Civil Society Experts Call on Delaware to Create Public Registry of Beneficial Ownership Information
WASHINGTON, DC – Global Financial Integrity (GFI) and Global Witness expressed disappointment that the Delaware House of Representatives passed two bills this evening that do little to stop criminals from using Delaware companies to launder their illicit proceeds.
The two pieces of legislation are House Bill 327 and House Bill 328, which would establish a chain of people that need to be consulted, in turn, in order to identify a person at a limited liability company or limited partnership who has a list of the entity’s legal owners. Legal owners may be other companies with hidden ownership or nominees, which are essentially front people for the real owner. The bills will now proceed to the State Senate for consideration.
“These bills are little more than window-dressing,” stated Stefanie Ostfeld, Senior Policy Advisor at Global Witness. “Anonymous companies lie at the heart of many of the world’s worst problems, and this legislation will do nothing to pull back the curtain on who owns and controls Delaware companies.”
E.J. Fagan, +1 202 293 0740 ext. 227
GFI Urges G7 Leaders to Push for an Illicit Financial Flows Goal in the Post-2015 Sustainable Development Agenda
GFI Calls for Implementation Assessments on Beneficial Ownership Commitment to Be Published by End of 2014
WASHINGTON, DC – G7 leaders meeting in Brussels reiterated their commitment to curtailing illicit financial flows stemming from crime, corruption, and tax evasion in a communiqué released today, as Global Financial Integrity (GFI) called on world leaders to push for an explicit illicit financial flows commitment in the post-2015 Sustainable Development Goals (SDGs).
Contributing to a Safer and More Secure World Demands That Financial Intelligence Units Work to Change the System from Within
GFI President Raymond Baker delivered the keynote address before the 22nd Plenary of the Egmont Group of Financial Intelligence Units in Lima, Peru.
Political scientists Mike Findley and Daniel Nielson discuss the findings of their new book: Global Shell Games: Experiments in Transnational Relations, Crime, and Terrorism, and the issue of anonymous shell companies. They are joined by Global Financial Integrity’s Heather Lowe, who moderates the event, as well as by Tax Justice Network-USA’s Jack Blum.
Christine Clough, PMP
Photos from the launch events for our May 2014 report, “Hiding in Plain Sight: Trade Misinvoicing and the Impact of Revenue Loss in Ghana, Kenya, Mozambique, Tanzania, and Uganda: 2002-2011,” which was funded by the Danish Ministry of Foreign Affairs.
These photos were taken from the launch events in Copenhagen, Denmark, and in Accra, Ghana.
While the precise magnitude and consequences of illicit financial flows in African countries — and throughout the developing world — deserve further analysis, it is clear that such flows are wreaking havoc on the continent. Any sustainable approach to global development has to curtail illicit flows and the mechanisms facilitating them. Only then will we be able to mobilize domestic resources for long-term development.
Fraudulent Trade Transactions Channeled at Least US$60.8 Billion Illegally in or out of 5 African Countries from 2002-2011
Tax Loss from Trade Misinvoicing Potentially at 12.7% of Uganda’s Total Government Revenue, followed by Ghana (11.0%), Mozambique (10.4%), Kenya (8.3%), & Tanzania (7.4%)
COPENHAGEN, Denmark / WASHINGTON, DC – The fraudulent misinvoicing of trade is hampering economic growth and potentially resulting in billions of U.S. dollars in lost tax revenue in Ghana, Kenya, Mozambique, Tanzania, and Uganda, according to a new report published Monday by Global Financial Integrity (GFI), a Washington DC-based research and advocacy organization. The study—funded by the Ministry of Foreign Affairs of Denmark—finds that the over- and under-invoicing of trade transactions facilitated at least US$60.8 billion in illicit financial flows into or out of the five African countries between 2002 and 2011.
The Little-Understood Practice of Misinvoicing or Re-Invoicing Relies on Legal Grey Areas and Financial Secrecy and Costs the Continent Dearly
Lately, the media has been replete with stories about how Africa is losing billions of dollars a year through a process called “trade misinvoicing.” The concept of trade misinvoicing is simple: companies and their agents deliberately alter the prices of their exports and imports in order to justify moving money out of, or into, a country illicitly.
The practice is very common in Africa. To name just a couple instances, it has allegedly been used to avoid paying import duties on sugar in Kenya and to shift taxable income out of Zambia and into tax havens abroad.
