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This is an article from Andres Oppenheimer of the Miami Herald, thought you guys might like it.
"Don't cry over `assault' on Caribbean banking havens"
Stronger measures justified in war on drugs, corruption
Should we feel sorry for the Caribbean financial havens? Not really.
While Latin American headlines are focusing on electoral disputes in Venezuela, Peru and Mexico, there is a little-noticed story that may have a long-lasting impact: the biggest effort ever to crack down on Caribbean banking havens where the region's drug lords and corrupt politicians hide their fortunes.
It's no secret that one of Latin America's biggest problems is government corruption, drug money laundering and tax evasion, and that crooks have long used some Caribbean tax havens to hide their ill-gotten fortunes.
Up to $40 billion a year in corruption-related deposits worldwide end up in offshore banking centers, experts say.
Now, the United States and the Organization for Economic Cooperation and Development, eager to act against domestic tax evasion and transnational crime, are separately moving to force offshore financial centers to relax their secrecy laws, set tighter controls on foreign deposits and strengthen international cooperation deals on tax matters.
``Assault on Caribbean offshore financial jurisdictions,'' screams the title of a new report from the University of Miami, written by Anthony T. Bryan, director of Caribbean affairs of its North-South Center.
``Offshore financial centers in the Caribbean and elsewhere are facing multiple attacks . . . and fear that [they] will suffer serious loss of business.''
Experts say the recent scandals over the Bank of New York's handling of $7 billion from dubious Russian sources, and more than $100 million in questionable deposits in Citibank by Raul Salinas, the brother of former Mexican President Carlos Salinas, have led to a growing consensus in Washington and European capitals to move against money laundering at home and abroad.
``We're definitely seeing the biggest initiative to impose new tax and money-laundering rules on offshore financial centers,'' says Bruce Zagaris, a Washington, D.C., attorney specializing in international financial crimes.
Last week, the U.S. Congress held several meetings to consider a Clinton administration bill to target ``identified tax havens.''
The bill, which congressional watchers say has a good chance of passing, calls for the U.S. Treasury to issue a ``black list'' of tax havens, which would be threatened with draconian measures, including a possible ban on U.S. correspondent banking relations with the worst offenders.
In addition, the Organization for Economic Cooperation and Development, a group of the world's wealthiest nations, will meet in June to draw up its own list of ``uncooperative tax havens,'' which will be publicly announced in July 2001. The OECD is also expected to threaten noncompliers with sanctions.
Understandably, Caribbean countries are furious.
They have already been hit hard by European Union restrictions on their banana exports, as well as by devastating hurricanes. At a May 15 meeting of the Caribbean Association of Industry and Commerce in Dominica, many voiced suspicions that rich countries are trying to destroy them for the benefit of their own banking centers in New York, Miami or London.
Should we feel sorry for the Caribbean financial havens?
Not really. Some of these countries, such as the Cayman Islands and the Bahamas, already have mature financial centers that deal mostly with institutional banking transactions, rather than individual accounts based on promises of secrecy.
Others should be able to benefit from the recently signed U.S. Caribbean Basin Enhancement law, which will give them free trade benefits to export to the U.S. market similar to those enjoyed by Mexico. Export industries will certainly provide more jobs than brass-plate banks.
I, for one, am not losing much sleep over the ``assault'' on offshore tax havens. Consider the alternative: new waves of corrupt politicians funneling billions to secret Caribbean trust funds, leaving their countries even poorer, and undermining efforts to promote free market reforms and stable democracies in the region.
-Andres Oppenheimer
"Don't cry over `assault' on Caribbean banking havens"
Stronger measures justified in war on drugs, corruption
Should we feel sorry for the Caribbean financial havens? Not really.
While Latin American headlines are focusing on electoral disputes in Venezuela, Peru and Mexico, there is a little-noticed story that may have a long-lasting impact: the biggest effort ever to crack down on Caribbean banking havens where the region's drug lords and corrupt politicians hide their fortunes.
It's no secret that one of Latin America's biggest problems is government corruption, drug money laundering and tax evasion, and that crooks have long used some Caribbean tax havens to hide their ill-gotten fortunes.
Up to $40 billion a year in corruption-related deposits worldwide end up in offshore banking centers, experts say.
Now, the United States and the Organization for Economic Cooperation and Development, eager to act against domestic tax evasion and transnational crime, are separately moving to force offshore financial centers to relax their secrecy laws, set tighter controls on foreign deposits and strengthen international cooperation deals on tax matters.
``Assault on Caribbean offshore financial jurisdictions,'' screams the title of a new report from the University of Miami, written by Anthony T. Bryan, director of Caribbean affairs of its North-South Center.
``Offshore financial centers in the Caribbean and elsewhere are facing multiple attacks . . . and fear that [they] will suffer serious loss of business.''
Experts say the recent scandals over the Bank of New York's handling of $7 billion from dubious Russian sources, and more than $100 million in questionable deposits in Citibank by Raul Salinas, the brother of former Mexican President Carlos Salinas, have led to a growing consensus in Washington and European capitals to move against money laundering at home and abroad.
``We're definitely seeing the biggest initiative to impose new tax and money-laundering rules on offshore financial centers,'' says Bruce Zagaris, a Washington, D.C., attorney specializing in international financial crimes.
Last week, the U.S. Congress held several meetings to consider a Clinton administration bill to target ``identified tax havens.''
The bill, which congressional watchers say has a good chance of passing, calls for the U.S. Treasury to issue a ``black list'' of tax havens, which would be threatened with draconian measures, including a possible ban on U.S. correspondent banking relations with the worst offenders.
In addition, the Organization for Economic Cooperation and Development, a group of the world's wealthiest nations, will meet in June to draw up its own list of ``uncooperative tax havens,'' which will be publicly announced in July 2001. The OECD is also expected to threaten noncompliers with sanctions.
Understandably, Caribbean countries are furious.
They have already been hit hard by European Union restrictions on their banana exports, as well as by devastating hurricanes. At a May 15 meeting of the Caribbean Association of Industry and Commerce in Dominica, many voiced suspicions that rich countries are trying to destroy them for the benefit of their own banking centers in New York, Miami or London.
Should we feel sorry for the Caribbean financial havens?
Not really. Some of these countries, such as the Cayman Islands and the Bahamas, already have mature financial centers that deal mostly with institutional banking transactions, rather than individual accounts based on promises of secrecy.
Others should be able to benefit from the recently signed U.S. Caribbean Basin Enhancement law, which will give them free trade benefits to export to the U.S. market similar to those enjoyed by Mexico. Export industries will certainly provide more jobs than brass-plate banks.
I, for one, am not losing much sleep over the ``assault'' on offshore tax havens. Consider the alternative: new waves of corrupt politicians funneling billions to secret Caribbean trust funds, leaving their countries even poorer, and undermining efforts to promote free market reforms and stable democracies in the region.
-Andres Oppenheimer
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