The use of tax havens is not only a socio-political and economic challenge but also an environmental one, ScienceNordic reported. The financial secrecy hampers the ability to analyse how financial flows affect economic activities on the ground and their environmental impacts.
Researchers also investigated the connection between tax havens and illegal fishing. They combed through several databases, including the Fishing Vessel Finder and data from Interpol. They found that 70 per cent of ships involved in illegal and unregistered fishing either are or have been registered in tax haven countries.
“This research is one of the hardest things we have done. The biggest challenge is getting good data. The other challenge is that as researchers, we’re entering a whole new world,”
says Henrik Österblom, one of the authors of the study.
Ship owners can pay to sail under what are called flags of convenience. The ship is registered in the tax haven country, which allows ship owners to evade taxes and fees in their home country. Many of the states that offer flags of convenience have limited ability to monitor and punish fishing vessels that break the law, making it easier for vessel owners to ignore international agreements and laws.
The saddest thing is such a lack of transparency hides how tax havens can play a key role in facilitating the degradation of environmental commons that are crucial for both people and planet at global scales. According to the Swedish researchers, using tax havens avoids visibility and publicity. Undoubtedly, an openness is key to stopping environmental crimes.
“Setting tax havens on the global sustainability agenda is important for protecting the environment and achieving the UN’s sustainable development goals,”
the researchers wrote.