This page provides background information about the extensive data and reports that we have produced. We aim to be as objective as possible and to present our data in a consistent format, to make it easier to compare one jurisdiction with another.
To access our full data reports for any particular jurisdiction, please refer to our database.
We also have reports on each indicator we use, available here.
For our full methodology (over 40 pages) click here.
The database
This database is the result of over a year of desk-based research by a dedicated team. Generally, it displays information available on the secrecy jurisdictions surveyed as of December 31, 2010, with some exceptions. The main exception is that the OECD has discontinued its annual Tax Co-operation report displaying the number of treaties and TIEAs ratified, so the cut-off date for these is June 30, 2010. For each data report we used up to 214 criteria. Where we need to provide cross-comparability, we have avoided using more recent data even when it has been available.
Our database covers information on the legal, administrative, regulatory, and tax structures of the secrecy jurisdictions. It uses multiple sources, including the OECD Tax Co-Operation Reports; the new OECD Global Forum peer review reports (where available); the US State Department’s Narcotics Control publication (US-INCSR), anti-money laundering assessments by the Financial Action task Force and others, the IMF’s financial sector assessment program and offshore financial centre-assessment program, as well as private sector sources including from the International Bureau of Fiscal Documentation (IBFD). We also used websites and legal texts from the secrecy jurisdictions concerned. All this was complemented by our own survey of jurisdictions, concluded in January 2011, involving requests for information to the relevant finance ministries and financial intelligence units (The questionnaires we sent them are available here and here).
Since each data source has differing objectives and layouts, combining them has been a colossal undertaking.
The full database is here.
The assessment process: a higher standard
We believe that the standards and assessment procedures used by bodies such as the Organisation for Economic Cooperation Development (OECD) are too lenient.
For example, the OECD's Global Forum on Taxation might commend a jurisdiction for requiring companies to file beneficial ownership information with a government authority but then they might note – often only between the lines – that this is not required of "non-resident" companies; it may also omit revealing what percentage of companies are non-resident. More fundamentally, the Global Forum checks merely whether or not corporate service providers have certain relevant information at their disposal, but we apply a higher standard: we require such information to be submitted to a government authority and updated appropriately.
Unlike the OECD, we always assess a jurisdiction based on the ‘lowest common denominator" principle. So for example, if a jurisdiction offers three types of companies, two of which are required to file beneficial ownership information, but the third is not, then we award no transparency credit.
We first thoroughly checked all publicly available data sources, and contacted the Finance Ministry of the jurisdiction concerned. If they did not respond with satisfactory data, or it was of dubious quality, we registered the data as unknown.
Given the sheer scale of this project, we have occasionally had to use reasoned judgement. Where this has happened, we have tried to be transparent about our criteria and reasons. So – in addition to references to all the sources we used, the database also includes a huge amount of notes and supporting information.
The full document on the methodological background of the 15 Key Financial Secrecy Indicators (KFSIs) can be downloaded here.
Identifying secrecy jurisdictions and the secrecy spectrum
In our previous project in 2009 we consulted eleven different lists of tax havens compiled by others (such as the IMF, OECD, or Financial Action Task Force) to draw up our own list of 60 secrecy jurisdictions.
This year, however, we took a broader approach. We added 13 new jurisdictions to our previous list, based on two criteria. Four jurisdictions -- Botswana, Ghana, Guatemala and San Marino -- were found to be offering secrecy facilities even though they were not our previous list of 60. Seven others had large financial centres – so we decided to run the numbers on them to see how they scored. These were Canada, Denmark, France, Germany, India, Italy, Japan, Korea, and Spain.
This year we prefer to talk in terms of a ‘secrecy spectrum’ in which jurisdictions are rated according to how ‘secretive’ they are, and to somewhat de-emphasise the term ‘secrecy jurisdiction.’ The question of whether or not a location is a ‘secrecy jurisdiction’ is in large part a matter of scale.
We still think the terms ‘secrecy jurisdiction’ and ‘tax haven’ are useful, however. For more details, See our short document What is a secrecy jurisdiction? and Richard Murphy’s longer technical document Finding the Secrecy World.
Methodology on our 15 Secrecy Indicators
About 40 of the 214 criteria employed in our database were used to construct 15 different secrecy indicators (KFSIs). The choice of our indicators is necessarily subjective – but an objective list does not exist, and never will. We aimed to produce the next best thing: a list that is plausible, comprehensive, transparent and as short as possible. We relied on expert input to make our selection.
Our indicators are designed to provide clear pointers for policy change to help jurisdictions become more transparent.
The 15 indicators are as follows (shown in no particular order):
1. Banking secrecy: Does the jurisdiction have banking secrecy?
2. Trust and Foundations Register: Is there a public register of Trusts and Foundations? This applies both to local trusts and foundations, as well as the local managers of foreign trusts.
3. Recorded Company Ownership: Does the relevant authority obtain and keep updated details of the beneficial ownership of companies?
4. Public Company Ownership: Does the relevant authority make details of ownership of companies available on public record online for less than US$10?
5. Public Company Accounts: Does the relevant authority require that company accounts are made available for inspection by anyone for a fee of less than US$10?
6. Country-by-Country Reporting: Are companies listed on a national stock exchange required to comply with country-by-country financial reporting?
7. Fit for Information Exchange: Are resident paying agents required to report to the domestic tax administration information on payments to non-residents?
8. Efficiency of Tax Administration: Does the tax administration use taxpayer identifiers for analysing information effectively, and is there a large taxpayer unit?
9. Avoids Promoting Tax Evasion: Does the jurisdiction grant unilateral tax credits for foreign tax payments?
10. Harmful Legal Vehicles: Does the jurisdiction allow cell companies and trusts with flee clauses?
11. Anti-Money Laundering: Does the jurisdiction comply with the FATF recommendations?
12. Automatic Information Exchange: Does the jurisdiction participate fully in Automatic Information Exchange such as the European Savings Tax Directive?
13. Bilateral Treaties: Does the jurisdiction have at least 60 bilateral treaties providing for broad information exchange, covering all tax matters, or is it part of the European Council/OECD convention?
14. International Transparency Commitments: Has the jurisdiction ratified the five most relevant international treaties relating to financial transparency?
15. International Judicial Cooperation: Does the jurisdiction cooperate with other states on money laundering and other criminal issues?
To see a detailed analysis of each indicator, click here. For more information on how the indicators were used in the construction of our Financial Secrecy Index, click here.
If you disagree with us
We have applied our methodology consistently and disclosed our fully referenced data, cross-checked against different data sources.
Some readers will be surprised by our findings. For example, some will claim that accounts are available on public record when we say they are not. This is because we expect accounts by all limited liability entities, not just some, to be easily available online at low cost. Please check carefully before challenging our data.
If you remain sure that our data is wrong, please let us know, and provide detailed explanations. Thank you.
