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Belgian back-room deals to preserve European secrecy

November 19, 2010

By Nicholas Shaxson

Nicholas Shaxson, the editor of TJN's Tax Justice Focus and writer for the Tax Justice Network, is an associate fellow at Chatham House in London and the author of a book about tax havens, entitled Treasure Islands, launched in 2011.

On a nasty Belgian back-room move to suppress European financial transparency. But first, some background.

The European Union’s savings tax directive is an excellent idea: governments automatically report to each other, on a multilateral basis, the income-generating assets of each other’s citizens, so that those governments can tax them properly. Unfortunately, it is full of loopholes – punched in the directive as a result of efforts by the likes of Luxembourg, Austria and the United Kingdom to preserve as much secrecy as possible in the financial sector.

Recently, some in the EU have been trying to patch up some of the loopholes. A second directive has been initiated on administrative assistance in tax matters, which is a parallel attempt to have a similar result to the Savings Tax Directive. The original proposal from February 2010 is here.

Take a look at Article 8 on page 16: the original proposal does not specify the categories of information to be exchanged. But this was amended, also in February, by the European parliament, in a process initiated by Mme Alvarez Magdalena (a Spanish Member of the European Parliament, or MEP, and a tax investigator.) This produced a draft arguing for the right kinds of information exchange to be applied on a nicely transparent set of things:

Income from employment
directors’ fees
dividends
capital gains
royalties
life insurance products not already covered by the STD and other measures
pensions
ownership of and income from immovable property

Now, thanks to another European MEP, Sven Giegold (as it happens, he was a founder member of the Tax Justice Network who left to move on to other things), a murky document has come to light on this subject. It appears to be an effort by the presidency of the Council of the European Union, currently held by Belgium (a secrecy jurisdiction) to water down the initial proposal for the directive until it becomes almost toothless.

Attac-Austria has published the document (of which only a part is visible on Giegold’s website) in full. It comes from the Belgian presidency of the European Union Council – and look at what Belgium has crossed out. Dividends, capital gains, and royalties! (And, a bit further down, a more minor change: the date has been modified slightly.)

This is a scandal, and Giegold and Attac-Austria have performed a valuable service. The Belgian presidency has been caught with its fingers in the till.

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http://www.TaxRefusal.com Daniel J. Lavigne
It is unfortunate that man, driven by greed to forever seek “MORE!”, is unable to see the short and the long term outcome of our non-stop plans and preparations to use nuclear and other weapons of mass murder in order that some can claim to be in the forefront of our collective attempt to get “MORE!”.
In his book “No More War!”, Linus Pauling, winner of two Nobel Prizes, explains to all who dare to think of such matters, why a Nuclear War must NEVER be fought. Alas, he failed to inform us how to deal with the greed that drives us, relentlessly, towards such madness.
“Peak Oil” now threatens the very basis of our existence due the severe challenges that reduced oil supplies will pose to the whole of humanity, especially the poor.
It is revealing of our inner conflicts, our desire to suppress / ignore “Bad News”, that our “Leaders” continue to ignore all calls that a decision be taken with respect to demands for the worldwide dismantling of all nuclear and other weapons of mass murder. Weapons that we KNOW shall be used to their most devastating capacity once the problems relating to “The peak of production of conventional oil” adversely effect the ability of such as America, China and Europe to ensure that their population is fed, quiet and not quite ready to turn upon its leaders.
It is proper that individuals should contribute to their nations’ welfare. And it is also proper that mechanisms be developed to ensure that all pay in accordance with agreed upon rules and stratagems.
However, it is apparent to all that Humanity has lost control. Our various business plans, private and public, are truly and thoroughly confused and stymied due the reality of our individual and collective greed for “MORE!”.
It is equally apparent that we are progressing towards the development of “Tactical Nuclear Weapons.
Weapons that, purportedly, will allow “Leaders” to selectively terminate the majority before our collective demands fracture and destroy Nature’s ability to provide.
“The Tax Refusal” was not started to please / sate the ego and demands of one person. It was established as a means by which the majority might be led to think of such matters and then place limits on its unsustainable growth and similar use of non-renewable, but necessary resources such as conventional oil.
In a July 9, 2002 letter to the Prime Minister of Canada (http://www.taxrefusal.com/letter-to-prime-minister.html ), it was pointed out that we had, at most, some ten years to come to a decision to guide ourselves in a more prudent fashion. We failed.
In a book with the ominous title “Without Hesitation”, we are informed of the commitment, by all American Presidents since the development of nuclear weapons, to immediately order the use of such arsenals at any time that any nation posed any threat to America’s nuclear arsenal and the sole means by which it might control the balance of the world’s rapidly diminishing supplies of conventional oil.
Despite such, President Obama has offered us some hope, some possibility that we might, yet, control our passions, moderate our demands and achieve a world free of nuclear weapons and their otherwise unavoidable use. He needs our help.
It is my most serious suggestion, to all, that they act, immediately, on their lawful right and duty to refuse to support any society they deem participants in plans and preparations that are predicated on a will and capacity to use such weapons.
Thank you.
To a safer, saner and more caring world.
Daniel J. Lavigne, Founder
International Humanity House (IHH)