Your bill to bankroll tax havens
UNBELIEVABLE BUT TRUE... HOW UK AID POURS IN TO OFFSHORE PANAMA – TO HELP FIGHT FRAUD!
BRITISH taxpayers have given £253million in foreign aid handouts over the last six years to be spent in dubious tax havens, The Mail on Sunday can reveal.
Astonishing sums of money were sent to 15 secretive states whose governments have either been blacklisted by the European Commission, criticised for failing to follow financial transparency rules – or both.
The revelations will fuel continuing anger over foreign aid waste and lead to questions about why UK taxpayers are funding states suspected of sheltering billions from the taxman.
Panama – now at the centre of the tax-haven scandal engulfing Prime Minister David Cameron following the leak of the Mossack Fonseca files – received £1.5million in aid between 2009 and 2014 including, ironically, £36,315 to host a financial transparency forum and other anti-corruption conferences.
Our investigation also revealed that the Foreign Office spent £11,634 to send delegates from Cuba, Paraguay and the Dominican Republic to conferences in Panama on reducing financial crime and corruption.
Last night Alex Cobham, research director at the think-tank Tax Justice Network, said: ‘In general, UK aid does a lot of good for the poorest people in the world but where it goes to countries playing a role in global financial secrecy we need to help them choose a different path.’
The revelation comes as it also emerged that taxpayers send more than £1billion in aid each year to countries whose leaders have links to property empires in the UK.
The president of Rwanda, the prime minister of Pakistan, Iraq’s former interim prime minister and the president of the Nigerian senate are among those whose links to London property are detailed by the Panama papers.
The Department For International Development (DFID) points out that UK aid provides money to help tax havens – areas where individuals or corporations pay no or low taxes – with assistance after natural disasters and for health and education projects. Despite receiving massive aid, these countries have been sheltering billions for corporations and individuals. In most cases, even a small amount of tax levied on those financial activities would significantly boost government coffers.
For example, Britain spent £15,000 for the president of Nauru, a remote island off Australia with a population of 10,500, to fly to London to meet Hollywood actress and UN ambassador Angelina Jolie and then Foreign Secretary William Hague for a summit on sexual violence in conflict. Nauru has been accused of sheltering billions in Russian mafia money.
We also spent £192,489 on a women’s rights project in Bahrain, despite its repressive human rights regime, much criticised by campaigners such as Amnesty.
The tiny Pacific island state of Vanuatu, visited by the Duke and Duchess of Cambridge in 2014, received £648,339 in 2008 to help clear its debts – although it is on both G20 and EU blacklists for lack of transparency and corruption.
Panama, along with Bahrain, Nauru and Vanuatu, was criticised earlier this year after it refused to implement international transparency rules introduced in the wake of public anger over tax evasion following the 2008 financial crisis.
Latest figures show that Panama received £448,000 from Britain in aid-related diplomacy in 2014 and £1.5million between 2009 and 2014 overall. While the country was receiving UK money, tax fraud accusations were being made against its senior business people, including Riccardo Francolini, former chairman of the state-run bank Caja de Ahorros and an ally of former president Ricardo Martinelli.
Other blacklisted countries that receive aid are Anguilla, Antigua and Barbuda, Belize, Grenada, Liberia, Maldives, the Marshall Islands, Mauritius, Montserrat, Seychelles and St Vincent & Grenadines.
A DFID spokesman said: ‘Corruption is a menace in many developing countries, making the poor even poorer. That is precisely why the UK’s aid strategy focuses on tackling corruption… and helping countries build proper tax systems and robust institutions.’
A Foreign Office spokeswoman said: ‘The Government delivers programmes to tackle corruption, the drugs trade and promotes free trade – support that is in the UK national interest. Our anti-corruption projects in Panama included the drafting of an anti-bribery law and the implementation of a new Freedom of Information system.’
‘These places promote global financial secrecy’
THE Mail on Sunday continues to expose the grotesque folly of Britain’s foreign aid splurge. This week’s discovery that we are pouring public money into tax havens which are sinking under the weight of private cash is especially laughable.
The numbers supporting our petition for a full Parliamentary debate are growing daily. It would be both right and popular to heed this call. Nothing short of total reform will do, and it will have the backing of the nation when it happens.