Global Financial Integrity (GFI) and over 100 other members of the Financial Accountability and Corporate Transparency (FACT) Coalition have submitted a letter to the U.S. Department of the Treasury (Treasury) and to the Internal Revenue Service (IRS) urging them to maintain and strengthen a proposed rule on Country-by-Country Reporting that would bring much needed transparency to how U.S.-based companies book profits and pay taxes in many of the countries in which they have subsidiaries. The proposed rule is meant to give the IRS and, potentially, foreign tax authorities, a window into how multinational companies may be gaming the international tax system and avoiding taxation in the U.S. and other countries. Today is the final day to submit public comments to Treasury and the IRS on the proposed rulemaking.
By Liz Confalone, December 5, 2014
Slow but Steady Progress towards Curtailing the Abuse of Anonymous Companies
In June 2013, G8 leaders met in Lough Erne and agreed to a set of principles on beneficial ownership transparency. The principles state that companies should maintain their beneficial ownership information and that the information should be available to law enforcement and other competent authorities; additionally, countries were to consider making such information available to financial institutions and other regulated businesses. Trust information should be collected and available, the principles explained, but only to law enforcement. These principles were largely reiterated by the Financial Action Task Force (FATF)—the body setting international anti-money laundering standards—in their Guidance on Transparency and Beneficial Ownership in October 2014 and by the G20 in their High Level Principles on Beneficial Ownership in November 2014.
Despite the establishment of this baseline, momentum is building since Lough Erne to raise the bar. In July 2013, the UK began the process to establish a central register of information and, after a public comment period, determined that the register should be publicly available—a position strongly supported by Global Financial Integrity (GFI). In April 2014, the European Parliament approved provisions requiring formation of public registers as part of their draft of the European Union’s Fourth Anti-Money Laundering Directive (AMLD), but the E.U. Council and the E.U. Commission have yet to take a public position on the AMLD, delaying its final adoption. Just last month, Denmark announced that it, too, would create its own public registry of beneficial ownership information.
World Leaders’ Weekend Summit Misses Opportunity to Act on Beneficial Ownership or Country-by-Country Reporting
Work Remains to Ensure Developing Countries Benefit Fully From Global Automatic Exchange of Financial Information, but Agreement to Include Developing Countries in OECD BEPS Project an Encouraging Move
WASHINGTON, DC – G20 leaders met this past weekend in Brisbane, Australia for their annual summit, issuing a communiqué full of ambitious proposals for growing the global economy, but noticeably lacking in responses to illicit financial flows, one of the largest drags on development worldwide. Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization, expressed its disappointment at the underwhelming result.
World Leaders Called on to Embrace Transparency Measures to Curtail Illicit Financial Flows
WASHINGTON, DC – As world leaders gather in Australia this week, Global Financial Integrity (GFI) called on the G20 to take strong action against illicit financial flows by embracing simple corporate transparency measures. Specifically, the Washington, DC-based research and advocacy organization urged G20 leaders to endorse the creation of public registries of beneficial ownership information as well as require all multinational corporations to publicly report their sales, profits, and taxes-paid on a country-by-country basis, as necessary tools to detect and deter crime, corruption, and tax dodging.
GFI President Raymond Baker signed a letter to the G20 along with 24 other high level individuals calling on world leaders to support public registries of beneficial ownership information and require public country-by-country reporting for all multinational companies ahead of the 2014 G20 Summit in Brisbane, Australia. GFI thanks Transparency International for coordinating the letter.
Move Strikes at One of the Biggest Tools for Laundering Money
Danish Plan Raises Pressure on European Council and Commission, G20, and U.S. to Take Action
WASHINGTON, DC – The Danish government announced today that it will create a public registry of beneficial ownership information for all Danish companies in a move lauded by Global Financial Integrity (GFI) as key to cracking down on one of the biggest tools for laundering the proceeds of crime, corruption, and tax evasion.
Leading Finance Ministers Offer Support to Developing Countries in Employing “New, Global Standard,” Eliciting Praise from Civil Society
GFI Disappointed in G20 Failure to Embrace Country-by-Country Reporting or Incorporation Transparency
WASHINGTON, DC – Over the weekend, the G20 finance ministers echoed the call by the G8 countries at Lough Erne to rapidly move to a system of automatic exchange of tax information, a move praised by Global Financial Integrity (GFI) as essential to cracking down on international tax evasion. As with the G8, the G20 finance ministers offered to provide support to poorer countries as they move to adopt the “new, global standard,” likewise eliciting support from GFI. However, the Washington-DC based research and advocacy organization expressed disappointment in the G20’s failure to embrace tax transparency for multinational corporations and the finance ministers’ reticence to meaningfully address the issue of phantom firms.
Greece Lost US$160 Billion to Illicit Financial Outflows over Past Decade
WASHINGTON, DC – Global Financial Integrity (GFI) today called upon G20 leaders meeting this week in Los Cabos, Mexico to tackle the issue of tax haven secrecy and the illicit financial flows it facilitates as a necessary means to ensuring stability in the international financial system.
