INDONESIA

As tax havens go, the US is worse than the Cayman Islands

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The US has overtaken the Cayman Islands and Singapore in a financial secrecy name-and-shame list compiled biennially by the UK-based advocacy group Tax Justice Network.

The Financial Secrecy Index ranks countries on “their secrecy and the scale of their offshore financial activities.” Switzerland topped the list, with Hong Kong following closely behind in second place.

The UK ranked 15th—but it would come out on top if the report had treated the UK and its dependent territories as a single unit.

Rank Jurisdiction FSI Value Secrecy Score Global Scale Weight
1 Switzerland 1,466.1 73 5.625
2 Hong Kong 1,259.4 72 3.842
3 USA 1,254.8 60 19.603
4 Singapore 1,147.1 69 4.280
5 Cayman Islands 1,013.2 65 4.857
6 Luxembourg 817.0 55 11.630
7 Lebanon 760.2 79 0.377
8 Germany 701.9 56 6.026
9 Bahrain 471.4 74 0.164
10 United Arab Emirates (Dubai) 440.8 77 0.085
11 Macao 420.2 70 0.188
12 Japan 418.4 58 1.062
13 Panama 415.7 72 0.132
14 Marshall Islands 405.6 79 0.053
15 United Kingdom 380.2 41 17.394

The report notes that most countries scores have improved as the world is taking “real action” to tackle financial secrecy. The OECD introduced the automatic information exchange this year, whereby countries can share information to curb tax evasion, and the EU is creating central registers of beneficial owners, which is openly available to everyone, and is forcing multinationals to provide country-by-country financial data.

While this progress should be applauded, the report warns some countries are blocking and sabotaging these efforts. The US is of “greatest concern,” rising from sixth to third—one of the few countries whose secrecy score worsened after 2013. “The US has not seriously addressed its own role in attracting illicit financial flows and supporting tax evasion,” the TJN report notes.

Though the Obama administration has made some attempts to tighten rules on offshore tax loopholes, it was the government’s refusal participate in the OECD’s global reporting standard for bank data that has landed it so high on the list.

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