Drugs, arms, racketeering: the dark side of Vanuatu’s tax haven

It is the worst-kept secret of tax havens around the world — the vast amounts of money being laundered through them on behalf of organised crime syndicates, narcoterrorists, totalitarian states and arms dealers as well as run-of-the-mill tax avoiders. The Tax Justice Network, an international group opposed to tax havens, estimates that about US$11.5 trillion worth of assets are held offshore in tax havens—a third of all global wealth—all beyond the oversight of tax authorities and law enforcement.

At a Bangkok airport, Thai police officers and soldiers found 30 tonnes of war weaponry in a cargo plane on its journey from North Korea to Iran. Photo: AP

Vanuatu’s tax haven is not immune, as this article published on the International Consortium of Investigative Journalists’s website in 2011 reveals. The article reminds us of the past exploits of Epi MP Robert Bohn Jr.:

On December 11, 2009, a former Soviet air force transport plane flying from North Korea to Iran stopped to refuel in Bangkok. The flight listed its cargo as spare parts for oil-drilling equipment. Instead police found 30 tonnes of explosives, rocket-propelled grenades and components for surface-to-air missiles, all being transported in breach of United Nations sanctions.

Three months later in a Miami courtroom, the U.S. Department of Justice revealed the country’s largest money-laundering scheme involving billions of dollars from Mexican drug lords.

Then, last April, documents emerged in London concerning Russia’s largest tax fraud, an alleged $230 million heist that led to the untimely deaths of four people and threatens to damage the Russian government.

The story behind the three events is many degrees stranger than fiction, but it includes one common element – a number of shell companies associated with 68-year-old Queensland businessman Geoffrey Taylor or members of his family.

Shell companies – that is, corporations with no apparent operations, no apparent employees and no apparent physical assets – are used by those who register them for a range of nefarious activities around the world.

…

Taylor’s immersion in and knowledge of the world of tax havens appears to stem from his many years working in Vanuatu, a small, earthquake-prone, tax-haven island [sic] in the south Pacific Ocean, about 1750 kilometres from Australia. Taylor operated from the capital, Port Vila, which put in its proper perspective is about the same size as Goulburn.

From 1997 until 2002 Taylor served as vice-president of European Bank, a Vanuatu-based company that was no stranger to controversy. In 1999, U.S. authorities accused the bank of accepting millions of dollars in deposits that turned out to be the proceeds of a massive credit card fraud.

In a separate action, a former director of the bank, Robert Bohn, was later convicted of racketeering in the US for his part in an alleged $100 million lottery scam that included Australians among its victims. Though there is no suggestion Taylor was involved in any illegality, throughout 2000 he was busy offering his services to sharemarket-listed firms in Australia in preparation for his eventual relocation to Southport in Queensland.

The full article, which was originally published in Australian newspaper The Canberra Times, can be found at this link: Inside the shell: Drugs, arms and tax scams.