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Abstract

his dissertation is a qualitative analysis of secondary literature and aims to answer the research question: why are tax havens vulnerable to money laundering and terrorist financing? The first primary objective is to use secondary academic literature to answer the research question in Chapter 3. The second primary objective is to use secondary non-governmental reports of 20 tax havens and 7 non-tax havens to answer the research question in Chapters 4 to 8. The secondary objective is to assess if the granular data of the non-governmental reports, referenced in Chapters 4 to 8, corroborates the findings of the core academic literature, referenced in Chapter 3. Based on qualitative analysis of core academic literature referenced in Chapter 3, the dissertation concludes, in line with rational choice theory, that tax havens are vulnerable to money laundering and terrorist financing due to a combination of 8 characteristics: low or no taxes, secrecy, bespoke products and services, a foreign client base, a high volume of administered assets in relation to GDP, the economic benefit for tax havens, light-touch law enforcement and regulatory supervision, and finally geography, economy and systems of governance. The 8 features cumulatively create an environment whereby tax havens are seen as secure places by criminals to launder illicit assets, knowing that arrest or confiscation is unlikely. Referenced in Chapters 4 to 8 and based on qualitative analysis of nongovernmental reports, produced by the Financial Action Task Force (FATF) and affiliated organisations, the dissertation concludes that tax havens are vulnerable to money laundering and terrorist financing due to an inadequate understanding of risk, inadequate and light-touch regulatory supervision, opaque beneficial ownership information, deficient laws, and light-touch law enforcement and non-dissuasive criminal penalties. The findings in Chapters 4 to 8 also serve to corroborate the findings of the core academic papers, referenced in Chapter 3, in relation to the vulnerabilities of secrecy and light touch law enforcement and regulation in tax havens.

Course: Economic Crime - MSc - P3493FTC

Date Deposited: 2024-11-11

URI/permalink: https://library.port.ac.uk/dissert/dis14509.html