University of Oulu

How British Island tax havens accommodate financial criminals? Historical perspective 1956–2020

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Author: Macegoniuk, Anna1
Organizations: 1University of Oulu, Oulu Business School, Department of Economics, Economics
Format: ebook
Version: published version
Access: open
Online Access: PDF Full Text (PDF, 0.5 MB)
Pages: 70
Persistent link: http://urn.fi/URN:NBN:fi:oulu-202109179025
Language: English
Published: Oulu : A. Macegoniuk, 2021
Publish Date: 2021-09-17
Thesis type: Master's thesis
Tutor: Puhakka, Mikko
Reviewer: Puhakka, Mikko
Koivuranta, Matti
Description:

Abstract

Master’s thesis regards British tax havens located on the islands and the features they possess making them an attractive place for criminals to store their ill-gotten wealth.

There are fourteen British Overseas Territories, seven of them are tax havens. Territories include British Crown dependencies such as the Channel Islands, Jersey, Guernsey and the Isle of Man, British Overseas Territories among which the most significant tax havens are the Cayman Islands, Bermuda, British Virgin Islands, and independent former British Imperial colonies such as Hong Kong, Singapore, the Bahamas, Bahrain and Dubai.

Financial criminals that store wealth in those places can be shared into three big groups: priests, corrupted public figures and organized crime groups (such as narcotics cartels, human traffickers, wildlife smugglers, etc.). All these groups were enabled to store their wealth due to specific legal and political changes that occurred in the United Kingdom and in British colonies starting from 1950s.

Therefore, this master’s thesis explains how for the past seventy years the United Kingdom has been transforming itself from the global colonial empire, deriving its strength from the army and colonial tax exploitation to global financial power, deriving its strength from financial regulations exploitation. To document this, I have applied scrupulous methodology analyzing scientific, press and investigative journalism articles, stretching from as far as 1880s until today.

Tax havens arose around two, cultural-historical centers: first is small, resources-poor European countries (Holland, Ireland, Switzerland), second is British islands colonies. Transformation of these islands into tax havens started as a response to British former colonies declaring independence and white British settlers no longer having a safe place to store their wealth. From this time onward, United Kingdom had undertaken deliberate legal and political changes to allow global scale financial operations to be conducted from the Overseas Territories. These operations may contain money laundering, tax dodging, tax evasion, opening shell companies, concealing legal and illegal wealth behind trusts. Britain’s financial center has been also a big beneficiary of the massive flight of Russian cash since the fall of the Soviet Union. London and British tax havens, especially British Virgin Islands, remain the Western capital of choice for Russian officials and oligarchs who flaunt their ill-gained money. Blooming financial sector lead, in consequence, to the fictionalization of developed economies in the last two decades at the expense of industry and agriculture.

Services offered by tax havens are proved to be so competitive and sought after by various world super-rich, wealthy and/or criminals, that none of the parties involved, be it British Parliament, indigenous inhabitants of the Territories or clients, are interested in compliance, transparency or regulation of tax havens.

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Copyright information: © Anna Macegoniuk, 2021. This publication is copyrighted. You may download, display and print it for your own personal use. Commercial use is prohibited.