Burma's Shwe Project and Singapore's banks

Updated

Where will Burma's junta put the billions in revenues it will obtain from the Shwe gas pipeline to China?  Noting that on a previous Yadana project, Myanmar's junta had siphoned off nearly $5 billion, ERI reports:

Despite the Singapore banks denials, ERI has confirmed from high level non-Singapore government sources that named banks and several other banks in Singapore are now “backing off cash from Burma” concerned over risks in holding certain accounts. If true, this would be significant; however, ERI is working to ensure that the banks, Monetary Authority of Singapore and other stakeholders do more to ensure the military junta is not squandering illicit gains from Burma’s natural gas wealth.

 If Singapore and other offshore banking locations get more rigorous, will Hong Kong, Macao or Shanghai banks offer more exclusive services to the dictator-thieves of the developing world?    So long as the G20 initiative to clamp down on tax havens worldwide expands and gains momentum, this scenario becomes somewhat less likely.   As Richard Murphy notes, China and India are very much concerned about the tax revenues that they themselves have been losing to loosely regulated offshore tax havens.  

Nevertheless, as some dictators can transfer funds abroad without violating their home country's tax laws, progress in terms of clamping down on tax havens will not necessarily help.   It depends on how offshore banking regulation proceeds.  But it's probably a case where progress -- in terms of coordinated international action -- on any front begets the potential for progress on all fronts.  For example, it would help if the Burmese people's groups could sue banks harboring ill-gotten gains of the country's dictators.   Greater banking transparency in general might enable such lawsuits.

Update:  FEER reports, "The BBC documentary news program Panorama has a report on tax avoidance which shows how Hong Kong has become one of the avenues of choice for dodging the European Savings Tax Directive."