Method and Concepts

This page provides background information about the extensive data and reports produced. We aim to be as objective as possible and to present our data in a consistent format, to make it easier to compare one jurisdiction with another.

To access our full data reports for any particular jurisdiction, please refer to the database. Reports on each indicator are available here. For the full methodology (over 100 pages) click here.

The database

This database is the result of over a year of desk-based research by a dedicated team, and by numerous researchers around the globe. In terms of the cut-off date of information in the database, we generally relied on reports, legislation, regulation and news available as of 30 September 2017. For some indicators, more recent data has been included. All jurisdictions had the opportunity to provide up-to-date information by answering the questionnaires sent out in February 2017. For each data report we used up to 185 criteria.

The database covers information on the legal, administrative, regulatory, and tax structures of the secrecy jurisdictions.The main data sources were official and public reports by the OECD, the associated Global Forum, the FATF and IMF. In addition, specialist tax databases and websites such as by the IBFD, PwC, and others have been consulted. Furthermore, surveys have been sent to the Ministries of Finance and the Financial Intelligence Units of all 112 reviewed jurisdictions which included targeted questions about the jurisdiction’s tax and regulatory system. (MoF questionnaires in english can be found here, in spanish here; FIU questionnaires english here, spanish here).

Since each data source has differing objectives and layouts, combining them is a major undertaking.

The full database is here.

Box: “You’ve treated my country unfairly!”

The FSI (predictably) gets attacked by the secrecy jurisdictions. The most common attacks are below – here they are, with our generic responses.

“You are x-bashing” (e.g. “Swiss-bashing.”)
  A: No we aren’t. We “bash” everyone. Read e.g. the U.K. or U.S. reports before levelling that accusation.
“We’ve been peer-reviewed by abc and they say we smell of roses!”
  A: We don’t use ‘accepted international standards’ as our benchmarks. We want things to improve, so we set a higher bar. Tough luck.
“You haven’t taken our xyz recent reform into account !”
  A: Nearly always, this is because we have a clear cut-off date (generally, end-Sept 2017) to enable us to compare countries fairly. We give no special treatment on this. Your reforms probably wouldn’t affect your country’s ranking anyway, not least because most other countries are improving too. We’ll include your reforms in the 2019 FSI.
“There isn’t any data.”
  A: That may be because you’re focussing on the narrative reports. Those are political and economic histories. You need to consult the database reports. They are available here.

The assessment process: a higher standard

We believe that the standards and assessment procedures used by bodies such as the Organisation for Economic Cooperation Development (OECD) and the Global Forum are too lenient.

For example, the OECD's Global Forum on Taxation might commend a jurisdiction for requiring companies to file beneficial ownership information with a government authority but then they might note – often only between the lines – that this is not required of "non-resident" companies; it may also omit revealing what percentage of companies are non-resident. More fundamentally, the Global Forum checks merely whether or not corporate service providers have certain relevant information at their disposal, but we apply a higher standard: we require such information to be submitted to a government authority and updated appropriately. For a comprehensive critical appraisal of OECD's Global Forum, read our "Creeping Futility" Report.

We always assess a jurisdiction based on the ‘lowest common denominator" or "weakest link" principle. So for example, if a jurisdiction offers three types of companies, two of which are required to publish financial statements online, but the third is not, then the highest secrecy score applies.

We first thoroughly checked all publicly available data sources, and contacted the Finance Ministry of the jurisdiction concerned. If they did not respond with satisfactory data, or it was of dubious quality, we registered the data as unknown. For the purposes of the calculation of the 20 Key Financial Secrecy Indicators, such absence of data translated into a (negative) secrecy rating. The reason is straightforward: country governments did have a chance to provide this information via the questionnaires, and if they chose not to answer, and are not making such fundamental information easily available and accessible, the country deserves to be assessed as secretive on this particular issue until the contrary is proven.Two questionnaires addressed to the Ministries of Finance and Financial Intelligence Units of each of the reviewed jurisdictions were sent via hard copy mail in February 2017. 26 Ministries of Finance answered to our survey (23%), and six Financial Intelligence Units (5%).

Given the sheer scale of this project, we have occasionally had to use reasoned judgement. Where this has happened, we have sought to be fully transparent about our criteria and reasons. In addition to references to all sources used, the database therefore also includes a substantial amount of notes and supporting information.

The full document on the methodological background of the 20 Key Financial Secrecy Indicators (KFSIs) can be downloaded here.

Identifying secrecy jurisdictions, and the "secrecy spectrum"

In our first FSI project in 2009 we consulted eleven different lists of tax havens compiled by others (such as the IMF, OECD, or Financial Action Task Force) to draw up our own list of 60 secrecy jurisdictions.

In 2011, however, we took a broader approach. We added 13 new jurisdictions to our previous list, based on two criteria. Four jurisdictions - Botswana, Ghana, Guatemala and San Marino - were found to be offering secrecy facilities even though they were not our previous list of 60. Nine others had large financial centres - so we decided to run the numbers on them to see how they scored. These were Canada, Denmark, France, Germany, India, Italy, Japan, Korea, and Spain.

In 2013, we have included all jurisdictions from 2011, plus an additional 9 jurisdictions, two of which were chosen based on indications that secrecy services are offered (Dominican Republic and New Zealand), and seven were added based on their scale of financial services exports (Australia, Norway, Brazil, Sweden, Russia, Saudi Arabia and South Africa).

In 2015, six countries were added because of their share in the global market of offshore financial services was in the Top 40 (in the data for the FSI 2013 - China, Finland, Mexico, Taiwan, Venezuela, Turkey). Seven countries were added because of indications of secrecy or financial centre ambitions (Bolivia, Chile, Gambia, Macedonia, Montenegro, Paraguay, Tanzania). In addition to this, for the FSI 2015, we also included all OECD members, following various publications about the role these countries play in absorbing and facilitating illicit financial flows (Czech Republic, Estonia, Greece, Iceland, Poland, Slovakia, Slovenia).

For the FSI 2018, nine new countries were added We have included all EU member states , adding four jurisdictions which were previously not covered - Bulgaria, Croatia, Lithuania, Romania) because of a large research project funded by the European Commission (“COFFERS”) is focusing on EU member states and enabled us to carry out the related research. Two countries - Thailand, Ukraine - were added because of their share in the global market of offshore financial services was in the Top 50. Last but not least, Puerto Rico, Indonesia, Trinidad and Tobago have been added because of indications of secrecy or financial centre ambitions.

With this approach, we emphasize the existence of a ‘secrecy spectrum’ in which jurisdictions are rated according to how ‘secretive’ they are, and somewhat de-emphasise the notion of a clear-cut binary choice of being, or not, a ‘secrecy jurisdiction.’ The question of whether or not a location is a ‘secrecy jurisdiction’ cannot be answered simply by yes or no, but is significantly a question of intensity.

We still think the terms ‘secrecy jurisdiction’ and ‘tax haven’ are useful, however. What is a secrecy jurisdiction? The Tax Justice Network does not want to offer a hard and fast definition, but we do offer the following form of words as a useful way of thinking about the phenomenon:

"A secrecy jurisdiction provides facilities that enable people or entities escape or undermine the laws, rules and regulations of other jurisdictions elsewhere, using secrecy as a prime tool."

Other descriptions and definitions exist, however, and these can also be useful. For a more detailed exploration of the themes, see an article we published in Economic Geography, as well as a book chapter written by Markus Meinzer, and Richard Murphy’s Finding the Secrecy World.

Methodology on our 20 Secrecy Indicators

About 115 of the 185 criteria employed in our database were used to construct 20 different secrecy indicators (KFSIs). The choice of our indicators is necessarily subjective – but an objective list does not exist, and never will. We aimed to produce the next best thing: a list that is plausible, comprehensive, transparent and as short as possible.

Our indicators are designed to provide clear pointers for policy change to help jurisdictions become more transparent.

The 20 indicators are as follows (shown in no particular order):

  1. Banking secrecy: Does the jurisdiction have banking secrecy?
  2. Trust and Foundations Register: Is there a public register of trusts/foundations, or are trusts/foundations prevented? This applies both to local trusts and foundations, as well as to local management of foreign trusts.
  3. Recorded Company Ownership: Does the relevant authority obtain and keep updated details of the legal and beneficial ownership of companies?
  4. Other Wealth Ownership: Does the relevant authority make details of ownership of real estate on public record online for free or against a fee? And does the relevant authority offer and promote its freeports (or similar venues such as bonded warehouses) for the storage of valuable assets and whether it requires the registration and cross-border automatic exchange of the identities of legal and/or beneficial owners (BO) of the stored valuable assets?
  5. Limited Partnership Transparency: Does the relevant authority require all types of limited partnerships to publish ownership (legal and beneficial) online for free or against a fee? Similarly, are limited partnerships required to file annual accounts with a governmental authority/administration which are then accessible online for free or against a fee?
  6. Public Company Ownership: Does the relevant authority require all available types of companies with limited liability to publish updated beneficial ownership and/or legal ownership information on public records accessible for free via the internet, or against a fee?
  7. Public Company Accounts: Does the relevant authority require that limited liability company accounts be filed with a governmental authority and are made available for inspection by anyone for free, or against a fee?
  8. Country-by-Country Reporting: Are all companies required to publish country-by-country financial reports?
  9. Corporate Tax Disclosure: Are unilateral tax rulings systematically published online, and does the jurisdiction require local filing of country by country reports whenever it does not obtain it via other means?
  10. Legal Entity Identifier: Does the relevant authority require domestic legal entities to use the Legal Entity Identifier (LEI)?
  11. Tax Administration Capacity: Is the jurisdictions’ tax administration able to collect and process data for investigating and ultimately taxing those people and companies who usually have most means and opportunities to escape their tax obligations?
  12. Consistent Personal Income Tax: Is the jurisdiction's PIT regime comprehensive and can the jurisdiction's citizenship or residency status be acquired against a passive investment or payment?
  13. Avoids Promoting Tax Evasion: Does the jurisdiction facilitate tax avoidance and encourage tax competition with its treatment of capital income in local income tax law?
  14. Tax Court Secrecy: Does the public always have the right to attend full proceedings and cannot be ordered to leave the court room if a party invokes tax bank secrecy, professional secrecy or comparable confidentiality rules? And are all written decisions resulting from civil/administrative or criminal tax proceedings published online for free or against a fee?
  15. Harmful Structures: Does a jurisdiction effectively ban bearer shares; rule out banknotes of a value greater than 200US$; prevent the management of trusts with flee clauses; dispense with protected cell companies/series LLCs?
  16. Public Statistics: To what degree does the jurisdiction make publicly available ten relevant statistical datasets about its international financial, trade, investment and tax position?
  17. Anti - Money Laundering: To what extent is the anti-money laundering regime of the jurisdiction failing to meet the recommendations of the Financial Action Task Force (FATF), the international body dedicated to counter money laundering.
  18. Automatic Information Exchange: Does the jurisdiction fully participate in the multilateral exchange of financial account information, and engage in a pilot project to support a developing country?
  19. Bilateral Treaties: Does the jurisdiction have at least 98 bilateral treaties providing for information exchange upon request, conforming to the ‘upon request’ standard developed by the OECD and the Global Forum?
  20. International Legal Cooperation: Does the jurisdiction participate in international transparency commitments and engage in international judicial cooperation on money laundering and other criminal matters?

To see a detailed analysis of each indicator, click here. For more information on how the indicators were used in the construction of the Financial Secrecy Index, click here.

If you disagree with FSI data or scoring

We believe we have applied our methodology consistently and transparently, disclosing the underlying, fully referenced and cross-checked data. Nonetheless, given the complexity and sensitivity of the work, it is likely that disputes may arise.

We are committed to addressing any issues, and warmly welcome engagement. If you believe that our data, or our scoring, contains errors, please contact us. The clearer and more detailed an explanation you are able to provide, the more easily we can consider the issue and respond accordingly. Thank you!