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1996 | Buch

The Offshore Interface

Tax Havens in the Global Economy

verfasst von: Mark Hampton

Verlag: Palgrave Macmillan UK

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Inhaltsverzeichnis

Frontmatter
1. How Tax Havens and Offshore Finance Centres Operate: Taxation and Secrecy
Abstract
One of the key features of the world economy during the last 30 years has been the growing international mobility of capital. This has had a number of far-reaching effects. Governments have found that their economic policy options are increasingly constrained by the reactions of the international money markets, while collective initiatives attempting monetary stabilisation, such as the European Union’s Exchange Rate Mechanism (ERM), have found themselves subordinated to the judgement of the world’s currency markets. Huge speculative currency movements precipitated the rapid and costly exit of the UK from the ERM in October 1992.
Mark Hampton
2. Offshore Finance in London, Regulation and Eurocurrencies
Abstract
In the opening chapter we discussed what OFCs are and the roles of taxation and secrecy in their development. We now focus on bank regulation and its relationship to the growth of offshore finance from the 1960s. Before we can go further, however, we first need to consider offshore finance in relation to theories of international banking, the behaviour of the TNC, and international finance centres. There is, nevertheless, one caveat as OFCs are not just international banking centres but may host a variety of other financial services including offshore trusts, private companies, offshore funds, captive insurance and so on, so we may not be able to merely graft OFCs onto the main body of international banking theory.
Mark Hampton
3. The Relationship between the Onshore State and Offshore Territories
Abstract
Having examined taxation, secrecy and regulation in the development of OFCs, we now engage with a fourth key factor, the role of the state, that is, the political context of the relationship between mainland state and offshore territory. Here we explore the nature of the special relationship between many offshore territories and mainland states as, arguably, such relationships are central to the development of offshore finance.
Mark Hampton
4. Area Study: Caribbean Island OFCs and Onshore States
Abstract
The political economy of the onshore state and the fractions of capital help explain why different onshore states appear to react so differently to OFCs. We now examine the Caribbean — a region containing several major OFCs — to illustrate the theory. In this chapter we focus on how the onshore political economy and the position of financial capital has affected specific Caribbean island OFCs and their relationships with mainland countries. First we examine the effects of three main European empires (British, Dutch and French) in the Caribbean before contrasting the different approaches of the US and UK governments to island OFCs as exemplified by their attitudes towards tax evasion and drug trafficking/money laundering. This highlights the different approaches and relative power of different government departments and institutions in the two mainland states. In a sense what we have discussed so far can be visualised as being on a vertical scale of abstraction with the most abstract material at the top (the fractions of capital). Now we turn to the other end of the scale, the concrete, and examine the different Caribbean island experiences of colonialism, and especially the changing dynamics of island-mainland relations over time.
Mark Hampton
5. Location, Technology and the Development of OFCs
Abstract
So far we have examined various factors that affect the development of offshore finance and OFCs: taxation, secrecy, bank regulation, and the role of the state, particularly the relationship of small territory to mainland. In addition, we examined OFCs in the Caribbean region. In this chapter we discuss another important issue — is location significant for OFCs? To do this, we ask two associated questions. First, why is there spatial unevenness in international banking, that is, what accounts for the geographical concentration in centres such as major cities like London and New York or in small territories? Secondly, what are the advantages to the financial services firms from this concentration?
Mark Hampton
6. Jersey Case Study: Part 1
Abstract
In Part I of the Jersey case study we address why the island developed as a functional OFC. Was it purely the result of being a tax haven or were other factors of regulation, secrecy and so on involved? If the tax haven aspect is of significance and if there is a causal relationship with other factors, what is the direction of causation? In this chapter we will examine the major changes in the direction of the development of Jersey’s post-war economy, focusing on the phenomenal growth of the OFC such that by 1994 it accounted for an estimated 54 per cent of GDP. First, we will briefly examine the peculiar constitutional position of Jersey in relation to the UK, and the role of OFC activities in the island’s economy, before examining Jersey’s emergence as an OFC. The OFC is then analysed over five phases from the mid-1950s to the present, evaluating the role of the different key factors and their significance in relation to each other.
Mark Hampton
7. Jersey Case Study: Part 2
Abstract
In the previous chapter we examined the emergence of the Jersey OFC, analysing the five main phases in its development using the key factors. This second part of the case study examines the impact of the OFC on the island using a provisional impact analysis. This leads us to address the issue of whether or not Jersey was subsidised by the UK in the areas of education, health and defence. Finally we discuss whether the States of Jersey had any real alternative to encouraging offshore finance from the 1970s and the outlook for the Jersey OFC.
Mark Hampton
8. The Outlook for OFCs
Abstract
This final chapter considers two issues that arise from the preceding analysis: whether the Jersey example is relevant for other jurisdictions wishing to host an OFC; and the outlook for OFCs. As we saw in Chapter 4, many Caribbean islands are currently OFCs of one type or another. Other jurisdictions have considered establishing an OFC as a development strategy, but will hosting an offshore centre result in effective economic development for a small territory or is it an unrealistic option? In short, do the benefits of hosting an OFC outweigh the costs, and even if a jurisdiction establishes one, is there room on the global playing field for such new players? First, we focus specifically on hosting OFC activities and return to the Jersey case and ask whether others can copy this example, questioning whether the key factors are replicable by other territories. The analysis then shifts to the question of whether other places should copy Jersey. We then discuss the impact of hosting a functional OFC.
Mark Hampton
Backmatter
Metadaten
Titel
The Offshore Interface
verfasst von
Mark Hampton
Copyright-Jahr
1996
Verlag
Palgrave Macmillan UK
Electronic ISBN
978-1-349-25131-5
Print ISBN
978-1-349-25133-9
DOI
https://doi.org/10.1007/978-1-349-25131-5