Global Financial Integrity

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Anonymous Companies

Kenya’s Removal from FATF’s Gray List Doesn’t Mean Much

FATF removed Kenya off the grey watch list.

Don’t get too excited about Kenya’s removal from the Financial Action Task Force’s (FATF) gray list.

The FATF list of “high risk and non-cooperative jurisdictions” is a list of countries that the organization believes to be doing very little in the global fight against money laundering and terrorist financing. The list is based off a series of 40 recommendations that it expects countries to abide by to reduce money laundering and terrorist financing. These recommendations include, among other things, the regulation of banks and other financial institutions. Countries that do not adequately address these expectations are placed on the black or gray list based on varying degrees of compliance.

In 2010, FATF placed Kenya on a list of high risk countries for delays in enacting laws to tackle criminal financial activity as well as a failure to track money laundering.

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Put an End to Money Laundering, Bribery, and Corruption

Curbing Cross-Border Corruption via Anonymous Companies Should Be a Priority for Global Leaders in 2014, Says Transparency International’s Cobus de Swardt

Corruption around the world is facilitated by the ability to launder and hide proceeds derived from the abuse of power, bribery and secret deals. Dirty money enters the financial system and is given the semblance of originating from a legitimate source often by using corporate vehicles offering disguise, concealment and anonymity. For example, corrupt politicians used secret companies to obscure their identity in 70 percent of more than 200 cases of grand corruption survey by the World Bank.

For far too long, corrupt figures have been able to easily stash the proceeds of corruption in foreign banks or to invest them in luxurious mansions, expensive cars or lavish lifestyles. They do this with impunity and in blatant disregard for the citizens or customers they are supposed to serve.

Importantly, the corrupt are aided by complacent and sometimes complicit governments of countries with banking centers that facilitate money laundering and allow the corrupt to cross their borders to enjoy stolen wealth. Weak government actions are failing to prevent the corrupt from evading justice and have enabled cross-border transfers of corrupt assets. Complacent governments responsible for protecting the public from such criminal acts are de facto supporting impunity for corruption.

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Why New York City Real Estate May Be the New Dirty Money Bastion

New York apartments are becoming the new Swiss banks

Kleptocrats and criminals are always looking for new ways to properly launder their illicit wealth, and it now appears that many of them are turning to Manhattan real estate.

Unsavory investors are increasingly purchasing New York City flats in an attempt to squirrel away ill-gotten funds or dodge billions of dollars in taxes, according to an in depth investigation by New York Magazine and the International Consortium of Investigative Journalists (ICIJ). Some might even say that New York City itself is becoming a sort of tax haven.

Since the financial crisis of 2008, 30 percent of all condo sales in the city were purchased through foreign entities—many of them anonymous shell companies—yet much of the purchased property remains vacant. The census bureau estimates that 30 percent of the apartments from 49th to 70th streets and between Fifth and Park Avenues in New York City are empty for up to 10 months of the year.

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Three Reasons TTIP Needs Transparency

The Transatlantic Trade and Investment Partnership seeks to unite U.S. and EU markets: a gigantic trade deal uniting over 800 million consumers across the United States and the European Union, and yet all its important documents remain shielded...

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Event Recap: How Illicit Financial Flows are Europe’s Common Enemy

On Wednesday, representatives from the Senate, European Embassies of Luxembourg, the Netherlands, and anti-corruption NGOs, including GFI’s Tom Cardamone, gathered in the U.S. Senate’s Kennedy Caucus Room to discuss the growing dangers of illicit financial flows in Europe as major contributors to the European financial crisis.

U.S. Senator Jeff Sessions (R-AL) spoke about his experience with Russia’s systematic aggression in the Balkan areas, and advised they take a stronger stance against Russian encroachment. Dependence on American financial and military hegemony in the region is not a sustainable security solution, he added. Sessions, who also served as Attorney General of Alabama, urged that Central and Eastern Europe push for anti-corruption and transparency laws.

I am convinced that prosperous and open societies make the world better. The values of financial integrity are exactly what we need.

All agreed that financial integrity is the linchpin of stability and security. Hon. Becky Norton Dunlop, Vice President of the Heritage Foundation, said:

Ensuring transparency is key to dealing with corruption.

This is not just a Republican issue. This is not just a Democratic issue; this is an issue for all Americans.

The crisis in Crimea was preventable, argued Natasha Srdoc, Chairman of the Adriatic Institute for Public Policy. Regional stability is greatly undermined by Western European banks promoting fraudulent transactions in the Balkans. Had Ukraine formally broken its ties to Russia and joined the EU, it could have deterred Russia from annexing Crimea. Yet joining the EU may also have exposed the corruption schemes of Ukrainian elites, including that of former President Viktor Yanukovych and former PM Pavlo Lazarenko, whose own anonymous shell company was based in Wyoming.

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Event Recap: Global Shell Games, Experiments in Transnational Relations, Crime, and Terrorism

GlobalShellGamesCoverOn Friday, Global Financial Integrity hosted professors Michael Findley and Daniel Nielson to talk about their new book, Global Shell Games, Experiments in Transnational Relations, Crime, and Terrorism.

The book follows their ground-breaking paper, Global Shell Games: Testing Money Launderers’ and Terrorist Financiers’ Access to Shell Companies, which was published in 2012. The authors approached nearly 4,000 services in over 180 countries in a random assignment experience designed to measure how difficult it was to convince a corporate service provider or law firm to create a shell company without proper identification.

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