Barclays Bank this week announced its plans to restructure its business to put ‘ethics before profits’ and speculation is rife that a notorious division that helped millionaire clients across the globe to avoid paying tax will be axed.
Barclays Bank this week announced its plans to restructure its business to put ‘ethics before profits’ and speculation is rife that a notorious division that helped millionaire clients across the globe to avoid paying tax will be axed.
The potential closure of Barclays Structured Capital Markets (SCM) unit is widely considered a face-saving exercise following series of high-profile scandals. Recently, Barclays was fined some £290m by US and UK financial regulators for insurance mis-selling. It also recently paid more than £190m in fines to both regulators and the US Department of Justice for attempting to manipulate Libor and Euribor inter-bank rates between 2005 and 2009.
Moreover, there is an ongoing investigation by US authorities to find out if Barclays’ “relationships with third parties who assist [the bank] to win or retain business” meet with the Foreign Corrupt Practices Act.
But Barclay’s potential exit from its money-minting tax avoidance business is most controversial, and indeed welcome. Over the years, campaigners have been calling on both Barclays and other financial institutions in western countries to stop aiding millionaires and corporations in their determination to avoid paying tax. In some cases, clients of these institutions are government officials and political leaders who have looted the public funds of developing countries. And we believe that this move by Barclays will help in checking corruption in those countries.
In light of this, we urge western countries to put pressure on all financial institutions to follow these steps in ending the scourge of tax avoidance.
