Bill seeks curbs on fraud in tax havens

ACCOUNTANTS and lawyers engaging in financial dealings with tax havens such as Liechtenstein, Switzerland and the Cayman Islands would be hit by legal sanctions under a Bill introduced to the Commons yesterday.

Though it will not become law, the private members' Bill from David Shaw, a Tory accountant, is a mark of the pressure on the Government to act to prevent fraudsters like Robert Maxwell transferring money to countries where dealings can be kept secret.

Mr Shaw said it was likely that as much as pounds 2bn a year was lost in avoided or evaded tax and personal and business fraud through the use of tax havens. The Dover MP told MPs that if his Transactions with Tax Havens (Sanctions) Bill had been law there would not have been the BCCI, Polly Peck and Barlow Clowes scandals, and Mr Maxwell, who based his empire in Liechtenstein, would not have been able to steal millions from pensioners.

He reckoned income tax could be reduced by 1p in the pound if the law could be tightened on tax havens. However, the main problem was their use as fraud havens. They allowed transactions to take place in conditions of 'extreme secrecy', which could be 'used by fraudsters like Maxwell and the management of BCCI unlawfully to remove many hundreds of millions of pounds from our citizens'.