Transcript
ANTHONY VAN FOSSEN: First of all I think it's important to place it in the context of a history of revelations about Pacific Islands tax havens. Beginning with the Cook Islands wine box in the mid 1990s which was at the time the biggest revelation of secret documents from any tax haven in the world. And established the career of Winston Peters and basically very much weakened, if not destroyed the reputations of Fay and Richwhite. Then a year and a half ago we had the revelation of the Panama Papers from the Panamanian law firm Mossack Fonseca which had quite a few cases of the use of Samoa and Niue. Where Mossack Fonseca had actually had a monopoly.
The Paradise Papers don't seem to have caused as much outrage as either of the Cook Islands wine box or the Panama Papers. And I think one of the reasons is that people are becoming more used to the idea that tax havens are central to the global system of money and power so it doesn't shock them as much. And it's hard to know now what the impact of the revelations from Asiaciti Trust about Samoa, the Cook Islands and Vanuatu are going to be because so many of them haven't been publicised yet. What we do know is that the HSBC branch in the Cook Islands was very hostile towards the ANZ responding to an Australian Federal Court judgement and releasing documents which HSBC believe to be covered by secrecy provisions to the Australian government about it's clients. And the Cook Islands Trustee Association wanted ANZ to move its information to someplace other than Australia in order to avoid similar things happening but of course that didn't happen.
We're more sure what has happened as a result of the release of information from the Marshall Islands. Because Wilbur Ross the US Commerce Secretary was implicated in two Marshall Islands companies which were flag of convenience shipping companies, Navigator Holdings and Diamond S Shipping. And Navigator Holdings had strong ties to a business run by Putin cronies and seemed to be involved in Putin's regime in another ways. So that's caused quite an uproar in the US. It's basically too early to tell what the full impact of Asiaciti Trust's information on clients released in the Paradise Papers will have on the other three Pacific Islands tax havens you mentioned, Samoa, the Cook Islands and Vanuatu. I think one thing that is certain though is that the information about Vanuatu is not likely to be as dramatic because Asiaciti pulled out of Vanuatu some time ago and it's still operating in Samoa and the Cook Islands so the information from Samoa and the Cook Islands are likely to be more interesting.
JENNY MEYER: Tell me about that role of the Pacific Islands in terms of tax havens and I guess the questions also about money laundering and white collar crime.
AVF: The Pacific Islands tax havens have been implicated in all of those things but it's a question of degree. It seemed to me that the relative importance of Pacific Islands tax havens in relation to various kinds of crimes and misdemeanours was being over estimated. And one of the reasons for that is that they're not as central to the global system of money and power as other tax havens are, particularly the ones in Europe. And paradoxically that means that they're more likely to be stigmatised. And one of the indications of this is that the President of the European Commission Jean-Claude Juncke, the former Prime Minister of Luxembourg, the man who had the greatest power in Luxembourg at the time that many very questionable deals were being made with the rich and powerful, the subject of the Lux Leak revelation back in November 2014. He has been very important in the blacklists that have been issued by the European Commission of tax havens which have disproportionately stigmatised the havens in the Pacific Islands and made them into sort of scapegoats and ignored the biggest havens especially the ones in Europe. The public perception of the dangers of the Pacific havens tend to be over estimated.
JM: So do you think that there's going to be much of an impact with this latest release on the activity that's happening in the Pacific in terms of financial investment going on?
AVF: I don't know because we don't know what the full dimensions of the revelations are going to be yet.
JM: Do you see these governments changing anything about their legal systems to try and tighten things up at all as a result of any kind of embarrassment? Do you think that's likely to happen?
AVF: Yes. I do think so. But of course we know from the past that those ultimately don't have very much effect. So there are legal changes. Various governments quite rightly think that there should be loopholes which are closed. But resourceful lawyers working diligently for their clients usually find new loopholes. And there has been a pronounced growth in tax havens since the early 1970s and this has been accompanied by constant legislative initiatives to close loopholes. We've seen stories in the media for decades about how tax havens are going to disappear because of changes that are going to be made in the laws, and enforcement is going to be increased, it hasn't happened.
Anthony van Fossen says there is no way of knowing whether tax havens are being used for legal but secretive tax minimisation or for hiding illegal money laundering, white collar crime or arms trading, unless cases are taken to court.
