Survival of the Richest

Europe's role in upholding an unjust tax system
Hidden ownership
It is no secret that wealthy individuals and corporations alike
can find ways to benefit from secrecy jurisdictions to hide
their money and minimise their taxes. Tax Justice Network
Africa (TJN-A) has looked at the number of registered offshore
companies, revealed by the Panama Papers, that have links
to 16 African countries. By comparing those figures to the
amount of illicit financial flows from these same countries,
they found that the countries with the highest illicit financial
flows also have the highest number of offshore companies. 168
TJN-A notes that, between 2004 and 2014, the countries in
focus lost more than US$50 billion to illicit financial flows,
while over the same period, they received US$30 billion in
Official Development Assistance (ODA). 169 Considering that
many of these countries are struggling with high poverty
levels and inequality, it is clear that this outflow of resources
has a negative impact on their development aspirations.
In the aftermath of the Panama
Papers, several developing country
governments, including Ghana, Nigeria,
Kenya and Afghanistan, have stated
their intent to create public registers of
the beneficial owners of companies.
In the aftermath of the Panama Papers, several developing
country governments, including Ghana, Nigeria, Kenya
and Afghanistan, have stated their intent to create public
registers of the beneficial owners of companies. 170 Beneficial
ownership is essentially about tracking down the individual
person who ultimately controls and benefits from a company.
Making beneficial ownership information public would help
law enforcement to detect crime and at the same time allow
civil society, journalists and citizens to see the owners of
the companies that operate in their society. As the Panama
Papers have illustrated, this can be an important step
forward in the battle against corruption and tax evasion.
In addition, there is also a strong business case for public
information on beneficial owners. EY’s Global Fraud Survey
2016, which is based on information collected from 2,800
senior executives in 62 countries and territories across the
world, shows that 91 per cent of respondents believe it is
important to know the ultimate beneficial ownership of the
companies with which they do business. 171 Unless beneficial
ownership registers are made public, this information would
not be easily available to other companies.
The Financial Secrecy Index is produced by Tax Justice
Network, based on a thorough assessment of the level of
financial secrecy in each jurisdiction, including transparency
around beneficial ownership of companies, trusts and
similar legal structures. 172 The highest ranking countries
have the highest levels of financial secrecy.
Table 3: The Financial Secrecy Index 2015
Global ranking
Jurisdiction
6 Luxembourg
8 Germany
15 UK*
24 Austria
31 France
37 Ireland
38 Belgium
41 Netherlands
53 Norway
56 Sweden
58 Italy
59 Latvia
66 Spain
75 Poland
81 Czech Republic
83 Denmark
88 Slovenia
90 Finland
*The UK is ranked as number 15 at the global level. However, as noted in the
Financial Secrecy Index, the UK would be top of the list if it the British Overseas
Territories and Crown Dependencies were included in the assessment of the UK. 173
Survival of the Richest • 31