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.
Trade Misinvoicing Drained US$763.4bn from Poor Countries in 2011, according to GFI Research
Influential News Weekly Features GFI’s Research & Experts in Latest Issue
WASHINGTON, DC – The latest issue of The Economist profiles the problem of trade-based money laundering, which drains hundreds of billions of dollars from developing economies each year, according to Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization. The prestigious financial news magazine cites heavily from GFI’s research and experts, while warning that efforts to tackle trade misinvoicing are “the weakest link” in the international effort to fight illicit financial flows.
