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Offshore zones destructive for global financial system

“Offshore zones affect the global financial system, they are its cancer cells,” Dominique Strauss-Kahn said

PARIS/ST PETERSBURG, July 31 (Itar-Tass) - Offshore zones exert the most destructive influence on the global financial system, former International Monetary Fund chief Dominique Strauss-Kahn said in an interview with Itar-Tass and Rossiya 24 TV channel.

He expressed an opinion that these zones had not been eradicated over the lack of political will. “Offshore zones affect the global financial system, they are its cancer cells,” he said. “It is well known that big enterprises find the loopholes to escape paying taxes that are absolutely legal with the use of offshore zones. At the same time, offshore zones are used not only by rich people, enterprises and the financial system. Offshore zones are advantageous to governments, therefore they exist until today.”

Focusing on the fight against offshore zones that had been repeatedly declared by many world leaders, Strauss-Kahn noted that these statements contradicted real practice of many countries that use offshore zones in their interests. “Until today, there have been many state-run enterprises. Management of these enterprises is centralized in ministries, which try to take such measures as to make enterprises yield as much money as possible. If it is necessary to use legal tax rules that are immoral from the point of view of common sense, enterprises are allowed to do this. When governments allow them to do so, they themselves use offshore zones.”

Strauss-Kahn said he kept an eye on world leaders’ statements on this issue, but these words had not been justified by deeds so far. “In reality nothing or practically nothing has happened,” he said. “The problem of offshore zones - economic system’s cancer cells - lies not in the shortage of technical means, but in the lack of political will that can eradicate this phenomenon.”