Chair: Gerd Grözinger
09:00 – 10:00 Uhr: Walter Otto Ötsch: The Political Economy of Offshore Jurisdictions: Its Neoliberal Background
10:30 – 11:30 Uhr: Ingo Fiedler: Online Gambling as a Game Changer to Money Laundering
Discussant: Jakob Kapeller
Abstract: The market for money laundering is a destructive one (Unger 2007) and is a necessary condition for organized crime. The law of supply and demand tells us that a decreasing price for money laundering will increase the demand for money laundering and indirectly the prevalence of organized crime (McCarthy, van Santen, Fiedler, 2012/2013).
While regulators thus try to increase the price for money laundering by increasing monitoring efforts the evolving technology leads to an ever decreasing price. This is mostly driven by the rise of electronic payment methods and cross border transactions. With online gambling a new opportunity for money laundering entered the stage. It offers a couple of advantages from the perspective of the money launderer: (1) A huge part of the market is still unregulated, (2) plenty of regular transactions help to disguise irregular ones, (5) online gambling comes with many payment options, (4) payments are often made internationally, and (5) payout ratios are very high.
Small and medium sums can easily be bet by criminals in virtual casinos or on sports betting sites and any potential winnings can be paid out as laundered and often tax-free gambling wins. Larger sums can be laundered by founding a virtual casino in an offshore jurisdiction and faking virtual business. The funds can then be paid out as business dividends. This talk highlights the different ways to launder money in online gambling and analyzes them in more detail. It is concluded that online gambling is a game changer to the market of money laundering and will lead to an increase in organized crime.
11:30 – 12:30 Uhr: Silke Ötsch: „Our Banking Secrecy is a Strong Castle“. Regulation Failure and the Use of Metaphors on Offshore Economy
Präsentation (1.8 MB)
Discussant: Stephan Pühringer
Abstract: In the contribution I assess that regulation of the offshore economy is not only a technical problem, but a problem that lies much deeper in implemented elite discourses and their effects. Politicians’ discourses on offshore economy shifted after the crisis. Whereas they first ignored the phenomenon, they later rhetorically attacked tax evasion and the circumvention of regulation. But a closer look on implemented regulation show that most states only imposed timid regulation or even lightened it. Laws intending to face tax havens are even combated by parties in power. Besides working out technical solutions on how to regulate offshore economy it might be useful to ask why offshore economy is not regulated despite public opinion usually is against it.
Referring to George Lakoffs studies about the misuse of language of interest groups, recent studies on the role of elites in financialization (Engelen et al. 2011; Ertürk et al. 2011) and to our own work on the use of spatial images of offshore service providers (Ötsch & Di Pauli 2009), I argue that one important reason for the continued existence of offshore economy is the intrusion of elite discourses related to offshore economy in the language and the thinking. By analysing the use of metaphors in key newspaper articles of different countries (Switzerland, Great Britain, Austria and the United States), I show that even in newspapers classified as middle-left, there is a contradiction between the apparent content of the article and the deeper meanings transmitted by metaphors. Even if the use of metaphors slightly differs from country to country, it is significant that the most used group of metaphors are those of war, violence and victims. The media analysis shows that the language of offshore constructs patriotic feelings about offshore economy and makes people identify with national offshore industry, even if this branch of the economy harms the majority of the citizens in question or has no apparent use for them. As a consequence of this, researchers and civil society should cautiously use metaphors (as the Tax Justice Network partly does) and question national categories while speaking on offshore economy favouring globally acting elites.
Chair: Doris Weichelbaumer
14:30 – 15:30 Uhr: Nicholas Shaxson: The Finance Curse. The Political Economy of Finance-Dependent Economies
Discussant: Walter Ötsch
15:30 – 16:00 Uhr: Nicholas Shaxson: Presentation of the last Empirical Findings of James Henry
Links to pdfs of Press Release, Selected issues, Main report.
Discussant: Walter Ötsch
16:30 – 17:30 Uhr: Petr Janský: What are the most Important Offshore Financial Centres?
Discussant: Markus Meinzer
Abstract: Offshore financial centres are an important part of the global financial system. This paper asks which centres are most important. We estimate the relative importance of offshore finance for different countries, and develop an index, which ranks countries according to their contribution to global offshore financial activity. As in the International Monetary Fund research by (Zoromé 2007), we estimate offshore financial activity by trade in financial services and, when data for these are not available, we use foreign portfolio assets and liabilities as an approximation. The results reveal that some of the developed countries have more characteristics of offshore financial centres than some of the usual small island suspects.
The secrecy score and the weighting are combined by simple multiplication to produce a Financial Secrecy Index which ranks secrecy jurisdictions according to their degree of secrecy and the scale of their trade in international financial services.
A jurisdiction with a larger share of the offshore finance market, and a high degree of opacity, may receive the same overall ranking as a smaller but more secretive jurisdiction. The reasons for this are clear – the ranking not only reflects information about which are the most secretive jurisdictions, but also the question of scale.
In this way, the Financial Secrecy Index provides an answer to the question: by providing offshore financial services and a lack of transparency, thereby facilitating and encouraging illicit flows and all the damage that they do to economies and to political systems, how much damage is each secrecy jurisdiction actually responsible for?