. $100 billion is enough money to provide an education for 124 million children and prevent the deaths of almost eight million mothers, babies and children a year.

·          Switzerland, which fails the EU’s criteria on fair taxation according to Oxfam’s analysis, has already declared they expect not to appear on the EU blacklist. This illustrates the risk that major tax havens might escape blacklisting due to political and economic pressure.

·          Following the Paradise Papers, Oxfam released a 5-point plan outlining steps governments should take to prevent further scandals on a global scale. This includes establishing a global blacklist of tax havens that naming countries such as Ireland and the Netherlands that have been key players in the Paradise Papers scandal. 

Digging in the dust

The soft soil falls away easily as the sharp metal hits the ground. Again and again Falah Abiya raises the axe above his head and brings it down on the compacted earth. Two of his colleagues stand waiting beside him, stepping in with shovels to remove the soil he has loosened.

The blue skies, dotted with clouds and the mid morning autumn sun do not match the tough work that Falah and his team have to do in Mosul today. They are digging graves in a large cemetery in the west of the city. “We have twenty-two to dig today”, Falah comments in between swinging his pick Axe.

Falah’s team work for the department of Forensic Pathology, which is being supported by Mosul General Hospital. Although they usually spend their days digging graves for people who have just died, today their work is of a different kind. They are working on a special programme to help the state identify bodies that have already been buried.

“The work we are doing here is very sensitive but very necessary”, says Dr Aziz, who works at Mosul General Hospital. “It’s important we know who has died and why. We must make sure the people buried in those graves are the people we have been told they are. Once we have recovered a body we run DNA tests to check.”

Today Hamid Hassan Jassim stands watching Falah’s team at work; the grave belongs to his brother Mahmud. “He died in a suicide bombing at a checkpoint. His head was missing when we buried him,” he says. Suddenly Falah’s axe hits something hard and he uses his hands to expose a wooden plank which he then pulls from the hole. Three of the team carefully lower themselves into the hole and slowly pull out a black plastic body bag.

Everyone is quiet as the team unzip the plastic bag and reveal what is left of Mahmud’s body, wrapped in a red blanket. The forensic examiner pulls on rubber gloves and carefully opens the blanket before inspecting its contents. He immediately confirms the head is missing and through his examination he also suggests that the man did in fact die in an explosion. He takes samples and zips the bag back up.

“Oxfam has supported the hospital in a lot of ways since Mosul was retaken.” Says Dr Aziz. The axes Falah and the team are using were donated to Oxfam and then the hospital by Irish Aid. As were other essential items such as mosquito nets which are being used to keep the flies off of burns patients and those with extensive wounds. “We hope we will continue to receive support from Oxfam so that we can keep doing this essential work and taking care of people who need urgent medical care.”

Mosul General Hospital sees an estimated 800 patients a day. As well as providing the pick axes, Oxfam has supported the hospital with essential items such as water tanks, bottled water, emergency food rations, blankets and mosquito nets.

Hamid stands and watches Falah and his colleague Sadam Hamadi carefully lower his brother Mahmud’s newly wrapped body back into the ground, re-covering it with the soft soil. They then throw their shovels and pick axes over their shoulders and make a move to the next grave. They have twenty one more to dig today.

 

 

Two weeks into the Yemen blockade – Fuel, Food and Medicines Running Out

19 November 2017 

Two weeks since land, air and seaports in Yemen were closed, aid agencies are appalled by the complacency and indifference of the international community regarding the historic humanitarian disaster now unfolding.

Aid agencies are gravely concerned about a new outbreak of cholera and other water borne diseases. UNICEF warns that they only have 15 days’ left of diphtheria vaccines. They are due to receive a new shipment late November but still have not received clearance. If this vaccine is not brought in, one million children will be at risk of preventable diseases.

The fuel shortage in Yemen means clean water in the country is more and more scarce. Water networks are closing by the day as fuel for the pumps runs out and pipes run dry. The lack of water poses grave risks to young children most of all. Schools will become centres of disease rather than centres of knowledge.

With no fuel, hospitals are closing wards and struggling to operate intensive care units and surgical operation theatres. Refrigeration units for essential medicines are being turned off for periods of time to save fuel. Doctors, some of whom have not been paid for ten months, are asking INGOs and UN to share their small supplies of fuel to run their life-saving generators; INGOs are citing one month fuel supply only.

Agencies are starting to double the value of the cash distributions to the most vulnerable people. This will enable people to buy and stock food for the coming cold winter months before prices rise beyond their means. This means agencies will exhaust their funds allocated for next year. Additionally, aid agencies have grave concerns for wellbeing of people that are currently inaccessible.

The country’s stocks of wheat and sugar will not last for longer than three months if cargo vessels are not allowed to discharge in Hodeidah, the country’s only deep water seaport, in the next few days. Even if they are allowed, food distribution systems have been severely disrupted and may collapse within weeks. Moreover, having incurred so many additional costs and in a highly volatile environment, international traders may decide that importing to Yemen is too risky a proposition to continue.

The international community must break its shameful silence and use all possible means to lift the blockade on Yemen immediately. Hodeidah port, that serviced 80% of all imports, and Sana’a airport, needs to be reopened to let in urgently needed shipments of food, fuel, and medicines. Every day the blockade lasts means thousands of Yemenis will suffer from hunger and preventable diseases. Millions could die in a historic famine if the blockade continues indefinitely. This is not the time for carefully balanced statements. The choice is between resolution, or complicity in the suffering; there is no third option.

 

Daniel English

Oxfam Ireland

086 3544954 

Give an unexpected gift this Christmas

Christmas songs playing in shops, lights strewn between buildings on city streets, shopping windows decorated with evergreen trees and holly, rosy cheeks on passers-by. The Christmas season has officially begun.

This also means crowded shops, long queues, and heavy bags. Ba-humbug!

Instead of enduring the crowds, waiting in queues and braving the cold, consider nestling up to a warm cup of tea with your internet browser opened to Oxfam Unwrapped.

Oxfam Unwrapped offers 17 unique and unexpected gifts ranging from €5/£5 to €1,000/£926. Whether it’s a cooking stove or a clutch of chicks, each gift funds Oxfam’s work around the world. Don’t worry… a clutch of chicks won’t arrive on your doorstep. Your gift donation goes toward poor families and communities that need it most.

Leave the soap and lotion gift baskets at the shops. Instead, purchase our soap stocking filler for a family member. Money raised from your donation supports humanitarian work from our Saving Lives fund. It provides people like Binta and her daughter Fati in Niger with hygiene training to keep them from illness and deadly diseases.

Want to get something sweet for a friend? Instead of picking up the predictable box of chocolates, make a donation to our Livelihoods fund by buying a honeybees gift card. This purchase helps fund the communities who depend on animals for their livelihoods. It empowers people like Augustina in Ghana. Through an Oxfam-supported beekeeping project, she was able to earn additional income to pay her children’s school fees.

When drought struck Somaliland, Faria moved with her children to Karasharka Camp where Oxfam provided safe water. This Christmas, give something better than a bottle of wine or bubbly to your colleague. Consider making a donation to our Water for All fund by purchasing safe water for a family gift card. This gift provides poor communities with safe access to water through pumps, tanks, taps and purification systems.

Your unexpected gift card from the Unwrapped campaign provides the tools, training and resources to support and empower communities. While bringing a smile to your loved one’s face, you will also be building brighter, happier futures. Happy shopping!

Pages