Heather Lowe, +1 202 293 0740 ext. 228
GFI Calls on Congress to Take Action to Ensure that Beneficial Owners are Actually Identified at the Time of Company Formation
The U.S. Departments of Treasury and Justice announced a raft of measures and proposals to address critical vulnerabilities in the U.S. financial system on May 5th, following actions taken by other countries in response to the Panama Papers disclosures. GFI welcomes the introduction of these measures after a four year process but urges Treasury and Justice to fix serious gaps in the requirements for identifying the beneficial owners of companies.
Leaked documents from global law firm Mossack Fonseca revealed today by the International Consortium of Investigative Journalists (ICIJ) bring to light a global shadow financial system for the rich and powerful of the world for many billions of dollars worth of transactions, noted Global Financial Integrity (GFI), a Washington, DC-based research and advisory organization. More than 11.5 million documents implicate familiar names with abuse of financial secrecy, including UBS, HSBC, Société Générale, Cyprus, Switzerland, and the British Virgin Islands.
Heather Lowe, +1 202 293 0740 ext. 228
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.
Christine Clough, PMP
WASHINGTON, DC—Former President of South Africa Thabo Mbeki and members of the United Nations Economic Commission for Africa (UNECA) High Level Panel on Illicit Financial Flows from Africa (HLP) concluded their latest visit to the United States today. Chaired by Mr. Mbeki, the group met with government representatives, civil society experts, the business community, and journalists to continue promoting the HLP’s report and urging action to curtail illicit flows in Africa.
“Illicit outflows stemming from trade misinvoicing is the most damaging economic condition in Africa today,” said GFI President Raymond Baker, a member of the High Level Panel. “This is a key point in the HLP’s report, Track It; Stop It; Get It, and an argument that GFI has been making for years in our annual estimates of illicit outflows from all developing countries.”
Can we curtail global crime while we welcome tax evasion? In my opinion the answer to this question is a resounding “NO.” But this is what we are trying to do.
Let us be very honest with ourselves. We in the West have over the past 4 or 5 decades built a global shadow financial system designed to move tax evading and tax avoiding money across borders. I think by now all of us are familiar with its elements – tax havens, secrecy jurisdictions, disguised corporations, anonymous trust accounts, fake foundations, money laundering techniques, trade misinvoicing is the most commonly used component of this structure, and then there are holes left in the laws of our western countries that facilitate the movement of money through this shadow financial system and ultimately into our own economies.
Christine Clough, PMP
Incorporation Transparency and Law Enforcement Assistance Act in House and Senate Would Tackle Anonymous U.S. “Phantom Firms”
In the wake of a searing segment on CBS’s 60 Minutes exposing how some New York attorneys are more than willing to create anonymous companies that foreigners may use as vehicles for laundering money in the U.S., Global Financial Integrity (GFI) welcomes the introduction by Representative Maloney and Senator Whitehouse to introduce legislation (bipartisan in the House) that would require companies to disclose the people that own or control them when these entities are formed. The two bills would bring the United States in line with international anti-money laundering (AML) standards, target individuals responsible for laundering money, and bring an end to the abuse of anonymous U.S. shell companies.
Christine Clough, PMP
US$7.8 Trillion drains from Developing World from 2004-2013
Trade Fraud Responsible for Illicit Outflows of US$6.5 Trillion
China, Russia, Mexico, India, Malaysia are Biggest Exporters of Illicit Capital over Decade
Sub-Saharan Africa Still Suffers Largest Illicit Outflows as % of GDP
WASHINGTON, DC – Illicit financial flows from developing and emerging economies surged to US$1.1 trillion in 2013, according to a study released Wednesday by Global Financial Integrity (GFI), a Washington, DC-based research and advisory organization. Authored by GFI Chief Economist Dev Kar and GFI Junior Economist Joseph Spanjers, the report pegs cumulative illicit outflows from developing economies at US$7.8 trillion between 2004 and 2013, the last year for which data are available.
Christine Clough, PMP
Photos from “Illicit Financial Flows: The Most Damaging Economic Problem Facing the Developing World,” a 2-day conference in Washington, DC that was hosted by Global Financial Integrity and held at the National Press Club.
