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Offshore shell companies, the black hole of global finance

09:59 AM | 16 Apr, 2016
Offshore shell companies, the black hole of global finance
WASHINGTON (APP) - Anonymously owned shell companies, against which the G20 economic powers pledged action Friday, amount to a global black hole that legally puts trillions of dollars out of tax authorities' reach.

The "Panama Papers," leaked two weeks ago from the Mossack Fonseca law firm, which helps set up such companies, opened a window into that world.

The documents show how thousands and thousands of the mailbox business fronts exist worldwide, most often in tax havens like Panama, the British Virgin Islands and the Cayman Islands, enabling untraceable owners to stash assets, legal or illegal, offshore.

Often encased by other shell entities like Russian nesting dolls, their existence represents a gaping hole in the international effort to combat tax evasion launched in 2009, which forced banks around the world to share account holders' data with their home tax agencies.

The business of providing secrecy through shell companies isn't confined to sunny Caribbean or Pacific islands. In the United States, a number of individual states such as Delaware and Wyoming are hubs for shell company registration.

Their promise of secrecy has made the United States an increasingly popular destination for foreigners wanting to hide assets, legal or illicit.

Russia's notorious arms trader Viktor Bout deployed shell companies around the world to hide his activities, including in the United States.

Britain's Jersey and Guernsey islands are also popular tax havens. In a recent case, anonymous companies set up in Jersey enabled a bank affiliated with the Iranian government and restricted by US sanctions to control a Manhattan skyscraper.

"They are designed for concealment and so are as useful for getting around sanctions as they are for tax avoidance or money laundering," said Pascal Saint-Amans, head of the Organization for Economic Cooperation and Development's unit fighting tax havens.

The G20's new commitment to opening up that black hole came out of a push this week by France, Germany, Britain, Italy and Spain, which said they would take the lead in establishing a registry of shell company owners' identities, with aims to expand it worldwide.

"The recent extensive leaks from Panama show the critical importance of the fight against tax evasion, aggressive tax planning and money laundering," the five said.

"The current events show that identifying the ultimate beneficial owner behind corporate structures is key to fighting tax evasion, money laundering and illicit finance effectively," German Finance Minister Wolfgang Schaeuble said.

The author is working as Editor Digital Media for Daily Pakistan and can be reached @ItsSarfrazAli.

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Pakistani rupee exchange rate to US dollar, Euro, Pound, Dirham, and Riyal - 24 April 2024 Forex Rates

Pakistani currency remains unchanged against US Dollar and other currencies on April 22, 2024 Monday in open market.

USD to PKR rate today

US dollar was being quoted at 277.4 for buying and 280.4 for selling.

Euro comes down to 293.2 for buying and 296.2 for selling while British Pound hovers at 339.5 for buying, and 343 for selling.

UAE Dirham AED was at 75 and Saudi Riyal's new rate was at 73.25. 

Today’s currency exchange rates in Pakistan - 24 April 2024

Currency Symbol Buying Selling
US Dollar USD 277.4 280.4
Euro EUR 293.2 296.2
UK Pound Sterling GBP 339.5 343
U.A.E Dirham AED 75 75.8
Saudi Riyal SAR 73.25 73.95
Australian Dollar AUD 181 182.8
Bahrain Dinar BHD 740.55 748.55
Canadian Dollar CAD 201 203
China Yuan CNY 38.47 38.87
Danish Krone DKK 39.78 40.18
Hong Kong Dollar HKD 35.53 35.88
Indian Rupee INR 3.33 3.44
Japanese Yen JPY 1.86 1.94
Kuwaiti Dinar KWD 903.11 912.11
Malaysian Ringgit MYR 58.08 58.68
New Zealand Dollar NZD 164.22 166.22
Norwegians Krone NOK 25.61 25.91
Omani Riyal OMR 723.2 731.2
Qatari Riyal QAR 76.45 77.15
Singapore Dollar SGD 204.5 206.5
Swedish Korona SEK 25.31 25.61
Swiss Franc CHF 305.47 307.97
Thai Bhat THB 7.56 7.71

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