Thursday, June 22, 2017

For No Syt: Regulation of Big Data: Perspectives on Strategy, Policy, Law and Privacy

An extraordinary report by consultants Capital Economics, for BVI Finance, claims that the British Virgin Islands are responsible for $1.5 trillion of assets invested around the world, and that these result in 2.2 million jobs and $15 billion in tax revenue. A better approximation would be that the BVI imposes global tax losses of $37.5 billion every year.
Any investments made via BVI could equally go through any other conduit jurisdiction but there is a particular reason why investments go through the small Caribbean nation. It is the anonymity of ownership that BVI sells globally, regardless of the repeated exposure of its entities’ involvement in tax abuses and other forms of corruption and criminal behaviour that is its unique selling point.  Not cost or market access, as the report claims, in fact there is little to choose between major financial centres on those metrics. There are also good reasons to avoid investing through a small and unbalanced economy, with questions over both its political governance and the sustainability of its business model.
The claimed $1.5 trillion of investment routed through the BVI is significantly higher than previous estimates by the likes of the IMF. And so too is the likely cost to the rest of us – not least in lost tax revenues.

Here’s a quick ballpark figure. The leading academic work by Gabriel Zucman (see Table 1) identifies a lower-bound for offshore assets of $7.6 trillion, with a proportion near 80% estimated to be undeclared to tax authorities, giving rise to an estimated global tax loss of $190 billion each year. As a hypothetical, and assuming the same propensity to declare to home tax authorities as Zucman finds elsewhere, the $1.5 trillion in assets claimed for BVI now would suggest that the jurisdiction would be responsible for global tax losses of the order of $37.5 billion.


yThe European Commission has just published its proposals for rules for tax advisers and related intermediaries which will require advance disclosure to national tax authorities and cross-border automatic information exchange of any tax scheme that might be deemed potentially aggressive. This is a welcome step, albeit one that still leaves the public in the dark about corporate tax avoidance since the disclosures won’t be publicly available (as our colleagues at Eurodad rightly note).  You can download the proposed European Commission Directive here.

TJN Senior Advisor Professor Richard Murphy has described the rules as “a vital step in the right direction”, adding in an interview with International Tax Review that:
“Without lawyers and accountants, most schemes would not exist . . . It’s better to attack the supplier than go after the user”
In the same article TJN’s John Christensen comments that the rules targeting tax avoidanceenablers might contribute to an important cultural change among tax professionals, too many of whom seem to operate in an ethical void:
“Too many tax advisers are prone to leave their moral and ethical values at home when they head to work, reckoning that the abusive schemes they concoct will never be investigated. These proposals have the potential for radically transforming this culture.”

Casanovas, Pompeu and de Koker, Louis and Mendelson, Danuta and Watts, David, Regulation of Big Data: Perspectives on Strategy, Policy, Law and Privacy (June 1, 2017). Health and Technology (2017) DOI 10.1007/s12553-017-0190-6. Available at SSRN: “This article encapsulates selected themes from the Australian Data to Decisions Cooperative Research Centre’s Law and Policy program

William Turton, The Outline – Leaked recording: Inside Apple’s global war on leakers – Former NSA agents, secrecy members on product teams, and a screening apparatus bigger than the TSA.
"A recording of an internal briefing at Apple earlier this month obtained byThe Outline sheds new light on how far the most valuable company in the world will go to prevent leaks about new products. The briefing, titled “Stopping Leakers – Keeping Confidential at Apple,” was led by Director of Global Security David Rice, Director of Worldwide Investigations Lee Freedman, and Jenny Hubbert, who works on the Global Security communications and training team. 

Official Google Webmaster Central Blog – Connect to job seekers with Google Search “At Google I/O this year, we announced Google for Jobs, a new company-wide initiative focused on helping both job seekers and employers, through collaboration with the job matching industry. One major part of this effort is launching an improved experience for job seekers on Google Search. We’re happy to announce this new experience is now open for all developers and site owners. For queries with clear intent like [head of catering jobs in nyc] or [entry level jobs in DC], we’ll show a job listings preview, and each job can expand to display comprehensive details about the listing:

For employers or site owners with job content, this feature brings many benefits:

“The Internet Crime Complaint Center (IC3) has released its 2016 Internet Crime Report, describing the numbers and types of cyber crimes reported to IC3. Business Email Compromise (BEC), ransomware attacks, tech support fraud, and extortion are all common schemes affecting people in the U.S. and around the world. US-CERT encourages users to review the 2016 Internet Crime Report for details and refer to the US-CERT Security Publication on Ransomware for information on defending against this particular threat.” [thanks Pete Weiss]