Report on Exposure to Tax Haven Countries

2010 – Canadian Imperial Bank of Commerce (CIBC)

 

 

BE IT RESOLVED THAT: CIBC provide a report to shareholders within 6 months describing the extent to which the bank is exposed to tax haven countries. The report shall include an assessment of material financial, regulatory and reputational risks associated with subsidiaries in tax haven countries.

 

Supporting Statement: Recent scandals, significant increases in government debt, and concern about the stability of the global financial system have led to greater media, legal, and regulatory scrutiny of countries serving as tax havens.

 

G20 leaders have stated “We stand ready to deploy sanctions to protect our public finances and financial systems. The era of banking secrecy is over.”

 

In Canada, the Auditor General has issued warnings about lost tax revenue through tax havens. A recent study from the University of Quebec estimates that Canadian banks avoided paying $16 billion in taxes between 1993 and 2007.

 

The actions of its clients also present risks for CIBC as illustrated by the case of UBS. The Canada Revenue Agency has discovered $7.6 million in income unreported by UBS’ clients. It is estimated that Canadians held as much as $5.6 billion in the Swiss branches of UBS.

 

While tax havens are legal and CIBC currently lists subsidiaries located in tax haven countries in its annual report as required, it does not disclose the extent of those operations. Given the potential for increased media scrutiny, more stringent regulation, and the potential for reputational damage, CIBC’s current disclosure on exposure to tax havens is inadequate.