Most of Europe’s Largest Banks Declare Profits in Tax Havens

A majority of Europe’s largest banks are relying on tax havens to stash their profits, despite the fact that in some cases, these firms don’t have a single employee working where these earnings are booked, a new report released on Tuesday by Transparency International EU revealed.

The report, which analyzed 39 of the biggest banks in the European Union, found that 31 of them declared profits in low or zero-tax jurisdictions, and that 29 did so through the use of “ghost operations,” meaning none of the firm's personnel were working in the areas where large portions of their earnings were declared.

Since 2015, the EU has required banks to publish country-by-country reporting as part of their annual statements, which allows for public scrutiny of key financial data for each country the banks operate in.

“We were only able to scrutinize the tax behavior of banks because they are subject to EU public country-by-country tax reporting rules,” Elena Gaita, senior policy officer at Transparency International EU, said in a press release.

“This is probably just the tip of the iceberg when it comes to aggressive tax planning, so it is essential that these rules are extended to other sectors of the economy,” she said. She noted that EU member states who are blocking legislation to apply this rule to other multinational companies should “put the interests of their citizens and their economic well-being over the interests of large companies, especially in these times of economic uncertainty.”

Some key findings of her organization’s report show that HSBC – the largest bank in Europe – booked 1.5 billion euro (US$1.77 billion) in profit over the last five years in Saudi Arabia, despite having no employees located there.

During the same time period, Deutsche Bank reported profits of 418 million euro ($494.47 million) in Malta, where it has had no personnel since 2016.

The report said Malta was the top spot in the EU for banks to set up these ghost operations, and that the Cayman Islands was the most popular in the world.

This finding comes following reports earlier this month that the Caymans had been removed from the EU’s tax haven blacklist, despite widespread criticism from civil society experts.

Another finding shows that while banking operations have reduced their reliance on traditional tax havens, they have turned instead to new countries that offer similarly favorable tax incentives for corporations, such as Hong Kong, Ireland, and Luxembourg.

https://www.occrp.org/en/daily/13325-most-of-europe-s-largest-banks-declare-profits-in-tax-havens

Company ownership secrecy prevails in Southeast Asia, UN report says

The United Nations Office on Drugs and Crime recommends strengthening reporting of beneficial ownership information across the region to stop dirty money flows.

Southeast Asian countries are lagging behind in the adoption of registries with information on companies’ true owners, a tool deemed crucial to fight corruption, money laundering and terrorism financing, according to a report by the United Nations Office on Drugs and Crime.

“While transparency in the banking sector is somewhat regulated,” the report said, “countries in Southeast Asia are considered to be very secretive when it comes to the transparency of ownership of legal entities and other forms of wealth.”

The U.N. estimates that the region generates about $100 billion a year from sources such as the illegal trafficking of timber, drugs, and migrants. Countries such as Malaysia, Indonesia and Thailand are among the top 10 generators of illicit flows, according to Global Financial Integrity, a research organization.

Making the disclosure of company beneficial ownership mandatory would help eradicate financial crimes because it would allow authorities as well as the public to see who’s behind a transaction or a deal.

FinCEN Files, an investigation by the International Consortium of Investigative Journalists, recently found that lack of publicly available information on company ownership hampers client due diligence and anti-money laundering checks by banks.

Bank employees in charge of monitoring illicit money transactions are often unable to identify the beneficiaries of companies based in secrecy jurisdictions and stop dirty cash flows in time, FinCEN Files revealed.

Beneficial owners are “natural persons” who ultimately own or control an entity, according to the definition by the Financial Action Task Force, an inter-governmental body that develops anti-money laundering policies.

In Southeast Asia, the level of transparency varies between countries in the region with Thailand and Cambodia ranking among the most secretive. Those countries don’t publish complete information on company and wealth ownership, according to the UNODC analysis – which doesn’t include countries such as Singapore or Brunei.

The agency also mentioned real estate as a particularly secretive sector where lack of owner information may be a hindrance to law enforcement, as previous research has shown.

https://www.icij.org/inside-icij/2020/10/company-ownership-secrecy-prevails-in-southeast-asia-un-report-says/

FinCEN official accused of leaking secret bank records requests time served

Natalie Mayflower Sours Edwards says she leaked “suspicious activity reports” after official complaints were ignored.

A former U.S. Department of Treasury employee convicted of leaking confidential bank intelligence documents to a journalist has asked a federal court for leniency, portraying herself in a court filing as a dedicated public servant and frustrated whistleblower who wanted to expose misconduct in the agency and protect national security.

In the filing, known as a sentencing memorandum, the attorney for Natalie Mayflower Sours Edwards says she believed sharing the confidential records with a journalist could pressure Congress to remedy what she believed were illegal and improper actions.

Among her concerns: that Treasury officials had illegally searched and stored banking data of U.S. citizens, and that her division, the Financial Crimes Enforcement Network, may not have been providing complete information to a congressional committee probing Russian interference in the 2016 election.

“Edwards not only believed that the people who were running Treasury were doing a very bad job, in her view some members of the Department were violating the law,” the filing in Manhattan federal district court says. “Policies and practices were putting American lives at risk. The privacy of the American people – an almost reverence for which had been imprinted on her during service . . . was not being respected.”

In the filing, Edwards’ lawyer says that BuzzFeed News reporter Jason Leopold encouraged Edwards to provide the documents to him, telling her that he would use information to write stories that would force Congress to investigate her allegations.

Edwards says that while Leopold encouraged her to share the SARs, she ultimately did so “of her own volition.” Leopold “did not force or trick her.”

BuzzFeed News published a series of reports in 2018 that appear to be based on leaked suspicious activity reports, or SARs, shared by Edwards. The reporting included new details about questionable money movements linked to Paul Manafort, the former Donald Trump presidential campaign advisor.

More

https://www.icij.org/investigations/fincen-files/fincen-official-accused-of-leaking-secret-bank-records-requests-time-served/

EUROPOL Continues Campaign Against Sex Offenders

On average, a sexual offense is reported to the police in the European Union every two minutes, be it rape, sexual violence or assault, Europol said Tuesday in a statement.

European police said that while anyone can be a victim of sexual assault, women and children are targeted in the most of the cases.

Because many perpetrators of such violent sexual assaults remain at large, Europol is working with 19 countries across Europe seeking help in finding “some of Europe’s most dangerous sex offenders.”

Eighteen such offenders, some convicted of sexual offenses, have been listed on Europe’s Most Wanted Fugitives website, initiated by the European Network of Fugitive Active Search Teams (ENFAST) community with the support of Europol.

For the next four weeks, law enforcement authorities from Belgium, Bulgaria, Croatia, Cyprus, Denmark, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Romania, Spain, Sweden and the United Kingdom, who have joined this online appeal, will circulate images of the fugitives online and on social networking sites.

The campaign, according to Europol, will also be promoted on multiple media channels to draw traffic to Europe's Most Wanted Fugitives website.

Europol said that “any information can be sent anonymously via the eumostwanted.eu website and will be shared directly with the national investigators looking for the fugitive.”

“In the past, such tips have already proved invaluable: since the launch of the project in 2016, 91 criminals featured on eumostwanted.eu website have been arrested,” read the statement.

In at least 33 cases, perpetrators of sexual assaults were arrested “thanks to information from the general public via the website.”

https://www.occrp.org/en/daily/13324-europol-continues-campaign-against-sex-offenders

More NSW schools target by bomb hoax emails, HSC Biology exam interrupted

More NSW schools have been sent bomb hoax emails, sparking mass evacuations and interrupting HSC exams.

Yesterday more than 20 high schools received anonymous threats over email, suggesting suspicious items were on the grounds.

Today at least 10 more high schools in regional NSW were sent similar threats.

Those impacted so far are Moss Vale High School, Bomaderry High School, Kiama High School, Bowral High School, Yass High School, Vincentia High School, Narrabri High School, Yanco High School, Merriwa Central School, and Nowra High School.

The Principal of Moss Vale High School confirmed HSC exams had been interrupted, saying: "the school is dealing separately with those students, in consultation with the NSW Education Standards Authority, which runs the exams."

The NSW Education Standards Authority also confirmed the interruption.

"This afternoon's exams will continue as scheduled unless students are advised otherwise by their school," a spokesperson said.

NSW Police have established Strike Force Rolum to investigate the emails.

NSW Education Minister Sarah Mitchell said students will not be able to resit the tests.

"The main exams yesterday were Legal Studies in the morning and Visual Arts and depending on the time the threats came to the school, some students were able to sit their exams without disruption, some were interrupted partway through," she told Today.

https://www.9news.com.au/national/more-nsw-schools-targeted-by-threatening-emails-disrupting-hsc-exams/243ebf43-16aa-4915-ab06-4d8cb9b3284b