OFFSHORE BANKING ZONES AND THEIR ROLE IN INTERNATIONAL RELATIONS

Abstract

The article summarizes and systematizes key theoretical aspects of the functioning of offshore zones in the context of the modern global economy and globalization of financial flows. Various approaches to defining offshore zones that exist in scientific literature and international practice are considered and analyzed. Based on this, their classification characteristics are presented according to various criteria, including the level of tax burden (tax havens, low–tax jurisdictions), the degree of transparency and regulation, as well as the nature of permitted operations (universal and specialized). The significant role of offshore banking zones as an integral element of the modern system of international economic and financial relations is revealed. The key reasons for the use of offshore jurisdictions by global economic entities have been identified and detailed, including: tax optimization, minimization of administrative costs, confidentiality, asset protection, and free access to international capital markets. The controversial nature of offshore jurisdictions has been outlined and thoroughly analyzed, as they are both an effective tool for attracting foreign direct investment and mobilizing capital on a global scale, and at the same time a mechanism for tax evasion, money laundering, and financing illegal activities. The positive and negative effects of offshore zones on the global financial market are examined, including their impact on macroeconomic stability, fair tax competition, and the international financial architecture. Proposals for improving state policy with a view to effectively combating tax fraud and the legalization of criminal proceeds, adapted to the specifics and needs of the Ukrainian financial sector, have been substantiated and presented.