Wednesday, March 11, 2009 - Vol. 11, No. 64
By Bob Bauman
"I have not become the King's First Minister in order to preside over the liquidation of the British Empire."
Winston Churchill's famous statement in November 1942, just as the tide of the Second World War was beginning to turn towards victory, pugnaciously affirmed that great British leader's loyalty to the global colonial institution he had served for most of his life.
Britain fought and sacrificed on a world scale to defeat Hitler and his allies - and won. Yet less than five years after Churchill's defiant speech, the British Empire effectively ended with India's independence in 1947 and the end of the British Mandate in Palestine in 1948.
Color Him Brown
And now the Rt. Hon. Gordon Brown, the current and dour British prime minister, seems bent on causing another major setting of the sun on what little remains of Britain's truncated empire.
Brown is in major political trouble.
Under pressure from unions and a nose diving economy, suddenly he is all too willing to throw to the leftists wolves Her Majesty's overseas territories. Most of these are leading tax havens nurtured as such by London for the last half century, (and by Brown himself, in a decade as Chancellor of the Exchequer).
Months ago, Brown was promoted by admirers as the man to save the world from economic catastrophe. Now he has his hands full just trying to save his own job. The Conservative Party and its well spoken young leader, David Cameron, have a 20-point lead over LabourLabor in polls in the run up to the general election in 2009.
Bank Bailouts Unlimited
But if you think Bush and Obama have been criticized for trillions of dollars in U.S. bank bailouts, Gordon Brown is being blasted by both right and left for even larger U.K. bank bailouts.
An estimated £1.2 trillion (US$1.7 trillion) has already been spent (with no end in sight) on the Royal Bank of Scotland, HBOS, Lloyds, and Northern Rock, all of which the U.K. government now controls (along with billions in toxic assets).
One British newspaper headlined: "Brown does a U-turn on tax havens with blacklist." And Brown chose to make a big pitch for his apostasy in his address to the U.S. Congress last week, no doubt trying to grab on to President Obama's flapping anti-tax haven coat tails.
Brown Blacklist
U-Turn Brown is preparing to unveil a blacklist of what he now suddenly considers to be "harmful tax havens" to be published before the London G-20 meeting next month, which he chairs.
This phony list is expected to include offshore centers, long overseas territories of Britain, including the Cayman Islands and Bermuda. Other U.K. OTs include the British Virgin Islands and the Turks and Caicos Islands. Add to the list the Crown Dependencies of Jersey, Guernsey and the Isle of Man...all major offshore financial hubs tied to the City of London.
So unique are these financial centers that hundreds of thousands of investors and business persons worldwide use the services of their investment houses, banks, accountants, lawyers, insurance brokers, and trust and corporation services located there.
Hypocrisy Squared
Brown's move is a radical departure from the prime minister's historic position of protecting the pre-eminence of Britain's financial services industry, both in London and in the overseas territories.
His move is a crude political attempt to counter growing criticism at home for his bank bailouts, and pressure from high tax France and Germany that make the specious charge that the U.K., like Switzerland, is an obstacle to imposing a global "transparent financial system" - meaning they demand an end to financial privacy everywhere.
Face it, dear readers, this isn't about transparency. This is about destroying tax competition and the forced exaction of confiscatory taxes internationally without regard for individual rights.
Offshore Centers Have Reformed
Brown, is certainly no Churchill.
Not even a pale imitation of his predecessor, the affable Tony Blair. But there is a special irony in Her Majesty's government suddenly attacking the British offshore tax havens that it created with great care since the end of World War II.
Over the last 15 years the Blair/Brown LabourLabor governments in London demanded and got substantial reforms in of all U.K. offshore financial centers, including statutory transparency, an important fact Brown never even mentioned in recent days when he suddenly turned on the offshore territories with his bogus attacks.
These offshore reforms are now written into local laws in these semi-independent islands. They include:
1) much tighter financial regulatory reforms;
2) "all crimes" money laundering and foreign tax evasion statutes;
3) extensive banking client surveillance;
4) increased cooperation with foreign official authorities seeking tax and other information about persons and legal entities based on the islands;
5) a major weakening of previously strict financial privacy laws and,
6) imposition of the EU savings tax directive which all of these offshore centers now enforce and collect.
Brown's Betrayal for Political Gain
In fact Bermuda, the Cayman Islands, the British Virgin Islands, the Isle of Man, Jersey, and Guernsey each already have signed Tax Information Exchange Agreements (TIEAs) with the United States and many other countries. What more transparency does galloping Gordon expect?
It is obvious that Brown, just another desperate socialist politician, is willing to disrupt, if not destroy, the economies of these loyal British offshore centers, jeopardizing tens of thousands of jobs in the midst of a worldwide recession.
All this would be amusing if it were not so tragic.
EDITOR'S NOTE: Concerned about your offshore account? Wanted to take an account offshore but you're not sure what to make of this news? Join Bob and our Council of Experts - among them are offshore banking professionals from around the world - at the 11th Annual Total Wealth Symposium in Bermuda to cut through all the confusion and figure out what kind of Asset Protection plan is right for you. Click here to take a look at the itenirary.