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Untangling land rights in rapidly-changing Myanmar
by International Land Coalition, Namati, agencies
 
Feb 2015
 
The abuse of land rights has been one of the central injustices in Myanmar over the last half-century.
 
But now, across seven states and divisions, thirty community paralegals, supported by Namati and the Pyay-based Civil and Political Rights Campaign Group, are working with thousands of farmers to protect their land rights.
 
The paralegals track data on every case they handle, so they can identify opportunities for improving the system as a whole. Using the data to advocate that Myanmar''s new land policy should respect the rights of women as well as those whose land has been grabbed in the past.
 
Phoe Sein is a land rights advocate working in the dry and dusty central plains region of Bago in Myanmar. In 1996, Phoe Sein lost five of his family’s ten acres when a military officer marched into his field with a pistol and informed him that he was “trespassing on government land”. At the time, under the military rule of Than Shwe, says Phoe Sein, “Everyone was afraid. So government took land very easily.”
 
Phoe Sein’s land – five acres on the west side of Shan Su Village was part of a 5,291acre swath that the military seized, leasing the land to Burmese sugarcane companies. When Phoe Sein protested that the land belonged to him, the officer raised his pistol. He gathered his tools and walked back home.
 
The company came in with machines and cleared the land. Some local farmers became day laborers on the sugarcane farms. As years went by, the farmers fell into debt because of their shrunken farms. Children in the village had to drop out of school after year five, because the cost of school was out of reach.
 
It is a story that has been repeated cross in Myanmar. The military seizes land and signs deals with Burmese and foreign companies, leaving farmers impoverished or landless.
 
With elections and a change of government in 2011, there has been hope for change in Myanmar and the government recently released a draft national land use policy, which will be finalized at the start of 2015. However there are fears it will fail to address historic land grabbing by the country’s ruling elite, threatens to dispossess women and will leave thousands of farmers with insecure rights to their land.
 
Land in Myanmar is complex and important – over 65 per cent of the country works in agriculture. Recent government reforms have opened the door to protest and the claiming of redress, but not all of the trouble dates from military land grabs.
 
In Lad Panpin Village, in Bago, I talked to Nyo Gyi, a 43 year-old farmer whose main crops are beans and rice. In 2012 he learned that he was no longer eligible for the annual six-month loan from the Government Agricultural Bank that he and his family had depended on for as long as they could remember.
 
He was denied the loan because the government’s records classified his farm as state forest. Looking at the land, it is hard to understand how it could be classified as forest. The acres surrounding the village stretch out under the bleaching sun, dry and flat – barely a tree in sight. “We’ve been farming there for many years,” Nyo Gyi says. “Even in the ‘forest area’ there are no trees.”
 
Without government loans, farmers are forced to pay high interest rates to buy seeds. In 2013, Nyo Gyi’s yield was worse than expected because of drought, so he couldn’t pay his loan in full. Without being able to pay, and with high interest rates, Nyo Gyi is at risk of entering a crippling cycle of debt. Many farmers are experiencing the same problem.
 
The classification issue reveals how tenuous the farmers’ claims to their own land really are in Myanamr. Nyo Gyi was under the impression that he controlled the land he farmed. It was only when the land was designated a state forest that he realized this wasn’t true.
 
A new registration process, announced in 2012, has revealed the tangled web of confusion around ownership, control, classification, and use. The process lends itself to abuse. In one village, I talked to 26 year-old Thar Hla whose aunt, when she learned about the registration process, tried to register her nephew’s land under her name.
 
Without a land use certificate a farmer has no formal tenure and no ability to protect his land or his family’s livelihood, regardless of how long it has been understood to be theirs.
 
Meanwhile Myanmar’s opening up means the tourism industry is growing. Near Inle Lake, we passed happy tourists riding bicycles down a lazy road amidst new construction and bungalows enveloped in greenery. Across the street from a new flower-laden boutique hotel is Milethong village, a community that is seriously struggling.
 
Many of the farmers in Milethong lost access to their land because it has been seized by government and leased to developers to build hotels. Many Junta cronies own tourism businesses in the area.
 
“Problems have been there for a long time – but now because of the changes, farmers can do something. That’s why we hear their voice,” says Nay Tun, founder of the Civil and Political Rights Campaign Group (CPRCG). CPRCG was founded by a couple of activists in their late twenties. It employs lawyers, activists, and now works in partnership with Namati, an international legal empowerment organization, there are 30 paralegals like Phoe Sein across six of Myanmar’s 14 states and divisions.
 
Since the passage of the Farmland Law in 2012, over 300,000 acres across the country have been restored to farmers. Many with the assistance of paralegals trained by Namati and CPRCG.
 
But a great many past land grabs remain unsolved. “With the prevalence of past land injustices, some of which are decades-old cases, the new land policy shouldn’t just regulate future land use,” says Laura Goodwin, Namati’s program director in Myanmar. She is also concerned that because current land regulations only allow one name on a land use certificate women face the threat of dispossession.
 
“We’ve seen that 83 per cent of registrations are in a man’s name, despite the fact that many women hold documents like tax records showing the land they maintained in the past,” says Goodwin. “There also needs to be recognition of community land rights – shared commons areas that millions rely on for livestock grazing, firewood, and other resources.”
 
By collecting information on the thousands of land cases handled, Namati and CPRCG have more data on the land registration process than the government itself. It is using that information to advocate changes that will make the process more equitable for women and responsive to the outstanding land grabbing cases from the past.
 
“The Burmese government created five drafts of the National Land Use Policy this year before making a draft public,” says Goodwin. “Without a longer period for public consultation Myanmar’s land laws are in danger of making permanent the injustices of the past and creating new ones for the future.”
 
* In order to protect their identities, the names of some farmers were changed in this article.
 
http://namati.org/freedoms-and-threats/ http://www.landesa.org/securing-land-rights-must-be-key-in-un-development-talks/ http://www.landcoalition.org/en/news/organizations-call-inclusion-community-land-rights-un%E2%80%99s-post-2015-sustainable-development http://www.landcoalition.org/node/2581 http://www.gltn.net/index.php/projects/global-land-indicator-initiative
 
* In January 2015, officers from the Fordham Law School - Leitner Center for International Law and Justice and the Global Justice Center undertook training workshops with representatives of 14 Civil Society groups in Burma to assist them in reporting to the upcoming Universal Periodic Review to the UN Human Rights Council - to harness and use international law to advance gender equality and to realize greater respect for human rights: http://globaljusticecenter.net/index.php/our-work/geneva-initiative/burma/gjc-in-burma-january-2015/burma-trainings-january-2015


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HSBC files show how Swiss bank helped clients dodge taxes and hide millions
by Guardian News, agencies
 
February 2015
 
HSBC’s Swiss banking arm helped wealthy customers dodge taxes and conceal millions of dollars of assets, doling out bundles of untraceable cash and advising clients on how to circumvent domestic tax authorities, according to a huge cache of leaked secret bank account files.
 
The files – obtained through an international collaboration of news outlets, including the Guardian, the French daily Le Monde, BBC Panorama and the Washington-based International Consortium of Investigative Journalists – reveal that HSBC’s Swiss private bank:
 
• Routinely allowed clients to withdraw bricks of cash, often in foreign currencies of little use in Switzerland.
 
• Aggressively marketed schemes likely to enable wealthy clients to avoid European taxes.
 
• Colluded with some clients to conceal undeclared “black” accounts from their domestic tax authorities.
 
• Provided accounts to international criminals, corrupt businessmen and other high-risk individuals.
 
The HSBC files, which cover the period 2005-2007, amount to the biggest banking leak in history, shedding light on some 30,000 accounts holding almost $120bn (£78bn) of assets.
 
The revelations will amplify calls for crackdowns on offshore tax havens and stoke political arguments in the US, Britain and elsewhere in Europe where exchequers are seen to be fighting a losing battle against fleet-footed and wealthy individuals in the globalised world.
 
Approached by the Guardian, HSBC, the world’s second largest bank, has now admitted wrongdoing by its Swiss subsidiary. “We acknowledge and are accountable for past compliance and control failures,” the bank said in a statement. The Swiss arm, the statement said, had not been fully integrated into HSBC after its purchase in 1999, allowing “significantly lower” standards of compliance and due diligence to persist.
 
That response raises serious questions about oversight of the Swiss operation by the then senior executives of its parent company, HSBC Group, headquartered in London. It has now acknowledged that it was not until 2011 that action was taken to bring the Swiss bank into line. “HSBC was run in a more federated way than it is today and decisions were frequently taken at a country level,” the bank said.
 
HSBC was headed during the period covered in the files by Stephen Green – now Lord Green – who served as the global bank’s chief executive, then group chairman until 2010 when he left to become a trade minister in the House of Lords for David Cameron’s new government. He declined to comment when approached by the Guardian.
 
Although tax authorities around the world have had confidential access to the leaked files since 2010, the true nature of the Swiss bank’s misconduct has never been made public until now. Hollywood stars, shopkeepers, royalty and clothing merchants feature in the files along with the heirs to some of Europe’s biggest fortunes.
 
In one memo, an HSBC manager is recorded discussing how a London-based financier whom the bank codenamed “Painter”, and his partner, could cheat on Italian tax. “The risk for the couple is, of course, that when they return to Italy the UK tax authorities will pass on information on them to the Italian tax authorities. My own view on this was that … there clearly was a risk.”
 
According to the files, HSBC’s Swiss bankers were also prepared to help Emmanuel Shallop, who was subsequently convicted of dealing in “blood diamonds”, the illegal trade that fuelled war in Africa.
 
One memo records: “We have opened a company account for him based in Dubai … The client is currently being very careful because he is under pressure from the Belgian tax authorities who are investigating his activities in the field of diamond tax evasion.”
 
The records indicate HSBC managers were untroubled that a customer collecting cash bundles of kroner might be breaking Danish law. HSBC staff were instructed: “All contacts through one of her 3 daughters living in London. Account holder living in Denmark, i.e. critical as it is a criminal act having an account abroad non declared.”
 
HSBC’s Swiss bankers routinely handed over large sums of cash to visiting clients, asking few questions, the files show. The bank said it had since tightened its controls. “The amended terms and conditions allowed the private bank to refuse a cash withdrawal request, and placed strict controls on withdrawals over $10,000 [£6,600],” its statement said.
 
One example of the old system detailed in the files involves Richard Caring, a British tycoon and owner of London’s celebrity-packed Ivy restaurant, who on one day in 2005 removed 5m Swiss francs (£2.25m) in cash. When the Guardian asked him why, he declined to explain. His lawyer said it was a private matter and involved no impropriety. Caring’s UK tax status allowed him legally to keep his accounts secret from the tax authorities.
 
The files show how HSBC in Switzerland keenly marketed tax avoidance strategies to its wealthy clients. The bank proactively contacted clients in 2005 to suggest ways to avoid a new tax levied on the Swiss savings accounts of EU citizens, a measure brought in through a treaty between Switzerland and the EU to tackle secret offshore accounts.
 
The documents also show HSBC’s Swiss subsidiary providing banking services to relatives of dictators, people implicated in African corruption scandals, arms industry figures and others. Swiss banking rules have since 1998 required high levels of diligence on the accounts of politically connected figures, but the documents suggest that at the time HSBC happily provided banking services to such controversial individuals.
 
The Guardian’s evidence of a pattern of misconduct at HSBC in Switzerland is supported by the outcome of recent court cases in the US and Europe. The bank was named in the US as a co-conspirator for handing over “bricks” of $100,000 a time to American surgeon Andrew Silva in Geneva, so that he could illegally post cash back to the US.
 
Another US client, Sanjay Sethi, pleaded guilty in 2013 to cheating the US tax authorities. He was one of a group of convicted HSBC clients. The prosecution said an HSBC banker promised “the undeclared account would allow [his] assets to grow tax-free, and bank secrecy laws in Switzerland would allow Sethi to conceal the existence of the account”.
 
In France, an HSBC manager, Nessim el-Maleh, was able to run a cash pipeline in which plastic bags full of currency from the sale of marijuana to immigrants in the Paris suburbs were collected. The cash was then taken round to HSBC’s respectable clients in the French capital. Bank accounts back in Switzerland were manipulated to reimburse the drug dealers.
 
HSBC is already facing criminal investigations and charges in France, Belgium, the US and Argentina as a result of the leak of the files, but no legal action has been taken against it in Britain.
 
Former tax inspector Richard Brooks tells BBC Panorama in a programme to be aired on Monday night: “I think they were a tax avoidance and tax evasion service. I think that’s what they were offering.
 
“There are very few reasons to have an offshore bank account, apart from just saving tax. There are some people who can use an ... account to avoid tax legally. For others it’s just a way to keep money secret.”
 
The Labour party said: “Tax avoidance and evasion harms every taxpayer in Britain, and undermines public services like the NHS. What is truly shocking is that HMRC were made fully aware of these practices back in 2010 but since then very little has been done.”
 
http://www.theguardian.com/business/2015/feb/08/hsbc-files-expose-swiss-bank-clients-dodge-taxes-hide-millions http://www.icij.org/project/swiss-leaks/banking-giant-hsbc-sheltered-murky-cash-linked-dictators-and-arms-dealers
 
3 February 2015
 
Accounting giants take on the world, by Alexis Moreau.
 
Since November, the LuxLeaks scandal has been gathering ever-greater momentum, but the main culprits remain in the shadows.
 
Journalists have revealed that over 300 multinationals, including Apple, Ikea and Disney, had negotiated secret deals with Luxembourg, to secure drastic reductions in their tax rates.
 
These journalists have accessed thousands of confidential documents from the world’s four biggest accountancy firms: PricewaterhouseCoopers (PwC), KPMG, Ernst & Young and Deloitte.
 
Unbeknownst to the general public, these companies – the so-called Big Four – advise governments and multinationals, lay down the law in tax havens, and spin their web of influence in international institutions, all whilst promoting “aggressive tax avoidance”.
 
Together they have a turnover of some €90 billion (US$105 billion).
 
In the case of LuxLeaks, the aim of the Big Four’s lawyers was to secure a tax rate lower than the official tax rate in Luxembourg. The result: several billion dollars “saved” by multinationals, at the expense of ordinary taxpayers.
 
Such practices come as no surprise to tax professionals.
 
In France, wealthy individuals hold direct negotiations on their tax rate with the taxman,” says Damien (not his real name), a young tax lawyer. “It’s the same in Luxembourg, except that multinationals negotiate too”.
 
Damien used to work for one of the accounting giants.
 
“The multinationals are all customers of one of the Big Four, which employ hundreds of lawyers. They tell the lawyers: ‘Find me a way of reducing my ETR (effective tax rate).’ The lawyers draw up a memo devising the best scheme possible. They exploit the loopholes and the benefits offered by the tax systems around the world.”
 
The fees for these “tax optimisation” memos are astronomical. “They are negotiated with the client, based on the time spent,” explains Damien.
 
“A partner in a big firm charges €600 an hour, on average; they work with one or several managers, whose hourly rates are €350, and a number of juniors, who are paid €100 an hour. In a year, PwC rakes in €6.4 billion from tax advice (US$7.3 billion).”
 
Although caught red-handed in the LuxLeaks affair, PwC remained unperturbed: “We have done nothing wrong, nor has Luxembourg. They are legal and legitimate activities,” said one of its directors.
 
It is true that these sleight-of-hand accounting tricks are not officially forbidden. They are referred to as “aggressive tax planning” in a bid to avoid the unsavoury term “tax evasion”.
 
However, the line between the two is, in fact, very thin.
 
In response to questions from British members of parliament, a partner at Deloitte stated that the rule was to sell schemes that had at least a 50 per cent chance of being upheld in court. In private, tax advisors admit that the real figure is 25 per cent.
 
It is a potentially expensive gamble. In 2013, Ernst & Young had to pay US$123 million to the United States to avoid criminal prosecution: the firm had sold tax schemes to 200 clients, allowing them to save US$2 billion in taxes.
 
Auditing and tax advice, a dangerous combination
 
Tax planning is not, however, the audit giants’ primary activity. Their main business, as their name indicates, is “auditing” multinationals.
 
Between them, the Big Four scrutinise the annual accounts of the 500 biggest companies on the planet, to ensure there are no irregularities.
 
This dual role is questionable: on the one hand, they play the role of the “cops” in charge of inspecting the companies whilst, on the other, they encourage them to flirt with illegality.
 
What’s more, the auditors are paid by the very same people they are auditing.
 
The Enron collapse, in 2002, demonstrates how flawed the system really is. Arthur Andersen, the energy giant’s auditor and financial advisor, was accused of having covered up its client’s financial manipulations. Employees at the auditing firm did not hesitate to shred thousands of documents to cover their tracks.
 
As a result of this scandal, the law now requires that accounting giants separate their auditing and their advisory services. The two are, however, still being mixed.
 
Take the example of ketchup giant Heinz, quoted in LuxLeaks.
 
While PwC tax advisors were helping the multinational to avoid the taxman, the firm’s auditors were still certifying Heinz’s accounts, as demonstrated by its 2010 annual report.
 
Having spent so much time in tax havens, the accounting giants have come to feel very much at home there. Jersey is a prime example. The lawmakers of this tiny territory are often happy to transcribe turnkey projects into law.
 
In 1995, the accounting firms managed to have a tailored-made legal status passed especially for them: the “limited partnership”. It is a status that combines the advantages of little transparency, lower taxation and limited liability in case of bankruptcy.
 
The idea was to then use the threat of fleeing to Jersey if the United Kingdom refused to pass an identical text.
 
Operation successful: one morning, the lawmakers of Jersey found the bill on their desk, a lobbying campaign pushes the most hostile opponents to give in.
 
In the European Union, the Big Four’s influence is more covert. Their objective: to stop any legislation that might bother multinationals. They have pride of place in a variety of expert groups.
 
In April 2013, when the European Commission launched the platform to tackle aggressive tax planning, its members included no less than PwC, which was nailed 18 months later in LuxLeaks.
 
For years, the OECD has been contemplating the introduction of “country-by-country reporting”.
 
Such reporting would oblige the multinationals to disclose information such as the profits made by each subsidiary.
 
This would be more than enough to upset the big groups locating their subsidiaries in tax havens. And to put an end to the accounting giant’s money-spinning schemes.
 
In April 2014, the OECD suggested that key data could be left out of these reports, much to the relief of the Big Four, for which tax advice represents a quarter of their turnover.
 
The Big Four do not only act as experts for companies and the European Union.
 
Over the last 30 years, they have diversified their client base, offering their services to states and local authorities. Their expansion corresponds with the neoliberal shift of the 1980s.
 
Their philosophy is simple: states should be run like companies, with cost “optimisation” as a key objective.
 
The French state regularly calls on the services of the Big Four.
 
During the launch, in 2007, of the General Public Policy Review (RGPP) – a sweeping package of reforms aimed at cutting public spending – the French government commissioned several firms, including Ernst & Young. The operation – paid by the taxpayer – cost €111 million.
 
Local and regional governments also call on the accounting giants’ services. KPMG is advising 6000 municipal councils, departmental and regional authorities in France.
 
“For a public service that is simpler, more efficient, more accountable – in short: more sustainable, KPMG assists public sector players,” proclaims the firm in its promotional material.
 
A seasoned auditor who works for one of the Big Four explains:
 
“More and more local authorities are coming to us because they can no longer take on all their missions with the continual fall in state funding. Our role is to tell them, ‘You’re going to have to have one of your limbs cut off, and we will tell you whether you need to lose an arm or a leg’. After doing a complete audit of their books, we advise them to abandon certain missions or to outsource certain services (IT, cleaning, etc.). It’s either that or bankruptcy.”
 
Another promising market has opened up for the Big Four in the South, with the growth in the “structural reforms” driven by the IMF or the World Bank.
 
African countries, for instance, hire the firms to advise them on the privatisation of their public sectors.
 
Côte d’Ivoire, despite being one of the world’s poorest countries, reportedly forked out €800,000 to pay for PwC’s advice on the privatisation of five state-owned banks. Its competitor KPMG had asked for no less than €2 million when bidding for the contract.
 
By knocking at the doors of the states around the globe, the Big Four are managing to pick up some unlikely customers.
 
Who would have thought that the Pope would one day turn to KPMG to put the Vatican’s books in order?
 
Pope Francis hopes, in so doing, to turn the page on the successive financial scandals that have marked the Holy See.
 
KPMG’s mission is to “bring greater transparency” to the Vatican’s finances.
 
It is true that when it comes to financial transparency, the Big Four are not short of know-how...
 
* This article was first published by Basta and has been translated from French. External link: http://www.equaltimes.org/accounting-giants-take-on-the#.VNgMHCypX-Y


 

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