Money Laundering, Terrorist Financing, and Tax Evasion

The Consequences of International Policy Initiatives on Financial Centres in the Caribbean Region

Author: Dr. Aretha M. Campbell

Publisher: Springer International Publishing

Part of: Springer Professional "Wirtschaft+Technik" , Springer Professional "Wirtschaft"

Table of Contents

About this book

This book explains the consequences of global policy initiatives against money laundering, terrorist financing, and tax evasion on financial centres located in offshore jurisdictions in the Caribbean region. Adding to the existing literature by detailing international policy initiatives against money laundering and tax evasion from the early 1920s to date, this book examines the factors that have contributed to their gradual development over time, their role in contributing to money laundering, terrorist financing, and tax evasion, the international policy initiatives that came about to address these financial crimes, as well as the consequences of these policy initiatives on the legislative systems, institutions, offshore business sectors, and economies of these financial centres.

Frontmatter

Chapter 1. Introduction

Abstract

This chapter is the introduction to the book. It discusses the emergence of offshore financial centres in the Caribbean and their proliferation as a result of globalization. It looks at the effects of globalization which have given rise to money laundering, terrorist financing and tax evasion, and the increasing concerns of the international community to find solutions to these phenomena, including the creation of the FATF and the assignment of the OECD with the responsibility to counter these three phenomena respectively.

Aretha M. Campbell

Chapter 2. Offshore Financial Centres in the Caribbean

Abstract

Part I of this chapter is a comprehensive overview of two main offshore financial centres in the Caribbean. These centres include The Bahamas and the Cayman Islands. A look at the general profile of each centre, including an overview of their offshore financial sectors and the anti-money laundering and anti-tax evasion regimes instituted in each jurisdiction prior to 2000, is conducted. Part II of this chapter is a comprehensive overview of two other main offshore financial centres in the Caribbean. These centres include Bermuda and the British Virgin Islands. A look at their general profiles, including an overview of their offshore financial sectors and the anti-money laundering and anti-tax evasion regimes implemented in each jurisdiction prior to 2000 is undertaken.

Aretha M. Campbell

Chapter 3. The Problems and Dimensions of Money Laundering and Terrorist Financing

Abstract

This chapter takes a look at the problem of money laundering from both the US’ and EU’s perspectives. It discusses globalization and the challenges associated with money laundering and terrorist financing which have led to increasing concerns in the international community. It also describes the incentives which pushed the international community to take action, the organization designated with the responsibility to deal with money laundering and terrorist financing, and its approach to tackle both issues.

Aretha M. Campbell

Chapter 4. The Problems and Dimensions of Tax Evasion

Abstract

This chapter examines tax evasion and the factors which facilitate it. It also looks at the challenges faced by tax authorities in jurisdictions to collect taxes, and the challenges associated with this phenomenon. This chapter also explores the incentives which contributed to pushing the agenda forward in the international arena to address the problem of tax evasion and discusses the organization and specific countries which took on the responsibility to deal with this issue, along with the tools implemented by each to combat this problem.

Aretha M. Campbell

Chapter 5. The International Solution to Money Laundering and Terrorist Financing

Abstract

Chapter five looks at the international initiative introduced by the Financial Action Task Force (FATF) as a solution to the problem of money laundering and terrorist financing. An in-depth review is undertaken of the Forty Recommendations to determine the role this international standard plays in countering money laundering and terrorist financing. Specifically, we will examine three principal aspects of the functions played by the Forty Recommendations in the areas of promoting transparency in the legal systems and institutional measures of jurisdictions, implementing backstopping measures as preventative mechanisms to mitigate the risks associated with these two phenomena, and in establishing effective exchange of information through fostering national and international cooperation. Conclusions are drawn based on the findings.

Aretha M. Campbell

Chapter 6. International Solutions to Tax Evasion

Abstract

Chapter six reviews the standards set by the OECD, the Global Forum on Transparency and Exchange of Information for Tax Purposes, as well as the US and EU, to determine the role they play in combating tax evasion. Specifically, we will examine three principal aspects of the function each standard plays in the areas of promoting transparency in the legal systems and institutional measures of jurisdictions, implementing backstopping measures as preventative mechanisms to mitigate the risks associated with tax evasion, and in establishing effective exchange of information through fostering national and international cooperation. The standards examined in this chapter include exchange of information on request (EOIR), foreign accounts tax compliance act (FATCA), common reporting standard (CRS), and the EU Code of Conduct on Business Matters.

Aretha M. Campbell

Chapter 7. The Impact of International Policy Initiatives Against Money Laundering and Terrorist Financing on the Legislative Systems and Institutions of Offshore Financial Centres in the Caribbean

Abstract

This chapter analyses the measures implemented by The Bahamas, the Cayman Islands, Bermuda and the BVI in response to international policy initiatives introduced by the Financial Action Task Force (FATF) to counter money laundering and terrorist financing. This analysis is conducted for the period 2007 to 2012, which coincides with the timeframe in which each jurisdiction underwent their third mutual evaluation report (MER) conducted by the Caribbean Financial Action Task Force (CFATF). We examine these measures using a comparative analysis approach and observe the trends to determine the impact of the Forty Recommendations on the legal systems and institutions of these four jurisdictions.

Aretha M. Campbell

Chapter 8. The Impact of International Policy Initiatives Against Tax Evasion on the Legislative Systems and Institutions of Offshore Financial Centers in the Caribbean

Abstract

Chapter eight examines the response of The Bahamas, the Cayman Islands, Bermuda and the BVI to international policy initiatives instituted by the Global Forum, the OECD, in addition to the US and EU to counter tax evasion. The period reviewed in this analysis is from 2010 to 2016, which coincides with the introduction of Exchange of Information on Request (EOIR) by the Global Forum, Foreign Account Tax Compliance Act (FATCA) by the US, Common Reporting Standard (CRS) by the OECD, and the standard implemented by the EU Code of Conduct on Business Taxation. We will examine the measures employed by each jurisdiction, and in a comparative analysis, observe the trends to determine the impact of these standards on the legal systems and institutions of these four Caribbean islands.

Aretha M. Campbell

Chapter 9. The Consequences of Global Policy Initiatives Against Money Laundering, Terrorist Financing and Tax Evasion on Financial Centres in the Caribbean Region

Abstract

In this chapter, we look at the dis-articulation and mis-portrayals of “offshore”, raise questions of the knowledge produced about the international financial ecosystem and present an analysis on the summary impact of major re-regulatory measures and compliance standards on the offshore banking sector of a select group of Caribbean international financial centres, namely The Bahamas, the Cayman Islands, Bermuda and the BVI. We examine the effects of this sector on the economies of these four jurisdictions, compare the results, and rank each jurisdiction from most to least adversely affected. We then draw conclusions based on the overall results of our findings.

Don D. Marshall, Aretha M. Campbell

Backmatter

Title: Money Laundering, Terrorist Financing, and Tax Evasion
Author: Dr. Aretha M. Campbell
Publisher: Springer International Publishing
Electronic ISBN: 978-3-030-68876-9
Print ISBN: 978-3-030-68875-2
DOI: https://doi.org/10.1007/978-3-030-68876-9