Vexed Bermoothes

As a performance hiding sideshow, the G20 leaders are whipping up the hounds over tax havens – and the media is largely too complacent to ask questions.

The Economist, which is the only news magazine left worth reading, hits the nail right on the head:   the G20 countries have more laxity in terms of money laundering and other financial crimes than the majority of the offshore centres.

A money-laundering threat assessment in 2005 by the [US] federal government found that corporate anonymity offered by Delaware, Nevada and Wyoming rivalled that of familiar offshore financial centres. For foreigners, America is a particularly attractive place to stash cash, because it does not tax the interest income they earn. Thus with both anonymity and no taxation, America offers them all the elements of a tax haven…

America is not the only rich nation Mr Sharman [the researcher] tested. He tried to open anonymous shell companies and bank accounts 45 times across the world. These were successful in 17 cases, of which 13 were in OECD countries. One example was Britain, where in 45 minutes on the internet he formed a company without providing identification, was issued with bearer shares (which have been almost universally outlawed because they confer completely anonymous ownership) as well as nominee directors and a secretary. All was achieved at a cost of £515.95 ($753).

In other cases Mr Sharman formed companies by providing no more than a scanned copy of his driving licence. In contrast, when trying to open accounts in Bermuda and Switzerland, he was asked for documentation such as notarised copies of his birth certificate. “In practice OECD countries have much laxer regulation on shell corporations than classic tax havens,” Mr Sharman concludes. “And the US is the worst on this score, worse than Liechtenstein and worse than Somalia.”

This is a witchhunt, plain and simple.