By Martin Banks - 29th September 2009
No-one seems to talk about what all this means for developing countries
Eva Joly
The chair of parliament's development committee has called for tough action against multinational companies who "seriously harm" poor countries through their use of tax havens.
Eva Joly, a former magistrate who has gained a reputation for campaigning against fraud and corruption, made her comments at a debate in Brussels on Tuesday.
She said tax havens were used as a means of tax evasion but the "real problem" was the funding and resources she says is subsequently denied to often developing countries, such as those in Africa and India.
Her remarks come in the wake of UK chancellor Alistair Darling's recent call at the G20 summit for rich nations like Britain to draw up a "blacklist" of countries whose regulatory systems pose a threat to the world's financial system.
Darling said they should extend their push to set standards on taxation and bank rules to cover countries that have a poor record overseeing institutions and allow wealthy individuals to hide cash.
Addressing a debate entitled "Tackling tax havens - a challenge for development", Joly, a French Greens MEP, said, "Often, there are huge amounts involved and the cost to member states is enormous. However, no-one seems to talk about what all this means for developing countries.
"The fact is that tax havens hamper development because, for example, they can be used by dictators to hide money that does not belong to them.
"Basically, it is what I call a new form of colonialism that is taking place."
She added, "It is unbelievable that multinational companies like Coca-Cola can continue to refuse to say what their tax arrangements are. They are allowed to do so because, currently, there are no rules on this issue.
"If there was more openness, it would allow people in places like African countries to know the extent of their government resources and to ask the necessary questions."
She said the use of tax havens was "harmful and universal" but conceded that it would be "very, very difficult" to enforce change to the present situation.
"In the meantime, people who are already hurting the most in the current economic downturn and as a result of governments cutting back on development aid will continue to suffer the most," she said.
Joly was the keynote speaker at a debate organised by the College of Europe Foundation.
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