Canadian & US authorities targeting offshore banking again

HSBC, PayPal, American Express latest accused

Barbados again called ‘tax haven’

by passin thru

Concern about the use of offshore banking in the Caribbean and other areas ebbs and flows like the tide depending upon the moods of government, notable incidents that bring the public’s attention and most of all, the state of the economy. When the economy is bad, governments and others look longingly for the hidden tax revenues and ill-gotten profits stashed offshore.

“It is apparent that the golden time of offshore banking is ending for Barbados. The question for Bajans is… what do we have to replace banking in our foreign currency earnings…?”

"Offshore banking nightmare"

In case you hadn’t noticed, the economy is bad in Canada, the USA and elsewhere. There have been some very noteworthy tax evasion cases and banking busts lately and it’s about to rain gasoline on the fire with the latest revelations about HSBC Bank. John Cruz, an employee of HSBC, has gone rogue (or gone legal) with data for thousands of HSBC bank accounts and corporations he says are used for money laundering with HSBC’s knowledge. PayPal and American Express are also fingered by the same HSBC employee for being wilfully blind or worse.

In case you’re wondering, Mr. Cruz brings a new HSBC scandal – different from when Herve Falciani (head of computer security at HSBC) went public with the detailed data of 80,000 foreign clients of HSBC’s Private Bank in Geneva, Switzerland.

With the HSBC news breaking out of Washington and New York, the new issue of Canadian Lawyer magazine calls Barbados a “Tax Haven” and talks about money laundering in the Caribbean…

“The Canada Revenue Agency refuses to divulge estimates of monies lost due to Canadian tax cheaters hiding cash offshore, but evidence suggests it’s a vast sum…”

“Canada Steamship Lines Inc., the family business of former prime minister (and lawyer) Paul Martin, has an international division registered in the Caribbean tax shelter of Barbados. The Barbadian corporation is owned by a holding company in Bermuda, another offshore haven. This complicated setup allows Canada Steamship Lines to escape paying millions in Canadian taxes.”

Canadian Lawyer: The offshore banking nightmare

Barbados makes substantial profits from offshore banking and enjoys the benefits of having thousands of tourists arriving every year for “board meetings” of their fully legal Barbados-based corporations. Common sense says there must be some criminal funds and tax evasion taking place, but we also know that our banking industry can’t be seen to be difficult or unreasonable to deal with because there are dozens of other offshore banking jurisdictions within an hour or two via business jet or airline.

Barbados is being squeezed between seeking to please the USA, Canada and the EU – and the reality that our offshore banking clients can move with the push of a few buttons of a keyboard.

Whatever the outcome of the latest HSBC scandal or anti-tax ‘haven’ moves by the US and Canadian governments, it is apparent that the golden time of offshore banking is ending for Barbados. The question for Bajans is… what do we have to replace banking in our foreign currency earnings as our offshore banking business continues to come under pressure?

3 Comments

Filed under Barbados, Business & Banking, Crime & Law, Offshore Investments

3 responses to “Canadian & US authorities targeting offshore banking again

  1. zipdeedoodah!

    It’s all about tax avoidance, why pretend otherwise? USA and EU using terrorism as an excuse to monitor and control the money of typical worker middle class.

  2. Time for casinos!

    Tourism sucks. Offshore banking under attack. Fish gone from the sea.

    What’s left ?

    Casinos!

  3. wtf?

    Casinos bring problems like prostitution, crime and destruction of local culture. Casinos are not the the way to prosperity. Look at Las Vegas, Bahamas etc. Ghost towns on the casino strips. There is no magic bullet, we have to do better at our basic product.