WATER ABLAZE - Patagonia Sin Represas

7.1 How to Avoid Paying Taxes and Make Fantastic
Profits at the Same Time
It is a well-known fact that, in the world of high finance, earning huge
amounts of money is not an end in itself – profits have to spiral ad
infinitum. To achieve this, two measures are necessary: expenditure
must be reduced and earnings increased. Paying taxes comes under
the heading “Expenditure”. Under normal circumstances, companies
which make billions of dollars of profits would find themselves
shouldering a very heavy tax burden indeed.
In order to stem this “bleeding”, inventive men of the law (“legal
eagles”), in collaboration with business consultants, developed the
“Cross Border Leasing” model, also known as “Lease in/Lease out”,
“LiLo” or “Service Contract”. This is how everything works: for a particular
CBL deal, a trust company is set up by a U.S. investor, which
may be a bank, an insurance company, a fund or any other kind of
business. The trust preferably has its headquarters in the U.S. state of
Delaware, which is a veritable tax haven inside the national boundaries
of the USA. Around 200,000 companies, among them 500 of the
biggest U.S. business enterprises, are based in Delaware, a state with a
modest population of 820,000. 29
CBL transactions can involve waterworks, trams, fair pavilions,
sewage works, residential or functional buildings, rail networks, water
or electricity mains networks, refuse incinerating plants and a whole
variety of other assets. Deals with local government bodies in Germany
are particularly sought after because these authorities cannot file for
bankruptcy. It is quite conceivable that a U.S. trust might one day claim
compensation from a German city, let us say for breaches of contract.
Should the local council plead insolvency, the responsible provincial
state would be called upon to accept liability for the damages incurred.
If this move proved fruitless, the matter would then be handed on to
the German government. In any case, taxpayers would have to foot the
bill one way or the other.
In CBL deals, profits are split unevenly: the U.S. trust keeps the
lion’s share, the German municipality receives between 2-8 per cent
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