WEEKLY NEWS DIGEST (October 28-November 3, 2013)

ARTICLE OF THE WEEK

Trusts and financial transparency; The weak link.” No by-line. Economist. October 31, 2013. A FEW years ago Mark Morris, a Zurich-based tax consultant with a conscience, requested a meeting with the European Commission to explain the many devious ways in which tax evaders were using shell companies and other vehicles to conceal their interest in offshore bank accounts. The official he met “seemed uninterested and offered me 20 minutes,” Mr Morris recalls, “but once I started describing all the loopholes his eyes lit up. Two hours later he was still listening, scribbling furiously.” Only a fool holds dirty money in his own name these days. The savvy try to conceal ownership through labyrinthine combinations of anonymous shell companies and so-called legal arrangements, such as trusts and foundations. Campaigners have worked hard to expose the extent of this “layering”, helping to push corporate transparency up political agendas. G8 countries backed mandatory registration of companies’ real, or “beneficial”, owners at their recent summit. On October 31st Britain became the first country to announce that its register would be open to the public. There has, however, been less focus on the misuse of legal arrangements, which some view as a bank-vault-sized loophole. Trusts, for instance, are likely to be exempt from the British register. “Very few of the measures so far have taken account of trusts and foundations, says John Christensen of the Tax Justice Network, a pressure group. “They’re one of the biggest nuts yet to be cracked.”

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