“Perhaps the largest ‘financial haven’ of all is your own country, Switzerland. And nobody is seriously concerned, and nobody is really interested in closing them,” notes Pieth. My hunch is that everybody has their little backdoor where they can actually escape into these offshore centers. And the EU has Malta, Cyprus, and Luxembourg. If you want to go into Germany, Switzerland, or Austria, they send you to Liechtenstein.
But go to France, they will send you to Monaco. There are many places where you get these kinds of services. “You mentioned South Dakota in the U.S., and you also could go to Delaware or Utah. So where are the world’s elite going to hide their wealth? Financial havens seem to be popping up all over the globe. It either doesn’t work, or states are not willing to do the work. We were kicked out of the country,” continues Pieth. Put that name into the registry.’ Well, you bet what happened. But does it work? “Joe Stieglitz and I suggested to Panama, ‘Well, why not have a company registered that has real names in it…but put the name of the beneficial owner, such as the person who is really fully in control. The alternative is you would be more insistent on finding out who are beneficial owners,” says Pieth. And then you’re dead as a financial center if you’re put on that list. The US called that a primary money laundering concern. You could actually simply close those offshore centers by saying they are no longer viable business centers. “ I think you can do things against them. What are some of the ways that they can be stopped?” asks Altamar’s Muni Jensen. And, these havens seem to be proliferating. “All these states, countries, and islands make money from enabling the hiding of wealth. It means there’s no way getting into that black box because they have their legal privilege,” elaborates Pieth.įiscal paradises are rampant around the world, even in the U.S. So the money has shifted around by somebody else, but the lawyer has opened the structure. They’re opening the structure and then they’re leaving it to somebody else to use it. There is a gray zone in between, and that’s where the people that we’re encountering here are really moving. If you are a financial operator, you’re subject to money laundering legislation. “ If you are a traditional lawyer, you have privilege. So, who exactly is helping the world’s rich and powerful to evade or even fully avoid taxes? “ Actually the lawyer is the key figure…, ” says Pieth. And then you have in the middle of the network the real enabler, who is typically a lawyer, be it in Geneva and London, or maybe in New York ,” responds Pieth. In the Panama Papers with Mossack Fonseca, you’ve got 14 such providers, and then you open bank accounts for these shell companies in Cyprus and Malta. And a structure is made up of shell companies, typically in the British Virgin islands. What is this process that allows the world’s rich and powerful to evade or even fully avoid taxes? “ The technique is relatively simple. The difficulty really is what proportion is really illegal and nobody can tell you that,” answers Pieth.
I would hope that this new leak would help bring about change. How does it keep happening over and over again? Can we prevent it from happening again? Are there consequences that follow these leaks? “ I would hope that finally those countries who’ve been steadfastly refusing to change their laws would now start to move. These elaborate financial operations are nothing new to the world as we’ve already seen it happen twice. You have some organized crime and you also have kleptocrats hiding their money, ” explains Pieth. “ What we’re seeing in the Pandora Papers is not new…we saw exactly the same thing in the Panama Papers. Pieth is the President of the Basel Institute on Governance, a research and policy institute he founded to help combat public and private sector abuses of power. But, what is legal and what is illegal? This week, Mark Pieth, Professor Emeritus of Criminal Law at the University of Basel, joins Altamar to delve into the world’s elite’s financial operations. These massive leaks exposed corruption at the world’s highest levels. While not all are illegal financial maneuvers, questionable ethics abound.įirst the Panama Papers in 2016, then the Paradise Papers in 2017, and now the Pandora Papers. Many politicians, royalty and heads of state have had their secret stashes discovered.
The Pandora Papers leaked nearly 12 million financial records. Guest: Mark Pieth, Founding President of the Basel Institute on Governance, a research and policy institute that combats public and private sector abuses of power