Kenya lost over $700 million in taxes in 2012 due to smuggling. But despite popular belief, the main problem with smuggling isn’t corruption. It’s tax havens, phantom firms and secrecy.
At the end of January, the Kenya Sugar Board, acting on a tip off, seized and impounded over 1,800 bags of illegally imported sugar. Arrests were made and the board vowed to begin a country-wide crackdown on other cartels who smuggle tons of sugar into the country each year.
E.J. Fagan, +1 202 293 0740 ext. 227
New Standard Ensures All Nations Can Potentially Benefit from Robust, Automatic Exchange of Financial Information
G20 Finance Ministers to Review Document for Approval Next Week Ahead of Australian G20 Summit in the Fall
Research and Advocacy Organization Expects New Transparency Regime to Be ‘Game-Changing’ Deterrent to Cross-Border Tax Evasion, Money Laundering
WASHINGTON, DC – Global Financial Integrity (GFI) applauded the Organization for Economic Cooperation and Development (OECD) today following its historic release of a new model multilateral agreement that countries will use to tackle tax evasion, money laundering, and other financial crime. GFI, a research and advocacy organization based in Washington, DC, touted this as a major victory and welcome culmination of one front in the long battle for cross-border financial transparency.
E.J. Fagan, +1 202 293 0740 ext. 227
Philippine Economy Loses US$132.9 Billion in Illicit Financial Outflows from Crime, Corruption, Tax Evasion over 52-Year Period; US$277.6 Billion Transferred Illegally into the Philippines
Smuggling through Trade Misinvoicing Cost Philippine Taxpayers at Least US$23 Billion in Customs Revenue since 1990
25% of Value of All Goods Imported into Philippines Goes Unreported to Customs Officials
Report Launch and Press Conference at Mandarin Oriental Manila Hotel at 10am Local Time on Tuesday, February 4th
MANILA, Philippines / WASHINGTON, DC – More than US$410 billion flowed illegally into or out of the Philippines between 1960 and 2011—reducing domestic savings, driving the underground economy, and facilitating crime and corruption—according to a new report to be published Tuesday by Global Financial Integrity (GFI), a Washington DC-based research and advocacy organization. Over the 52-year period studied, the report finds that the Philippines suffered US$132.9 billion in illicit financial outflows from crime, corruption, and tax evasion, while US$277.6 billion was illegally transferred into the country, predominantly through the misinvoicing of trade transactions.
E.J. Fagan, +1 202 293 0740 ext. 227
GFI Urges EU Parliament Legislators to Follow UK’s Lead, Ban Anonymous Shell Companies
Anonymous Shell Companies are a Major Conduit of Illegal Funds; Public Registries of Beneficial Ownership are the “Gold Standard” in Curbing Phantom Firm Abuse
WASHINGTON, DC – Global Financial Integrity (GFI) today urged members of the European Parliament to support the creation of public registries of corporate ownership information in the upcoming vote on key revisions to the European Union (EU) Anti-Money Laundering Directive (AMLD). The pressure comes as GFI revealed that nearly US$70 billion in illicit financial flows—the proceeds of crime, corruption, and tax evasion—flowed into or out of developing and emerging EU member-states in 2011.
Repeal of FATCA Would Cripple U.S. Crackdown on Tax Havens & Financial Secrecy, Cost the U.S. Taxpayer Billions
WASHINGTON, DC – Global Financial Integrity (GFI) urged the Republican National Committee (RNC) to reject a proposed resolution calling for the repeal of the Foreign Account Tax Compliance Act (FATCA)—the cornerstone of the U.S. effort to fight offshore tax evasion. The law, which was passed in 2010 as part of the Hiring Incentives to Restore Employment (HIRE) Act, requires foreign banks to report deposit information on their U.S. accountholders for U.S. tax compliance, as is required of domestic U.S. banks.
A Year after HSBC, Is the U.S. Doing Enough to Fight Money Laundering?
Writing in the current New York Review of Books, Jed S. Rakoff castigates the U.S. government for failing to prosecute any executives of financial institutions responsible for the recent, world-shaking financial crisis. As a judge on the U.S. District Court for the Southern District of New York, Rakoff has witnessed firsthand much of the legal denouement of the crisis, and his disappointment with the government’s inadequate response carries a great deal of weight. Rakoff questions the government’s reasoning in generally not even threatening criminal charges for executives, despite overwhelming evidence that knowledge and responsibility for the mortgage-backed asset bubble predicating the financial crisis rose to the highest levels in many banks.
Fraudulent Trade Misinvoicing Fueling Currency and Housing Speculation within the Country
WASHINGTON, DC – As the Chinese government recently announced moves to crackdown on illicit capital inflows through trade misinvoicing, Global Financial Integrity (GFI) finds that US$400 billion flowed illicitly into China from Hong Kong via trade misinvoicing between 2006 and the first quarter of 2013. The estimates by Global Financial Integrity were released today in an article by GFI Junior Economist Brian LeBlanc on the website of the Thomson Reuters Foundation.
US$400 Billion Smuggled into China from Hong Kong through Trade Misinvoicing Since 2006
China’s regulatory body responsible for managing the country’s foreign exchange reserves (SAFE) announced last month that it was planning to increase enforcement and penalties associated with the abuse of trade payments to mask illicit inflows of foreign exchange. The Wall Street Journal reports that Chinese authorities have uncovered 1,076 instances of false reporting of export invoices by 112 companies, adding up to approximately $2.5 billion. Still, SAFE has not disclosed the severity of the problem nor how it would clamp down on such practices—leaving many questions to be answered. Allusions to “fishy” trade with Hong Kong were given, but specifics were lacking.
