Tax-avoiders of all countries, beware! A crusade against offshore companies is on the cards

A scandal has been unfolding in the UK and US, with the potential to also seriously effect Czech tax-avoiders, doing business through offshore-registered companies. Under the joint pressure of investigative journalists from The Guardian, BBC, and the American ICIJ’s (International Consortium of Investigative Journalists), the identities of shrewd guys who have been avoiding taxes or laundering money through dummy companies are now coming to light. For now, the companies involved have been located in the UK, but also in the British Virgin Islands, in Belize, or in the US State of Delaware. Over the past few days, The Guardian and the ICIJ server have published articles (see the links below) that must be giving headaches to these companies’ owners and to their lawyers. Speedy transfers to Cyprus, for example, are to be expected – but for many, it might be too late.

A rather endearing feature of this affair is the shock it seems to have caused in the UK. As if people have been jolted awake from a long slumber. All of a sudden, they are discovering who has been buying their local property or taking over their businesses, and how many British companies are not, in fact, British at all. To date, journalists have been able to identify a network involving 21,500 companies managed by 28 mock CEOs. In this context, noticeable slackness has also been exposed as to the enforcement of legal obligations, such as tax filings. HRMC, the British Revenue authority, admitted that many companies have failed to meet their obligations, ignoring its requests for various documents. However, no company has ever been fined for such behaviour as yet.

To both countries’ respective populations’ bewilderment, the British and American revelations spell out something that has been common knowledge in the Czech Republic for a long time. In a great majority of cases, the intent behind shell companies with dummy managers its not tax optimisation, but concealing the assets’ true owners: as such, these are a key instrument for thriving corruption.

These companies’ would-be managers are often quite peculiar individuals, ranging from small tricksters through naive old-age pensioners and widows, right up to cunning lawyers. Most of them figure as managers in dozens or even hundreds of companies at the same time. Some are paid a few hundred dollars apiece, others are more expensive: the most valued are those who prefer knowing nothing about their company, its owners, and business.

Their signatures on agreements are often fakes – who would bother to seek them out in their homes spread from Cyprus to Belize? This leads to absurd situations when long-dead people or people currently in prison act on behalf of these companies.

We can quote a case of the kind right from our sweet homeland, and has already brought it – through an American contact – to the attention of American authorities and ICIJ journalists.
The company’s name is Brandson Enterprises, located in London, and represented by a certain Irvin Boncamper, an American citizen. Around six years ago, the company purchased from Dopravní podnik Ostrava (Ostrava public transport company) difficult-to-recover receivables pertaining to unpaid fines. Since then, the company has filed thousands of actions against debtors in Czech courts. It has been very successful: the courts have been mass-producing injunctions to pay; bailiffs have been confiscating and auctioning assets for its benefit. The first thing that looks puzzling is why was so easy a task, in addition performed by a single lawyer – Brno-based Markéta Vaňková hired for the purpose – not ordered directly by the transport company; secondly, the person or persons behind Brandson Enterprises remain, of course, unknown. It could be somebody close to the Ostrava public transport company who arranged such a good deal for Brandson.

If you want to contact the company and ask Mr. Boncamper questions, you down on your luck. This man who is still registered as the company’s General Manager, and upon whose signature Ms. Vaňková obtained a power of attorney for what she is doing, is in an American jail, and has been there for nearly two years. The reason? Forgery of financial and insurance documents.

There is no doubt, though, that there is somebody else than the small-time con artist Boncamper who has access to the company’s foreign account, well-filled thanks to the Ostrava business. According to the British Companies’ Registry, the Brandson Enterprises’ account showed a £1.5m balance (about CZK 47m) in June 2010. Last year, somebody withdrew one million pounds. It cannot have been the jailbird Boncamper.
More about the British and American offshore affair to come…


Translated by Lingvus

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