So tonight’s PBBC Panarama programme on the Panama Papers was a total yawn.Besides the tepid reporting and comical ‘stings’ on a couple of people whose names turned up in the leaked files there was not much else to recommend it.
However, the post BBC news clip about the leaks which featured the now, well-worn innuendo about independent small state international financial centres, the sound bite by the Director of the OECD Centre for Tax Policy and Administration who has some oversight in the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes, and Automatic exchange of Information (the new standard) did shed some light on what, to my mind, is the bigger question..Why Now?.
The other by-product of the Panama Papers was to perhaps inadvertently provide further support for the US position that it will not exchange taxpayer information with countries that can’t ensure that the information they exchange won’t fall into the wrong hands.
Interesting then how these ‘leaks’ reinforce the post-AEOI competitive advantage of some countries which is not based on secrecy per se but on protecting their taxpayers from inadequate confidentiality safeguards in the state receiving the automatic transmissions of information.
In fact, aside form the buzzfeed about certain Presidents, UK property owners, and others with enough money to be particularly concerned about keeping it, the methodology of the International Consortium of Investigative Journalists should cause some pause because it is precisely this kind of breech that could undermine the ‘confidentiality’ of information exchanges that has become a sticking point for the US.
Though a footnote , the fact is that the vast majority of the 11.5M files of confidential information were not part of the Mossack Fonseca ‘sting’. What then happens to the clients whose financial privacy was compromised seemingly without any legal action being contemplated, in the cause of ‘naming and shaming’ countries, companies and their clients.
In the name of exposing some clients, so-called ‘whistle-blowers and other objectors whose access to information is such that they are able to ply a brisk trade in confidential information; and the non-governmental beneficiaries of such exchanges threaten to implode the AEOI agenda.
While it is clearly important to remove the ‘cloak of secrecy’, for those minority of operators who are still wedded to the old dispensation; surely there there must be a place and a form of redress for those innocent clients of Mossack Fonseca and others whose private, legitimate offshore financial affairs have been laid bare.
Confidence in the new OECD-sponsored AEOI standard must be manifest not only by the participating countries but also the tax-payers. If the Panama Papers ‘sting’ becomes the norm it seems unlikely to support the noble, yet untested ideal of the automatic, multilateral sharing of taxpayer information without compromising their right to privacy; and their government’s duty to protect this fundamental right.