U.S. Placed Above Cayman Islands in Financial Secrecy Blacklistby
The U.S. government’s refusal to take part in a global system for exchanging bank data has moved it above the Cayman Islands in a financial secrecy list compiled by the Tax Justice Network.
The U.S. trails only Switzerland and Hong Kong in a league of offshore havens after refusing to comply with information-sharing standards created by the Organization for Economic Cooperation and Development, according to London-based TJN, which campaigns for greater transparency in finance. That’s despite the U.S. creating its own system of data collection known as FATCA, which obliges banks around the world to provide details about American account holders who try to dodge the Internal Revenue Service.
“While the U.S. has pioneered powerful ways to defend itself against foreign tax havens, it has not seriously addressed its own role in attracting illicit financial flows and supporting tax evasion,” TJN said in a report Monday. “Washington’s independent-minded approach risks tearing a giant hole in international efforts to crack down on tax evasion, money laundering and financial crime.”
Singapore and the Cayman Islands were placed fourth and fifth in the TJN rankings, which applies a weighted score to jurisdictions based on factors such as bank secrecy rules, registers of ownership and cooperation with other governments. The methodology favors the more than 90 jurisdictions that have said they will adopt the OECD standard by 2017, or in some cases, 2018.
The TJN list is compiled every two years and in 2013 the U.S. was placed sixth.