How strange that an Australian should have emerged as the face of Samoa in the Pandora Papers leak.

Accountant Graeme Briggs’ role in establishing Samoa’s reputation as an international tax haven – a sunny place for shady people – is without parallel.

His Asiaciti group advised rich people worldwide about how to minimise their tax burdens and he put Samoa on the map for these clients, in favour of traditional places such as the Canary and British Virgin Islands.

• READ MORE: The Pandora Papers – The secret keeper
• Other Pandora Papers reports

Samoa had a lot going for it, clients were told, including secret trusts and an effective tax rate for offshore companies of zero.

For his services to raising Samoa’s offshore profile, the government made Briggs Honorary Consul to Singapore for 25 years.

But the latest release of data from the International Consortium of International Journalists (ICIJ) includes thousands of files from Asiaciti and shows just how he managed to help already wealthy bank executives and businessmen pay nothing to their governments.

He denies any legal wrongdoing – and he is most likely right.

Tax minimisation is not illegal, nor is doing business internationally.

Many of the names you are reading in connection to the investigation – the King of Jordan, Vldimir Putin, former British PM Tony Blair – will face no consequences. Their accountants and lawyers will have made perfectly sure of that.

The complexity of tax codes in wealthy countries make complex maneouvres such as blind and investment trusts, shell companies and other tax evasion moves possible.

Why haven’t more Samoans been exposed on this list?

It’s a good question with some simple answers. Living in a tax haven only requires an overseas business partner to acquire the benefits of offshore banking. But more practically, as Samoa is officially listed as a tax haven by bodies like the European Union every business in the country, down to innocent non-profits are flagged in the ICIJ’s system; Australians who do their banking in Samoa, by contrast, stick out like sore thumbs.

That places a huge burden on Samoan journalists in identifying the financial maneouvres of those in the top one percent.

This raises questions about the government’s goose that laid the golden egg: the Samoan International Finance Authority (SIFA) – an agency which assures us it is cleaning its act up.

Ads currently on the internet offer users the ability to establish an offshore company in Samoa virtually instantly for prices as low as US$900.

Last fiscal year the authority recorded a profit of $23 million. Ten years ago the authority was bringing in close to $20 million a year. It is not a soaring growth industry.

At what cost do we price our reputation and dignity?

We doubtlessly have a tax code that has in-built favourability for tax evasion, precisely because it appears to have been designed, at least in part by Briggs himself.

Two leaked emails reported on by Australia’s public broadcaster tell the story of Briggs’ pivotal role in tax policy. One came from a senior public servant in Samoa, who described Briggs as the “grandfather” of Samoa’s offshore Industry.

In another, an Asiaciti employee brags that Briggs was involved in “setting up the structure and legislation of the Samoa offshore finance centre”.

That second email may have been a bit of hyperbole but it is hardly stretching the imagination to think that his influence was substantial, if not total.

Prime Minister Fiame Naomi Mataafa’s call for a review of the entire tax code is highly welcome.

But before we get too harsh on ourselves, we must ask who are the biggest tax minimisers and money launderers in the world and from which countries do they operate?

The most significant corporate tax crimes take place in countries such as America and aided by big banks and the world’s “big four” accountancy firms registered in England and Holland.

They have helped clients avoid tax for years. Banks and accountants are safe in the knowledge that a slap on the wrist awaits them if caught.

Nobody’s hands are clean. But other countries’ rule-breaking far outweighs our island nation’s because of its volume and sheer disregard for the law.

In the last year alone, many of Credit Suisse’s executives were criminally charged for accepting proceedings of drug dealing while the Spanish Banco Santander was fined €5.6 billion for failing to investigate the source of clients’ wealth.

Perhaps the most infamous case involved American firm Goldman Sachs agreeing to wholesale defraud the people of Malaysia by creating a secret fraudulent future fund.

Goldman helped the government steal US$1.2 billion which was spent on private planes, dozens of crocodile skin Hermes handbags, apartments in New York, London and Paris and even financing the film The Wolf of Wall Street before it was exposed.

These scams are nothing compared to the money brought in by SIFA. Like climate change the problem is global but Samoa has contributed to only a tiny fraction of it and has received undue attention for doing so.

Nonetheless we believe that we should cease our reputation as a go-to country for tax evasion as soon as possible because it is the right thing to do.

But we should also diplomatically remind our development partners that they are saying one thing and doing another on tax evasion.

It would take a comparatively tiny contribution of less than US$10 million to replace SIFA’s profits and go toward funding a programme to develop technical expertise that would create a new, legitimate financial services industry long into the future.

The Samoa Observer editorial on 8 October 2021. Republished with permission.

The  Integrity Plus 2013 New Zealand National Integrity System Assessment (NIS) clearly described the concerns, says TINZ chair Suzanne Snively.

It also recommended straight-forward improvements to trust structures which to date have been ignored, she says.

“These loopholes allow people to hide money gained through crime and/or money-laundering using trusts registered in New Zealand,” Snively said in a statement tonight.

The Panama Papers are an unprecedented leak of 11.5 million files from the world’s fourth biggest offshore law firm, Mossack Fonseca.

They indicate that weaknesses in New Zealand business ownership structures are being exploited, says the TINZ statement.

According to the International Consortium of Investigative Journalists (ICIJ), which analysed the document trove, Mossack Fonseca’s services have been used to “facilitate massive money laundering, tax avoidance and criminal activity, including drugs and arms dealing”.

NZ named 60,000 times
New Zealand is named by the ICIJ as a “tax haven” used by Mossack Fonseca.

According to reports, New Zealand is mentioned more than 60,000 times in the documents.

The 2013 NIS analysed good business practice and then looked at the causes and the extent of possible corruption.

It noted that the creation of a new company in New Zealand is simple, low cost and can be completed in 30 minutes online.

This is a positive competitive advantage designed to attract good business to our shores, says the TINZ statement.

Related to this current tax haven scandal, the NIS also reported that there is:

• no requirement for permission to register or operate a private company in New Zealand, opening the door to criminal behaviour
• a lack of requirement for companies to identify their beneficial owners
• no trust registry and weak controls on trusts, allowing them to hide beneficial owners, bank accounts and other property which in many cases is not held in New Zealand.

Repeated warnings
“We have repeatedly warned that these factors are being exploited by overseas interests. They are setting up shell companies and trusts for those involved in corrupt and illegal activities, including tax evasion and money laundering,” says Snively.

“The recent amendment to the Companies Act 1993, while strengthening requirements to have a New Zealand director, fails to require companies to identify all their beneficial owners”.

She says trusts in New Zealand often do not come to the attention of tax authorities or law enforcement agencies because there is no transparent mechanism for reporting them.

They have no presence in measurements of funds held in New Zealand and are often hidden in solicitors’ trust accounts.

“The picture of New Zealand that emerges from the Panama Papers is another huge blow to its reputation as one of the least corrupt countries in the world,” says Snively.

“New Zealand’s trade – essential to our prosperity and the well being of our country’s residents – relies on our reputation for integrity.

“Immediate and substantial action must be taken by the government to demonstrate world leadership in restricting the flow of ill-gotten funds and assets”.

• The Panama Papers
• The full investigation
• PMC director speaks out on Panama Papers

By Alastair Wanklyn in Tokyo