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Norway’s Sovereign Wealth Fund Faces Big Risks from Tax Havens

The Panama Papers sparked a loud, but rather limited debate on the Norway’s Sovereign Wealth Fund and its use of tax havens. Here we present some new facts, discuss what risks the Fund really faces and suggest concrete steps for reform.

Taken together, the Oil Fund’s direct investments in tax havens amount to as much as 8%-10% of its total value. These include its investments in real estate through subsidiaries in Luxembourg and Delaware, fund managers who use tax havens and direct stakes in companies registered offshore.  Most discussions so far have focussed on getting the Fund to reduce or eliminate this kind of direct use of tax havens.

While this is important, the largest financial, reputation and ethical risks for the Fund arise indirectly from its investments in companies that use tax havens and aggressive tax avoidance strategies.