Month: November 2017

States versus Corporations: Rethinking the Power of Business in International Politics

A new paper by the CORPNET group has been published in The International Spectator: Italian Journal of International Affairs. The article, “States versus Corporations: Rethinking the Power of Business in International Politics”, is written by Milan Babic, Jan Fichtner and Heemskerk and can be found here.

Abstract

Over 25 years ago, Susan Strange urged IR scholars to include multinational corporations in their analysis. Within IR and IPE discussions, this was either mostly ignored or reflected in an empirically and methodologically unsatisfactory way. We reiterate Strange’s call by sketching a fine-grained theoretical and empirical approach that includes both states and corporations as juxtaposed actors that interact in transnational networks inherent to the contemporary international political economy. This realistic, juxtaposed, actor- and relations-centred perspective on state and corporate power in the global system is empirically illustrated by the example of the transnationalisation of state ownership.

Response to Howard Quayle, Chief Minister of Isle of Man

Howard Quayle, Chief Minister of the Isle of Man has recently stated that CORPNET did not list Isle of Man as a tax haven:

“I don’t think we are a tax haven, for a start. That’s not me saying that, that’s the OECD, that’s the University of Amsterdam who did a report very recently listing tax havens, the Isle of Man wasn’t one of them.”

The report: “Uncovering Offshore Financial Centers: Conduits and Sinks in the Global Corporate Ownership Network”, Javier Garcia-Bernardo, Jan Fichtner, Frank W. Takes & Eelke M. Heemskerk, Scientific Reports 7, Article number: 6246 (2017)

We clarify that we did not produce a list of tax havens, but a list of jurisdictions where the ownership of companies accumulates (sinks-OFCs) and a list where the ownership of companies goes through (conduit-OFCs). While Isle of Man may not be a large player in corporate tax avoidance, it may be a large player in other types of tax avoidance, such as VAT avoidance, and that cannot be inferred from our study. Recognized tax havens by the EU and the IMF such as Barbados, Antigua and Barbuda, Grenada, Montserrat, St. Kitts and Nevis, or Turks and Caicos Islands did not show up as sink-OFCs, for the simple reason that corporations/individuals do not organize their ownership structures from those places.

In our report, we found that owners of companies do not generally place their entities/vehicles in Isle of Man. This is similar to what we find with Guernsey, Ireland or the Netherlands (Figure A as lime-colored dot). On the contrary, according to our data, entities in Isle of Man are usually owned from other countries.

However, we found that Isle of Man is used as a conduit in corporate constructions that start from a sink-OFC, go through Isle of Man, and end up in a third country (Figure B as lime-colored dot in the bottom-right quadrant). While Isle of Man may not be a sink-OFC, our results indicate that the territory may be used to own companies in sink-OFCs.

For the complete list of sink and conduit-OFCs, please see Supplementary Information.

Comparison with several list of offshore financial centers

Screening Politics: The Spider’s Web

On the 4th of December “The Spider’s Web – An investigation into the world of Britain’s secrecy jurisdictions and the City of London” will be screened at CREA Amsterdam.

States lose 600 billion dollars in taxes through corporate tax avoidance practices spanning several countries. Some of these countries, such as the United Kingdom or the Netherlands play a key role facilitating tax avoidance, as recent studies by researchers at the University of Amsterdam showed.

The Spider’s Web is a documentary film that shows how Britain transformed from a colonial power into a global financial power. At the demise of empire, the City of London created a web of offshore secrecy jurisdictions that captured wealth from across the globe and hid it behind obscure financial structures. Today, up to half of global offshore wealth is estimated to be hidden in British offshore jurisdictions and Britain and its offshore jurisdictions are the largest global players in the world of international finance. How did this come about, and what impact does it have on the world today? This is what the Spider’s Web sets out to investigate.

After the film, the public will get the opportunity to address questions directly to the filmmakers in London and an expert panel. Subsequently, we will discuss the role of the Netherlands in offshore finance, and the advantages and drawbacks for Dutch and European citizens.

Panel participants:
Rodrigo Fernandez, expert on tax avoidance from SOMO
Ewald Engelen, prof. of Financial Geography at the UvA
John Christensen, director of the Tax Justice Network

Moderation: Eelke Heemskerk, program director of the CORPNET research team

CREA Amsterdam
Nieuwe Achtergracht 170, 1018WV Amsterdam
Monday December 4th 20:00- 23.59

Free entrance for students, others € 5,-

Please register for this event: https://goo.gl/forms/gO442t7qbtBMB1XI3

Director: Michael Oswald
Year: 2017
Trailer: http://spiderswebfilm.com/#trailer

The Cayman conundrum: why is one tiny archipelago the largest financial centre in Latin America and the Caribbean?

A new blog by the CORPNET group has been published by the LSE Latin America and Caribbean Centre. The blog, “The Cayman conundrum: why is one tiny archipelago the largest financial centre in Latin America and the Caribbean?”, is written by Jan Fichtner and can be found here.

Abstract
Analysing how millions of multinational corporations structure their global ownerships chains reveals that Cayman acts as a ‘sink’ offshore financial centre where foreign capital accumulates and data trails often end, writes Jan Fichtner (University of Amersterdam).