How UK tax haven officials responded to the Financial Secrecy Index 2020

This year’s edition of the Financial Secrecy Index 2020 – the biennial ranking of the world’s biggest supplies of financial secrecy – has received more news coverage and global support than any previous editions of the index. With over 700 news articles and broadcast pieces published on the index in the past two weeks across 80 countries, it is clear that tackling financial secrecy has become an important issue to people around the world. More people are recognising the harmful impact rampant tax abuse by the ultra-rich and powerful has on their lives and want their governments to do something about it.

But perhaps, one of the best indicators of the success of the Financial Secrecy Index is the increasing hostility it receives from representatives of secrecy jurisdictions ranking high on the index. The first edition of the Financial Secrecy Index was published in 2009 and those at the Tax Justice Network have become familiar with the boilerplate responses from secrecy jurisdictions to their research. However, this year’s responses have been particularly aggressive: Luxembourg’s Finance Ministry called the index “misleading, if not often outright false”. They have been accused of making assumptions “without providing enough clear and credible evidence to support [its] analysis.” Cayman’s Ministry of Financial Services has said: “TJN’s methodology remains flawed”.

 

The UK’s Financial Secretary to the Treasury has said our research is “bogus”, except for the parts that criticise the legacy of the opposition party.

 

The most aggressive and coordinated attack on the Financial Secrecy Index, however, has unsurprisingly come from the Cayman government and Cayman Finance (the association of the financial services industry of the Cayman Islands). On the same day that the Financial Secrecy Index 2020 went live and ranked the British Overseas Territory, Cayman as the world’s biggest supplier of financial secrecy, the EU blacklisted Cayman as a non-cooperative jurisdiction. These two developments without a doubt have raised serious concerns for the territory and more broadly the rest of the UK’s network of secrecy jurisdictions (the UK spider’s web), particularly in this post-Brexit era.

After publishing a statement saying “TJN purposefully uses outdated, inaccurate and irrelevant information to manipulate the results of its report”, Cayman Finance then chased journalists who had published articles about the index to persuade them of the supposed inaccuracy of their research, and when that failed to yield success, resorted to promoting their tweets about the index.

As before, however, the attacks and responses have not identified any actual inaccuracies in the research or the calculations behind the index, and most are in the form of sweeping accusations. But in light of the coordinated efforts seen this year to target journalists and TJN’s Twitter followers with misinformation, and to misdirect scrutiny away from secrecy jurisdictions, the TJN have prepared their blog to debunk some of the common claims used by secrecy jurisdictions to excuse their ranking on the index.

Despite the hostility directed by representatives of secrecy jurisdictions towards the Financial Secrecy Index 2020, they have been unable to muster any factually-based criticisms of the index.

The Financial Secrecy Index 2020 has, as of the time of writing, enjoyed media coverage in outlets with a combined audience of more than 2 billion people. The claims put out in response by secrecy jurisdictions have reached far fewer people and likely convinced even fewer (the responses to the promoted tweets of Cayman Finance are a joyous read, for example). Nonetheless, as public pressure continues to grow on governments to clamp down on financial secrecy, some secrecy jurisdictions will become even more desperate in their attempts to misdirect scrutiny and spread misinformation.

You can read TJN’s full report HERE

 

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