Despite Acknowledging Dangers of Phantom Firms, Obama Administration & G8 Fail to Endorse Public Corporate Ownership Registries
G8 Leaders Allow Multinationals to Continue Aggressive Tax Avoidance in the Dark
World Leaders Endorse Global Automatic Exchange of Tax Information, Transparency in Extractive Industries at Lough Erne Summit
WASHINGTON, DC – Global Financial Integrity (GFI) welcomed the statements from G8 leaders today reiterating the significant progress that has been made to crack down on international tax evasion and supporting a global standard of automatic tax information exchange, but the research and advocacy organization expressed disappointment in the White House and world leaders for failing to fully address the need for transparency in multinational companies’ basic financial reporting and in corporate ownership.
U.S. President Urged to Join David Cameron’s Call for Public Registries of Beneficial Ownership Information at G8 Summit Next Week
Multilateral Automatic Exchange of Tax Information Should Be Global Norm, Expanded to Developing Countries
Country-by-Country Reporting by Multinational Companies Essential to Deter & Expose Abusive Tax Dodging
WASHINGTON, DC – As G8 leaders prepare to meet Monday and Tuesday in Northern Ireland, Global Financial Integrity (GFI) called on U.S. President Barack Obama to take aggressive action to curtail illicit financial flows and support public disclosure of corporate ownership information as essential to reducing crime, corruption, tax evasion, and terrorist financing. Under the leadership of British Prime Minister David Cameron, the G8 Summit is expected to focus on curbing abusive tax dodging and corruption.
When the G8 Foreign Ministers met in London last month, they reaffirmed their commitment to supporting economic and political reforms in Egypt, Tunisia, Morocco, Jordan, Libya and Yemen under the Deauville Partnership with Arab Countries in Transition. The Deauville Finance Ministers and international financial institutions made a similar declaration at their meeting in Washington a week later. A key part of this effort has focused on corruption and asset recovery. The six Arab countries are supposed to improve rule of law and reform their economies and political systems to fight corruption and be more transparent. The G8 governments have agreed to help with these domestic reforms, including building greater institutional capacity and championing recovery of assets stolen under the previous regimes in Egypt, Tunisia and Libya. But their statements seem to reveal a flawed premise: that corruption and capital flight are the fault of those countries over there, and the only role for Western governments to play is helping them to clean up the mess. The money that Mubarak, Ben Ali and Gaddafi allegedly stole went to banks in the UK, the U.S., France, and a number of other countries. If the G8 sincerely wants Deauville to be an “effective and pragmatic partnership,” member countries should work to make their own financial sectors more open and law-abiding.
As the saying goes—when things seem too good to be true, they often are. And so it is with tax haven secrecy.
For decades, government officials in Washington, London, and other Western nations were in agreement: Tax havens and anonymous shell companies were beneficial, or so the logic went. Regulators at the US Federal Reserve and the Bank of London saw trillions of “foreign” dollars flowing into American and British markets from offshore tax havens. Surely, that was a good thing. If a bunch of anonymous shell companies and disguised bank accounts want to funnel enormous wealth into the American and British economies, why ask questions? What’s the worst that could happen?
Illicit financial flows are a key issue impacting economic justice and human rights. They stifle domestic resource mobilisation, undermine government accountability and stability, and fuel economic inequality. For many decades, the human rights movement focused its programs and campaigns on civil and political rights. Experts and policymakers are now working to include issues of economic justice. This is the lens through which we in the development community should view the issue of illicit flows. While 1.2 billion people struggle to survive on $1.25 per day, we estimate that $859 billion drained illicitly out of developing countries in 2010.
British PM Endorses Public Registries of Company Ownership to “Break through the Walls of Corporate Secrecy”
France, Germany Also Call for Meaningful End to Anonymous Shell Companies
GFI Urges G8, U.S., EU to Follow Suit
WASHINGTON, DC / LONDON – In a major victory for transparency advocates, British Prime Minister David Cameron called on members of the G8 and the European Union Wednesday to “break through the walls of corporate secrecy” that facilitates tax dodging, money laundering, and corruption—endorsing the disclosure of beneficial ownership information in central public registries. Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization, lauded the statements by Mr. Cameron—included in a letter sent Wednesday to Herman Van Rompuy, President of the European Council—and the organization encouraged the United States, EU, and G8 to follow suit.
Cover-Page Editorial and 10-Article “Special Report” Highlight Trillions of Dollars in Dirty Money Flows Facilitated by Delaware, Miami, City of London, and Offshore Tax Havens
WASHINGTON, DC – A 10-article exposé accompanied by a cover-page editorial in this week’s edition of The Economist highlights the damaging role of anonymous shell companies, banking secrecy, and lax money laundering regulations and enforcement in places like the United States, Great Britain, and offshore tax havens. The influential British magazine—which hits newsstands tomorrow—calls on developed western economies like the United States, Great Britain, and Europe to “focus… on cleaning up their own back yards and reforming their tax systems.”
Industry Lobbying Groups Seek to Mire Regulations in ‘Legal Quicksand’ Despite Widespread Support by World Leaders
WASHINGTON DC — Global Financial Integrity (GFI), a Washington DC-based research and advocacy organization, urged the Securities and Exchange Commission today to deny the suspension request made by the American Petroleum Institute for recently finalized rules implementing Dodd-Frank Section 1504 transparency requirements for oil, gas, and mining companies.