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Off shore fi nancial centres are not about secrecy and hiding away money but can off er quite legal tax and asset-protection advantages. By Paul Brent Good business or cheating the taxman? O ffshore financial centres, or offshore tax havens as they are more commonly referred to, have been the subject of heightened international scrutiny and pressure in recent years from governments in the developed world. The reason for the escalating attention? Money. Governments are feeling the squeeze from mounting debts, are unwilling or unable to raise taxes, and no doubt expect to find billions or trillions secretly stashed away by their citizens in tropical — and not so tropical — tax havens. Add in some well-earned public anger over bonus-taking bank managers and high-profile financial frauds and you have the recipe for the G20's "name and shame" campaign against opaque tax havens launched last spring. What is held in offshore havens has been estimated to be US$11.5 trillion by independent advocacy group Tax Justice Network. The pressure on OFCs and those individuals who have used them to hide income in their home jurisdictions continues to grow as European governments have taken to rewarding employees at secre- tive offshore banks to act as whistleblowers and provide client lists in exchange for cash. The power of the cash-for-client-lists strategy, com- bined with a new spirit of information sharing among the Organisation for Economic Co-operation and Development nations, was illustrated last year after the U.S. government's probe of Switzerland's UBS bank and more than 14,000 American taxpayers disclosed the existence of offshore bank accounts to the Internal Revenue Service. The trend could ultimately prove to be a boon to Ottawa and its tax collectors at the Canada Revenue Agency, which has traditionally lacked the budget or international muscle to go after the billions sup- posedly stashed with OFCs. While it co-operated with American tax authorities, UBS has so far rebuffed the CRA's efforts to obtain secret client data. The CRA's major victory so far came when it obtained a list of approximately 100 Canadian account holders with Liechtenstein's 28 JUNE 2010 www. C ANADIAN Law ye rmag.com