68% Of Foreign Money Flowing To Firms Leveling The Amazon For Soy & Beef Went Through Tax Havens

[hatrack]

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The researchers focused on the nine largest companies operating in the beef and soy sectors of the Brazilian Amazon – agribusiness activities widely recognized as key drivers of deforestation. The firms selected that were involved with beef production included Bertin, JBS, Marfrig, and Minerva, four companies that alone represented 33 percent of total slaughter capacity in Brazil in 2006, and 38 percent in 2009. Their selection of soy producers included transnationals Bunge, Cargill, Archer Daniels Midland, Louis Dreyfus, and Brazil’s Amaggi, which together owned 48 percent of all the installed soy crushing capacity in Brazil over the period 1999-2009.

The findings showed that a total of US$26.9 billion in foreign capital was transferred to these nine companies between October 2000 and August 2011. 68 percent of this amount – about US$18.4 billion – was transferred from tax havens, but this is an average figure. For example, Bunge received US$6.9 billion from its own subsidiaries registered in the Cayman Islands as cash in advance, representing 90 percent of the total foreign capital received by that company between October 2000 and August 2011. ADM received virtually 100 percent of its foreign loans (about US$1.7 billion, representing 62.4 percent of the total foreign capital it received) from its own subsidiaries, also located in the Cayman Islands.



The lion’s share of these billions flows through the Cayman Islands for a reason: it is a British overseas territory with strong links to the UK and in particular the City of London, a well-connected economic powerhouse. Today, these little Caribbean islands do far more business than their tiny population warrants, and the Caymans is one of the world’s largest financial centers: not only because investors enjoy its legal efficiencies, but also due to tax-minimization (in many cases zero taxes and low fees), as well as a high degree of secrecy.

Jones points out that tax havens are competitive with one another, and very often specialize in particular areas. “Hence, Cayman has a tendency to specialize in banking and hedge fund formation and this has evolved to form a major cluster of financial activity that helps ‘grease the wheels’ of what many might regard as illicit financial flows that are channeled through the financial system,” he said. The secrecy and lack of transparency found in Cayman Island and other tax havens appear to be very important to those investing large sums in agribusiness companies responsible for significant Amazon deforestation, likely because these investors do not wish their activities to be exposed to a critical public or to environmental NGOs.

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https://news.mongabay.com/2018/11/tax-havens-and-brazilian-amazon-deforestation-linked-study/

[mucifer]

1. The soy is mostly for animal feed