Christine Clough, PMP
Governments Commit to “Substantially Reduce Illicit Financial Flows by 2030”
Development Accord Seeks to Curb an Estimated $1 Trillion in Annual Outflows
ADDIS ABABA, Ethiopia – Global Financial Integrity (GFI), the Africa Progress Panel (APP) and Jubilee USA applauded the global commitment made today at the Third Financing for Development Conference (FfD3) to reduce the massive flow of illicit funds from developing country economies. For the first time international consensus was reached on the importance of an issue that has been at the forefront of efforts by hundreds of research and development organizations for the last ten years. The negotiations concluded today and formal adoption of the document will take place on Thursday.
It’s Better to Adopt Measures to Tighten the Creation of Black Money than to Be Quixotic about its Return
Despite India’s support for it at the G-20, the OECD’s automatic exchange of financial information (AEFI) regime is riddled with loopholes that make its usefulness questionable.
Successive governments have attempted to curtail the black money menace through policy action and moral suasion. But the recent slew of measures, including bilateral and multilateral initiatives — most recently, India and the United States signed an agreement under the American Foreign Account Tax Compliance Act — is perhaps the most far-reaching in memory. Black money or illicit financial flows violate laws in their creation, utilisation or transference. They have had a pernicious influence in India since Independence — from the financing of elections to that of terrorism against the state.
Christine Clough, PMP
Initiative Funded by the Government of Norway
WASHINGTON, DC – Global Financial Integrity (GFI) is pleased to announce the launch of a new program that seeks to assist developing country governments with increasing domestic resource capture by curtailing trade misinvoicing, and continuing work to educate policy makers about the corrosive impact illicit financial flows have on developing economies.
The Most Important Step that Can Be Taken Toward Equitable, Sustainable Development in the Years Ahead Is Legitimate Trade
Plastic buckets from the Czech Republic at $970 each? Brown sugar from Turkey going for $240 per pound? Or weed whackers shipped to Venezuela at $12,300 apiece?
These are all examples of the troubling and growing phenomenon known as trade misinvoicing — the fraudulent over- and under-invoicing of international trade transactions to secretly move money, covering the proceeds of crime, corruption, and tax evasion.
Christine Clough, PMP
GFI Spokespersons Available for Comment and Updates on Financing for Development (FfD), Sustainable Development Goals (SDGs), Illicit Financial Flows, Trade Misinvoicing
ADDIS ABABA, Ethiopia / WASHINGTON, DC – The third Financing for Development Conference (FfD) will take place in Addis Ababa, Ethiopia, July 13-16, and Global Financial Integrity will be on the ground advocating for specific, measurable and achievable targets to significantly reduce illicit financial flows.
This process marks a momentous opportunity to create a sustained path for helping developing countries address the nearly US$1 trillion that flows out of their economies illicitly each year. Of that amount approximately $730 billion is moved offshore through trade misinvoicing (i.e. trade fraud). The related tax loss, coupled with the potential investment resources that are lost, represent significant costs to governance and development efforts in poor countries.
Tom Cardamone
Offshore Financial Centres Can Help Curb Illicit Flows by Exchanging Tax Information and Providing Transparent Beneficial Ownership Information
In its recent op-ed, Jersey Finance provides a defence of the offshore financial centre’s legal code and regulatory framework against charges by “pressure groups” of alleged financial improprieties. The author also promotes Jersey’s financial services to current and potential clients that intend to invest in Africa.
However the article’s logic is flawed. It suggests that since Jersey is an international finance centre with allegedly tough anti-money laundering laws to help prevent wrongdoing, other IFCs are also proper places to facilitate investments in the developing world. One need only search “Swiss leaks” or “Lux leaks” to understand more clearly how taxes are dodged, money laundered, and financial secrets kept around the globe. Secret bank accounts, anonymous corporations, fraudulent foundations, nominee trust accounts and other opaque structures are the calling cards of many IFCs and are utilised by any firm or person who wants to move, hide or launder money.
World Leaders Urged to Target Illicit Flows, Trade Misinvoicing at Addis Summit
The outlook was promising. In the outrage over the unfolding FIFA corruption scandal, UK Prime Minister David Cameron vowed Saturday to put corruption on the agenda of this week’s G7 Summit in Germany.
G7 Communiqué Ignores Illicit Flows in the Context of the Post-2015 Development Agenda
World Leaders Urged to Target Illicit Flows, Trade Misinvoicing at FfD Conference
WASHINGTON, DC – Global Financial Integrity (GFI) expressed disappointment in world leaders Monday for failing to advance efforts to curtail illicit financial flows—particularly in the context of the Post-2015 Development Agenda. The G7 failure comes despite a new GFI study released on Wednesday showing the outsized-impact that illicit financial flows (IFFs) have on the poorest countries in the world, and notwithstanding a Friday pledge by UK Prime Minister David Cameron to put corruption on the agenda of the G7 Summit, which concluded today in Germany.
