WHAT LIES BENEATH: EVIDENCE FROM LEAKED ACCOUNT DATA ON HOW ELITES USE OFFSHORE BANKING – THE CAYMAN NATIONAL BANK AND TRUST LEAK

On 5 May, the Brookings Institution published this Global Working Paper #156 which uses account data leaked from an Isle of Man bank to investigate the characteristics of individuals and firms that store their money in tax havens.  The author says that he has established 3 things

  1. most customers are from rich countries and are likely to be from the upper end of the income and wealth distributions of those countries;
  2. a non-negligible amount of offshore wealth is connected to a small number of political elites (so called politically-exposed persons). On average, these accounts have substantially higher balances and are more likely to receive payments from other tax havens, which is consistent with politically-exposed persons having access to more resources than the average offshore client while also desiring to obscure that ownership; and
  3. a substantial proportion of bank deposits are obscured from publicly-available statistics published by the Bank of International Settlements which are commonly used to measure offshore wealth.

The Paper says that when the author correctly assigns deposits to their ultimate beneficial owner, offshore bank deposits owned by residents of tax havens drops by up to 32% and deposits held by residents of non-havens doubles.   The author therefore concludes with recommendations on how reporting requirements need to change to improve the ability of regulators and the research community to detect and counter illicit finance.

https://www.brookings.edu/wp-content/uploads/2021/05/What-lies-beneath_Collin.pdf

Any modest contributions for my time and ongoing expenses are welcomed!  I have a page, where contributions start as low as $3, at https://www.buymeacoffee.com/KoIvM842y

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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