Parvati Magazine December 2014/January 2015: Consequence/Beginnings | Page 48

BUSINESS

THE WEB OF OIL

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epotism - transactions and hiring decisions based in favouritism - is very common in
business. While nepotism itself is not illegal, it is certainly problematic. As this article will
reveal, it is a major complicating factor in the potential seismic bombing of the Arctic
seabed.
According to the magazine World Finance, 50% of all global transactions now occur between related parties. This has led to tax authorities worldwide tightening the rules governing transfer pricing to ensure that international business is done at fair market value.
The arm’s length principle addresses the potential of deals being made between parties
where there are biased relationships, such as within a family, between those who have
shared interest, or when one party is controlled by the other. For example, a father may
sell property to his son, but at a price below the true value of the property. This would not
be an arm’s length transaction, and the property taxes paid on the sale would be artificially low.
Turning a blind eye to transactions that do not respect the arm’s length principle can enable questionable business practices that bypass competition and create opportunities
only available to an elite few. Left unchecked, it feeds an inequitable system as documented in Velcrow Ripper’s film “Occupy Love”, which highlights how 99% of the wealth
in the United States is owned by 1% of the population. It allows mega-corporations to get
away with profiteering agendas that may benefit few while harming the whole.