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Illegal fishing and deforestation companies use tax havens, study finds

© AFP file photo

Text by FRANCE 24

Latest update : 2018-08-13

Companies involved in unlawful resource extraction, including illegal fishing and deforestation in the Amazon, are overwhelmingly using tax havens, according to a major study released Monday.

The links between corporate use of tax havens and resource extraction from two key global environmental resources -- the ocean and the Amazon rainforest -- were exposed in a study published in the journal Nature Ecology and Evolution.

The study follows the 2015 leak of the Panama Papers, which showed how wealthy individuals and companies use offshore schemes to reduce their tax bills.

Seventy percent of fishing vessels implicated in illegal, unreported and unregulated catches had been registered at some point in a tax haven, usually Belize or Panama, the scientists reported.

By contrast, they said, only about four percent of all the fishing vessels registered worldwide are flagged in tax havens.

The scientists also cited documents from Brazil's central bank which showed that almost 70 percent - or $18.4 billion of a total $26.9 billion - of foreign capital invested by major companies in soy and beef farming in Brazil from 2000-2011 had flowed through tax havens.

Key drivers of deforestation

Land clearances for beef and soy farms have been "key drivers of deforestation", especially in the early years, they said. Most funds for beef and soy went via the Cayman Islands, Bahamas and Netherlands.

"In the fisheries case... there are examples of illegal uses of tax havens. We are talking about tax avoidance," lead author Victor Galaz of Stockholm University told Reuters.

By contrast, Galaz said there was nothing illegal about using a tax haven to channel money to farms in Brazil, but he added that this could sometimes act as an indirect subsidy for environmentally damaging practices.

The report did not name fishing companies but the scientists wrote to firms listed on the Brazilian central bank documents, which showed Cargill and Bunge had the largest amount of loans or cash flowing via tax havens.

Both companies said they were committed to protecting the environment and supported a 2006 soy moratorium in Brazil, which bans purchases from recently deforested areas.

"We do not 'hide' profits or cash in tax havens," a Cargill official wrote to the authors. "Our company is subject in the US to full disclosure of all our activities and bank accounts associated with non-US holding companies."

Cargill told Reuters it had nothing to add to that statement.

"Our goal is to build sustainable supply chains free of deforestation," a Bunge spokeswoman wrote in an e-mail to Reuters, echoing remarks the company sent to the authors.

(FRANCE 24 with REUTERS)

 

Date created : 2018-08-13

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