Has The IFSC Attracted Dubious Activities ?

[Dr. FIVE]

Fianna Fáil is proposing:

• Establish an internship programme similar to JobBridge but focused on providing 1,000internships solely in the IFSC. Graduates would receive their job seekers benefit alongwith an
additional € 100 weekly payment from participating companies.

• The internship programme would be time limited, approximately 6-9 months, and therewould be clear criteria about the kind of work and training that interns would engage inand also
to ensure that it does not displace any jobs in the sector.

• Double the amount of money available to the Summit Finuas Network, which providesenterprise led education training programmes within the IFSC. At present, the FinuasNetwork
receives approximately €1million from the State each year.

• We believe these extra funds must be used to significantly expand the number of freeplaces for young unemployed graduates and young people on the live register who
are interested in pursuing a career in the IFSC.

• Ensure that each state supported bank invests in our young people and puts in placean internship programme for third level graduates. This programme would be funded bythe
banks rather than the State

[ang]

Some good stuff here on IFSC -

This is revenue that Irish Revenue is simply not interested in collecting. Allowing companies to avoid tax in this way would suggest that the Irish legislature is simply a branch of one of the major four accountancy firms that offer tax advice to clients who wish to set up business in Ireland.

There has been plenty of debate about effective tax rates, with perhaps the most notorious being Google, which, according to Bloomberg, was able to reduce their overseas tax rate to 2.4% through various mechanisms available in Ireland, in tandem with tax havens like Bermuda. There are plenty of other examples, however, such as Boston Scientific which had an effective tax rate of 0.54% for 2001 ? 2003; Forest Laboratories had an effective tax rate of 6.2% for 2005-07; Jansen Pharmaceutical had an ETR of 8.2 for 2003-05; between 2004-5 Symantic had an effective tax rate of zero.

http://apologia-scandalize.blogspot....x-rate-is.html

[Captain Con O'Sullivan]

The Irish Government has no control over the IFSC which is effectively a self-governing corporate island off the Irish coast.

I recall the debate about resource finds by Tony O'Reilly's company and the notion there'd be loads of tax.

I looked back at what his company paid in tax in Ireland over a ten year period and it was sweet F/A.

There is a system of 'deferring' taxation open to companies and wealthy indviduals which adds up in anyone else's mind as a way of avoiding tax altogether.

Crucially all these corporates are routing money only through Ireland and other jurisdictions on their way to a zero rate tax haven such as the Bahamas. The only time they surface in Ireland or Netherlands is as one leg of a two legged transaction which attracts tax relief but no tax.

The IFSC tail has wagged the dog of the Irish Exchequer ever since it was opened up by Charlie McCreevy.

[Dr. FIVE]

lulz

Mitt Romney investment in Ireland attacked by Barack Obama. Ireland labelled a tax haven

http://www.irishtimes.com/newspaper/...319428255.html

[Dr. FIVE]

£13 trillion of wealth hidden offshore – as much as the American and Japanese GDPs put together.

http://www.guardian.co.uk/business/2...fshore-economy

....at least £13tn – perhaps up to £20tn – has leaked out of scores of countries into secretive jurisdictions such as Switzerland and the Cayman Islands with the help of private banks, which vie to attract the assets of so-called high net-worth individuals. Their wealth is, as Henry puts it, "protected by a highly paid, industrious bevy of professional enablers in the private banking, legal, accounting and investment industries taking advantage of the increasingly borderless, frictionless global economy".

[Dr. FIVE]

Donagh Brennan's piece from the last issue of lookleft is now online

http://www.lookleftonline.org/2012/0...ne-of-failure/

[DCon]

Enda is bringing some jobs home! Up you boy you!!

WESTPORT is in line for a welcome jobs boost this week, with Taoiseach Enda Kenny set to announce on Friday that The Lafferty Group is to locate a new base in the town.
While the number of jobs to be created by the financial services company has not been released, The Mayo News believes that initially, around a dozen people will be employed, largely in graduate-level positions. If the Westport office develops according to expectations, this figure will significantly increase within a number of years.
Based in London, and with offices in various locations around the world, The Lafferty Group is a major provider of advanced knowledge services for the global financial industry, with particular specialisations in the fields of retail banking, cards and payments and central banking. Its founder, chairman and CEO is Ballaghaderreen native Michael Lafferty, a former Financial Times journalist. He started the company in 1981.
A number of senior executives of The Lafferty Group visited Westport on a number of occasions in recent months and scouted potential office locations across the town. Mayo County Council, the Western Development Commission (WDC) and the Industrial Development Authority (IDA) were also involved in the search and in the deal to bring The Lafferty Group to Westport. However, none was in a position to comment further on the matter ahead of the investment being officially unveiled.

Westport seems like the logical location for a company specialising in banking

[Captain Con O'Sullivan]

How can they seek to attract banking yet condemn fornication? In both areas of endeavour someone is always going to end up f**ked.

[Dr. FIVE]

Seven people between them sit on the boards of 1,284 companies in the Irish Financial Services Centre.

http://www.broadsheet.ie/2012/08/14/...or-efficiency/

[C. Flower]

http://www.broadsheet.ie/2012/08/14/...or-efficiency/

Brilliant stuff from the Story and Conor McCabe.


http://www.irishleftreview.org/2012/...rvices-sector/

[Dr. FIVE]

interesting stuff

http://www.irishleftreview.org/2012/...ire/#more-6881

[Frankie Lee]

interesting stuff

http://www.irishleftreview.org/2012/...ire/#more-6881

While we are on the subject of tax havens and the British empire here is some more food for thought (albeit from last year).
http://treasureislands.org/northern-...s-tax-havenry/

[Kev Bar]

Mark Malone was just tweeting this link which looks like it is pertinent.

The subprime crisis and the emergence of the ‘shadow banking sector’ and subsequent
collapse described in this paper is an example of a Minsky process. Financial innovation
is a pervasive aspect of market based economies. Minsky has argued that a boom based
on financial innovation necessarily results in a collapse. Minsky argues part of the
solution to instability by financial innovation is through regulation that is through
constraints on debt levels both for the personal sector and the corporate especially the
financial sector.
The emergence of the shadow banking sytem illustrates the problem of regulating
complex financial products, operating across a number of different jurisdictions one or
more of which may be a tax haven. The recent controversies in relation to Goldman
Sachs illustrates the issue of information asymmetries between purchasers of complex
instrument and those who create and market them (Schwartz and Dash, 2010). It also
illustrates conflicts of interest that allows one party to the contract to exploit information
asymmetries. Underlying these issues is the issue of the whether derivates have any social
value (Soros, 2010) or economic value (Grantham, 2010). In this context the much
criticised unilateral action by Germany to ban certain derivative trading in Germany is
likely to be followed by other countries ((Wiesman, et al., 2010; Ewing, 2010).
The enforced liquidation of the Carlyle Capital Corporation which in February 2008 was
reported as managing $21.7 billion in funds (New York Times 14/3/08) is a good
example of the difficulties in regulation following from different country locations of
discrete parts of the group. The New York Times comments (March 14, 2008) that
“Carlyle Capital’s problems also provide a glimpse into the challenges faced by the
usually secretive hedge fund industry because, unlike most such funds, Carlyle Capital is
publicly listed.”. While true that Carlyle Capital was publicly listed in Amsterdam it was
registered in Guernsey to benefit from a low tax regime (Guardian Newspaper 14/8/08).
Seven of its funds were listed on the Dublin Stock Exchange, three of these funds were
registered in the Cayman Islands, and a further three were registered in the Cayman
Islands and Delaware.
These and other examples cited in this paper confirm the need for extensive regulatory
and other institutional reform, There is especially an urgent need to take into
consideration the use of low tax regimes/tax havens by financial firms. For countries
based in the EU this is likely to mean an EU based regulator as in the ECB model.

http://www.schumpeter2010.dk/index.p...ewFile/374/185

[Dr. FIVE]

Bernie Madoff's liquidators are chasing money round Dublin 2 say the Phoenix

[Captain Con O'Sullivan]

The only reason the IFSC and Irish Stock Exchange exist at all is for people with money too shady even for the City of London.

And thats saying something. I recall the Financial Times referring to Dublin as the 'wild west'. And they aren't too picky about whose money they accept.