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The Tax Justice Network’s 2015 Financial Secrecy Index Ranking has placed the United States in third place, falling short of Switzerland and Hong Kong but definitely rising above Singapore and the Cayman Islands. This created a buzz in the world of finance, business and economy around the world because how could the United States fight against the offshore companies that are being protected by their corresponding tax havens and become the third best to keep financial secrets at the same time.  Arguably, the United States is the #1 tax haven in the world.

The rapid growth of hidden wealth globally is becoming worrisome to economy watchers such as the OECD. In 2012, James Henry of the Tax Justice Network has estimated the global hidden wealth to have reached more than $21 trillion. Berkeley economist Gabriel Zucman estimates it at $7.6 trillion or 8% of the world’s wealth. In his book, The Hidden Wealth of Nations: The Scourge of Tax Havens he used the discrepancies in international accounts to arrive at his estimated amount. Whoever has the right estimate, two things are certain – it will keep increasing and progressive tax systems will continue to be very challenging and almost hopeless.

In the countries or tax havens’ perspective, the reasons for accepting and engaging in offshore transactions are clear. They want and need as many investors as possible to improve their economy. And the list is growing as the competition is becoming intensive among the leading tax havens. The United States and Britain are two important players in the tax haven industry with heavy emphasis on fund secrecy.

The US President, in his presidential campaign year ago stressed his opposing stand against the offshore industry, hitting on Cayman Islands as an example. However, certain states like Nevada and Delaware have already been long participating as tax havens. It has also been noted that the United States is doing the same thing that other jurisdictions do – providing as little to no information as possible when it finds itself in the defendant’s seat.

The country’s aggressive program against secrecy heightened when the government used the Foreign Account Tax Compliance Act (FATCA) to tax financial institutions if they refuse to submit offshore account details of US citizens. Most journalists have failed to understand that this agreement is a two-way information share.  Except the United States refuses to provide any information back to other countries about their citizens transactions. Many countries are now reviewing their partication.

The United Kingdom has also been supporting various secrecy jurisdictions all over the world. TJN believes that Britain plays a vital role in widening the gap between transparency initiatives and offshore trusts. UK placed 15th in the financial secrecy index but TDJ reports that could had been UK and all its dependent territories were treated as one, it would easily rank first overtaking Switzerland.

In the light of a better and fairer world, a new standard on information sharing among nations has been established by the Organization for Economic Cooperation and Development (OECD). The success will still depend on the level of cooperation from the financial institutions and with the US’ unclear support on the matter, full cooperation from the rest of the players is not guaranteed.