On this page we offer an analytical perspective on some of the key data collected in our database. Each report looks at a particular feature of secrecy jurisdictions and can be downloaded as a pdf.
Key Data Report 1: Number of Companies (pdf)
This report provides information on the number of companies incorporated in a given jurisdiction.
Lenient incorporation rules that allow near total or absolute anonymity to those who own and run companies incorporated in secrecy jurisdictions foster all sorts of crime.
The number of companies incorporated in a jurisdiction may be indicative of two things: first the ease of company formation and secondly the extent to which the jurisdiction facilitates abuse by those from outside its domain. The companies in most territories surveyed are likely to be formed for the sole purpose of recording transactions (that is, carrying on business) that occur exclusively outside its geographic domain. Indeed, many jurisdictions offer types of companies than are not allowed to do business locally. However, because of the secrecy that surrounds companies in most of the jurisdictions surveyed it is almost impossible to tell where these companies do actually trade, and where they should have tax liability or be subject to regulation. This is the danger that arises from the use of these entities.
Key Data Report 2: Financial Services-to-GDP-ratio (pdf)
This report concerns the contribution of the financial services sector to the overall economy of each jurisdiction surveyed.
A high share of financial services in the overall economic activity of a country is likely to indicate the presence of considerable political influence by the financial services industry on the government of the jurisdiction.
It is almost universally true that the more reliant a territory is upon a particular economic activity the more deferential it is likely to be to the demands of that sector. Such influence can undermine democratic decision making processes, can facilitate corruption, in the case of financial services can create a strong orientation towards the needs of those outsides the territory who would not normally be the prime concern of its government, and can be (but we stress, is not always) conducive to a criminogenic environment.
Key Data Report 3: Financial Services in Workforce (pdf)
This report considers the number of people working in the financial services sector in the secrecy jurisdictions surveyed by the Mapping the Faultlines project as a proportion of their total workforce.
A high proportion of people working in financial services in the overall economic activity of a country is likely to indicate the existence of considerable political influence by the financial services industry on the government of the jurisdiction.
This is especially so as the issue of employment is always emotive and totemic in politics. A financial services provider in many secrecy jurisdictions will only have to claim that new regulation to limit its activity is “business-damaging” and will therefore threaten employment and if that sector is one of the largest in the economy then politicians will take great heed and the more likely it is that appropriate regulation will be rejected.
Key Data Report 4: Number of banks, accountants and lawyers (pdf)
This report looks at the number of institutions allowed to undertake banking and financial intermediation in each secrecy jurisdiction surveyed by the Mapping the Faultlines project, as well as the number of lawyers and accountants that offer their services in each such jurisdiction. Together these can be labelled “secrecy providers”.
Having a large number of banks, lawyers and accountants in a jurisdiction is likely to generate three effects. Firstly, bankers, lawyers and accountants offer and support financial services and, by interaction and collusion, have the knowledge and means to handle and hide illicit financial flows if they so wish.
Secondly, banks, lawyers and accountants active in financial services will have considerable power in any secrecy jurisdiction that is heavily dependent upon financial services (for discussion and explanation of this second effect, refer to Key Data Reports 2 and 3).
Finally, if bankers, lawyers and accountants are present in high numbers a culture of constructive non-compliance can be created. In effect this means that the appearance of compliance is present but the rate of reporting of potential money laundering offences is low in proportion to the likely risk that they occur.
