The US has overtaken Switzerland in a global ranking of countries most complicit in helping individuals to hide their finances from the rule of law while the Cayman Islands has leapfrogged both countries to rank as the worst offender according to the Tax Justice Network’s Financial Secrecy Index 2020.
Encouragingly, the index reveals that financial secrecy around the world is decreasing as a result of recent transparency reforms, but a handful of jurisdictions accounting for a large share of global financial services have bucked the trend.
More transparency
On average, countries on the index reduced their contribution to global financial secrecy by 7 per cent.
But financial services hubs, including the US, Cayman and the UK now constitute the greatest global threat of corruption and tax abuse.
The Tax Justice Network is calling on policymakers to prioritise sanctions against what it describes as these backsliders.
Cayman’s deterioration
Cayman has increased its supply of financial secrecy to the world by 24 per cent, moving it up from third on the 2018 index to first on the 2020 index.
The deterioration is a result of Cayman increasing the volume of financial services it provides to non-residents by 21 per cent.
The top 10 biggest enablers of financial secrecy in the world currently are, respectively, Cayman Islands, US, Switzerland, Hong Kong, Singapore, Luxembourg, Japan, Netherlands, British Virgin Islands and the UAE.
Recommendations
The Tax Justice Network is recommending that to stamp out financial secrecy, meaningful counter measures are now needed against jurisdictions and their economic actors that refuse to cooperate, regardless of their economic power.
The network is also calling for corporate tax transparency and is urging countries to adopt the new Global Reporting Initiative tax standard.
It also recommends that the Financial Action Task Force(FATF) should add public registration of beneficial owners and legal owners of all legal vehicles to its binding recommendations.
More details on and a link to the Tax Justice Network’s Financial Secrecy Index 2020 can be found here.
Categories: Trade Based Financial crimes News
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