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September 29, 2016

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‘Offshore’ has different meaning for Imran’s lawyer

‘Offshore’ has different meaning for Imran’s lawyer

ISLAMABAD: Although Imran Khan acknowledges the company owned by him in Jersey is an offshore holding, his lawyer has come up with a unique explanation that the PTI chairman termed it “offshore” only because it was located at a distance from the British shores.

Bakhtiar Kasuri is one of the lawyers to defend Imran in the case pertaining to concealment of assets. According to Naeemul Haq, PTI spokesman, Kasuri has done a lot of work on this issue for the last one month.

Asked by The News how he could deny the company’s offshore status already admitted by Imran himself, Kasuri said the PTI chairman, in fact, wanted to say that since Jersey was situated away from the shores of Britain, the company operated there was offshore. “Absolutely not,” he said when repeatedly asked if he really believed that it was not an offshore company.

Imran owns the offshore company that he never disclosed until Ahmed Noorani of The News discovered it by following the trails of his asset documents which showed that his flat in London was purchased through the Niazi Services Limited registered in a notorious tax haven, Jersey.

Explaining the difference between Jersey and other offshore jurisdictions, Kasuri said the territory was controlled by the British government so that no wrongdoing could occur under its watch.

Britain is under intense pressure from within and outside to reform the offshore tax havens operating under its administration. Kasuri’s second argument was that obtaining information about a company registered in Jersey was easy unlike, what he thought, other tax havens.

Also the fact persists that some other tax havens            Bahamas and Seychelles      provide basic information like the date of incorporation and names of directors, etc. What these secret jurisdictions don’t share is the business and bank accounts operated through registered entities.

That Jersey is not an island for keeping clean money is what he doesn’t know. A joke is common in London: “Jersey or jail.” This means if a scam goes well, the scammers will make a fortune and retire to Jersey, but if it falls apart, they will be headed for jail.

Kasuri appears to be unaware of the concept of offshore jurisdictions and the controversies surrounding Jersey in connection with its role in avoiding taxes and stashing ill-gotten wealth. Considering that both assumptions are incorrect, he is then twisting facts to secure a clean chit for Imran that is unlikely because the company was never declared in Pakistan, though it existed until 2015.

Imran was the first to aim guns at those named in the Panama Papers. “Only reason to open offshore accounts through Panama is to either hide wealth, esp ill-gotten wealth, or to evade tax or both,” is what he tweeted the day the first batch of names was released.

Mossack Fonseca, the law firm which provided data for the Panama Papers, had registered 14,500 companies, foundations and trusts in Jersey where Imran was also found hosting a company.

Like other offshore jurisdictions, Jersey has zero tax for foreigners registering companies there unlike 20 per cent tax rate for the residents of this island. Jersey was given 16th position on the 2015 Financial Secrecy Index of Tax Justice Network. “With its tiny population and oversized financial services sector, Jersey is economically dependent on, and politically captured by, offshore finance, serving as a microcosmic illustration of the concept of the Finance Curse,” notes the Tax Justice Network. Although Jersey does not have formal banking secrecy backed by the criminal law (as is the case in Switzerland or Bahamas), the secrecy is provided in other ways including Jersey trusts, offshore companies and, since 2009, foundations, it further notes. These legal arrangements, combined with judicial separation from the UK, provide an effective secrecy space that attracts illicit financial flows from across the world.

“While the funds were flooding in during the 1980s and 1990s, the island’s regulatory authorities did little to prevent dirty money from rushing through Saint Helier en route to London,” explains Tax Justice Network.

 

 

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