BBC World Service, I'm Tim Huell, with the inquiry.

I'm Tim Huell with the inquiry.

Our question this week, why do tax havens still exist?

One stormy day towards the end of the 18th century, a British fleet ran a ground on a

reef in the Western Caribbean. Most of the passengers and crew, including a royal prince,

would have perished but for the heroism of people from a nearby island

who rode out to rescue them.

In gratitude, King George III of England promised that the island Grand Cayman would never pay tax.

And so was born the world's first tax haven.

That's the legend told on the Caymans to explain why they still have no income,

capital gains or wealth tax. But it's not only the lucky 55,000 residents of the

island who benefit from that privilege, so to 80,000 companies, mostly

subsidiaries of foreign firms, hardly any of which conduct real business on the islands and banks with total assets of 1.4 trillion dollars.

It's been estimated that the total sum hidden away in the Caymans and other low tax, low regulation jurisdictions around the world

is about 21 trillion dollars, equivalent to the total annual economic output of the United States

and Japan combined.

And a global campaign against their very existence has gathered momentum in recent years.

Echoingors demands. Barack Obama and other world leaders have vowed to

crack down on tax havens. A former British cabinet minister Vince Cable Cable, called them sunny places for shady people.

But they're still there, indeed they're booming.

So our question this week, why do tax havens still exist despite the growing opposition to them.

Part 1 Un unquestionably tropical.

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