The Eternal Value of Privacy  

freedom       2020-08-22 

THE MOST COMMON retort against privacy advocates – by those in favor of ID checks, cameras, databases, data mining and other wholesale surveillance measures – is this line: If you aren't doing anything wrong, what do you have to hide? Some clever answers: If I'm not doing anything wrong, then you have no cause to watch me. Because the government gets to define what's wrong, and they keep changing the definition. Because you might do something wrong with my information. My problem with quips like these – as right as they are – is that they accept the premise that privacy is about hiding a wrong. It's not. Privacy is an inherent human right, and a requirement for maintaining the human condition with dignity and respect. Two proverbs say it best: Quis custodiet custodes ipsos? (Who watches the watchers?) and Absolute power corrupts absolutely.

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  Face masks are breaking facial recognition algorithms, says new government study  

privacy       2020-07-28 

Face masks are one of the best defenses against the spread of COVID-19, but their growing adoption is having a second, unintended effect: breaking facial recognition algorithms.

Wearing face masks that adequately cover the mouth and nose causes the error rate of some of the most widely used facial recognition algorithms to spike to between 5 percent and 50 percent, a study by the US National Institute of Standards and Technology (NIST) has found. Black masks were more likely to cause errors than blue masks, and the more of the nose covered by the mask, the harder the algorithms found it to identify the face.

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  We Mapped How the Coronavirus Is Driving New Surveillance Programs Around the World  

privacy       2020-05-15 

In an attempt to stem the tide of the coronavirus pandemic, at least 30 governments around the world have instituted temporary or indefinite efforts to single out infected individuals or maintain quarantines. Many of these efforts, in turn, undermine personal privacy.

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  The 14 Characteristics of Fascism  

freedom       2020-02-26 

1. Powerful and Continuing Nationalism -- Fascist regimes tend to make constant use of patriotic mottos, slogans, symbols, songs, and other paraphernalia. Flags are seen everywhere, as are flag symbols on clothing and in public displays.
2. Disdain for the Recognition of Human Rights -- Because of fear of enemies and the need for security, the people in fascist regimes are persuaded that human rights can be ignored in certain cases because of "need." The people tend to 'look the other way' or even approve of torture, summary executions, assassinations, long incarcerations of prisoners, etc.
3. Identification of Enemies/Scapegoats as a Unifying Cause -- The people are rallied into a unifying patriotic frenzy over the need to eliminate a perceived common threat or foe: racial, ethnic or religious minorities; liberals; communists; socialists, terrorists, etc.
4. Supremacy of the Military -- Even when there are widespread domestic problems, the military is given a disproportionate amount of government funding, and the domestic agenda is neglected. Soldiers and military service are glamorized.
5. Rampant Sexism-- The governments of fascist nations tend to be almost exclusively male-dominated. Under fascist regimes, traditional gender roles are made more rigid. Opposition to abortion is high, as is homophobia and antigay legislation and national policy.
6. Controlled Mass Media -- Sometimes the media is directly controlled by the government, but in other cases, the media is indirectly controlled by government regulation, or through sympathetic media spokespeople and executives. Censorship, especially in wartime, is very common.
7. Obsession with National Security -- Fear is used as a motivational tool by the government over the masses.
8. Religion and Government are Intertwined -- Governments in fascist nations tend to use the most common religion in the nation as a tool to manipulate public opinion. Religious rhetoric and terminology is common from government leaders, even when the major tenets of the religion are diametrically opposed to the government's policies or actions.
9. Corporate Power is Protected -- The industrial and business aristocracy of a fascist nation often are the ones who put the government leaders into power, creating a mutually beneficial business/government relationship and power elite.
10. Labor Power is Suppressed -- Because the organizing power of labor is the only real threat to a fascist government, labor unions are either eliminated entirely or are severely suppressed.
11. Disdain for Intellectuals and the Arts -- Fascist nations tend to promote and tolerate open hostility to higher education, and academia. It is not uncommon for professors and other academics to be censored or even arrested. Free expression in the arts is openly attacked, and governments often refuse to fund the arts.
12. Obsession with Crime and Punishment -- Under fascist regimes, the police are given almost limitless power to enforce laws. The people are often willing to overlook police abuses, and even forego civil liberties, in the name of patriotism. There is often a national police force with virtually unlimited power in fascist nations.
13. Rampant Cronyism and Corruption -- Fascist regimes almost always are governed by groups of friends and associates who appoint each other to government positions, and who use governmental power and authority to protect their friends from accountability. It is not uncommon in fascist regimes for national resources and even treasures to be appropriated or even outright stolen by government leaders.
14. Fraudulent Elections -- Sometimes elections in fascist nations are a complete sham. Other times elections are manipulated by smear campaigns against (or even the assassination of) opposition candidates, the use of legislation to control voting numbers or political district boundaries, and the manipulation of the media. Fascist nations also typically use their judiciaries to manipulate or control elections.

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  Rulers Seek to Rule  

freedom       2015-12-29 

Rulers seek to rule. Well, that seems a bit obvious, doesnt it? And yet, time after time, we elect new leaders, imagining that, This new group will be better—theyll represent us as they promised. Unfortunately, the democratic system doesnt really work very well at all. The idea is supposed to be that if old leaders overstep their bounds, new candidates may come forth who promise a reversal of the autocracy of the previous group, and we elect them. They will then proceed to implement that reversal. Of course, we all know that its this last bit that consistently fails to happen. The new group does not fulfil its promises to the electorate—in fact, it almost invariably seeks to increase its power over them. And as each group assumes greater power than the previous one, the country slowly declines, until ultimately, it reaches the state of tyranny. But what is at the heart of this process? Why on earth does it never seem to happen that the new leaders actually diminish their power and become true representatives of those who elected them? Surely, we must get a few good leaders once in a while. To answer this question, lets have another look at that title, at the top of the page… Rulers seek to rule. Ruling is not a side issue; it is not a by-product. It is their very purpose. It is the reason they ran for elected office. But then, why do better, less-obsessed people not run? Well, they occasionally do, mostly at the lower levels of public office, where they soon find that politics is a nasty business and that their fellow office-holders detest them for their integrity. In effect, they find themselves isolated, much like New York policeman Frank Serpico—a lamb amongst vipers. In such an environment, its unlikely that a good guy will last long. There arises the occasional Ron Paul, a beacon in the night, but the Ron Pauls are rare and even more rarely attain high office. Instead, those who are most likely to pursue public office and most likely to remain there are those that most desire to rule. So, if we follow this reasoning along, who within a given society does most want to rule? Well, clearly, those who are the most obsessive in their desire to control others. Even more so if they possess this desire to a pathological degree. In a small jurisdiction, this is less pronounced, because there are fewer people to run for office. The larger the country, the greater the likelihood that those who are pathological will not only come forward, but will do whatever it takes to succeed. Their odds of initial and continued success are therefore far greater than those of the good candidates. If the above reasoning is correct, we wouldd find our legislatures full of pathological people. In a large country, all candidates, in all parties, might well answer this description, resulting in a virtual guarantee that the top spots would be filled by those who are pathological. (Estimates hold that approximately 6.2% of any population are likely to be narcissistic. Sociopaths are at 4%.) So, lets test this out. Lets look at a list of character traits of each of these psychopathies and ask ourselves if the descriptions fit any (or all) of our rulers. Narcisism Grandiose sense of self-importance Preoccupied with fantasies of unlimited success and power Requires excessive admiration Has a pronounced sense of entitlement Is exploitative of others Lacks empathy Demonstrates arrogant, haughty behaviour Sociopathy Superficial charm and good intelligence Unreliability Untruthfulness and insincerity Lack of remorse and shame Poor judgment and failure to learn by experience Pathologic egocentricity and incapacity for love In examining the traits above and comparing them to the traits we observe in our political leaders, we no longer wonder why our leaders are not more truthful, more reliable, more representative, less arrogant, etc. In fact, in any given situation, we can expect overreach from leaders in each of the following categories: An assumed right to power (over both the electorate and other sovereign states) Extreme lack of concern for truth or integrity (Reality becomes whatever the leader has most recently decided it is) Lack of true concern for the electorate on any level (although concern may very well be pretended) Inconsistency and unreliability in actions and policymaking Fascination with opportunities for armed conflict (both domestic and international) Carelessness in the sacrifice of the lives of others in combat situations (Armed conflict is an interesting game, rather than an unfortunate necessity) Whatever nation the reader is from, he might reread the above description, whilst picturing each of the last several leaders his country has had, and ask himself if these traits apply. (Again, the larger the country, the more likely that all the boxes are ticked, with regard to every leader, regardless of political party.) In addition, if the reader decides to extend the exercise to those on the second and third tiers of power (deputy prime minister, vice president, chancellor of the exchequer, secretary of state, etc., depending upon the jurisdiction), my guess would be that these individuals would also fit the bill fairly well. Right, then. We were already a bit glum about those who ostensibly were elected to represent our interests. Now, it appears not only that they are a bad lot, but that theres little hope for improvement, short of exhuming Guy Fawkes and cloning him in large numbers. So what can we glean from this exercise? We can surmise that, whether a sovereign state was founded as a free republic (e.g., Ancient Rome or the United States), or whether it was founded right from the outset as an oppressive state (e.g., France or the Soviet Union after their respective revolutions in 1799 and 1917), it is certain that pathological individuals will be those who will most desperately seek office. This then means that, over time, the new state will invariably progress toward tyranny, until such time as the system is ended and started anew. What this means is that the reader might wish to assess the point that his home country has reached in its decline and consider whether it has reached the point of diminishing returns as regards his own personal freedom to live his life as he sees fit. The good news is that, at any point in history, countries exist that are at different stages of decline, and the reader has choices as to where he might reside, work, and invest, if he wishes to pursue them.

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  Facebook - Global Government Requests Report  

freedom       2014-01-26 

Think your information is safe from your government on Facebook? Think again... Check on your country with Facebook's published data.

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  How to turn a democracy into a STASI authoritarian state in 10 easy steps:  

freedom       2013-08-13 

1. Misuse the concept of a Top Secret government document (say, the date of D-Day) and extend classification to trillions of mundane documents a year. 2. Classify all government crimes and violations of the Constitution as secret 3. Create a class of 4.5 million privileged individuals, many of them corporate employees, with access to classified documents but allege it is illegal for public to see leaked classified documents 4. Spy on the public in violation of the Constitution 5. Classify environmental activists as terrorists while allowing Big Coal and Big Oil to pollute and destroy the planet 6. Share info gained from NSA spying on public with DEA, FBI, local law enforcement to protect pharmaceuticals & liquor industry from competition from pot, or to protect polluters from activists 7. Falsify to judges and defense attorneys how allegedly incriminating info was discovered 8. Lie and deny to Congress you are spying on the public. 9. Criminalize the revelation of government crimes and spying as Espionage 10. Further criminalize whistleblowing as 'Terrorism', have compradors arrest innocent people, detain them, and confiscate personal effects with no cause or warrant (i.e. David Miranda, partner of Glenn Greenwald) Presto, what looks like a democracy is really an authoritarian state ruling on its own behalf and that of 2000 corporations, databasing the activities of 312 million innocent citizens and actively helping destroy the planet while forestalling climate activism

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  EU funding 'Orwellian' artificial intelligence plan to monitor public for "abnormal behaviour"  

freedom       2009-10-24 

A five-year research programme, called Project Indect, aims to develop computer programmes which act as "agents" to monitor and process information from web sites, discussion forums, file servers, peer-to-peer networks and even individual computers. Its main objectives include the "automatic detection of threats and abnormal behaviour or violence". Project Indect, which received nearly �10 million in funding from the European Union, involves the Police Service of Northern Ireland (PSNI) and computer scientists at York University, in addition to colleagues in nine other European countries. Shami Chakrabarti, the director of human rights group Liberty, described the introduction of such mass surveillance techniques as a "sinister step" for any country, adding that it was "positively chilling" on a European scale. The Indect research, which began this year, comes as the EU is pressing ahead with an expansion of its role in fighting crime, terrorism and managing migration, increasing its budget in these areas by 13.5% to nearly �900 million. The European Commission is calling for a "common culture" of law enforcement to be developed across the EU and for a third of police officers � more than 50,000 in the UK alone � to be given training in European affairs within the next five years. According to the Open Europe think tank, the increased emphasis on co-operation and sharing intelligence means that European police forces are likely to gain access to sensitive information held by UK police, including the British DNA database. It also expects the number of UK citizens extradited under the controversial European Arrest Warrant to triple. Stephen Booth, an Open Europe analyst who has helped compile a dossier on the European justice agenda, said these developments and projects such as Indect sounded "Orwellian" and raised serious questions about individual liberty. "This is all pretty scary stuff in my book. These projects would involve a huge invasion of privacy and citizens need to ask themselves whether the EU should be spending their taxes on them," he said. "The EU lacks sufficient checks and balances and there is no evidence that anyone has ever asked 'is this actually in the best interests of our citizens?'" Miss Chakrabarti said: "Profiling whole populations instead of monitoring individual suspects is a sinister step in any society. "It's dangerous enough at national level, but on a Europe-wide scale the idea becomes positively chilling." According to the official website for Project Indect, which began this year, its main objectives include "to develop a platform for the registration and exchange of operational data, acquisition of multimedia content, intelligent processing of all information and automatic detection of threats and recognition of abnormal behaviour or violence". It talks of the "construction of agents assigned to continuous and automatic monitoring of public resources such as: web sites, discussion forums, usenet groups, file servers, p2p [peer-to-peer] networks as well as individual computer systems, building an internet-based intelligence gathering system, both active and passive". York University's computer science department website details how its task is to develop "computational linguistic techniques for information gathering and learning from the web". "Our focus is on novel techniques for word sense induction, entity resolution, relationship mining, social network analysis [and] sentiment analysis," it says. A separate EU-funded research project, called Adabts � the Automatic Detection of Abnormal Behaviour and Threats in crowded Spaces � has received nearly �3 million. Its is based in Sweden but partners include the UK Home Office and BAE Systems. It is seeking to develop models of "suspicious behaviour" so these can be automatically detected using CCTV and other surveillance methods. The system would analyse the pitch of people's voices, the way their bodies move and track individuals within crowds. Project coordinator Dr Jorgen Ahlberg, of the Swedish Defence Research Agency, said this would simply help CCTV operators notice when trouble was starting. "People usually don't start to fight from one second to another," he said. "They start by arguing and pushing each other. It's not that 'oh you are pushing each other, you should be arrested', it's to alert an operator that something is going on. "If it's a shopping mall, you could send a security guard into the vicinity and things [a fight] maybe wouldn't happen." Open Europe believes intelligence gathered by Indect and other such systems could be used by a little-known body, the EU Joint Situation Centre (SitCen), which it claims is "effectively the beginning of an EU secret service". Critics have said it could develop into "Europe's CIA". The dossier says: "The EU's Joint Situation Centre (SitCen) was originally established in order to monitor and assess worldwide events and situations on a 24-hour basis with a focus on potential crisis regions, terrorism and WMD-proliferation. "However, since 2005, SitCen has been used to share counter-terrorism information. "An increased role for SitCen should be of concern since the body is shrouded in so much secrecy. "The expansion of what is effectively the beginning of an EU 'secret service' raises fundamental questions of political oversight in the member states." Superintendent Gerry Murray, of the PSNI, said the force's main role would be to test whether the system, which he said could be operated on a countrywide or European level, was a worthwhile tool for the police. "A lot of it is very academic and very science-driven [at the moment]. Our budgets are shrinking, our human resources are shrinking and we are looking for IT technology that will help us five years down the line in reducing crime and combating criminal gangs," he said. "Within this Project Indect there is an ethical board which will be looked at: is it permissible within the legislation of the country who may use it, who oversees it and is it human rights compliant."

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  EU to renew US bank scrutiny deal  

privacy       2009-07-28 

The EU plans to renew an agreement allowing US officials to scrutinise European citizens' banking activities under US anti-terrorism laws. EU member states have agreed to let the European Commission negotiate new conditions under which the US will get access to private banking data. US officials currently monitor transactions handled by Swift, a huge inter-bank network based in Belgium. German politicians have voiced concern about the scope of US bank scrutiny. The US wants to have access to a new European database that Swift is setting up in Switzerland. The US Treasury already has access to Swift's American database. Tracking the funding of terror groups globally has been a priority for Washington since the 11 September 2001 attacks on the US. Swift handles millions of transactions daily between banks and other financial institutions worldwide. It holds the data of some 8,000 banks and operates in 200 countries.

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  Switzerland agrees to US tax deal  

freedom       2009-06-20 

Switzerland has agreed a new bilateral framework on sharing tax information with the US, as it continues to ease its once strict banking secrecy. In March, the Swiss government announced that it would start to abide by the current global standards on sharing bank data. Switzerland is hoping these moves will help secure its removal from a list of countries considered likely tax havens. In February Swiss bank UBS had to give the US details of 300 account holders.

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  Leaders see end to banking secrecy  

privacy       2009-04-02 

Leaders of the G20 nations on Thursday declared that 'the era of banking secrecy is over', calling for the immediate publication of a list of countries that fell short of international standards. The politicians threatened to take action against 'non-co-operative jurisdictions, including tax havens�, asking the Paris-based Organisation for Economic Co-operation and Development (OECD) to report back by November's meeting of finance ministers in Scotland.They said: 'We stand ready to deploy sanctions to protect our public finances and financial systems.' The blacklist is likely to prove controversial although most of the offshore financial centres that have been the target of criticism are contained in a second list. This named 38 countries that have promised greater transparency but not yet signed agreements, ranging from countries such as Panama that apparently committed itself to greater transparency years ago to jurisdictions such as Singapore and Switzerland, which have only recently announced plans to become more transparent. A third category named 40 jurisdictions that had 'substantially implemented' the international tax information-sharing standard. This list included Jersey, Guernsey and the Isle of Man, the British crown dependencies but excluded the Cayman Islands, on the grounds that the OECD was reviewing its recent unilateral agreements on information exchange. A lawyer dismissed the blacklist as a 'face-saving exercise, with mainly inconsequential players.' These jurisdictions have not been the focus of international pressure because they were not named by the OECD in 2000 as meeting its tax haven criteria which at that time included having no substantive business activities. Costa Rica features in a wide-ranging list of 34 'secrecy jurisdictions' published in US anti-tax haven legislation. Labuan, a small Malaysian island, has emerged as a low-profile but important offshore centre in Asia. The Philippines, like Malaysia, requires a domestic tax interest for authorities to obtain information. Uruguay has certain restrictions on information exchange. President Nicolas Sarkozy of France who pushed hard for the blacklist said the results of the summit were 'beyond what we could have imagined ... We are all happy with the results.' US officials said that Barack Obama had helped broker a compromise over offshore centres between Hu Jintao, China's president, and Mr Sarkozy, who had threatened to walk away from the summit. One official said an 'elegant solution' was eventually found that enabled the G20 to avoid producing its own blacklist, while the leaders still recognised that of the OECD. The politicians faced difficulty in finding objective criteria to target jurisdictions that do not currently exchange tax information, given the insistence from China that Hong Kong was not targeted and the resistance of European Union members to putting European countries on the list.

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  Cayman Islands Extends Tax Cooperation To Seven Countries  

freedom       2009-03-20 

The Cayman Islands government on March 19 announced the extension of comprehensive tax information assistance to seven new countries, under provisions in the Tax Information Authority Law introduced in 2008, which do not require a bilateral treaty. The seven countries now able to request tax information from the Cayman Islands under this unilateral mechanism are Germany, Austria, Belgium, Czech Republic, Luxembourg, Slovak Republic and Switzerland. Requests may be made in relation to both civil/administrative and criminal tax matters. 'The Cayman Islands was one of the first jurisdictions to commit to OECD standards for transparency and exchange of information in tax matters. We have upheld that commitment by working with OECD and non-OECD colleagues to design effective standards, by reflecting those standards in our domestic regime, and then embarking on a program to extend assistance arrangements to other countries; the first being our tax information agreement with the US signed in 2001,' said the Leader of Government Business, Kurt Tibbetts. Tibbetts added: 'Our actions today in extending tax information assistance to seven more countries is the culmination of many months of technical work, and we are especially grateful to Germany for the insight they were able to provide by virtue of having a unilateral mechanism for cooperation in tax matters themselves.' The unilateral mechanism is complementary to Cayman�s bilateral negotiation program. The latest development in that area was the conclusion of technical negotiations with the Nordic countries for a series of bilateral agreements, including tax information agreements. The seven tax information agreements are currently going through the political authorization process on both sides, to enable execution at a signing ceremony in Stockholm on April 1 2009, with the commercial agreements to follow in June 2009, added the Caymanï's release. Tibbetts concluded by stating that the Cayman Islands also looks forward in the immediate term to concluding bilateral arrangements with the United Kingdom.

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   Andorra Announces OECD Cooperation  

freedom       2009-03-17 

Andorra's government announced on March 10 that it would cooperate with OECD principles by reaching tax information exchange agreements by November 2009, when it will pass legislation to ease its banking secrecy controls. The announcement comes in anticipation of the G-20 summit on April 2, where a revised blacklist of uncooperative jurisdictions is expected to be discussed. Andorra intends, as soon as the General Council passes the appropriate legislation, to conclude a double tax treaty and a TIEA with France, and other member states. The move by Andorra, and similar moves by Monaco and Liechtenstein, indicate that all remaining blacklisted jurisdictions are beginning to conform with OECD principles on transparency and tax information exchange. Welcoming recent revelations, which have seen increased conformity by a number of jurisdictions, including Hong Kong, Singapore and the Cayman Islands, OECD Secretary General Angel Gurria stated: "Moves by a number of financial centres over recent weeks have given a welcome boost to efforts to promote transparency and exchange of information on tax matters." "While many jurisdictions still maintain arrangements that prevent them from assisting foreign authorities in tax investigations, recent actions and statements consistent with the OECD standards in this area on the part of some show that real progress is being achieved." "Ending the abuse of banking secrecy arrangements that facilitate tax evasion is part of a broader drive to clean up one of the more controversial sides of a globalised economy," he said, adding: "The support of the G-20 for efforts to improve transparency and exchange of information has underscored their relevance for both developed and developing countries."

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  UBS to close all US citizen & resident offshore accounts  

freedom       2009-01-23 

Swiss wealth manager UBS AGs closing all the offshore accounts of its U.S. clients, the bank said on Friday, as it comes under pressure from U.S. tax authorities. The Swiss bank decided in July last year to stop offering offshore accounts to U.S. citizens after it was targeted by a U.S. tax investigation which challenges Switzerland's famous banking secrecy laws. U.S. prosecutors have alleged UBS helped clients hide $18 billion of untaxed American money in undeclared accounts. This amounts to around $300 million of annual unpaid taxes, the newspaper said. UBS spokesman Serge Steiner said the decision to close offshore accounts for U.S. domiciled clients was taken in November 2007. The bank started last year to close cash accounts of U.S. clients holding less than 50,000 Swiss francs ($45,660), he added. "This is an ongoing process. It started last year and accelerated since last summer," Steiner said, confirming a New York Times report. As part of the investigation, U.S. authorities indicted UBS's wealth management chief last year. UBS, which U.S. authorities say helped wealthy Americans hide cash in offshore bank accounts, will shut about 19,000 offshore accounts, the paper said, quoting unnamed U.S. clients. NO TIMEFRAME UBS would not comment on the number of accounts to be closed and Steiner said it was not possible to say how long it would take for all the accounts to be closed. "We cannot give any time framework for the whole exercise," he said. Clients will have the option of transferring their assets to one of three U.S.-regulated units -- on-shore wealth management units in the U.S., Switzerland and Hong Kong -- or other banks, Steiner said. They may also choose to receive checks, creating paper trails for U.S. federal prosecutors who are checking whether UBS clients used such accounts to evade taxes. "You can either transfer the money to new banks, or deposit somewhere and get busted," a UBS client was quoted as saying in the newspaper report. All banks in Switzerland are bound to strict bank secrecy laws but a Swiss banking source said local private banks would be reluctant to take on any of UBS' American offshore clients. The transfer of more than $10,000 to a new bank is something that clients are expected to report to the Treasury Department, the paper said. In a separate article, the Wall Street Journal said on Friday many U.S. clients of UBS had started to voluntarily turn themselves in to the U.S. Internal Revenue Service. The clients have so far avoided serious punishment, the paper said.

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  European Commission Unveils New Savings Tax Directive Proposals  

tax       2008-11-17 

The European Commission (EC) announced on Thursday that it has adopted an amending proposal to the savings tax directive that will widen the scope of the legislation "with a view to closing existing loopholes and eliminating tax evasion." Effective since 2005, the savings tax directive seeks to ensure that paying agents either report interest income received by taxpayers resident in other EU member states or levy a withholding tax on the interest income received. The Commission proposal seeks to tighten the directive, so member states can tax more interest payments channelled through intermediate tax-exempted structures. The EC proposes to extend the scope of the directive to forms of income obtained through investments in some "innovative financial products" as well as investments in certain life insurances products. It also proposed to simplify the technical operation of the directive to make it more "user friendly and efficient." Laszlo Kovacs, Commissioner for Taxation and Customs, said: "The first report on the operation of the savings tax directive concluded that the directive, although effective within the limits of its scope, can be easily circumvented. The current scope of the directive needs to be extended, in order to meet our goal of stamping out tax evasion, which affects the national budgets and creates disadvantages for the honest citizens." At present, it is relatively easy for individuals to circumvent the rules of the savings directive by using interposed legal persons or arrangements, such as foundations or trusts, which are not taxed on their income � something that the Commission has long acknowledged. With regard to interest payments made by paying agents (banks, financial institutions, independent professionals, etc.) established in the EU to certain intermediate structures established outside the EU, the Commission proposes that paying agents in the EU apply the provisions of the directive (exchange of information or withholding tax) at the time of the payment to the intermediate structure, as if this payment was directly made to the individual. Concerning payments of interest to certain intermediate structures established within the EU, including some non-charitable trusts and foundations, those structures will be always obliged to act as a �paying agent upon receipt� under the proposed new regime. This means that the provisions of the directive must be applied by these structures upon receipt of any interest payment, no matter where they are established and regardless of the actual distribution of any sums to the individual beneficial owners. The suggested definition of "paying agent upon receipt" includes all entities and legal arrangements (trusts, foundations etc) which are not taxed on their income under the general rules for direct taxation in their Member State of residence or establishment. The savings tax directive can also be circumvented by using financial vehicles other than a classical savings account in a bank. To combat this, the Commission proposes extending the scope of the directive to income from securities which are equivalent to debt claims and life insurance contracts whose performance is strictly linked to income from debt claims. In addition, the Commission proposal seeks to ensure a level playing field between all investment funds or schemes independently of their legal form. This means that income obtained from those investment funds by individuals resident in the EU will be subject to effective taxation. The savings tax directive has applied in 42 jurisdictions since July 1, 2005. These include 27 member states, 5 non-EU 'third countries' (Switzerland, Liechtenstein, Monaco, Andorra and San Marino) and 10 dependent and associated non-EU territories (Anguilla, Aruba, the British Virgin Islands, the Cayman Islands, Guernsey, the Isle of Man, Jersey, Montserrat, the Netherlands Antilles and the Turks and Caicos Islands). Following the request of the Ecofin Council, the European Commission started discussions with selected Asian financial centres earlier this year regarding the application of the directive, namely Hong Kong, Singapore and Macao. Formal negotiations are also expected to take place with Norway, at its request, whilst other jurisdictions like Bermuda and Iceland have shown interest in participating in the savings taxation arrangements.

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