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US named world’s worst country for financial secrecy

Tax justice campaigners have cited the United States as the worst offender for countries helping individuals to hide their wealth from the rule of law.

For the first time, the Tax Justice Network put the US at the top of the global ranking of their 2022 Financial Secrecy Index.

Bermuda is listed 49th on the index.

The self-appointed watchdog says financial secrecy facilitates tax abuse, enables money laundering and undermines the human rights of all.

The group says the index identifies the world’s biggest suppliers of financial secrecy and spotlights the laws that governments can change to reduce their contribution to financial secrecy.

They said the US earned the worst rating ever recorded since the ranking began in 2009.

Top 10 biggest suppliers of financial secrecy

1. United States

2. Switzerland

3. Singapore

4. Hong Kong

5. Luxembourg

6. Japan

7. Germany

8. United Arab Emirates

9. British Virgin Islands (British Overseas Territory)

10. Guernsey (British Crown Dependency)

Source: Tax Justice Network

The Tax Justice Network’s Financial Secrecy Index 2022, reports that the supply of financial secrecy services, like those utilised by Russian oligarchs, tax evaders and corrupt politicians, has continued to decrease globally due to transparency reforms.

But they say five G7 countries alone — the US, Britain, Japan, Germany and Italy — are responsible for slowing global progress against financial secrecy by more than half.

The declaration is a victory for small countries, particularly in the Caribbean, who have long been the subject of global criticism from these same countries for the same alleged practices.

G7 finance ministers were meeting this week to recommit to enforcing sanctions on Russian oligarchs’ hidden assets.

The Tax Justice Network called on them to commit to a global asset register to bring law and accountability to the trillions in “lawless wealth” secretively held offshore by wealthy individuals.

The network said: “An estimated $10 trillion is held offshore beyond the rule of law by wealthy individuals through secretive arrangements — equivalent to 2.5 times more than the value of all US dollar and Euro bills and coins in circulation around the world today.

“The G7 countries’ undermining of global transparency has further fuelled calls by leading economists for a UN tax convention that moves rule making on international tax and finance out of the hands of the few rich countries who have repeatedly been shown to be some of the world’s biggest tax havens.”

US treasury secretary Yellen remarked in December last year that the US may be “the best place to hide and launder ill-gotten gains”.

US president Joe Biden claimed shortly after taking office: “A lot of companies also evade taxes through tax havens in Switzerland and Bermuda and the Cayman Islands.”

But the Tax Justice Network stated: ”The US now fuels more global financial secrecy than Switzerland, Cayman and Bermuda combined.”

Alex Cobham, the organisation’s chief executive, said: “Globally, we’re starting to curb the financial secrecy used by Russian oligarchs, and also by tax evaders, corrupt politicians and organised crime around the world to hide and launder ill-gotten wealth.

“But the US, UK, Germany, Italy and Japan cut back that global progress by more than half, fuelling financial secrecy instead of fighting it.

“The G7 must make clear where they stand in the fight against financial secrecy by committing to a global asset register.”

The 2022 edition of the Tax Justice Network’s biennial Financial Secrecy Index sees some of the world’s biggest economies climb up the ranking.

TJN said the US dramatically expanded the gulf between itself and the rest of the world by enabling the biggest supply of financial secrecy ever recorded by the index — nearly twice as much as the second biggest supplier currently on the index, Switzerland.

Germany, which hosted the G7 finance ministers meeting and now ranks 7th, returned to the Top 10 after dropping to 14th in 2020. Japan, which returned to the Top 10 in 2020, has continued to climb the index, now ranking 6th.

Tax Justice Network cites the United States in its 2022 Financial Secrecy Index as the worst offender in helping individuals to hide their wealth from the rule of law

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Published May 19, 2022 at 7:48 am (Updated May 19, 2022 at 7:48 am)

US named world’s worst country for financial secrecy

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