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| Offshore accounts widespread |
| [30.08.2007, 11:06pm, Thu. GMT] |
Investigators claim that Norwegian companies, and quite a few individual Norwegians, maintain secret bank accounts outside the country, much like the one that brought the political career of Oslo's mayor to an abrupt end this week. It's a form of corruption that officials have trouble cracking. Both large and small Norwegian companies hide money that they don't report to Norwegian tax authorities in foreign bank accounts, say corruption investigators like Erling Grimstad, the former head of Norway's white collar crime unit Økokrim.
The money, he told newspaper Aftenposten on Friday, is most often stashed in bank accounts under fictional names. The accounts can be accessed by credit cards that often are used to pay for everything from travel and entertainment to shopping, while cash withdrawn from the accounts can cover more illicit activity like bribery and prostitution.Use of offshore accounts has long been suspected of being widespread in the shipping and oil industries because of their international nature. The attraction for the companies, or their employees, is the ability to shelter income and/or savings from tax authorities who would demand that it be included in the company's or individual's net worth calculation. Net worth is subject to taxation in Norway, through the country's controversial "fortune tax" called formueskatt.
"This (hiding funds in foreign accounts) is much more widespread than people think," Grimstad told Aftenposten. "It's not unusual to have money in a tax haven, linked to a credit card, which is used for shopping on 5th Avenue in New York, for example, or for dinners."
Some cases involving large amounts of alleged offshore funds have generated publicity, such as the tax authorities' hunt for money believed to be controlled by shipowners like Fred Olsen and the late Anders Jahre and Hilmar Reksten.
"Twenty years ago it was mostly just shipowners who did this, but today it's everyone," said Grimstad.
Residents of Norway and firms doing business in Norway are supposed to reveal all foreign holdings on their annual tax returns. Many, including deposed Oslo Mayor Per Ditlev-Simonsen, don't, and the authorities have a hard time uncovering such evasion.
Some argue that if Norwegian tax laws were less onerous, the temptation to stash funds overseas would be greatly diminished. |
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