Black Money in India

Now, many of these banking groups are owned by foreign investors, despite attempted safeguards. This ownership has provided investors leverage and influence over the actions of the government because the government owes an exorbitant amount to these banks (Daniel Lederman). The same argument can be made about the United States’ government. This influence can be seen across the board as many decisions now seem to favor only a select few, forgetting about the ramifications for the many.

Americans across the board would be in shock if the truth was revealed that the establishments that they trust their moneys to are unintentionally doing business with banks that are involves in the laundering of money or providing terrorists with funding, or possibly involves in like activities themselves. In the last few decades there has been a rigorous struggle, directed by the United States and Western European countries, to limit the occurrence of money laundering and terrorist financing by urging states to implement vigorous controls to counter such activities. It is clear that there is a long way to go before anti-money laundering and counter-terrorist financing organizations are able to stop the completed

In 2009, UBS, a huge Swiss bank was identified to have been aiding around 52,000 U.S. persons in evading tax. The U.S. Department of Justice had to take action to stop such a large scale action and thus demanded names and information of the U.S. accountholders with the bank. This allowed the federal government to focus its attention on international banking secrecy and its facilitation of financial crime. UBS had to shell out $780 million as fine in a settlement with the DOJ. United States was granted the right to receive names of 4,500 U.S. accountholders. This case paved the way for FATCA. Thus, to ensure there is a better detection of tax evasion by U.S. persons, FATCA came up with a unique approach of requiring a more detailed information reporting and compliance provision.

Although, first we need to understand a bit more about the case before we can take a look at it through ethical eyes. The truth of the case here is privacy, something that most people of American believe in, however there is a big calling for transparency as well. Privacy allows people to guard things that they think is no one else’s business. As for this case of financial privacy about offshore accounts, it’s a type of privacy for personal financial information and the wealthy. The rich have a different view for this privacy, some decide to try and hide their wealth so they help determine which friends are their true friends and not friends that are just after their money. They also might use this privacy to hide their social class as well. The less people know about one’s assets, in particularly one’s inherited assets, the more it

With the development of modern society, multinational companies reach higher profits than before. For instance, Starbucks got 495 million of sales revenue while it only paid 6 million of tax to the government. It turns into the topic of tax avoidance. Actually, there are many multinational companies use the strategy of tax avoidance, and Starbucks is just one of the examples.

Sadly, this has done little to prevent money laundering from occurring. Terrorists often receive funding through charities, small businesses, governments, and coercion which at times circumvents the Bank Secrecy Act. Ultimately, financial trails are left and can be traced by forensic accountants.

The communication between private and public sector helped to create some of the laws against money laundering, directed at the financial sector with the combination of national strategies from Switzerland, the United Kingdom, and the United States. One of the key issues to point out between sectors is that it is often assumed that the monitoring roles developed in the private sector might never be successfully accomplished directly by the states alone, and with so much assumption it leaves room for doubts. Banks careless associations with criminals have often undermined the public’s confidence in bank's stability of the entire financial system.

In the analysis of the proposals put forward by UK Government (Department for Business, Innovation & Skills (BIS) paper on ‘Transparency & Trust) and other intergovernmental agencies such as the Financial Action Task Force (Guidance on Transparency and Beneficial Ownership Recommendations 24 and 25) , G20 (High-Level Principles on Beneficial Ownership) and the European Commission (Fourth Money Laundering Directive) to increase the transparency of beneficial ownership of legal structures, some core principles have been highlighted with a view to protecting the integrity of the financial system. These principles stressed the need to understand who ultimately own companies and other legal arrangements by mandating that countries maintain a

So what is money laundering? Our trip to HSBC, Nick Batterton, provided us with a detailed overview and a case scenario to show just how easily one may launder money. The three core stages of money laundering are the placement, layering, and integration. You must first enter your illegal funds into the financial system through deposit, usually through a legitimate looking business. Then you layer or launder, where you make multiple complex transactions to displace it from the origin deposit. Once complete you re-enter the funds into ligament purchases such as luxury purchases and financial investments. So why are the banks in

The term “shadow banking” is one that is used by banking regulators, the media and academics especially when coming up with explanations for the financial crisis of 2007-2008. It has become a rallying point for international reform efforts aimed at the unregulated nonbank financial activities which have potential to destabilize the global financial system1.However on closer examination it is apparent that not only does shadow banking subsist predominantly within the regulated banking system2, it also in another

When people do not want to pay the high Chicago taxes the come to Indiana or the suburbs, but where do corporations go to make save their money from being taxed? They go to the countries with the lowest corporate tax rates which include Bermuda, The Cayman Islands, The Bahamas, and Ireland. Bermuda, The Bahamas, and The Cayman Islands have tax rates of 0%, while Ireland has a tax rate of 12.5% which is still significantly lower than most developed countries. Around 70 billion dollars every year are lost by the U.S. from these offshore tax shelter countries. The reason that these small islands choose to make such low tax rates is because they know they can attract the foreign money. They do not have many natural resources, so they make their money from vacationers and tax sheltering large corporations. Almost every large corporation in the United States, from Apple to Pfizer, relies on these islands to escape the taxes they would be paying in The United States. Although they do not actually have offices in these islands, in fact many only have a mailbox, the companies are able to claim taxes there because it is not illegal in the tax code. Also, the money never really makes its way to these small islands they only are there in a digital sense. Most of the products sold, knowledge and

If the results of Harbenger are to be believed, where owners of capital bear the full or close to the full burden of the tax, then there should be cause for concern for countries implementing high levels of corporation tax. This is because there is a global trend for increasingly higher levels of capital mobility. Therefore, owners of capital would be able to somewhat avoid the tax burden by avoiding countries with high capital tax rates, and thus restricting the flow of capital to those countries. However, given the large number of variables which need to be taken into account when determining the incidence of the corporate tax it is still not completely clear who bears the incidence of the corporate

Firstly, that Indian banks are ridden with debt. There is also a significant rise in Non-Performing Assets as well as restructured loans while the bad debts amount to 11% of the lending.

As it is often covered in the news, I was previously informed about the subject of offshore accounts and tax evasion. For the most part, wealthy athletes are thrown in the spotlight for having a sizable portion of their assets concealed in a foreign country that limits their tax reporting. However, the significance of the topic and the willingness of banks in aiding tax evasion was unknown until I read the articles that will be later discussed. This topic is of great interest because it truly shows the risk that people are willing to take to avoid paying their dues.

Historically, the U.S. has done little to regulate and enforce laws on offshore accounts. As highlighted by the UBS and Credit Suisse cases between 2009 and 2011, the U.S. government has recently begun regulating offshore bank accounts on a heavier basis. This creates a myriad of legal issues for lawyers dealing with large banks, as they need to ensure the company complies with U.S. regulation wherever they are conducting business. A new provision of the Foreign Account Tax Compliance Act (FATCA) originally passed in 2010 which will take effect in July 2014. This new provision would require foreign financial institutions to report information about their U.S. account holders to the Internal Revenue Service (IRS). This includes both U.S. citizens and U.S. green card holders, no matter where they are living. If you were planning to move to a different country from the U.S and wish to move all your money with you, the IRS will still hold jurisdiction over your accounts.