By Grace Zhao, August 22, 2014
U.S. Laws Enable the Outflow of Illicit Money from China, which Totaled US$1.08 Trillion from 2002 to 2011
Corrupt politicians, fugitive officials, and leaders on the lam have found a new safe haven to call home—the United States of America.
Interestingly enough, despite the sometimes contentious relationship between the two countries, the U.S. has now become the destination of choice for China’s “economic fugitives” running from corruption charges in their home country according to China Daily and the International Consortium of Investigative Journalists.
Many of these fugitives are known as “naked officials”, those who have moved their assets and family abroad to avoid regulations and scrutiny. Much of the time, these are high ranking leaders who have decided to move their wealth abroad should a corruption investigation arise.
By Max Heywood, Global Financial Integrity, August 12, 2014
Lionel Messi’s Tax Troubles Should Increase Pressure on Politicians to Curb the Abuse of Anonymous Companies
The ongoing prosecution of football super star Lionel Messi for alleged tax evasion made global headlines last week. Messi and his father Jorge are accused of evading 4.2 million euros (US$5.6m) in tax on sponsorship earnings in court documents submitted by the prosecutor.
The alleged tax evasion scheme was based on using a web of anonymous shell companies registered in tax havens such as Belize and Uruguay, as highlighted by our colleagues at Global Witness. These shell companies were linked to other anonymous companies in what the prosecutor calls “convenience jurisdictions” such as the UK and Switzerland.
By Grace Zhao, July 31, 2014
IFJP Seeks Applicants for its Four-Day Media Training Program on Illicit Finance, Financial Secrecy, and Asset Recovery by August 24th
If you weren’t able to sign up for the Thomson Reuters Foundation’s media training program on illicit finance and tax abuse in Africa, you’re in luck because another opportunity has just opened up!
The Illicit Finance Journalism Programme (IFJP) has launched its fourth training program, Introduction to Illicit Finance, Financial Secrecy, and Asset Recovery Autumn 2014. This is a four-day training workshop that will focus on equipping journalists from the developing world to expose illicit financial practices—from corruption to money laundering to tax evasion—and analyze the impact such illicit financial activity has on an economy and society.
According to the IFJP, the workshop aims to:
bring together journalists from countries where often corruption, tax havens and harmful tax practices stall development and entrench poverty.
To do so, the program will focus on teaching journalists how to access company accounts, how to investigate corruption stories, how to track the international policy agenda, and a number of other foundational steps in understanding the offshore world and illicit financial flows.
By Grace Zhao, July 30, 2014
Joint GFI/MINDS Event, Taking Place September 9th in Rio de Janiero, Will Launch New, In-Depth Research on Brazil’s Illicit Financial Flows
We are pleased to announce the dates of our much anticipated conference in Brazil, Illicit Financial Flows in Brazil: A Hidden Resource for Improving Prosperity and Economic Stability.
Join us on September 9th for a joint conference in Rio de Janeiro hosted by GFI and the Multidisciplinary Institute for Development and Strategies (MINDS).
The conference will focus on illicit financial flows in Brazil. According to our previous research, Brazil has a significant problem with illicit outflows, which totaled roughly US$193 billion from 2002 through 2011, making it the 7th largest exporter of illicit capital globally.
By Mark Hays, Global Financial Integrity, July 25, 2014
Half of Delaware’s State Legislators Urge their Congressional Delegation to Support the Incorporation Transparency and Law Enforcement Assistance Act
Last November, a former special agent for the Treasury Department, John Cassara, wrote an op-ed for The New York Times with the headline “Delaware, Den of Thieves?” Cassara described how the state of Delaware (along with Wyoming and Nevada) has become “nearly synonymous with underground financing, tax evasion and other bad deeds facilitated by anonymous shell companies”. He told of his frustration as a law enforcement officer trying to get information out of Delaware about the real owners and controllers of companies registered in the state.
This week, a debate has started in Delaware about its role as a corporate secrecy haven. One-half of the members of the Delaware State Legislaturehave sent a letter to the Delaware Congressional Delegation, urging them to support bipartisan federal legislation introduced by Senators Levin (MI-D) and Grassley (IA-R) to deal with anonymous companies.
To understand why this is such a big deal, it’s important to understand the extent to which Delaware is a global hub for company formation. More than 1 million companies are incorporated in Delaware, which is more than the actual number of living residents. That number includes 50% of all publicly-traded companies in the U.S. and 64% of the Fortune 500. This is no accident; Delaware law grants attractive tax arrangements and other measures that attract businesses to incorporate there. These measures have paid off – in 2011 alone, Delaware collected roughly $860 million in taxes and fees from these companies – about a quarter of the state’s total budget.
By Grace Zhao, July 24, 2014
Any Effective Effort to Save Rhinos, Tigers, and Pandas from Extinction Must Tackle the Anonymous Companies that Propel the Illegal Wildlife Trade
Wildlife trafficking is more than illegally killing exotic animals; it is part of a complex criminal network that makes use of anonymous companies to illegally transfer both goods and money.
The illegal wildlife trade consists of the poaching, sale, and trade of exotic wildlife. Animals are used for food, medicine, commercial products, and even as pets. The illegal trade hosts a bevy of clientele in both developing and developed countries.
We probably all know that wildlife trafficking can be grisly and disturbing. Rhino horns are hacked off, turtles are stuffed into suitcases, and bear gall bladders are milked from living animals. The impact on biodiversity is astounding. According to our 2011 report, Transnational Crime in the Developing World, only 500,000 elephants exist today compared to a population of 1.2 million in the 1970s. The world’s tiger population has plummeted to just 3,200—down 95 percent since 1900, and an entire species of Rhino went extinct in 2009.
By Michele Fletcher, July 18, 2014
More Transparency and Accountability Are Needed, if Tanzania Is to Truly Benefit from its New-Found Gas Reserves
Tanzania’s new-found gas reserves are valued at an estimated $20 billion. Many look at these prospects with optimism, as this revenue may help Tanzania achieve its goal of becoming a middle-income country by 2025. But for others, the situation is more precarious.
Tanzania has been in the same situation when it became a major source of gold not even two decades ago. Today, though Tanzania is still the third largest exporter of gold, there is widespread agreement that the mining sector did not produce the revenue it should have, nor was the effect of the growing industry felt in the population. Tanzania still stands 152nd out of the 182 countries on the Human Development Index, despite having exported billions of dollars worth of gold throughout the past two decades. The value of Tanzania’s mining exports grew to $1.5 billion in 2010, but annual government revenue from its sale was only about $100 million, or about 7%.
By Clark Gascoigne, July 17, 2014
Thomson Reuters Foundation Seeks Applications from African Media for Illicit Finance Training and Assistance Program by July 28th
Are you an ambitious journalist in Africa with an interest in probing illicit finance, money laundering, and tax related abuses? Or, perhaps, you represent an outstanding, independent media organization based in Africa with a desire and reputation for exposing financial crime and corruption?
Either way, the Thomson Reuters Foundation is launching a new three-year program assisting African media on the reporting of illicit finance and tax abuse, and they are hoping that you will apply. According to the TR Foundation:
African economies lose huge sums of money every year through practices such as tax evasion and avoidance, often carried out by large companies. However, this phenomenon receives little attention and is rarely the subject of in-depth investigation.
Thomson Reuters Foundation believes that African media has a vital role to play in bringing this issue to light and exposing tax abuse where it is taking place. We also believe that collaboration between journalists and media organisations across borders is essential when reporting on money flows between countries.
We are seeking outstanding journalists and ambitious, independent media organisations to join us in this new project.
