Global Financial Integrity

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Information Exchange, Reporting, Facilitating Due Diligence, Key to Increasing Transparency

Monique Perry Danziger, +1 202 293 0740 ext. 222
Global Financial Integrity
Monique Perry Danziger, +1 202 293 0740 ext. 222

WASHINGTON, DC – The discovery of “massive and on-going fraud” at Stanford Financial Group, intensifying U.S. pressure against Swiss bank UBS, and strong words of intent to crackdown on tax havens issued Sunday by EU finance ministers are just the latest events to underscore the need to institute transparency measures in tax and financial policy.

It is estimated that $12 trillion in undeclared assets are held in secrecy jurisdictions and tax havens. The lost tax revenue from the undeclared assets is approximately $255 billion annually. Moreover, evasion of tax and customs duties by corporations is estimated to be $450 billion each year.

Global Financial Integrity (GFI) urges Congress to implement measures to mandate automatic exchange of tax information as a means to curtail banking secrecy and tax evasion. Further, GFI calls on the Obama Administration to push for similar measures at the upcoming meeting of the G-20 in London on April 2. Global Financial Integrity recommends the following measures be implemented:

  • Automatic Exchange of Information: Require governments to collect from financial institutions data on income, gains, and property paid to non-resident individuals, corporations, and trusts and mandate the governments to automatically provide that information to the governments where the non-resident entity is located.
  • Beneficial Ownership: Require that beneficial ownership, control and accounts of companies, trusts and foundations be readily available on public record to facilitate due diligence.
  • Country-by-Country Reporting: Require that all multi-national corporations report sales, profits, and tax paid in all jurisdictions in their audited annual reports and tax returns.

“There are trillions of dollars in undeclared assets stashed in more than 70 tax havens around the world,” said Baker. “Mandating cooperation and information exchange in tax collection would impair the furtive practices which move money into these tax havens and enable countries to improve tax revenue collection.”