Thursday 16 June 2022

EU turns to Egypt and Israel to ensure alternative gas supplies

Article published in Brussels Morning

The EU signed a new three-year energy agreement with Egypt and Israel as Brussels remains determined to seek alternatives for its energy dependence on Russia. 

Recent discoveries in the Mediterranean have made the region a potential source of new imports.

The Memorandum of Understanding (MoU) was signed yesterday in Cairo by Israel’s Energy Minister, Karine Elharrar, along with Egypt’s Minister of Petroleum, Tarek El Molla, and the EU’s Energy Commissioner, Kadri Simson.

The EU also signed a trilateral MoU for the export of natural gas to Europe from Israel and other sources in the Eastern Mediterranean region which will be liquefied in Egypt before being sent to the EU.

“Today Egypt and Israel make a commitment to share our natural gas with Europe and to help with the energy crisis,” said Elharrar.

The agreement follows deals simitars to those between the EU and the US and the EU and Qatar.  

“This is a big step forward in the energy supply to Europe, but also for Egypt to become a regional energy hub. It is for us also very important to look forward into the new forms of energies. And these are, of course, the renewable energies,” said Commission’s President Ursula von der Leyen.

el-Molla said the deal was a “milestone” and could be an opportunity to further increase cooperation between other Mediterranean countries. The European Commission said it now expects to import 7bcm of LNG from Egypt in 2022, up from an originally expected 5bcm. 

“I look forward to working with Egypt as COP27 Presidency to build on the good momentum from last year in Glasgow. Egypt is also a crucial partner in our efforts to move away from Russian fossil fuels and towards more reliable suppliers,” added von der Leyen.

Not enough

Despite the celebration of a new forged deal, analysts cautioned that the ability of either Egypt or Israel to ship large additional volumes to the EU in the short term was limited, and that the deal in Cairo would not be enough to fill the gap left by Russian deliveries, which accounted for about 40% of the bloc’s gas imports in 2021.

“The agreement does not lay out any specific timeline for the ramp-up in LNG flows from Egypt or for the construction of a new pipeline to ship extra volumes of Israeli gas to Egypt,” said Leo Kabouche, LNG market analyst at Energy Aspects in London to the Financial Times.

Monday 16 May 2022

US to send two shiploads of gas to Bulgaria amid Russian’s energy cut

 Article published in Brussels Morning

Belgium, (Brussels Morning) — After Russia’s Gazprom cut off gas deliveries to Bulgaria on 27 April, the country is set to receive two shiploads of US gas on 8 June and 23 June.

Prime Minister Kiril Petkov said two US gas tankers are headed to Bulgaria noting that a review of the options available to address the energy crisis showed that the gas price on the US market was a quarter of the EU price.

The two shiploads of liquefied natural gas (LNG) from the US were contracted directly with a US company during Petkov’s working visit to Washington on 9 and 10 May, according to the Bulgarian News Agency BTA.

Multiple suppliers

The PM said that the US lower price will end up being equivalent to the price of Gazprom supplies. Trying to secure multiple suppliers, Bulgaria has also forged a deal with Azerbaijan, with deliveries expected for 1 July. “I want to prove that Bulgaria is not dependent and that no one can twist its arms,” he said.

Speaking on the Bulgarian National Television (BNT) earlier on Sunday, the Prime Minister’s Chef de Cabinet, Lena Borislavova, said that the Azeri gas is priced at 25-26 euros, whereas the current price in Europe is 90 euros.

Borislavova said the country needs between “12 and 20 tankers of gas per year to guarantee supplies”. She added that negotiations are underway on medium- and long-term gas supplies “at prices three or four times lower than the last agreed prices with Gazprom”. 

Additional options are being sought for gas supplies from Turkmenistan, Egypt, Turkey and elsewhere. The long-term gas agreements will be signed directly with the suppliers, without any intermediaries.

National considerations

Despite having its own refinery infrastructure, Borislavova said that at the moment, no economic or legal considerations could lead to the nationalization of strategic facilities such as the LUKoil Neftochim refinery of Burgas, which is owned by Russia.

In a related development, the natural gas transmission and storage system operator Bulgartransgaz Executive Director Vladimir Malinov said that Bulgaria has started talks with Turkey for gas supplies through its territory. 

After visiting the Chiren gas storage facility on Sunday, Malinov told BNT that Bulgartransgaz expects to be able to fill it up by the autumn from the current 21% of its capacity, a normal volume for this time of the year. 

Around one million cubic metres of gas are fed to the facility on a daily basis. 

Malinov also said that Bulgaria is not going to suspend the transiting of Russian gas via its territory to Serbia and Hungary.

Wednesday 30 March 2022

Conflict in Ukraine moves to dangerous rhetoric of chemical weapons


With the war in Ukraine entering its second month, several media outlets have started speculating over the possibility of chemical weapons being used in warzones across Ukrainian territory. 

During his official visit to Brussels last week, US President Joe Biden said NATO “would respond” if Russia used chemical weapons in Ukraine. When asked if the US had evidence that Vladimir Putin is under the possession of chemical weapons, Biden said he wouldn’t comment.

"We are partly concerned because we see the rhetoric and we see that Russia is trying to create some kind of pretext that it could use chemical and biological weapons in Ukraine,” said NATO’s Secretary-General Jens Stoltenberg.

Blame game

The concern, however, seems to be weaving on both sides of the battling parts. According to The Telegraph, Russia has accused US President Joe Biden’s son, Hunter Biden, of funding biological weapons labs in Ukraine. The paper claims that the accusation has raised fears that the Kremlin is laying the groundwork to use chemical weapons in Ukraine.

On 8 March, the Chinese Foreign Ministry also accused Ukraine of maintaining dangerous biological weapons labs: "The US has 336 labs in 30 countries under its control, including 26 in Ukraine alone. It should give a full account of its biological military activities at home and abroad and subject itself to multilateral verification," said the spokesperson Zhao Lijian. 

US aware of “biological research facilities”

The US responded on 9 March with Under Secretary of State Victoria Nuland, long in charge of US policy in Ukraine, testifying before the Senate Foreign Relations Committee. Senator Marco Rubio, hoping to debunk growing claims that there are chemical weapons labs in Ukraine, asked Nuland: “Does Ukraine have chemical or biological weapons?”

Nuland did not deny the claim. With palpable discomfort and halting speech, the US diplomat acknowledged the existence of “biological research facilities” saying the US was concerned they would be used by Russian forces. “We are working with the Ukrainian forces to prevent that these research materials from falling into the hands of Russian forces should they approach,” said Nuland.

On 15 March, in a short video, Gabbard said there are more than 25 US-funded biological laboratories in Ukraine and called for a ceasefire at the laboratories as they could spread dangerous pathogens. Gabbard urged for the labs to me “shut down immediately” and the pathogens they hold to be destroyed.

“Instead of trying to cover this up, the Biden-Harris Administration need to work with Russia, Ukraine, NATO and the UN to immediately implement a ceasefire for all military action in the vicinity of these labs,” urged Gabbard.

The Republican Senator Mitt Romney accused his ex-House counterpart of spreading “treasonous lies” that amounted to Kremlin propaganda: “Tulsi Gabbard is parroting false Russian propaganda. Her treasonous lies may well cost lives,” tweeted Mitt Romney in response to Tulsi Gabbard’s video post.

Russia speaks

As for Moscow, it maintains that laboratories in Ukraine have been funded by the US military to develop biological weapons components, yet local staff was being kept in the dark about their research. 

The statement was given by Lieutenant-General Igor Kirillov, who commands the Nuclear, Biological and Chemical Protection Forces of Russia. “We believe that components of biological weapons were being made on the territory of Ukraine,” said Kirillov to RT .

On 17 March, Kirillov presented documents and imagery during a briefing with the Russian Defense Ministry, showing why the military has come to such a conclusion: “The documents have the signatures of real officials and are certified by the seals of organizations,” he said adding that “journalists and experts in the West” can “verify their veracity”.

One document, dated March 6, 2015 reportedly confirms the “direct participation of the Pentagon in the financing of military biological projects in Ukraine”, according to Kirillov. 

Kirillov went on saying that the US officially funded the projects through the Ukrainian Ministry of Health, based on the Agreement on Joint Biological Activities. However, the evidence shows that the real recipients of some $32 million in funds were Ukrainian Defense Ministry laboratories in Kyiv, Odessa, Lvov and Kharkov.

Countering bioweapons

As the blame-game goes on, evidence from the Washington Post’s archive dating back to 2005, reveals that, as of that year, the US and Ukraine agreed to work jointly to prevent the spread of biological weapons in Kyiv. The agreement was announced by former Senators Richard G. Lugar and Barack Obama.

One of the labs that received funding, according to the report, was the I.I. Mechnikov Antiplague Scientific and Research Institute, in the Black Sea port city of Odessa. It’s not clear, however, until when the agreement was in place between the US and Ukraine. 

Syria's reminiscences

On April 7, 2018, Douma, Syria, traveled the world after reports of the use of chemical weapons. To this day, what happened in Douma remains to be explained. After the episode, an investigation by the Organization for the Prohibition of Chemical Weapons (OPCW) began. Expert toxicologists have ruled out the possibility that chlorine gas was the cause of the victims' deaths. However, leaked information from Wikileaks exposed how senior OPCW officials had censored the explosive discovery.

In the early days of the OPCW investigation of an alleged chemical attack in Douma, Syria, toxicology experts ruled out the use of chlorine gas as the cause of death for the more than 40 civilians found at the scene. Instead of publishing this finding, senior OPCW officials withheld it and then launched an investigation into a veteran inspector who questioned OPCW's censorship.

The suppression of toxicologists is among a number of deceptions by the OPCW leadership aimed at corrupting the scientific process of the investigation at Douma, as detailed in The Grayzone’s investigation and the various official documents presented by Wikileaks.  

German toxicologists

In early June 2018, four OPCW staff went to Germany to meet with toxicologists/pharmacologists, all recognized world experts in chemical weapons poisoning. The trip was approved at the highest levels through a Mission Alert Order. The delegation consisted of Dr. Brendan Whelan and Dr. Sami Barrek, both senior members of Douma's investigation team, Dr. Marc Blum, Head of the OPCW Laboratory, and Dr. Soumik Paul, Head of the OPCW Health and Safety Branch.

German experts saw numerous photos and videos of the victims and were told what the alleged witnesses had described to inspectors. Some alleged witnesses claimed a rapid, even immediate onset of severe foaming due to exposure to a toxic chemical (Original Report for 7.82). As the final report revealed: “Victims began arriving [to the hospital known as Site 1] shortly after 7 pm with excessive salivation or foaming at the mouth.” (paragraph 8.56). The alleged attack took place around 7:00 pm (paragraph 8.58).

Within an hour, toxicologists easily confirmed what the OPCW team and other experts already suspected – that such a rapid onset of profuse foam was incompatible with exposure to chlorine. According to the leaked minutes of that meeting, previously published by Wikileaks:

“…experts [toxicologists] were conclusive in their statements that there was no correlation between symptoms and exposure to chlorine. In particular, they stated that the appearance of excessive foam, due to pulmonary edema, observed in photos and reported by witnesses, would not occur in the short period of time between the reported occurrence of the alleged incident and the time when the videos were recorded (approximately 3-4 hours).”
The evidence was now overwhelming that the more than 40 victims filmed at Site 2 had not been killed by nerve agents or chlorine gas. But the Douma samples did not reveal any other toxic chemicals that could have caused the rapid foaming. Could it be that the highly toxic chemical had not been detected in the samples? The OPCW team and German toxicologists discussed this possibility, but found it unlikely.

Friday 18 March 2022

Oliver Stone’s 2016 Ukraine on Fire defies mainstream narrative on Russia-Ukraine war

 Article published in Travel Tomorrow

Ukraine on Fire presents a likely controversial overview of Ukraine’s political history leading up to the 2014 protests in Euromaidan and shedding light on today’s military developments in Eastern Europe.

Directed by Igor Lopatonok and produced by Oscar winner Oliver Stone, the 2016 documentary defies the mainstream media narrative on the geopolitical analysis of the Russia-Ukraine conflict, spanning events from the World War II to the Cold War. The film features the international pressure over Ukraine — leading to an apparent coup d’état ousting the democratically elected Viktor Yanukovich and culminates with the implications of NATO expansion.

In the documentary, Oliver Stone uses his critical lens on the Ukraine crisis, and more specifically on the role played by the US. Labelled as propaganda by the Western media, Russia’s argument of “denazifying” Ukraine as a justification for the invasion is analysed in Ukraine on Fire with the spotlight on a number of neo-nazis groups that, over time, seemed to have incorporated the Ukrainian National Guard.

Ukrainian Nazis joining forces with Hitler

In a throwback to World War II, the documentary denounces the estimated 80,000 Ukrainian ultra-nationalists — notorious for their cruelty towards the Polish, the Jewish and Russian people — who have joined the Schutzstaffel, the infamous Nazi SS.

In 1929, the Organization of Ukrainian Nationalists (OUN) was founded by Stefan Bandera, an ardent nationalist known by the CIA for leading a “reign of terror” and masterminding several ethnic cleansing operations, such as the 1941 Babi Yar massacre, where nearly 34,000 Jews were killed. However, after the war, Bandera fled to Europe, backed by the CIA for safe entry.

Cold War

“The CIA’s fingerprints can be found throughout the conflict,” the film stated, referring to the aftermath of the protests in Ukraine, both the 2004 and 2014 revolutions and events dating back to the Cold War. According to the documentary, CIA documents declassified in 2016 reveal strong ties between US intelligence and Ukrainian nationalists since 1946.

Such ties would serve as a possible source of counter-intelligence against the Soviet Union. During the Cold War, Ukrainian nationalists were part of numerous military operations, including Operation Belladona, Operation Lynx, and Operation Trident. Yet, during the Nuremberg trials in 1945-1956, Ukrainian Nazis were spared from proper justice. “By 1951, the Agency [CIA] excused the illegal activities of OUN’s security branch in the name of Cold War necessity,” reads a declassified memo from the CIA.

The Ukrainian ultra-nationalist movement kept growing with names like Dmytro Dontsov, Andriy Melnyk and Roman Shukhevych shaping the neo-Nazi movement. In 1989, the Ukrainian nationalist organisation Narodny Rukh (People’s Movement) was created, serving as an incubator for neo-Nazi leaders against the Soviet Union’s trajectory towards the West guided by Mikhail Gorbachev’s Perestroika and Glasnost policies.

Shortly before the end of the Soviet Union, in 1991, Oleh Tyahnybok founded yet another nationalist group, Svoboda, which ideology was the purging of Jews and ethnic Russians in Ukraine. As early as 2012, the BBC reported the danger of Ukraine’s ultra-nationalists, particularly Svoboda, and the EU passed a resolution condemning the group as anti-Semitic and xenophobic.

US ties with Svoboda

Despite the warnings from Europe, Victoria Nuland from the US State Department met Tyahnybok, Svoboda’s leader, in February 2014, ahead of the Euromaidan protests. The plot thickens when Nuland was caught on tape with the US Ambassador to Ukraine, Geoffrey Pyatt, masterminding an apparent coup d’état. “Now it would be great to help glue this thing and have the UN help glue it and, you know, f*ck the EU,” said Nuland.

Recalling his troubled tenure as a President (2010-2014), Viktor Yanukovich told Oliver Stone: “My high-level contact was VP Joe Biden. We had frequent phone conversations but the problem was that Mr Biden said one thing but they did different things in Ukraine.”

As for Mr Pyatt, the US Ambassador, Yanukovich said he received visits from Maidan representatives all the time. “We got the impression that the headquarters in charge of the whole process was in the US embassy,” said Yanukovich.

EU and IMF pressure

Throwing back to 2013, Yanukovich explained that Ukraine was going through a difficult economic period and the country was torn between turning to the EU, the International Monetary Fund (IMF), or Russia. With an existing trade agreement with Russia, Yanukovich sought to negotiate a new — and better — agreement, but both the EU and the IMF offered “unacceptable solutions”, he said.

“A significant rise in utility rates, for electricity and natural gas. This would mean a lot more expenses for the people, while their income would stay at the same level,” said Yanukovich about the IMF’s proposal. Ukraine suggested other solutions, but these were officially rejected by the IMF in November 2013.

Kyiv was left with Russia, which said it was ready for partnership if their interests were taken into account. Interviewed by Oliver Stone, the Russian President Vladimir Putin said that an agreement with Ukraine “would mean that EU goods would enter the Russian market without any negotiations”, which was not tolerated by the EU.

Talking about the trade agreement proposed by the EU, Yanukovich said that Ukraine couldn’t go ahead because it “required essential economic expenses and Europe didn’t provide any loss balancing.”


After Ukraine’s decision to move towards the East for trade partnerships, the documentary reveals the manufacturing of a protest, with Euromaidan right behind the corner. As the November 2013 protest started in Ukraine, three new TV channels went on the air and suddenly became stunningly popular. Spilno TV was launched on November 21, Hromadske TV went live on November 22 and Expresso TV followed on November 24. These channels went viral supporting the protests, which were asking for an alignment with the EU and encouraging more and more people to go to Maidan.

Eventually, the protests led to overthrowing the President Yanukovich after an apparent coordinated action between the US and Ukrainian nationalist groups. Such outcome was reported by the filmmaker as the result of a successful staged revolution which included “money, the media and techniques”.

NATO expansion

A crucial element featured in the documentary is NATO’s military threat bordering the Russian Federation. NATO has not stopped expanding since the fall of the Soviet Union, growing from 17 countries in 1990 to 30 today, several of which were once part of the Soviet-led Warsaw pact.

“Why do we react so vehemently to NATO’s expansion?” asked Putin. “We are concerned with the decision-making process. I know how decisions are made. As soon as the country becomes a member of NATO, it can’t resist the pressure of the USA.”

Putin stressed the military threat that NATO membership poses to Russia, saying that “anything at all can appear in such country such as missile defense systems, new bases, or, if necessary, new missile strike systems.”

Putin’s lack of sense of security has been compared to the Cuban missile crisis in 1962, when the US drew a red line in respect of the installation of medium-range missiles 70 km from its border and the world was at the brink of nuclear war.

“This is a very dangerous topic. It’s a topic of war. War between the US and Russia would be complete madness,” said Yanukovich referring to NATO expansion.

Described by critics as Russian propaganda, Oliver Stone’s Ukraine on Fire 2016 documentary presents verifiable claims that bring a different perspective when reflecting on the military escalation in Ukraine and have recently been voiced by the US political scientist John Mearsheimer.

Why is the EU fuelling a new arms race?

Article published in Brussels Morning

Europe’s role in mediating the war in Ukraine is under question following an investigative report that in effect suggests the EU is fuelling a new arms race. A second report, denounces the selling of weapons by EU member states to Moscow, since the 2014 embargo.

European Defence Fund

The joint report from the Transnational Institute (TI) and the European Network Against Arms Trade (ENAAT) is based on an analysis of the European Defence Fund (EDF) (2021-2027), which has an 8 billion euro budget for research and development (R&D) of military materiel. 

However, because it was still too early to conduct a detailed analysis of the EDF’s impact, the investigators explored two predecessor programmes — the Preparatory Action for Defence Research (PADR 2017–2019), with a budget of 90 million euro to fund defence research, and the European Defence Industrial Development Programme (EDIDP 2019–2020), with a budget of 500 million euro to fund the development of defence equipment and technology.

The report is highly critical of the astronomic jump in the EDF’s budget 2017-2021, a 13.6-fold increase over that for the previous programmes. These budgets are intended to fund research and develop new weaponry, as well as to enhance existing armaments by integrating new technology such as artificial intelligence (AI), unmanned or autonomous systems.

Questionable principles

Those conducting the investigations claim the EU acted contrary to the bloc’s founding principle of promoting peace and suggest that the Union is trying to establish itself as a global military power. 
According to the report, the EU’s “decision-making processes and budgets have been captured by highly lucrative corporations that exploit these political spaces for their own gain.“ 

It accuses some of the corporations involved of “highly questionable practices“, which, it asserts, pose serious questions about human rights and the rule of law, two of the EU’s core values. 

Beneficiaries under the EDF are involved in “highly controversial arms exports” to countries experiencing armed conflict or with authoritarian rulers in regions where human rights violations are commonplace, the report claims. 

Regrettably, these practices seem to unfold by design. The TI and ENAAT report reveals that the European Commission proposal establishing the EDF was based on a report presented by 16 private representatives on Defence Research and that it included entire sections copied verbatim from the defence fund proposal as written by the representatives.

“Anti-war voices warned for years about the dangers of the EU pumping billions of taxpayer money into armament — a union founded on peace, churning funds into weapons of war”, MEO Clare Daly, exclaimed.

EU selling weapons to Russia

In continuous disregard for the principles the EU preaches, member states have been exposed as selling weapons to Russia since the 2014 embargo. Ten EU countries exported 346 million euro worth of military equipment, which is considered likely to have been deployed for use in the ongoing military conflict.

The deals were exposed by yet another inquiry, this time by Investigate Europe, which looked into the various types and origins of military apparatus shipped to Russia up until 2020, ranging from missiles, aircraft, rockets, torpedoes, and bombs to vehicles of war. 

France, Germany and Italy are in the top tier of these military “black sales”. Paris sold 152 million euro worth of military equipment to Russia, and accounted for 44% of European arms exported to the Kremlin.
“The 2014 arms embargo allowed contracts which were already signed to be completed. Therefore legal arms sales to Russia continued for some time, but no new contract was signed and deliveries dropped significantly”, MEP Nathalie Loiseau, Chair of the Subcommittee on Security and Defence told Brussels Morning.

MEP Nathalie Loiseau

According to Loiseau, France also canceled the contract for the sale of two Mistral helicopter carriers to Russia, despite the deals having been signed before 2014. The French MEP acknowledged the situation as “clearly inappropriate”, adding that the 2014 arms embargo “was not comprehensive enough”.

Germany exported 121.8 million euro in military equipment to Russia, representing 35% of all EU arms exports to Russia. The total mainly represented the sale of icebreaker vessels, but it also included rifles, and “special protection” vehicles. 

Italy, meanwhile, sold 22.5 million euro worth of military equipment to Moscow between 2015 and 2020. Military vehicles produced in Italy – the IVECO-manufactured Lynce model, for example   – were spotted by a TV channel La 7 journalist on the Ukrainian frontline at the beginning of March, according to the Investigate Report.

Other countries listed as selling artillery to Russia included Austria, Bulgaria, the Czech Republic, Croatia, Finland, Slovakia and Spain.

Wednesday 21 October 2020

John Christensen's Interview: Corporates remain too big to fail, too big to jail

Taxation is one of the most powerful means of corporate regulation. By the end of the year, the European Commission is expected to announce a new initiative that is set to transform the business taxation for the 21st century. 

By the end of the year, the European Commission is expected to announce a new initiative that is set to transform business taxation for the 21st century. Earlier this year, the EU executive announced a series of measures aimed at curbing corruption by fighting tax evasion and tax avoidance, promoting good governance in the EU and beyond, as well as revising the “Automatic Exchange of Information” directive. 

Brussels Morning talked with John Christensen, director of the Tax Justice Network, who in 1996  blew the whistle on a fraud involving a criminal currency trader and the local subsidiary of Switzerland’s largest bank — Union Bank of Switzerland. In 2017, Christensen, co-produced the documentary “The Spider’s Web: Britain’s Second Empire”, in which he exposed in detail how the super-rich exploit the flawed tax system to escape taxes and hide their wealth, thus contributing to widening the gap of extreme inequalities in the world. 

John Christensen, Tax Justice Network Director 

Brussels Morning (BM): Could you tell us what is the professional trajectory one needs to follow to become a champion of equitable taxation ?

John Christensen (JC): I originally trained as a forensic investigator and my ambition was to make documentary movies.   In 1978 I started to investigate how financial market liberalisation was profoundly reshaping the global political economy, and because I grew up in the British tax haven of Jersey I was intrigued by the role that tax havens play in globalised markets. I could see that tax havens enable big companies and very rich people not only to avoid paying tax, but also empowered these people and companies to use their enormous political leverage to secure tax breaks, or deregulation, or some kind of subsidy. 

Back in 1978 this subject was completely unresearched and you couldn’t even study it because there wasn’t a university anywhere in the world offering a course focusing on tax havens. It was as if tax havens didn’t exist. So I decided to head off and investigate by myself, completely alone. I finished my training in forensics investigation, studied for a degree in applied economics — looking at world trade and investment theory — and then I did a master’s degree in law and economics. After doing all that I went offshore. I returned home to Jersey and took a job with Deloittes in their offshore company and trust administration division. That’s the coal face where I learned how offshore works in practice. 

After a couple of years with Deloittes, I was recruited to head the government economic service in Jersey, which I did for over a decade.  By the time I left Jersey in 1998 I’d gained a lot of professional experience of working inside a tax haven, in both the private and public sectors. 

BM: What led you to found the Tax Justice Network?

JC:  What I learned in Jersey was that the rapid spread of tax haven activity had undermined any possibility for globalization to improve the lives of the majority of people, especially in the global South.  Worse, they had become a major threat to social stability and democracy. I discussed this with activists and anti-poverty NGOs from all over the world, and in November 2002 we agreed to launch a global network to tackle tax havens.  That’s how the Tax Justice Network came into existence.  In 2003, I was appointed as its first executive director.

BM: What have been the main cases the Tax Justice Network has brought before the European Commission?

JC: Initially we focused on transparency measures. A lot of corrupt practices — including tax evasion and tax avoidance — are protected by the absence of accounting and legal transparency. So our focus was on a new International Financial Reporting Standard for all multinational companies to require them to publish accounting information at country level, known as country by country reporting (CBCR).  CBCR reveals the ways in which big companies avoid taxes. We were successful; country by country reporting is now a global standard. 

To begin with, there was a lot of resistance to CBCR, particularly from large companies and accounting firms, who claimed it would be too expensive for them to produce the information.  Being trained professionals we were in a position to challenge them, arguing that because this information is material to understanding risks at country level, all boards of directors should have access to this information, and the information should also be available to other stakeholders, including employees, investors, and the communities in which they operate. 

BM: What were the Tax Justice Network major achievements?

JC: Apart from the important corporate transparency demands, we also won the argument for adopting ”Automatic Information Exchange” between tax authorities as a new global standard. Tax havens had successfully blocked this approach for many years, and I was constantly told by politicians “you will never achieve that”, and “it will not happen in your lifetime”. But automatic information exchange is now the global standard, and we can claim credit for that. 

We can also claim credit for pushing for a global standard for making information about company ownership publicly available. A lot of corrupt practices are hidden behind offshore shell companies, making it hard for investigators to find out who really owns these companies. In most cases the people who are listed are not the true beneficial owners. We’ve made the case, working with anti-corruption organisations around the world, for that information to be made publicly available. The EU has accepted our arguments and implemented public registers.  So we’ve made some progress towards tackling tax havens, but there’s still a long way to go.

EU’s tax structure: a political failure

BM: What are the major reforms the EU should incorporate into its tax system?

JC:  We must recognise that tax regimes in the EU are increasingly regressive, contributing to levels of wealth and income inequality so extreme that they threaten social and political stability.  I identify two areas of tax policy where the EU has significantly failed to take sufficient action: the first involves the race-to-the-bottom on corporate tax rates, which is disastrous.  The EU should have agreed a common tax base and a minimum tax rate of around 25 percent decades ago.  These are important steps towards abandoning the failed arm’s length method for taxing multinational companies and adopting unitary taxation. 

The EU has for a long time taken a permissive attitude towards tax competition. When talking to experts, it seems to be broadly accepted that tax competition is anti-democratic and economically harmful because the beneficiaries of tax competition are almost always multinational companies and the losers are almost always local companies. The EU’s thinking here is profoundly mistaken, and the EU needs urgently to reverse out of the race-to-the-bottom and push in the direction of enhanced cooperation to block tax havens from undermining the tax sovereignty of other countries.  If the EU wants to improve the lives of its citizens, a race-to-the-top on better regulation and more progressive taxation would be far more worthwhile than the foolishness of a race-to-the-bottom.

The second crucial step which the EU needs to take follows on from the need to tackle tax havens. Recently, the European Commission removed the Cayman Islands from the list of non-cooperative jurisdictions. How did that happen?  The Cayman Islands rank third, behind the BVI and Bermuda, on the Corporate Tax Haven Index, yet the EU drops it from its own blacklist.  Worse, the EU blacklist doesn’t include Ireland, or Luxembourg, or the Netherlands, all of which are prominent tax havens, so we still cannot take seriously the Commission’s promises to tackle this issue.  And this failure contributes in a big way to undermining public confidence in the EU itself.  The Corporate Tax Haven Index and the Financial Secrecy Index, both published by the Tax Justice Network, provide objective and independent rankings of the world’s leading tax havens and secrecy jurisdictions; the EU should abandon its politically compromised blacklisting process and substitute these indices.

BM: There is a feeling that there is a huge discrepancy between income tax and corporate taxation. Why can’t we make companies pay their fair social share?

JC: It seems to me that for decades, countries in the EU, and others, have been basing their tax policies around supporting the big multinational companies to gain market positions around the world, and they have been doing this by giving preferential tax treatment to multinationals compared to small and medium enterprises. And this is not always obvious because often it is a case of being lenient towards offshore tax avoidance.  But tax avoidance isn’t a legitimate activity in any circumstances, and this leniency creates a harmful market distortion: It’s essentially an indirect subsidy to big companies which allows them to operate as economic free riders. 

I think this is based on the politically mistaken idea that we need to support “our “multinational companies. In the long run, this leniency towards tax avoidance strengthens monopolies and weakens small companies, innovators and job creation. 

BM: Multinationals like Apple and Microsoft can use the extra cash that they don’t pay in taxes (and their competition does!) to aggressively market their products and buy out smaller firms that do.  Do you feel that ‘tax competitiveness’ can be regulated in the Single Market given the reliance of a number of member states on the model? 

JC: The EU needs to totally rethink its competition policy.  I favour applying higher tax rates to excess profits generated by monopolies, but I think the EU needs to go much further in shaping its competition policy, accepting that many companies are given monopoly rights through their intellectual property rights that can go on for decades. That is fundamentally anti-market and anti-competition. And to make matters worse, current tax rules allow these companies to park their intellectual property rights in offshore subsidiaries registered in the Cayman Islands, Bermuda, or other tax havens, and to shift their profits there to avoid taxes.  Anyone looking for the systemic roots of inequality should start by looking at how tax havens have disastrously distorted market economies.  

BM: Income tax in Europe is 51% in some countries. How do you see a tax system based on consumption and not on income as a means to reform capitalism? 

JC: Faced with capital mobility and massive lobbying from powerful corporations, political leaders feel themselves incapable of defending domestic tax sovereignty and resisting race-to-the-bottom pressures.  In response, they have shifted tax charges away from capital by largely abolishing wealth taxes and lowering corporate income tax (CIT) rates, while at the same time increasing value added and similar consumption taxes, and cutting back heavily on welfare provisions.

The decades-long trend away from direct taxation of wealth and income must be reversed. The COVID-19 pandemic makes it imperative that the EU reduces reliance on regressive indirect taxes like VAT, and makes much greater use of wealth taxes and excess profits taxes on the monopoly rents being generated by some companies.

BM: LuxLeaks, Panama Papers, Paradise Papers, FinCEN, and with whistle-blowers like Rudolf Elmer, Hervé Falciani coming forward… It’s official that chronic excess of debt is a consequence of central banks’ reckless modus operandi, perhaps based on orthodox neoliberal practices. Yet, debt is now regarded as something normal. Is there a sense of apathy? 

JC: I’m more optimistic than the question suggests. It’s not a question of people feeling powerless. We can see this in the US elections, where there is an astonishing level of political activism, whether coming from the right wing supporting Trump, or the centre-left supporting Biden. The Brexit divisions in the UK also revealed a huge level of public participation from across a wide spectrum of society.  There is a degree of political activism now that I haven’t seen in my lifetime and that shows how passionately engaged people truly are. I think the same applies in most European countries. What I think is missing is a coherent sense coming from progressives that another world is possible.  

Since the banking crisis of 2008, people have begun to lose confidence in any idea that returning to what was previously regarded as “normal”, amounts to a good idea. The public wants a radical departure from neoliberalism, preferably in the direction of a Green New Deal, to tackle both the climate crisis and the inequality crisis.  And the COVID-19 crisis has shown that states will necessarily be key players in shaping and financing the enormous investments required to make a transition away from a fossil fuel-based economy to a genuinely sustainable, renewables-based economy.  This will require a massive change of behaviour on the parts of central banks, which haven’t exactly covered themselves in glory, either in terms of preventing waves of banking crises, or in recognising the enormous existential risks posed by the climate crisis.

BM: The general sentiment of the public towards any kind of banking activity is one of great distrust…

JC: And rightly so.  Banks played a key part in the 2008 financial crisis. They were bailed out by states, and then went back to business-as-usual.  Ten years later we have record levels of corporate debt, record levels of household debt, record highs on stock markets, and record property prices.  Clearly something is not right; the global economy is even more fragile than it was before the financial crisis. 

BM: The TV documentary you co-produced in 2017 — “The Spider’s Web: Britain’s Second Empire” — is a comprehensive eye-opener about the global-scale of the tax evasion issue How is it that the City of London manages to avoid the scrutiny of political scientists and economists? 

JC: This reflects the way in which neoliberalism penetrated the state and most of the institutions of modern democracy, including media concentration in the hands of unaccountable billionaires, and the massive funds flowing into bogus think tanks, which then publish bogus research to distort political arguments. I think something similar has happened to academia. Too many academics say they can’t secure research funding to do this kind of critical analysis or critical accounting, and not surprisingly they’re concerned about the consequences of exposing the corruption that lies at the heart of offshore finance.

From my own experience, going back to when I blew the whistle on corrupt politicians and regulators in Jersey, once you stick your neck out, you can expect to be personally attacked.  Former friends and allies will fall back into the shadows because they’re frightened of losing their jobs. The police and judiciary will do nothing, and you run the risk of ending your career. It takes tremendous personal courage to engage in the kind of in-depth investigation of what is truly happening behind the surface of the City of London and other offshore financial centres.  In most cases, we would know nothing about the corrupt practices were it not for the heroic whistleblowers behind the LuxLeaks, the Panama Papers, the Paradise Papers, and the recent Jersey offshore scandal.

BM: There was an understanding that a common OECD framework (on domestic tax Base Erosion and Profit Shifting – BEPS) would allow cooperation between developed economies on limiting tax avoidance. How is that working?

JC: When the OECD first announced the BEPS programme many years ago, I asked them whether this would open the door to a comprehensive shift away from the arm’s length method, which is flawed beyond repair, towards unitary taxation.  But the OECD seemed determined to retain the arm’s length method, and the result is even greater complexity, even more possibility for lengthy and expensive disputes and arbitration processes, but still no clarity on how to tax multinational companies in this age of the digital economy.

The fact that they weren’t prepared to abandon the previous flawed system is not because of a political failure — quite the opposite. The previous system suits powerful interests — the big companies and big countries, like the US and the UK, and several other major EU countries. They’re perfectly happy to continue with this system because the losers are the poorer countries, which are not allowed to play a role in the decision-making processes. This isn’t an economic issue. This is all about the politics of corporate power.

I think this is a huge challenge facing humanity, ranking alongside climate crisis.  We’ve seen the rise of extremely powerful corporations, which are highly aggressive in shaping policies, particularly around regulation and taxation, to suit their interests.  And the BEPS process demonstrates the extent to which corporate power is able to resist change that would benefit the vast majority of people on this planet.

BM: The European Commission pledged to do more about tax evasion, but it seems like the system has a solid structure in place to protect those who commit the fraud and punish those who come forward to expose it.  Is there any way change can be achieved by political means?

JC: Yes, I’m reasonably optimistic because we have a lot of support coming from the European Parliament to strengthen whistleblower protection, which is an important step forward. 

We need to recognize that whistleblower protection is expensive. At high-level, particularly in financial services, a whistleblower is likely to suffer enormous financial damage as a result of whistleblowing. I would like to see in the EU, the development of a system of payments to support whistleblowers and, at the very least, to not allow financial penalties to discourage whistleblowing. And the payment should not come from general taxation. It should come from a levy imposed on the financial services sector and administered by an independent body.

Without whistleblowers, we would have made almost no progress during the last 30 years. We have seen how whistleblowers have been attacked — Antoine Deltour, Hervé Falciani and my own experience in Jersey. The attacks have been ferocious. The attackers have never been penalised for their bullying behaviour, which is, in many cases, criminal. 

BM: Do you think EU Commissioner for Competition Margethe Vestager is doing a good job?

JC: Initially, I was encouraged by her appointment, but less so now. She hasn’t significantly changed EU competition policy, which seems to start from a confused position of thinking that in order to support European companies to compete on the world stage we must allow them to monopolise domestic markets.  So, in one sector after another, we’ve seen mergers and acquisitions which have concentrated corporate power, and we’ve seen a steady modification of intellectual property rights which also concentrate corporate power, and we’ve seen the relentless rise of corporations both too big to fail and too big to jail.  And the competition authorities appear powerless to take effective action to protect public interest.

BM: How will the Tax Justice Network respond to such persistent challenges?

JC: Well, our work on investigating tax havens and identifying the areas where they fail to meet standards on transparency and regulatory compliance goes on, and we will continue to explore ways in which tax havens harm human rights, democracy and international security.  We have some new initiatives underway, including the imminent launch of a new anti-monopoly network to fight back against excessive corporate power. We’re optimistic that this will become as large and influential as the Tax Justice Network.

Tuesday 20 October 2020

European Commission announces 2021 work programme

The Commission’s 2021 work programme, presented by EU Commissioner Maros Sefcovic today, largely takes into account the corona recession that has hit hard the global economy. Sefcovic said that EU action and coordination were required in order to avoid turning an “economic crisis into a social crisis”. 

“The European Commission (EC) will continue its efforts to secure a future vaccine for Europeans and to help our economies recover, through the green and digital transition,” said Commission’s president Ursula von der Leyen.

Under its communication, the EC stated that “we have the investment to match the vision and the ambition” focussing on the NextGenerationEU recovery instrument along with a reinforced EU budget for 2021-2027. “Our economies need continued policy support and a delicate balance will need to be struck between providing financial support and ensuring fiscal sustainability,” it further reads the EC’s announcement.

 “In 2021, we plan to table 86 major initiatives, in 44 packages, defining for the entire decade,” shared Sefcovic on social media.

Carbon border adjustment and sustainable transport

The 2030 Agenda and its Sustainable Development Goals as well as the Paris Agreement will stand as the guiding tools of the EC action. On this note, some of the new steps announced by the EU executive include a proposal on a carbon border adjustment mechanism to help motivate foreign producers and EU importers in order to reduce their carbon emissions as well as a series of measures on smart and sustainable transport, including a revision of the regulation on the trans-European transport network and of the directive on intelligent transport systems.

Circular economy

The Commission proposed to continue the implementation of the circular economy action plan, looking at eco-design and sustainable products, in particular circular electronics, including improving the collection, reuse and repair of mobile phones, laptops and other devices. The EU executive also set the intention of following up the EU biodiversity strategy for 2030 and the farm to fork strategy. 

Digital transition

As for the digital transition, a roadmap will be tabled with clearly defined goals for 2030, such as for connectivity, skills and digital public services. With regards to Artificial Intelligence, the Commission will develop legislation covering its safety, liability, fundamental rights and data aspects. A new European digital identity is also on the EC’s agenda “to make it easier to do tasks and access services online across Europe”.

Taxation and Capital Markets

Moving towards taxation issues, the EU executive said it will continue working for an international agreement for a fair tax system that provides long-term sustainable revenues. In case this attempt fails, the Commission will propose a digital levy in the first half of next year. A revision of competition rules is also on the EU’s agenda in order to ensure they are fit for the changing market environment, including the accelerating digitalisation of the economy.

The Commission is also eager to make progress on the Capital Markets Union and the Banking Union. For this matter, the EC proposed to revise the framework for handling EU bank failures, take measures to boost cross-border investment in the EU and step up the fight against money laundering. This will come together with legislation on sustainable corporate governance in view of fostering long-term sustainable and responsible corporate behaviour. The notorious green bonds were also introduced to push for sustainable financing. 

Social measures

The European Pillar of Social Rights will be the compass of Europe’s recovery when it comes to social matters. This includes a new European child guarantee aimed at reducing child poverty and inequalities, by ensuring access to health and education for all children.

Also, a new communication will be tabled for a revamped EU’s humanitarian aid, which will focus on new ways of working with EU’s partners and other donors.

A new biomedical agency

The Commission is also set to update the new industrial strategy for Europe to take into account the impacts of the corona recession. Also, a new pharmaceutical strategy will look at the security of Europe’s supply chain and ensure citizens can rely on high quality medicines.

A revamped Schengen

Additionally, they will propose to establish a new agency for biomedical advanced research and development and a new strategy for the future of Schengen and stronger Schengen rules.

The new pact on migration and asylum will also be subject of assessment. In this context, the Commission will propose a number of measures on legal migration, which is set to include a “talent and skills” package.

Wednesday 7 October 2020

Fair taxation: Member States update EU list of non-cooperative tax jurisdictions

EU Member States added two countries – Barbados and Anguilla – to the EU list of non-cooperative tax jurisdictions. Both jurisdictions were added to the list due to tax transparency concerns. At the same time, the EU has now completely delisted the Cayman Islands and Oman, since they have now delivered on their pending commitments to remove a harmful tax regime and increase tax transparency respectively. Today’s update keeps the number of constituents of the EU list at 12: 

American Samoa









Trinidad and Tobago


US Virgin Islands

Under the EU listing process, jurisdictions are assessed against three main criteria – tax transparency, fair taxation and real economic activity. Those that fall short on any of these criteria are asked for a commitment to address the deficiencies within a set deadline, and run the risk of being added to the list of non-cooperative jurisdictions if these commitments are not met. That said, because of the coronavirus pandemic, Member States again decided to grant certain extensions to some countries on the current ‘grey list’ to fulfil the commitments they have taken. 

This is the first update of the list since the Commission announced plans in July to review the geographic scope and criteria of the listing process, and to evaluate the defensive measures currently being applied by the EU and individual Member States against listed countries and territories. 

Tuesday 6 October 2020

EU’s plastic strategy at risk, warn EU Auditors

Article published in Brussels Morning

Today, the European Court of Auditors (ECA) published a review claiming “there is a significant risk that the EU will not meet its plastic packaging recycling targets for 2025 and 2030.” At stake is the EU Action to tackle plastic packaging waste under the European Green Deal (EGD). In the EU, more than 60% of plastic waste still comes from packaging, but only 40% of that packaging is recycled. 

Describing the new recycling targets for plastic packaging as “a daunting challenge”, Samo Jereb, the Member of the ECA responsible for the review, pointed out how the EU must reverse the current practice “whereby we incinerate more than we recycle.” He noted pointedly that by “resuscitating single-use habits amid sanitary concerns, the COVID pandemic shows that plastics will continue to be a mainstay of our economies, but also an ever-growing environmental threat.”

The European Commission (EC) adopted its plastics strategy in 2018, updating the 1994 Packaging and Packaging Waste Directive and doubling the current recycling target to 50% by 2025 and to 55% by 2030.

However, according to the ECA, nearly a third of the Union’s reported plastic packaging recycling rate is achieved through reliance on shipments to non-EU countries for recycling. As of January 2021, under the soon to be enforced Basel Convention, most plastic waste shipments will be banned. This, combined with the lack of capacity to treat plastic waste within the EU, constitutes another risk to achieving the new targets.

Commission’s delicate ambitions

On 11 March, the European Commission (EC) published its “New Circular Economy Action Plan” listing some 50 actions to combat the ever-growing plastic waste being generated by humans. One of the most positive actions is the pledge to develop new measures on making products more sustainable. To achieve this, on 15 September, the EC launched the “Sustainable products initiative” which aims at revising the Eco design directive. 

The objective is to not only to design a good strategy but also how to operationalize it effectively from a financial and infrastructural perspective. Frans Timmermans, the EU Commissioner in charge of the Green Deal, will elaborate on this at the Budapest Climate Summit when he talks about how the Commission intends to deliver on its green goals.  Soon, the EU executive is expected to launch a renewed sustainable finance strategy, a crucial initiative that will outline how to underwrite the sustainable transition.

In 2018, the EC put forward “A European Strategy for plastics in the circular economy — Local and regional dimension” in line with the UN’s 2030 Sustainable Development Goals. Shortly afterwards, In December 2018, the Commission created the Circular Plastics Alliance to help plastics value chains boost the EU market for recycled plastics to 10 million tonnes by 2025. 

In 2015, Jean-Claude Junker’s Commission delivered the circular economy action plan, which outlined the bloc’s first ecological objectives. These covered the cycle from production and consumption, to waste management and the market for secondary raw materials. The EU’s circular economy gained momentum with the signing of the Paris Agreement in 2016. 

Rethink Plastic Alliance calls for more

However, despite all the green initiatives and its green ambitions, NGOs ask for more from the EU exectutive. 

The Rethink Plastic Alliance welcomed the Commission’s plans to curb plastic pollution but it showed reservations, in particular with regards as to how the Commission intends to set a policy framework for bio-based and biodegradable plastics. “These plastics, which are too often pushed as a solution, are mostly applied as single-use materials with similar environmental impacts to conventional plastics, especially in the ocean,” they warned.

The Alliance accused the Commission of confounding consumers by referring to a “direct substitution of conventional plastics with bio-based and biodegradable plastics” claiming that it will “amount to greenwashing.” The plastics network called on the EC to develop EU legislative measures to address pollution from all primary microplastics.

EU’s watchdog remains sceptical 

The EU’s watchdog Corporate Europe Observatory (CEO) has raised questions regarding the overall “official version” of the EGD. “The fingerprints of industry, and in particular the fossil fuel industry, can be seen all over the EGD,” the CEO reports in a research paper.

“In spite of all its rhetoric, the EGD does not seek to transform, but rather to accommodate, the status quo. It does not rethink the economic system that is the root cause of the climate, ecological, and financial crises. It continues to promote economic growth while seeking to manage the environmental and social impact,” the CEO analysis declared.

The EU watchdog body noted that the EGD is the number one most lobbied-on topic in Brussels, pointing out how, in the first 100 days after the Green Deal was announced on 11 December 2019, key members of the Commission in charge of the deal met with business interest representatives 151 times, roughly 11 meetings a week. “They only met 29 times with public interest representatives, which is about two meetings a week,” CEO commented.

“The fossil fuel industry wants the EGD to focus on ‘solutions’ that allow them to keep their business model, based on the extraction and production of fossil fuels, or at least to control the energy transition as much as they can, making sure they can keep profiting from it.”

However, the update of the EC’s legal framework for plastic recycling in 2018 does reflect the EU’s increased ambitions and it could help boost plastics recycling capacity. The scale of the challenge facing Member States should not be underestimated. EU auditors strongly call on concerted action to get the EU on a good track within the coming five-to-ten years.