2017 saw the European Union step up its campaign against tax havens. Having spent the year reviewing 92 jurisdictions around the world the EU named a total of 17 locations that it alleges fall short of its standards on financial transparency and haven’t enlisted in the campaign to combat tax avoidance.
The EU’s ‘name and shame’ list singled out:
- American Samoa
- the Marshall Islands
- St Lucia
- South Korea
- Trinidad & Tobago
- the United Arab Emirates.
According to the EU, the 17 locations on its blacklist failed to meet international standards and hadn’t committed to improving their performance in future. However, there are no proposals for EU member states to impose sanctions or otherwise penalise the worst offenders.
A further 47 locations were put on notice that their performance also needs to swiftly improve. They include the British territories and dependencies of Bermuda, the Cayman Islands, Guernsey, Jersey and the Isle of Man. Each has been given a year’s grace in which to improve their performance or face blacklisting.
Those on this ‘grey list’ have pledged to revise their tax structures, for example to end the ability of companies to exploit their zero corporate tax rates for shielding their profits.
The EU’s finance ministers believe that more than £500bn (€565bn) is lost annually as the result of aggressive tax avoidance. They also suspect that while the shell companies set up in many tax havens are often perfectly legal, many conceal a host of activities ranging from the morally dubious to the illicit.
As The Guardian observed when publishing the leaked so-called Paradise Papers in November 2017: “Over the past 40 years, offshore tax regimes have grown exponentially.
“Back in the 1970s, they were a way for individuals to hide their money from corrupt and predatory governments in unstable countries, or for banks to move cash around to avoid fluctuations in currency rates.
“Then, the lack of transparency and advantageous tax regimes made them the investment place of choice for the rich and famous, who wanted legitimate but tax-efficient investments for their wealth.
“That cottage industry has developed into a sprawling kingdom for the rich, and there has been little political appetite to thoroughly review what has been going on in this new realm.”
Lifting the stone
Publication of the Paradise Papers confirmed what was already common knowledge: that many of the world’s wealthiest – from Formula One racing champion Lewis Hamilton to U2’s lead singer Bono – use offshore tax havens to shelter their money.
Even the Queen was embroiled, with the revelation that several million pounds from her private estate was invested in a Cayman Islands fund as part of a hitherto unpublicised offshore portfolio.
The Paradise Papers episode came less than two years after the publication in April 2016 of the Panama Papers, a leak of 11.5m files from the database of Panama-based Mossack Fonseca, the world’s fourth-biggest offshore law firm.
The Panama Papers exposed in some detail how the rich and famous – including 12 national leaders – used secretive offshore tax havens to conceal their wealth. It apparently galvanised the EU into accelerating its efforts to crack down on tax avoidance.
At the beginning of this year, Brussels contacted the 92 countries identified as tax havens – which ranged from the US and China to small countries such as Monaco and Andorra – to inform them that they would be assessed.
The assessment would be based on three criteria; their transparency on tax issues, how fair their tax system is and whether they are committed to the Organisation for Economic Co-operation and Development’s (OECD) initiative to prevent countries ‘poaching’ the tax base of others.
From the list of 92 locations, Brussels whittled the total down to 41 and wrote to each at the end of October warning that they would be included on a blacklist unless their performance based on the three criteria improved.
The figure is similar to an assessment by the charity Oxfam, which believes that 39 countries are serial offenders and should be blacklisted. The figure includes four EU states: Ireland, Luxembourg, Malta and the Netherlands.
Yet in most cases there is no suggestion that what these tax havens are doing is illegal – even when it is morally dubious.
Often the location of choice for a tax shelter is a British Overseas Territory and Crown Dependency, which can operate autonomously and apply its own rules on taxation and company law.
As one of the most vocal critics of tax havens, Oxfam, is urging cooperation between governments to reform the international tax system so there are no longer advantages in using them.
Its report issued in December 2016, Tax Battles, reveals how tax havens “are leading a global race to the bottom on corporate tax that is starving countries out of billions of dollars needed to tackle poverty and inequality.”
Esme Berkhout, Oxfam’s tax policy advisor (above) commented: “Corporate tax havens are helping big business cheat countries out of billions every year. They are propping up a dangerously unequal economic system that is leaving millions of people with few opportunities for a better life.”
Critics and defenders
According to Oxfam, the world’s worst tax havens, in order of significance are:
- Cayman Islands
- the Netherlands
- Hong Kong
- British Virgin Islands
The report found that the average corporate tax rate across the G20 countries that represent the world’s leading economies stood at 40% at the start of the Nineties. However, over the next 25 years it declined to less than 30% as new tax avoidance locations and schemes proliferated.
“The use of unproductive and wasteful tax incentives is also ballooning – particularly in the developing world,” said Oxfam. “For example, tax incentives cost Kenya $1.1bn a year – almost double their entire national health budget.
“When corporate tax bills are cut, governments balance their books by reducing public spending or by raising taxes such as VAT, which fall disproportionately on poor people. For example, a 0.8% cut in corporate tax rates across OECD countries between 2007 and 2014 was partially offset by a 1.5% increase in the average standard VAT rate between 2008 and 2015.”
Yet tax havens have their defenders, whose ranks include Conservative MP for North East Somerset, Jacob Rees-Mogg.
“The Paradise Papers, which reveal people’s holdings in offshore activities, show three things, none of which are surprising,” says Rees-Mogg.
“The first is that most offshore investment is entirely legitimate. The Queen’s holdings fall squarely into this category.
“The second category is for tax avoidance. It is, however, legitimate. No taxpayer has any obligation to pay more than the law requires.
“The third category is the deliberate and illegal hiding of income or capital gain to evade legitimate taxes. This does not require offshore havens but can be as rudimentary as receiving cash for a service rendered.
“The socialist hysteria that assumes that all offshore investment is of this kind is as wrong as thinking that all taxpayers are receiving cash bungs.”
History of tax havens
Just when and where tax havens originated is a matter of debate, but the US states of New Jersey and Delaware are widely accepted to be pioneers.
In the late 19th century, New Jersey began attracting corporates through the twin incentives of liberal incorporation laws and a relatively low rate of corporate tax. By the end of the 1890s, Delaware sought to replicate New Jersey’s success.
The next stage came in the aftermath of the First World War, when the technique of attracting non-resident companies through a favourable economic environment was adopted by several of Switzerland’s cantons and also Lichtenstein, and took hold in Europe.
Rulings by the British law courts furthered the concept of ‘virtual’ residencies, in which companies could incorporate in the UK without paying tax.
The 1929 case of Egyptian Delta Land and Investment Co. vs. Todd legalised tax loopholes, finding that a company registered in London but without any activities in the UK was not liable for British tax.
The ruling extended beyond the UK to the entire British Empire, paving the way for jurisdictions such as Bermuda and the Bahamas to become tax havens and later employed to maximum effect in the Seventies by the Cayman Islands.
At the end of the Twenties, Luxembourg also introduced the concept of the holding company, which could claim exemption from income taxes. Bermuda, the Bahamas, Jersey and Panama were all used, to a limited extent, as tax havens in the 1920s and 1930s.
In the post-war period, tax havens got a further fillip in 1957 from the Bank of England. The Bank conceded that transactions undertaken by UK banks on behalf of a lender and borrower located outside the UK would not be regarded as having taken place in the UK for regulatory purposes even though it took place in London.
The ruling spurred the development of the Euromarket – an inter-bank or 'wholesale' financial market in the City of London – as a driving force for an integrated offshore economy, centred on London and including remnants of the British Empire.
The Euromarket was not regulated by the Bank, but as transactions took place in London it was exempt from any other authority and became effectively unregulated or ‘offshore’.
By the 1960s a number of tax havens were established and able to benefit as taxation levels in developed countries rose during the decade.
British banks extended their Euromarket activities in Jersey, Guernsey, and the Isle of Man and in 1964 were joined by three major US banks - Citibank, Chase Manhattan and Bank of America.
In 1966 the Cayman Islands legislated to relax a range of regulations and swiftly established itself as one of the world’s leading tax havens, growing over the next 40 years to become the fourth largest financial centre in the world.
By the late 1960s Singapore was also developing as tax haven, after a tightening of credit sparked rising interest rates in the Eurodollar market and dollar balances in the Asia-Pacific region became attractive to banks.
Singapore responded by introducing incentives for branches of international banks to relocate to the city state. A Bank of America branch set up a special international department to handle transactions for non-residents in what was dubbed the Asian Currency Unit (ACU).
The success of European and Caribbean tax havens established a template for locations in other regions of the world to copy. In 1966 the first Pacific tax haven was set up in Norfolk Island, a self-governing external territory of Australia.
Over the next 30 years, it was joined by Vanuatu, Nauru, the Cook Islands, Tonga, Samoa, the Marshall Islands and Nauru.
Each adopted legislation based on existing tax havens, including provision for zero or near-zero taxation for exempt companies and non-residential companies, Swiss-style bank secrecy laws, trust company laws, offshore insurance laws and flags of convenience for shipping fleets and aircraft leasing.
In the 21st century, to this list was added laws aimed at facilitating electronic commerce and online gambling.
The heyday of offshore tax havens
The 30 year period from the early 1970s to the late 1990s is regarded as the zenith of the tax haven, when both the number of locations available rose sharply, as did the scope and volume of financial assets that passed through them.
Tax havens established themselves as centres of expertise for routing financial payments and circumventing regulatory supervision. In some cases this meant that they facilitated illegal activities such as money laundering.
Developments over this period include Bahrain’s licensing of offshore banking units (OBUs) in 1975, which was quickly duplicated by Dubai.
Ireland joined the ranks of tax havens in 1987, when it established the Irish Financial Services Centre in Dublin, offering an attractive tax regime for certain financial activities and a corporate tax rate of 12.5%.
During the 1980s and 1990s, new tax havens were also established in regions of the world such as the Indian Ocean, Africa and now post-Soviet republics. By the early 1990s, depending on how strictly the definition of ‘tax haven’ was applied, the worldwide total had risen to between 60 and 100.
By the end of the 1990s, attitudes towards tax havens had begun to change as they were seen as facilitating tax avoidance and constituting a major drain on the economies of developing countries.
In 1998 the Organisation for Economic Co-operation and Development (OECD) published its report ‘Harmful Tax Competition; an Emerging Global Issue’, which identified tax havens and harmful preferential tax regimes as two problems to be eliminated
The OECD’s initiatives over nearly two decades to reduce international tax avoidance strategies include the Base Erosion and Profit Shifting (BEPS) project, a collaboration between more than 100 countries and jurisdictions.
It has put forward a number of proposals, which include the principle that the applicable tax rate should directly reflect where economic activity takes place.
Advocacy group the Tax Justice Network, a coalition of researchers and activists, praises the OECD’s initiatives on corporate tax, but warns: “The process has been continually undermined by the army of paid corporate tax advisers and lobbyists, as well as governments seeking to protect some of their pet tax breaks to business.”
Ten major tax haven countries:
Switzerland has a long-established reputation as one of the world’s leading tax havens but is not a member of the European Union.
The main contender for the title of the EU’s top tax haven is generally agreed to go to the Grand Duchy of Luxembourg, which maintains that it operates fully within the law. Its low rates of taxation have attracted many international companies to set up subsidiaries in Luxembourg to maximise their profits.
The Grand Duchy’s efforts to attract investors and corporates owes much to president of the European Commission, Jean-Claude Juncker, who was Luxembourg’s prime minister for a total of 18 years and shaped its tax policy during his time in office.
Foreign corporations began moving there in the early 1990s, when Luxembourg transposed into national law an EU directive enabling companies to choose to pay taxes in the European country where they were headquartered, rather than where their subsidiaries operated.
The so-called ‘Lux Leaks’ episode, in November 2014, resulted from an investigation by the International Consortium of Investigative Journalists, which released details of tax avoidance schemes set up for over 300 multinational companies based in Luxembourg.
It helped accelerate measures to increase the regulation of tax avoidance schemes beneficial to multinationals.
The island’s premier, Alden McLaughlin (left), prefers for the Caribbean island to be described as an “international finance centre” rather than a tax haven.
Nonetheless, Newsweek magazine placed the Caymans as a ‘top five’ global tax haven after Switzerland, Hong Kong, the US and Singapore and commented: “Cayman retains many secrecy features — not least a law that can put people in jail not just for revealing confidential information, but merely for asking for it.”
The island is a British dependency and its zero corporate tax rate has attracted nearly 20,000 companies to use it as a base for subsidiary entities. The zero rate extends to interest or dividends earned on investments, making the Caymans a popular choice among hedge fund managers.
Instead of tax, offshore corporations pay an annual licencing fee directly to the government, based on the amount of their authorised share capital. The Caymans makes an estimated $350m annually from fees and providing work permits.
Among the revelations of the recently-leaked Paradise Papers was that the Queen’s private estate invested nearly £6m in a fund held on the islands.
Reports also claim that the Cayman’s proximity to Miami and Cuba established it as a popular drop-off point for money laundering in the late 1960s and 1970s.
Isle of Man:
Since the 1950s, the Isle of Man has reinvented itself and transformed from a popular seaside resort into a location of choice for anonymously owned, untaxed shell companies. The island’s banks hold an estimated €68bn in assets.
The IoM is another location that dislikes being dubbed a tax haven and prefers the description “low-taxed financial centre”.
However, campaigners against tax evasion maintain that the island’s status is as a tax haven, one effectively subsidised by a customs union with the UK dubbed the ‘common purse’ whose origins date back to the 18th century.
As the island’s newly-published Tax Saving Guide confirms: “The maximum income tax rate is 20% (compared with 45% in Britain). There is also a generous tax-free allowance and a big chunk of income is taxed at just 10%.”
The IoM collects value added tax (VAT) and duties on tobacco and alcohol that is pooled with similar income in the UK and then shared according to an agreed formula, which is due to rise by 4.5% annually to 2019.
As the Paradise Papers revealed, tech giant Apple transferred the subsidiary holding most of its untaxed offshore cash reserve to the Channel Island of Jersey in 2013, following a crackdown on its tax practices in the Republic of Ireland, the previous location.
A UK Crown dependency, Jersey has its own tax laws and applies a zero corporate tax rate to foreign companies.
The island was one of the very first locations to enter the offshore financial services market. In the 1920s high net worth individuals in the UK began moving to Jersey or transferring their wealth to the island and registered offshore trusts and companies to avoid wealth and inheritance taxes.
The island is also host to hedge funds, private equity firms and a variety of unregulated financial intermediaries dubbed ‘shadow banks’, and has specialised in the offshore securitisation of debt since the Sixties, when London-based secondary banks expanded their offshore Euromarket activities.
Financial services represent 50% of Jersey’s economy and its gross domestic product (gdp) totalled $5.08bn in 2015. The capital, Saint Helier is home to a various international banks, trust companies and law firms, but the island’s other activities such as tourism and agriculture have diminished in importance.
Ireland has a corporate tax rate of 12.5%, which reduces to just 6.25% for revenue tied to a company’s patent or intellectual property.
As a result, Ireland ranks sixth in a list compiled by Oxfam of 15 countries accused by the development agency of assisting large-scale corporate tax avoidance through profit-shifting, aggressive tax planning structures and so-called sweetheart deals.
The Industrial Development Agency (IDA) has responsibility for drawing foreign operations and investments to Ireland. The IDA states that “thanks to our attractive tax, regulatory and legal regime, combined with our open and accommodating business environment, Ireland’s status as a world-class location for international business is well established.”
Before 2013 these attractions were added to by the ability of multinationals to further enhance their tax benefits by shifting profits out of Ireland to zero-tax jurisdictions such as Bermuda.
Dubbed the “double Irish”, under the manoeuvre US companies such as Google and Microsoft shrank their overseas tax rates by establishing Dublin-registered subsidiaries, which they designated as tax resident in Bermuda.
The Irish subsidiaries made sales to customers, and then paid large, tax-deductible sums of money in royalties to the Bermuda affiliate, thus channelling profits to the island’s zero-tax jurisdiction.
Apple shifted to Jersey as a result of moves to restrict this benefit.
The Indian Ocean island has a multi-ethnic population of 1.3 million and officially applies a corporate tax rate of 15%.
But the Financial Times recently reported that some companies pay a maximum effective tax rate of 3% as they can claim a “deemed” tax credit equivalent to 80% of their Mauritian tax.
Reforms enacted by the then finance minister introduced global business to Mauritius in 1994. The government refutes accusations that the island is a tax haven and maintains that there is simply no secrecy and that it is instead “a low-tax jurisdiction”.
The official line is that the government favours “quality over quantity”, demonstrated by figures showing 25,000 international business companies (IBC) registered in Mauritius compares with 375,000 in the Cayman Islands, and more than one million in the British Virgin Islands.
Nonetheless, Mauritius has recently clashed with the Organisation for Economic Co-operation and Development (OECD), which stated that the island should not base its future on “leaching” tax revenue from its African neighbours.
A dispute arose with the OECD over the issue of so-called “treaty shopping”, or the ability of multinationals to route investments through havens to avoid tax in other countries.
Mauritius initially opted to exclude several bilateral tax accords from the OECD’s multilateral treaty to stamp out treaty shopping.
An agreed compromise enabled Mauritius to join the OECD framework, by adding a rider stipulating that it would review the excluded treaties and ensure they met the G20’s minimum agreed standards by the end of 2018.
In December 2016 Oxfam named Bermuda, which is under UK sovereignty, as the biggest offender out of 15 locations identified by the charity as the “world’s worst” corporate tax havens.
It reported that the island was a favourite for US corporations seeking to reduce their tax bill via ‘profit-shifting’. In 2012 alone, American firms had reported $80bn of profit in Bermuda, more than their combined reported profits in Japan, China, Germany and France.
According to Oxfam’s ranking, Bermuda had the worst record in offering unfair and unproductive tax incentives, low-to-zero corporate tax rates and reluctance to cooperate with international incentives to prevent tax avoidance.
The government of Bermuda responded by claiming there were “substantial errors” in Oxfam’s report. It disputed claims that there were “anonymous shell corporations” on the island. It insisted that it cooperated fully with international anti- tax avoidance initiatives.
“It should be emphasised too that the right to set a corporate tax rate is recognised by the UN as a sovereign right and is considered by Bermuda to be an essential contributor to its world-leading reinsurance centre, along with political stability, regulatory excellence and geographic independence,” said Bermuda’s finance minister, Everard Richards.
The offshore law firm Appleby, which was directly implicated in the Paradise Papers as a result of its leaked documents and has offices in many of the tax havens, is based in Bermuda.
Situated on the Mediterranean coast of France, Monaco is the second smallest and the most densely populated country in the world.
A Principality favoured by the rich and famous, its development was helped in the late 19th century by the opening of a casino and a rail link to Paris.
A further attraction for residents is that it does not levy income tax, although all goods and services are subject to a value-added tax (VAT) rate of 19.6%. It is also relatively easy to be a Monaco resident while working in another country.
The Principality has the world’s second highest GDP per capita at US$153,177 and nearly one in three of its residents are millionaires.
Until 2009 Monaco was, together with Andorra and Liechtenstein, on the OECD’s blacklist of “uncooperative tax havens”, but all three were removed in return for agreeing to enter various tax and information exchange agreements (TIEAs).
Pressure from the US and European Union countries mean that Switzerland is no longer a location for ‘hiding’ money.
However, there are still incentives for the wealthy to live and keep their money there, with recent studies indicating that Switzerland is home to as much as $2.5 trillion in wealth.
There is a low level of taxation for high net worth individuals, who can opt to pay a low lump-sum on the money they bank inside the country. The Swiss government bases the amount of tax foreigners owe on five times their monthly rent.
Foreign corporations regard Switzerland as an attractive location for establishing an office and around 30% of the US’s Fortune 500 companies have operations in the country.
Significant tax breaks are available to companies holding 20% of the shares of other corporations and the government reduces tax imposed on profits based on the number of shares the company owns.
Switzerland’s 26 cantons – similar to states in the US - do not impose tax on holding corporations, which acts as an incentive for shell corporations to set up operations within the country.
The Bahamas consist of around 700 islands located to the southeast of the US. It is an offshore jurisdiction providing services that include:
- offshore banking
- registration of offshore companies
- investment funds
- registration of ships and other vessels
- fund management.
More than 250 banks and trust companies representing 25 countries are licensed to do business in the islands.
As an offshore financial centre, the Bahamas has also developed as a tax haven since 1989. Legislation was passed to assist the incorporation of offshore companies of Bahamas international business companies (IBCs) and giving them exemption from tax.
Once registered, a company becomes a legal entity that qualifies for tax exemption over a period of 20 years. It can also ensure a high level of privacy; for example the names of its beneficial owners and directors are filed with the Registrar of Companies but not made public.
There is also no obligation on them to prepare annual accounting records.
Users of tax havens in the world
Family offices typically are dedicated to managing and protecting the wealth of a single family and oversee activities from investment strategy to philanthropy.
Tax planning is a key function and activities largely consist of converting one type of income into another that is taxed at a lower rate. Many of the techniques employed are perfectly legal and wealthy taxpayers maintain that they are perfectly entitled to exploit them.
Many family offices are concentrated in offshore tax havens, with the Cayman Islands among the most favoured locations.
One recent phenomenon has seen a number of hedge fund managers convert their structures to family offices, due in part to the Dodd Frank regulations in the US, which have increased the cost of conducting hedge fund operations.
The strategy has also been used by hedge funds that have underperformed, as a means of preserving their assets.
Among the revelations of the Paradise Papers was that the Queen’s estate had invested in two offshore funds, based in Bermuda and the Cayman Islands respectively.
It was quickly explained that Her Majesty’s investment portfolio is overseen by Stanhope Consulting, the advisory arm of investment company Stanhope Capital, which manages $9.5bn of investments on behalf of wealthy families and charities.
Singers Bono and Madonna, US commerce secretary Wilbur Ross and companies including Apple, Nike and Uber were also shown to have shell corporations and multiple companies to structure their investments so income earned in high-tax nations was redirected to tax havens
In each case the strategy was at the direction of their investment adviser and the leaked documents didn’t reveal whether the individuals and heads of the companies involved were aware of the often elaborate tax avoidance mechanisms utilised on their behalf.
However, investment advisers will communicate directly with clients in the early stages of arranging a tax avoidance strategy suitable to their requirements.
These include choosing an appropriate offshore jurisdiction from the many available around the world and overseeing the setting up of a company, trust, or ready-made firm. In some locations, an off-the-shelf option can be approved within three days in return for a fee.
The investment adviser may also recommend the establishment of a private foundation as a non-profit entity in which to place their client’s cash. This can then own a corporation and add a further layer of secrecy to any tax evasion scheme.
Private equity firms:
For many investors, directing their money via private equity firms incorporated into a tax haven jurisdiction is an attractive proposition.
Both investors and fund managers alike are looking to maximise returns on their investment, which requires the availability of tax exemption schemes, the easy repatriation of profits and capital mechanism set into tax treaties and broader maximum tax efficiency.
Fund managers will take into account the respective regulatory costs of each location, its geopolitical environment, expected benefits and also the fund’s legal structure.
Typically, the private equity fund will be structured as a limited partnership, which follows the terms set out in a limited partnership agreement (LPA).
These funds have a general partner (GP), who raises capital from cash-rich institutional investors, including pension plans, universities, insurance companies, foundations, endowments, and high-net-worth individuals, which invest as limited partners (LPs) in the fund.
So, offshore limited partnerships are the most popular structure for private equity firms. Typically, the offshore jurisdiction in which a fund is incorporated exempts it from direct taxation on the fund’s income. Nor will it impose any withholding or similar income taxes on distributions by the fund to its investors.
This means that individual investors usually receive their return on investment in the form of capital gain rather than income. This results in favourable tax treatment, as gains are taxed at lower rates than income for individuals.
Tax havens are firmly established around the world, serving all of its major financial and commercial centres. This provides opportunities for curbing their worst excesses, but also presents a coordinated international campaign to fight them with various challenges.
Tax havens basically consist of three groups. The largest are UK-based or British Empire-based tax havens that include Crown dependencies, overseas territories, Pacific atolls, Singapore and Hong Kong.
Second are European havens that house head offices, financial affiliates and private banking. The remainder include a disparate group of either emulators, such as Panama, Uruguay and Dubai, or new havens from the transition economies and Africa.
The OECD has made progress in its campaign against tax havens, but is hampered by the fact that many of its members themselves qualify, such as the UK, Switzerland, Ireland and the Benelux countries.
The 2008-09 global financial crisis was also a setback, weakening the United States and Western Europe, and giving opportunities to locations in other regions of the world to emerge as significant tax havens.
Against this, the intensifying pressure on public finance and the limited ability of governments to raise taxation has lent impetus to a more co-ordinated campaign to improve the transparency of tax havens and eliminate abuses.
The revelations provided by both the Panama Papers and the Paradise Papers in 2016 and 2017 have intensified pressure on the authorities to crack down on tax havens. The campaign is set to continue.
French politician and former minister of finance Pierre Moscovici, who is now European commissioner for economic and financial affairs, taxation and customers, wants sanctions to be imposed on offenders. He is now lobbying EU members states to agree to specific penalties.
Yet effectiveness demands a co-ordinated global response. There might just be too many vested interests in preserving the current regime for that to be possible.