The Caisse “empties” tax havens

Charles Emond and the rest of the senior management at Caisse de depot recently thought it would be a good idea to invest $3.1 billion to own 22% of the Jebel Ali port and its free zone, which has no corporate taxes are.

By buying and holding shares in companies and subsidiaries of companies registered in tax havens, the Caisse de depot et placement du Québec “clears” these types of investments.

DP World is a subsidiary of Dubai World, a joint venture company owned by the Government of Dubai. And Jebel Ali is the ninth busiest port in the world, the largest man-made port and the busiest and by far the busiest port in the Middle East.

Why is this Caisse investment sparking controversy in the UAE?

  • Listen to Michel Girard Radio’s economic chronicle:
  • First, because the Jebel Ali Free Zone is the equivalent of a tax haven.
  • Secondly, because the United Arab Emirates refused to condemn Russia’s invasion of Ukraine and, moreover, the country welcomed Russian oligarchs with open arms.

The refuge of the Russians

Here’s what Andreas Krieg, associate professor at the School of Security Studies at King’s College London, said in the journal last week time on Dubai, statement reproduced in The Globe Mail.

“Dubai is one of the world’s leading dirty money hubs, a major hub in illicit financial networks that provides a safe haven for warlords, scammers, terrorist organizations and gangsters. It is not surprising that the Kremlin’s kleptocrats have recently washed ashore in the Emirates. Allowing Putin and his entourage to circumvent sanctions makes the UAE a key catalyst for the interests of Russia’s power elites. »

Interviewed by The newspaperFranck Jovanovic, Professor of Economics and Finance at TÉLUQ University, also paints a bleak picture of the United Arab Emirates.

“It is clearly a tax haven, that is well known. Also, the UAE has often been singled out for money laundering issues and is not transparent. The fund’s decision is surprising, I’m at a loss. »

The same applies to financial critics of the opposition parties in the National Assembly.

“It makes no sense. It’s a total aberration. This is totally unacceptable,” said PQ MP Martin Ouellet.

For her part, Québec solidaire’s Ruba Ghazal says “it’s embarrassing that a public institution of this importance [la Caisse] buy stocks in a free zone that encourages tax havens.”

The Caisse doesn’t care about criticism

But at the Caisse we don’t deal with this kind of denunciation.

We hide behind the classic response that the Caisse respects “Canadian sanctions” in all of its investment decisions and that its transaction with DP World was completed “after a thorough and thorough process”.

“Our partner specifies the fund Canadian press, assured us that it meets the highest standards. DP World has no assets in Russia. »

The Caisse held $1.13 billion worth of Russian assets. She liquidated them in early March last year. We expected nothing less from him!

bad example

Regardless of its CEO, Charles Emond, the Caisse sets a bad example when investing through companies registered in tax havens.

While the Caisse claims to “respect all laws and fulfill its tax obligations” and “opposes all forms of tax evasion,” it certainly won’t set an example by holding subsidiaries in tax havens.

In the Cayman Islands, Caisse’s registered affiliates are Apollo Hercules Partners, KKR-CDP Partners and GMAC ASO Fund. This also includes the joint venture Kiwi Holdco Cayo, in which the Caisse holds 69% of the shares.

Einn Volant Aircraft Lessing Holding (90.5% owned by the Fund) is incorporated in Bermuda.

45% owned joint venture DP World Caucedo is registered in the British Virgin Islands.

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