Shell Companies Research Articles

Unconscious Crimes: Tax Evasion by Exploiting Shell Companies

Unconscious Crimes: Tax Evasion by Exploiting Shell Companies

Automatic for the (tax) people: information sharing and cross-border investment in tax havens

Summary This paper examines the impact of international automatic exchange of information (AEOI) treaties on cross-border investments in tax havens. Using a restricted version of the BIS Locational Banking Statistics, we find that AEOIs significantly reduced cross-border deposits. A sectoral breakdown assessment reveals that households were the key driving force behind this contraction. However, we also document evidence of households’ deposits shifting to non-AEOI haven countries and larger deposits by non-bank financial institutions between tax haven countries, suggesting an increased use of shell corporation networks since AEOI introduction. Extending the analysis to portfolio and direct investment, we observe that changes in investment patterns vis-à-vis tax havens are consistent with a significant impact of AEOI treaties on these forms of cross-border investment.

Offshore finance and corruption in oil licensing

Does the awarding of oil and gas licenses increase corruption? We answer this question by exploiting leaked data on the incorporation of shell companies and detailed information on the awarding of oil and gas licenses. Using this data, we construct a new dataset covering 119 countries over the period 1990–2014. Shell companies, by providing secrecy to their ultimate beneficiaries, are an ideal vehicle to channel bribes to officials involved in the awarding of oil licenses. We consider the incorporation of offshore entities as an indicator of corruption risk. We find that the number of new shell companies increases by 11% in the period around the awarding of an exploration license. We interpret this evidence to be a strong indicator that the award of an exploration license increases the risk of corruption. Consistent with rent-maximising behaviour, this association is stronger when the price of oil increases.

A research on the Italian fiscal shell companies turnover

Purpose The purpose of this paper is to study the turnover of Italian shell companies (SCs)/missing traders used for tax crimes, a predicate offence of money laundering. This research could be useful for Italian obliged entities to the Anti-Money Laundering Law to detect and report SCs, as soon as possible, to the Financial Intelligence Unit for Italy. Design/methodology/approach The author uses a sample of 32 SCs that are present in the Third Penal Section of the Italian Supreme Court in the period 2018–2020, involved in tax crimes and that have presented their balance sheets for two or more years. For SCs, the author computes the averages for: the turnover growth rate from first and the maximum turnover; the years between these two values; and the years in which SCs are active. Moreover, the author verifies if SCs are similar in terms of turnover by studying the relationship between the turnover growth rate and the first turnover and the reduction of turnover standard deviations. Findings SCs growth is very high and they reach, on average, their peak in less than three years; SCs are active, on average, for about four years; eventually, SCs exhibit a convergence process in turnover levels. Originality/value To the best of the author’s knowledge, there are no studies that analyse the SC turnover.

Csr In Emerging Markets: Challenges And Opportunities For Shell Companies

This article explores the challenges and opportunities of Corporate Social Responsibility (CSR) in emerging markets, focusing on a case study of a Shell company. Emerging markets present unique dynamics that affect the implementation and effectiveness of CSR. Shell, as one of the world's largest energy companies, has operated in various emerging markets and sought to implement effective CSR practices. Through an in-depth analysis of Shell's operations in these markets, this article identifies key factors that influence CSR success and provides recommendations for best practices. It finds that while there are significant challenges related to local regulations, infrastructure and culture, there are great opportunities to increase CSR impact through collaboration with local stakeholders, technological innovation and local capacity building. The article concludes that adaptation and flexibility are key for multinational companies like Shell to face the challenges and capitalize on the opportunities of CSR in emerging markets.

AKTIVISME GREENPEACE DALAM MENDORONG PERUSAHAAN SHELL BERKONTRIBUSI PADA PERJANJIAN PARIS

This research examines Greenpeace's activism in encouraging the Shell company to contribute to the 2015 Paris Agreement, and the power of Greenpeace as an INGO in that case. Through the concept of the main function of non-governmental organizations according to Glasius, Kaldor, and Anheier as an analytical tool as well as the concept of the power of non-governmental organizations according to Boström & Hallström. This research is described using descriptive and qualitative methods, as well as documentation studies which produce the argument that Greenpeace carries out its function as activism which acts as an "alarm" for the global corporation Shell to contribute to the 2015 Paris Agreement. In its advocacy efforts to sue Shell, Greenpeace achieved victory over collective demands. The alliance, in this case, cannot be separated from the power possessed by Greenpeace as an NGO, namely symbolic power, social power, cognitive power and supervisory power

Southbank Place development: tunnel movement predictions and monitoring performance

The Southbank Place project comprised the redevelopment of the UK headquarters of the Shell Company (formerly known as the Shell Centre) in the Waterloo area of London. The project included the demolition of all structures within the site except for the iconic tower building, local extension of the existing basement and the construction of eight new mixed-use buildings. London Underground's (LU) Bakerloo Line and Northern Line running tunnels pass beneath the site. The excavation of the basement and construction of the Shell Centre in the late 1950s caused movements of the underlying Bakerloo Line tunnels that were much larger than expected. The monitoring of these tunnels between 1958 and 1995 has provided a classic case history for the behaviour of London Clay. The proposed redevelopment offered an opportunity to analyse and monitor the behaviour of LU tunnels over a period of 60 years and two phases of significant construction. This paper presents a back-analysis of the historical monitoring of the Bakerloo Line tunnels and the calibration of a sophisticated finite-element model. The model was subsequently used to predict the impact of the redevelopment on the tunnels as part of the assurance procedure with LU.

Interpretation of “Investments” and “Investors” in the Russia-Belgium/Luxembourg BIT: Seeking Ways to Resolve the Case of NSD

The paper addresses jurisdictional issues on the case of NSD initiating investment arbitration against Belgium/Luxembourg. Under the Russia-Belgium/Luxembourg BIT, the states undertake to prevent expropriation of investments and, if it does happen, to pay timely and fair compensation. Such “expropriation” may also occur due to sanctions. Being a Russian intermediate custodian for a number of foreign securities, the NSD has accounts with the centralized European securities Euroclear/Clearstream depositories. Since the inclusion of the NSD in the list of entities provided for in Annex I of EU Regulation no. 269/2014 in June 2022, transactions with the securities were suspended, NSD’s account with Euroclear/Clearstream was blocked. Because the NSD accounts with foreign securities depositories were blocked, it became impossible to transfer non-Russian securities from a securities account opened with the NSD to another Russian or foreign securities depository. One of the ways to challenge the consequences of Euroclear/Clearstream actions is to file a claim with the investment tribunal against Belgium/Luxembourg. The case has two potential solutions: mass claim from the end-investors or one single claim by the NSD as a “nominee holder” of the end-investors’ securities. The first option might seem time- and resource-costly, which is why a claim by the NSD might seem more attractive. Hence, using the interpretation instruments of public international law, the paper aims at assessing the perspectives of initiating investment arbitration proceedings by the NSD, thereby focusing on interpretation of the two central terms in the Russia-Belgium/Luxembourg BIT — “investor” and “investment”. The paper concludes that prima facie the investment tribunal would have jurisdiction over the case rationae personae nonetheless the “nominee holder” status of the NSD, as well as jurisdiction ratione materiae, where the blocked securities could constitute an “investment” in the sense of the BIT. Consequently, the paper defines the legal capacity of nominee holders to initiate arbitration. Since the issue has never been raised before, the paper draws an analogy with the case law on shell companies.

Identificando evasão fiscal em empresas de fachada e em créditos ilegais de ICMS

Abstract Companies that issue tax documents to defraud the tax authorities with the transfer of credits of Brazil’s state value-added tax (ICMS) without the movement of goods cause financial losses to the government and, therefore, to society as a whole. Several initiatives to combat tax fraud have successfully used data analysis and Machine Learning techniques. This work sought to investigate the use of these techniques in identifying a specific practice of tax fraud, practiced by shell companies, formed exclusively to issue non-due ICMS credits, the tax on operations related to the circulation of goods, and the provision of interstate, intercity, and communication services. Based on document analysis and consultation with auditors and specialists, typologies and variables relevant to identifying tax evasion events carried out by shell companies were identified. Around these variables, data from the Finance Department of the Federal District were collected and prepared. With this data, it was possible to explore the use of predictive models based on Machine Learning capable of pointing out potentially fraudulent behavior. The good results obtained by these models demonstrate their potential as part of systematic monitoring and fiscal audits by tax authorities.

Identifying tax evasion in shell companies and fraudulent credits of Brazil’s state value-added tax (ICMS)

Resumo Empresas que emitem documentos fiscais para fraudar o fisco com a transferência de crédito do ICMS sem a circulação de mercadorias causam prejuízo ao erário público e, por conseguinte, à sociedade. Diversas iniciativas de combate a fraudes fiscais têm utilizado, com sucesso, técnicas de análise de dados e aprendizagem de máquina. Este trabalho buscou investigar o uso dessas técnicas na identificação de uma prática específica de fraude fiscal realizada por empresas popularmente conhecidas como “empresas noteiras”, que formadas exclusivamente para emitir créditos não devidos de ICMS, imposto sobre operações relativas à circulação de mercadorias e sobre prestações de serviços de transporte interestadual, intermunicipal e de comunicação. Com base na análise documental e em consulta com auditores e especialistas, foram identificadas tipologias e variáveis relevantes na determinação de eventos de sonegação fiscal realizados pelas empresas noteiras. Em torno dessas variáveis, procedeu-se à coleta e à preparação de dados provenientes da Secretaria de Fazenda do Distrito Federal. Com esses dados, foi possível explorar o uso de modelos preditivos baseados em aprendizagem de máquina capazes de apontar comportamentos potencialmente fraudulentos. Os bons resultados obtidos por esses modelos demonstram seu potencial como parte de uma sistemática de monitoramento e auditorias fiscais realizadas pelos órgãos fazendários.

К вопросам обращения взыскания по налоговой задолженности в исполнительном производстве

The positions of various authors on the issues of enforcement measures and actions used by bailiffs and tax officials to collect tax debts are considered. The possibility of collecting tax debt from a debtor-citizen for his economic activities in a liquidated, bankrupt company or in the absence of its property, when the citizen appropriated financial amounts for himself without paying taxes on them, is touched upon. It is proposed to transfer the powers to foreclose on tax debts and compile statistical reports from the Federal Tax Service to the Federal Bailiffs Service, leaving the function of “seizure” of the debtor’s property at the claim stage of settling tax debts to the Federal Tax Service, so that the debtor would subsequently be unable to avoid its collection by a bailiff. In this regard, it is expected to be quite logical to reduce the number of staff in the Federal Tax Service and increase it in the Federal Bailiffs Service. The introduction of a ban on registration of shell companies is justified by the insufficiency of insurance financial and (or) property assets. The position of the inexpediency of judicial collection of funds by a bailiff due to a debtor from a third party under judicial acts is substantiated, if there is confirmation of financial or property funds due to the debtor by documentary evidence collected at the request of a bailiff or provided by the recoverer – the Federal Tax Service, since foreclosure by a bailiff on these funds is possible and without legal recourse.

Shells, Fronts, Astroturfing, and Beyond: Examining Concealment Strategies of Proxy Organizations

This study investigates what we call proxy organizations (e.g., shell companies, front organizations, astroturfing efforts). Drawing on existing literature to better conceptualize proxy organizations and their communicative nature, we position these proxy organizations within scholarship on visibility management and hidden organizing. To answer research questions about public discourse around these proxies and their use of concealment strategies, we analyze news coverage of these organizations from 2001, 2011, and 2021. Findings suggest sizable increases in discourse about each proxy type. Additionally, analysis reveals several concealment themes in that media coverage: dark/secret money/finances, hidden owners, shadowy influence, anonymous proxies, covert links, online concealment, secret/illegal activities, and revelation safety/fear. We then draw conclusions, discuss implications, and suggest directions for future organizational communication research about proxy organizations.

Shell Companies

The term ‘shell company’ has been heard quite often in recent years. Though most of the people have heard this term, not many people know the exact meaning behind it. In our country, there is no specific definition for this term. No legal definition is mentioned in The Companies Act or any other Act. Efforts to define it have been going on. However, it can be said that a shell company is a company that has no or few significant assets or operations. The main objective behind establishing such companies would include money laundering, tax evasion, converting black money into white money, etc., These shell companies affect the economy of a country by making the poor into poorer and rich into richer. In order to curtail these companies there is no specific provision, Act, or law related solely to shell companies. Issues related to these companies are generally dealt with under The Prevention of Money Laundering Act, 2002; Benami Transactions Prohibition (Amendment) Act, 2016; Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015; The Income Tax Act, 1961; Indian Penal Code; and The companies Rules 2017. Hence the Author is going to discuss what is a shell company, how to identify it, the reason behind the creation of shell companies, laws that are violated, the effects of shell companies, and the challenges faced while curtailing shell companies. Finally, the author will end the discussion with probable suggestions.

Unveiling The Shadows: Exploring Money Laundering Mechanisms In Bangladesh's RMG Sector

This study examines the intricate web of money laundering in Bangladesh's Readymade Garments (RMG) sector, a vital industry for the nation's economy. Utilizing two ethically sound focus group discussions (FGDs) with various stakeholders, including RMG representatives, labour leaders, legal experts, and law enforcement officers, the study was conducted in Gazipur, a significant centre for garment manufacturing in Bangladesh. The findings highlight the multifaceted nature of prevalent money laundering strategies in the RMG industries. Notable techniques include trade-based money laundering, smurfing and structuring, false invoicing, shell companies, offshore accounts, cost manipulation, informal value transfer systems (IVTS), and real estate investments. This research sheds light on the concealed financial complexities of the RMG industry, highlighting the need for vigilant regulatory measures and industry-wide awareness.

Motivation and Performance of Backdoor Listing: A Case Study of Shunfeng

With the arrival of the new normal of economic development, the growth rate of business volume in the express delivery industry has been gradually slowing down since 2015, while the emergence and development of the e-commerce industry will have an impact on traditional express delivery enterprises. Through the survey method, comparative method and literature method, this paper selects the case of the backdoor listing of SF, and through the analysis of the internal and external motivations of the backdoor listing, the performance analysis using the consolidated financial performance method, as well as the analysis for its listing risks, it can provide reference and reference for the future listing of enterprises. The results of this paper indicate that most of the courier industry chooses to go public by backdoor listing in order to broaden their financing channels, and that backdoor listing can improve corporate performance to a certain extent. In addition, this paper can provide an evaluation method and reference experience for other enterprises to list in shells, and provide reference ideas for potential shell companies whether to give up shell resources. It also provides regulatory suggestions for the formulation of relevant policies in China.

FDI-led growth models: Sraffian supermultiplier models of export platforms and tax havens

This paper develops two Sraffian supermultiplier models of two different kinds of economies that are dependent upon foreign direct investment (FDI): the ‘export platform FDI-led’ growth model and the ‘tax haven FDI-led’ growth model. The former is driven by the growth of the exports of foreign-owned firms and is associated with greenfield FDI inflows, whereas the latter is driven by the growth of profits booked at foreign-owned shell companies that are partly absorbed through taxation and is associated with intangible FDI inflows. The two models achieve demand, output, and income growth via fundamentally different channels yet appear similarly export-led given how profit shifting artificially inflates the net exports of tax havens. Based on these models, a set of empirical indicators are proposed to differentiate export-platform from tax haven economies. In contrast to Bohle/Regan (2021), who characterise output growth in both Hungary and Ireland as being led by the exports of foreign-owned firms, the model and indicators proposed here support the hypothesis that Ireland is closer to the tax haven FDI-led growth model whereas Hungary is better approximated by the export platform FDI-led model.

O3PO: A domain ontology for offshore petroleum production plants

The challenge of integrating data from many data sources has persisted as an issue in several industry areas. With the evolution of technology in the upstream petroleum sector (i.e., exploration and production), the petroleum business must contend with technological silos from diverse service providers and suffers from the associated waste of time to locate data and information throughout siloed databases. Based on a thorough compilation of industry-oriented requirements in the form of use cases and competency questions, this document defines a domain ontology for defining entities in offshore petroleum production plants. The objective is to develop a uniform and clearly defined reference vocabulary to aid engineers and information technology professionals in labeling and relating production plant monitoring, simulation measures, and facilities. BFO is the top-level ontology, while GeoCore and a continuing version of the core ontology developed by the Industry Ontology Foundry (IOF) configure the middle-level ontologies. We have studied and combined several other resources to build the ontology, such as glossaries from the industry and related ontologies. The research resulted in a well-founded domain ontology that provides universals, defined classes, and relations that can be useful in several types of applications in the domain. We have demonstrated the utility of the ontology within an actual scenario in an offshore petroleum field in Brazil, where we conceived and applied the domain ontology. This study is a component of the PeTWIN project,22Petwin is an academic cooperation between UFRGS, UiO, and Libra, Equinor, and Shell companies (www.petwin.org). which looks at the best approaches for creating digital twins of offshore petroleum plants.

What is real and what is not in the global FDI network?

Macro statistics on foreign direct investment (FDI) are blurred by offshore financial centers with enormous inward and outward investment positions. This paper uses new data sources, both macro and micro, to estimate the global FDI network while disentangling real investment and phantom investment and allocating real investment to ultimate investor economies. We find that Phantom FDI into corporate shells with no substance and no real links to the local economy accounts for around 40 percent of global FDI. Ignoring Phantom FDI and allocating Real FDI to ultimate investors increases the explanatory power of standard gravity variables by around 25 percent.

Intelligent Automation Of Fraud Detection And Investigation:A Bibliometric Analysis Approach

Purpose:This study aims to examine the use of intelligent automation in the process of detecting and investigating fraud. Methodology/approach:This research is a bibliometric-based systematic literature review (SLR) related to fraud detection. The research sample consisted of 75 articles obtained from the Science Direct, Emerald Insight, IEE, and MDPI databases for the period 2020–2023. Findings: The results of the research show that machine learning and deep learning are the most popular fraud detection techniques used by researchers, and the field of credit card fraud is the most popular field used as a research object. The fields of property insurance, health, cyber phishing, taxation, Shell companies, social programs, Ponzi schemes, and supply chain management are the ones that have the least amount of research, namely only one article for each of these fields. Practical implications: The result show that there are smart tools in detecting fraud in several fields, but it has not been explained whether the existence of these tools can reduce fraud. Originality/value: This research provides novelty in the use of intelligent automation in the process of detecting and investigating fraud.

A Simulation Game for Anti-money Laundering (AML) Using Unity

With increasing demand of anti-money laundering (AML) regulation in Fintech, AML is one of the key factors in FinTech and its regulatory technologies (RegTech). Presently, as research and education on AML focus on financial institutions and authority, the individual is vulnerable to money laundering (ML) by being money mules with lack of awareness. Therefore, this paper illustrates the design of a 2-player simulation game for AML, which integrates the game-based learning model with plots including introduction stories, player actions and ending stories. In the game, a player role-plays either a money launderer or AML specialist. Within 6 in-game months, the former needs to perform ML with a target goal while the latter needs to identify the former’s actions and restrict him to achieve his goal.
 For actions of the money launderer, this paper integrates the criminal order with the PLI model (placement, layering and integration) to simulate the full ML circle. The criminal order provides return to the attacker if he completes it within the time limit. Each layer in the PLI model is expanded with middle processes for the methodology. The attacker uses shell companies to hide his identity and support each transaction for ML with apparently legitimate reasons.
 For actions of the AML specialist, this paper integrates the AML transaction monitoring with the Financial Action Task Force (FATF)’s Forty Recommendation. The defender needs to perform AML transaction monitoring with identifying suspicious financial activities based on money flow. Then, he needs to identify the actual beneficial owner of suspected companies with their share distributions. Both money flows and share distributions are visualized in data charts. Later, the defender shall report suspicious companies to the Financial Intelligence Unit (FIU), which will return the investigation result at the beginning of the next in-game month.