The Hypocrisy of the Group of 20 Nations in relation to The Bahamas status as a Tax Haven

by MACGREGOR N ROBERTSON O.B.E.

The following Letter to the Editor was published in The Nassau Guardian on Thursday, May 7, 2009 and is reprinted here with the kind permission of the author.

The Hypocrisy of the Group of 20 Nations

I write to express my dismay at the hypocrisy shown at the recent G20 meeting where the attendees all joined U S President Obama in condemning tax havens.

When you think of what the OECD requires you to go through to open a bank account in the Bahamas in recent years it really gets annoying. You have to provide copies of the first four pages of your passport, utility bills, references and so on. This is not so in a majority of the G20 and OECD countries.

Of all the countries whose mantra is: “Do as I say, not as I do.” America is the foremost: For example the state of Nevada’s official web site boasts of its “limited reporting and disclosure requirements and speedy one hour incorporation service.” They do not ask for shareholders’ names or identification and incorporate some 80,000 companies each year.

Another famous American state offering corporate anonymity is, of course, Delaware, represented in the U S Senate for years by now Vice President Joe Biden, yet another is Wyoming. A recent study showed that these American states rivaled the business done by all the familiar off-shore centres combined. The reason for this is that America is a very good place to put your cash via an anonymous shell company, partly because it is not taxed but mostly because what the bankers do not know they cannot be forced to divulge.

America is not alone in this however, another example being Britain, where in a test case a company was recently incorporated on line with bearer shares in 45 minutes with no identification asked for. The company was given nominee directors and a secretary. All of this was not done in British tax havens Jersey or Guernsey but in the mainland U K.

A recent study by Jason Sharman, a professor at an Australian University, found that of 45 countries tested, 17 allowed accounts to be opened using anonymous shell companies. Of these 13 were OECD members.

In an article in The Economist Newspaper professor Sharman concluded that “In practice OECD countries have much laxer regulation on shell companies that the classic tax havens and the US is the worst on this score, worse that Liechtenstein or Somalia.”