The Mapping the Faultlines project is based on the contention that the mechanisms that allow illicit financial flows to occur result from the synergistic relationship between the world’s tax havens and offshore financial centres. At the time the project was proposed these were defined as follows:
- Tax havens are the legislative, judicial, fiscal and regulatory spaces provided by jurisdictions that encourage the relocation of economic transactions to that domain;
- An offshore finance centre (OFC) is the commercial response to the provision of those legislative, judicial, fiscal and regulatory spaces by those seeking to profit from the opportunities they provide.
The project also set out to identify the characteristics that identify a location as having tax haven status.
It soon became apparent that continuing to employ the prevailing language of tax havens and offshore would add a considerable difficulty to our task, since there was (and is) little agreement on what much of the language really means. We therefore decided to reappraise the language of offshore to offer more accurate, and precisely defined terms for use in the Mapping the Faultlines project.
The paper that attempts that task has been developed through a process of discussion between expert practitioners. Its core arguments were tested at a number of academic conferences in 2008. Some of the terms we propose, for example, ‘secrecy jurisdiction’ in place of ‘tax haven’, have already entered into common usage during 2009, largely as a result of this work. It is, therefore, safe to conclude that in this respect the Mapping the Faultlines project has already had an impact on discourse about the secrecy world.
This paper is in three parts. First it explores the way in which the offshore world works. Second, it suggests a new language to describe the ‘offshore world’. Third it explores the policy implications that result from that revised language.
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