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tv   Close up - Paradise Papers - The Ethics of Tax Havens Part 2  Deutsche Welle  November 22, 2017 10:15am-10:46am CET

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you're watching d.w. news live from berlin we're back at the top of the next hour with more sumi will be with you then we leave you with images of the jubilation in zimbabwe after the resignation of president robert mugabe thanks watch. this find him i wasn't always successful i wasn't born with a silver spoon in my mouth i had to find success now came.
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the paradise papers an astonishing view into a world in which prophet reigns king for an entire year an international consortium of investigative journalists analyzed an enormous trove of leaked documents many of which come from appleby one of the largest and best known offshore legal service providers. its clients include politicians major corporations and celebrities. this time. the things the set those we see are mostly legal but the end result is the same people don't pay taxes the paradise papers is
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a joint project comprising. almost four hundred journalists some from the new york times. there are several from connected people who are in the in the files. that actually show a business relationship between senior members of the government often people who are in putin's inner circle. others may be the biggest thing ever and it's. never. that. we thought this was a leak of leaks act and here we are i meet again. it's like a hydra you cut off one head to grow back. it's a network of tax havens it with every other you lose about
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a billion euros or tax evasion and avoidance. and. we have a highly clan army where the most powerful and the richest people to fire society to their game. these leagues shows us that that time will stop secrets is over. we're at the german finance ministry to interview what's gong show shortly before he resigned as finance minister to take over as president of the blunder stock.
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shortbread is a very busy man so three german news organizations are taking part in this interview. you know during his eight years as finance minister charbel often had to deal with criticism that the government had not done enough to combat tax avoidance and tax evasion. i'm in the city. but there have been a number of leaks in recent years the panama papers looks leaks they revealed how people managed to reduce evade or avoid their tax payments next why haven't the e.u. finance ministers with us their de facto leader managed to get the situation under control when. it's a welcoming the us the and. we have for today we've made some progress but the truth of the matter is that we're living in a globalized world international markets have become globalized and that includes the financial markets in particular. it every citizen every investor can now make
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financial transactions anywhere in the world and that has significantly increased the opportunity for them to find extremely favorable tax configuration structures fifi. but isn't that an admission that you failed and will never fully get this situation under control cleaning the bed is the one you mentioned people are far from perfect the concept of original sin dates back to biblical times and i think causing trouble ever since that's not a philosophical doctrine our capacity for creating new legislation has improved substantially or always calling for tougher laws and more bureaucracy but we've also seen a substantial improvement in people's ability to get around those laws so globalization presents both opportunities and challenges i just saw. and opportunities to break the law. you know review of the appleby documents we came across an online casino called stakes seven. online gambling is technically
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illegal in germany but in reality anyone here can do it on their home computer applebee touts its involvement in the online gambling business you know let's see what comes up under gaming machine. mccool has even met because he was america's game or he's. he did today excess day and says here steak seven made in germany a specific reference to germany to. this online casino is based on the isle of man. you can log on quickly and easily and start playing poker roulette or slot machines is easy to make payments to through german banks. and unconditionally and ok let's try this. kid these days i got a few there but not enough. as it started with
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a small bed or you lose your whole stake. in school to something i didn't bet more is i've already lost ten year olds. if that i thought i'd win something. he didn't say i want two year olds fifty. online gambling be a casino on the isle of man is illegal. but i don't expect the german authorities to come knocking on my door anytime soon. that's good for germany's best known gambling kingpin. dollar goes a man is the inventor of the america games. when it comes to protecting our
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customers we go beyond the legal requirement he's going to feel the shots fight but he has it's mission for government right for his contributions to society and to german business paul gals a man has been awarded the federal cross of merit first class as a whole to even though the shaft has become the macor sun shines throughout the world of gaming and gambling. this is the eiffel region in western germany. here in the town of down there is an addiction treatment clinic. and you know more boxes disconnected is tablet from the internet to protect himself he played games on stakes seven now he's got to put his life back together. as it is online should be on the scale of. hearts admissions he wants engine and i used to spend at least seven to ten hours a day playing online games all most get into their casinos online you can play them
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any time you'd be in conte's fun that i'd be on the train with a ninety minute trip in front of me and i'd get out my phone or tablet can i marry an online as you know song and i'd sign up with several casinos. to get minutes nobody there keeps an eye and how much of spent initially hollin a natural gambling arcade that's not the case a national negating they make you take a break after an hour it's good to also win and i know that's powers and i'm now out on martin how much did you lose during this time. if you look at my hand enough to buy two homes at least five hundred thousand euros from the tolls or stagnant. at the hamburg regional court we show judge john philip rock how a gambling company uses the isle of man to get around a german law. you know steak seven made in germany it's all in german. original makower games licensed in europe. but not in germany so this exhibit
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is. here so that i get the feeling that i'm going to win big time. but i think we can proceed from the assumption that the house always wins and b to. me that's the business model in. this is so how can this happen on the german weapon in. his mind i must say this is a clear violation of paragraph four subsection four of the state treaty on gambling which specifically forbids online gambling we can assume that this provider has not been issued the appropriate business license for germany and as such is in violation of german law not bought from best. the appleby files help us make sense of stakes sevens rather convoluted business structure. at
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one time the site was registered to the gaza money company. now the site is run by a third party. top gaming europe limited. but goes on month still makes money with illegal online gambling. that's because macro games which operates take seven out of the isle of man collects licensing fees. this is done through an elaborate construction that was designed and implemented by apple. but you won't find this construction in any trade register so we put together this diagram for you there's another layer up here and we found a company behind stakes seven something called sunny. dozen of these the constable who put this complicated scheme together. is an email that shows that one of gals woman's attorneys contacted appleby yeah outlined quite clearly what they wanted applebee to do so that they could set up
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a structure. that. we wrote to guzzle months for him to request an interview. the company even has a senior manager who's in charge of the technically illegal online gambling operation. agreed to talk to us here in berlin. but it's clear his company has no intention of obeying german laws that forbid online gambling. this is an old guy ends in we've seen documents that appear to indicate that in november twentieth eleven a senior gazal month employee contacted the appleby law firm. and ask for recommendations regarding online gambling that good stuff with the soon afterwards take seven game holding was registered in the isle of man. since september two thousand and twelve this company has been operating as top gaming europe ltd it
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runs the stake seven site that features macor games is all that correct as of yet we supply games to third parties like we do so either directly to license companies or to third party distributors and providers or to so-called aggregator sites on the web. they've got to on the internet see visit but you are aware that goes on one company games are made available in germany through stake seven or not as busy as it was you'll have to ask think seven about that since the stakes i've been following the idle but these macro games which are registered in the isle of man guns are marketed aggressively and made available in germany. where online gambling is illegal. in the us on time just as a german regulatory system in the sector has been chaotic for the last decade particularly when it comes to online gambling and that includes both online sports
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betting and online casinos the law simply cannot be enforced as it stands now the sport is old least. it keeps some would argue whether the german gambling goal is valid on the european level but i'm not aware of any european culture and justice ruling that has specifically invalidated the german law on all mind gambling i. say any violation of this germinal constitutes a criminal offense five hundred. back to the isle of man. we're looking for the offices of top gaming europe the company that supplies stakes seven with america online casino games after our interview with do a crime on the gals among company informed us that the emails we've seen had nothing to do with steak seven and here on the isle of man we discover another very peculiar detail. i was talking i mean the dress is correct but there is no top
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gaming office here. so you also don't know stakes have the top game in europe no but because it's written here can i show you it's written here. it's in it's take seven. it's the online gambling company and it's run by the top limited and this is the ever second clause twenty host rick davis is the writer. it's strange that we're not there on the net play. so. you have never heard of this company. this can this is one way to get around the german ban on online gambling set up an offshore letterbox company. the island's minister for economic development has no problem with that at all it's forbidden and. and
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you give the possibility to undermine the german law by what you offer from the isle of man well i can't speak for why the german german law is that way it's important to recognize the global audience is rather than just one single jurisdiction as to whether they support or don't support this particular activity this is kelly eighty five thousand people living on that island and have more than twenty seven thousand registered companies what is strange relations policy is open is transparent and its is might be regarded as being competitive in some people's eyes but there are many other jurisdictions are also competitive aisle of men seems to be what luxembourg was few years ago. well. since their statements are for us we have to set an open and transparent but also a very simple taxation system that is very straightforward to understand and that
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is probably another reason. if a business. anything to create a competitive advantage. here's another example the netherlands has developed an aggressive tax dumping program. this is amsterdam's financial district. these buildings are filled with the offices of businesses that actively implement europe's most tax friendly policies that includes the use of countless offshore companies. at this address on the prince brown outline there are no less than three thousand seven hundred forty businesses registered. looks like they don't want us filming air. here's the most popular of the dutch
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based tax avoidance schemes the cuts the tax on a company's profits to almost nothing. it's called a c.v. b.v. this is how it works let's say an american multinational sets up two businesses in the netherlands one is a b.b. the other a c.v. . the b.b. is an operating company which generally runs the multinationals european business most of the european profits flow tax free into the netherlands directly to the b.v. the c.v. is the limited partnership which is responsible for licensing and marketing the company's products. pays excessive license fees to the c.v. . reducing its tax liability companies that earn less profit pay less tax. the key element in this scheme is that the c.v. business pays no taxes at all according to dutch law taxes can only be levied
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against the company's owners. the company that owns the c.v. is based overseas so dutch tax authorities basically ignore the seabees income. in recent years u.s. companies of racked up an estimated five hundred billion dollars in profits in the netherlands and all of it tax free. country magara news attack specialist with a non-governmental organization. there's a particular department in the ministry of economic affairs. it's called invest in the netherlands and its job is to attract four of them to set up the head offices here with their regional head offices this department paid the tax advice company to give tax advice to particular to at least eleven multinational corporations so they that the dutch ministry of economic affairs pays professional advice to
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multinational corporations to reduce that tax bill it's announced the c.b. b.v. structure will come to an end in two thousand and twenty can one say then netherlands on a real good way of improvement no not at all not with the policies that are being proposed at the moment they are piecemeal they are very small they only tackle one avoidance structure. we're talking about billions so this emissions should be. structural. the dutch government appears to have given its placing to corporate greed it operates as a tax haven to draw profits away from other e.u. countries so much for european solidarity. so. you use. legal systems but you abuse the new poles with the systems and that's not illegal so that's also why it's difficult for the lawmakers to address this problem
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why do you think. countries tolerate the death tax policy yeah i think because the opposition against this policy is not strong enough and also that other countries within europe are not critical enough of the netherlands but i think it is something a country should think about put more pressure on the netherlands to move more quickly in addressing these issues. you uses a trillion euros in tax revenue per year because of tax havens like the netherlands malta ireland switzerland and bronzer. the tax models used by the netherlands the isle of man in luxembourg are sucking tax revenue out of the e.u. . and. destroying some countries do tax income from licensing payments at a lower rate if we've created a system of tax regulations that will apply to all of europe including the
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netherlands and it will take some time to implement but it will happen it must also be approved by the national parliament we are working constantly and aggressively to reduce the number of these loopholes in it it's like dealing with a hydra you cut off its head and it grows two more. journalists in the us it been pouring over the paradise papers one of the more interesting leads that they've been following involves alleged connections between u.s. commerce secretary wilbur ross. and russian business executives. could these leaks cause serious problems for some members of the trumpet ministration or
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perhaps even for the president himself. new york times reporter mike macintyre is on his way to the offices of the international consortium of investigative journalists to prepare for an interview with ross. came right out i don't see it we've moved down three floors. to go the other way it was a move off what i know well we're down literally but hopefully going forward thought in the moment is important when so i can't argue with that you know what's the what's on the agenda here is that it was from the swedish yet. swedish journalists have provided photographs that appear to support claims of contacts between eros and russian businessman. they show a tanker that belongs to a russian petro chemicals company called seaboard. the company's shareholders have
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close ties to the kremlin. on the stern there's another name. navigator navigator holdings ltd a shipping company owned in part by ross. there are four of the sips and over the past few years millions of dollars in charter fees have flowed from seaboard to the parent company mike mcintyre and sasha chavkin from the i.c.i. j a putting together a list of questions they want to know why ross didn't reveal the connection between navigator and seaboard. in hamburg we're tracking a navigator tanker that sailing along the german baltic coast. there's a second tanker the navigator libra docked at the port of near st petersburg.
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this port is said to be a key transfer point for russian gas and oil shipments. are so high not hard today . but nary stress for ike. well. interesting just while it seems to take care. disclosure story already that's always a risk so what they choose to do with information. that's always a challenge with these things. going on by the way. traveling for our troops. in a written statement secretary ross admitted he has interests in the shipping company but he said seaboard is not subject to any u.s. economic sanctions. meanwhile on the isle of man chief minister howard quayle has
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called a press conference on short notice. i've invited you here today to write some background in context a matter of significant national importance. now we have taken a preemptive action to demonstrates that the isle of man is a well regulated open and transparent member of the international community. a local journalist doesn't understand what all the fuss is about and on why why why would. he move. on that. there is something more i think we've got nothing to hide and i want to you know you know about his response station. this is the appleby law firms office on the isle of man we asked them some questions in writing a few weeks ago but they didn't provide the details we wanted so we decided to visit the office in person. the receptionist is obviously nervous
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she repeatedly tells us that there's no one here to talk to. on the same day some of our colleagues are at the appleby office in bermuda they have a few questions to ask. they figured a group effort might produce better results. but just like on the isle of man no senior company officials are available. so when i personally know he's lucky right now thank you this is hard but i will do is help and we can be you know someone who can take you if you can hear it later appleby said the press was using material that had been acquired from the company illegally it was because it was an apple b he would not comment on the allegations but insisted that there was no evidence of wrongdoing. back to the memoir of german billionaire
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court angle on the businesses and wealthy individuals are easy prey for going to say sions that raise money but they're often aggressive and try to play on your emotions as they beg for donations whether it's for people in need or some event on behalf of people who've been hit by a natural disaster is a fund that took up as we rarely take part in these fundraising efforts as a matter of principle so i can spin zone but. they have preferred to donate to specific charity projects it gets you to death. with kids what's the biggest most even this part is really funny. they've put up a. bust of me at the door just museum in munich i know it's good for my ego is there really a bust of in there that did say he thought it was the amount of distance one day and if i did this and i did in disguise screw the government out of millions or even billions and they put up
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a bust of him at the museum that like this i want to see stefan wouldn't of been a monument to a man who avoided paying millions in taxes and made donations worth a fraction of that he's now celebrated as a generous benefactor a sad state of affairs. in. the fast pace of life in the digital world shift as the lowdown on the web showing new developments and providing useful information the wittiest finds and interviews with makers and users. next
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