Ethics and the Law


This week on Facebook: This week I picked up on a series of articles and comments about the Paradise Papers published by the FCPA (The FCPA Blog publishes news and commentary about white-collar crime, enforcement, and compliance). The FCPA articles on the Paradise Papers highlight not just the issue of tax havens but those of ethics, morality and the law¹.

This follows on from Trouble in Paradise a series of articles that I posted last week regarding the Paradise Papers where the main opinions on this exposé have centred on ethics and the law — the morality of legal tax avoidance being predominant and the immorality of illegal tax evasion being largely ignored.

I posted a paper some years ago that was first published in 1968 with the title What laws may cure.  The author stated, We assume nowadays that politics should normally be concerned almost exclusively with the distribution of wealth and this exclusive concern has changed very little in the intervening years. Nevertheless the political concern has led to an ever increasing global disparity in wealth. The Paradise Papers expose how the wealthy protect their wealth from the insatiable fiscal policies of governments that have created this disparity.

The exposé of the Paradise Papers has focused the arguments for this exclusive concern regarding the distribution of wealth on the ethics of legal tax avoidance. There is no doubt that to make a law it should be seen as being ethical and moral, however laws are real and impacts on lives while ethical and moral standards are abstractions that may — or may not — be relevant to someone.

It’s tempting to assume that a cache of documents this huge must have come from an insider with special access, but this is contested. Süddeutsche Zeitung (SZ) stated:

For reasons of source protection, the SZ does not provide information on how the data reached the newspaper, who submitted it, and when it was handed over.

While Appleby claims:

We wish to reiterate that our firm was not the subject of a leak but of a serious criminal act and our systems were accessed by an intruder who deployed the tactics of a professional hacker.

Is the 1.6TB Paradise Papers exposé a leak or a hack?

ICIJ Appelby

ICIJ Release Paradise Papers Data from Appleby — click image

An article in Global Finance Integrity with the title ‘Why Offshore Tax Havens Should Matter to Everyone’ states that offshore tax havens impact everybody in the United States. It raises the individual tax bills of each American citizen by approximately $1,259 extra due to lost revenue from offshore tax haven abuse. By stating that the individuals tax bill is a consequence of lost revenue from offshore tax havens, it implies that a reduction in the individual’s tax bill would be achieved if the lost revenue from offshore tax havens were taxed.

This is the tenor of the political argument used globally to justify a fiscal policy for the closure of tax havens. There may be an ethical case for the closure of tax havens and for politicians there is certainly a fiscal policy one, but to conflate the lost revenue from offshore tax havens with taxation policy in such a manner is disingenuous in the extreme.

It is the fiscal policy of every government to collect taxes and every government does so to support their public administration. However, a government’s appetite for taxation is voracious and any reclaimed lost revenue from offshore tax havens will — at its best — only provide a temporary respite.

The fiscal ineptitude and political self interest of successive public administrations, has turned compassionate perceptions of benefaction into frugal perceptions of munificence amongst those forced to contribute to the tax revenue input stream. Other People’s Money


Monday — Paradise Papers show need to close beneficial owner loopholes: While shell companies have legitimate uses, their opacity makes them a favourite tool for tax evaders, money launderers, corrupt public officials and other criminals. The leaks also shine a light on the role of offshore tax havens. (November 6, 2017)

Tuesday — Real news or a titillating non-story? The recent revelations arising out of the publication of the Paradise Papers have been gleefully seized upon by anti-corruption and tax justice campaigners. (November 9, 2017)

Wednesday — Reputation has become an ethical issue, not a legal one: Kenney rightly argues (in the article above) that many practices revealed by both of the large-scale data leaks are perfectly legal, and he says it is important not to confuse an ethical debate over tax policy and social responsibility with an argument about legality. (November 13, 2017)

Thursday — Every big corruption story features anonymous companies: While there are legitimate uses of shell companies, the issue is that the secrecy offered by these offshore structures makes them a favourite tool for just about any criminal from tax evaders and money launderers to drug traffickers and kleptocrats. (November 16, 2017)

Friday — Lawful tax avoidance is neither immoral nor unlawful: It should be remembered that at the time of writing, the media’s approach to reporting on the Paradise Papers has been almost entirely focused upon those who apparently avoided paying taxes legally. It is arguably a non-story until such time as criminality is disclosed. (November 17, 2017)


¹Ethics, morals and International Law: If ethics is deeply personal care, intransitive responsibility, and openness, what role is left for law, one might ask. This question is one which, when asked from an ethical standpoint, also has no absolute or even adequate answer. Nevertheless, it cannot be denied that law is real, that it influences and impacts lives.

Law, as the medium through which society channels its ideals into the real, has a function of inserting the common interests of society into the particulars of individual lives. It carries the structures of society from the past into the future and thereby sets the limits for the future possibilities of society. In this manner, law itself has a choosing dimension which is shaped, but not completely controlled, by its human actors.

One response to “Ethics and the Law

  1. Pingback: Social Media & Democracy | Aasof’s Reflections

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This site was created for members and friends of My Telegraph blog site, but anyone is welcome to comment, and thereafter apply to become an author.

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The Real Economy

Hello, I’m Ed Conway, Economics Editor of Sky News, and this is my website. Blogposts, stuff about my books and a little bit of music

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Professor Mark Elliott

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Am I my Brothers keeper?

An Anthology of Short Stories

Selected by other writers

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The Short Stories of David Goodwin (Capucin)

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