May 4, 2009
WASHINGTON, DC – Global Financial Integrity (GFI) applauds the Obama Administration’s efforts to fix the broken tax system that enables corporations to game the system to avoid paying their fair share of taxes.
April 30, 2009
Economists use two basic models to estimate illicit financial flows (IFFs), also known as illegal capital flight. According to the first method, if the source of funds (borrowing abroad and foreign direct investment) is higher than recorded use, the excess must have leaked out as unrecorded transactions and are therefore illicit by definition. The second method tracks the over-invoicing of imports and under-invoicing of exports by domestic residents in order to capture their illicit holdings of foreign currency abroad. The Global Financial Integrity (GFI) study estimated that black money to the tune of $22.7-$27.3 billion left India annually during 2002-2006.
That issue, of black money leaving India, and the total stock of slush funds held abroad by Indians, has become a hot-button political issue. Unfortunately, in the political fray a number of commentators have misinterpreted the GFI report and have confused the issues.
April 30, 2009
Global Financial Integrity (GFI) recently published a report titled Illicit Financial Flows from Developing Countries: 2002-2006 as part of a project financed by the Ford Foundation. This report, which was well received by academia, governments and non-governmental organizations, came to be widely discussed in the Indian media. The report found that black money to the tune of $22.7-27.3 billion a year has been leaving India over the five-year period, 2002-2006. It should be noted that even the upper range of GFI’s estimates likely understates the outflow of black money from India. After all, economic models cannot capture all the channels through which money can be transferred illegally out of a country. A few examples will suffice. It is well known that illicit hawala transactions are an important way by which residents can swap the rupee for foreign exchange. A US state department report estimates that hawala transactions in India range between $13 billion and $17 billion annually, and present a security threat to the country. Neither can economic models capture the outflow of black money as in a courier’s cross-border transfer of foreign exchange in a suitcase.
April 28, 2009
WASHINGTON, DC – Global Financial Integrity (GFI) applauds the European Commission’s release of recommendations for actions EU Member States should take to promote “good governance” in tax assessment and collection, such as increasing transparency. Released today, the Commission’s recommendations build on existing EU policy for good governance and the recent G20 conclusions concerning uncooperative tax jurisdictions.
April 24, 2009
WASHINGTON, DC – Global Financial Integrity welcomes Krishen Mehta, as the newest member of its Advisory Board. Mr. Mehta is a U.S. CPA and has been a partner with PricewaterhouseCoopers (PwC) for almost 20 years. From 1994 to 2008 Mr. Mehta worked closely with PwC clients in Japan, South Korea, China, Singapore, Malaysia, Indonesia, Taiwan, and India.
April 24, 2009
India’s opposition party leader L.K. Advani sparked a political conflagration with pre-election campaign remarks that India was losing tens of billions of dollars each year in illicit financial outflows, or “black money”. He asserted that the National Democratic Alliance would vigorously pursue recovery of these lost assets if voted into power. With the rolling election now in progress, the issue of India’s missing billions has grown progressively thornier, as both sides vie to take the moral high ground.
Whatever the outcome of the election, India’s problem has broader implications both for the developing world and for efforts by the Group of 20 developed and developing nations to craft an effective post-crisis economic plan for the global financial system.
April 20, 2009
WASHINGTON, DC – Global Financial Integrity issued a statement today on its 2008 report “Illicit Financial Flows from Developing Countries: 2002-2006,” in response to growing interest in and citation of the report’s estimates of illicit capital flight out of India, which is ranked fifth out of 160 developing countries analyzed.
April 20, 2009
WASHINGTON, DC – The Netherlands Ministry of Foreign Affairs is the newest member to join the Task Force on Financial Integrity and Economic Development as a member of the Task Force Partnership Panel, Global Financial Integrity (GFI) announced today.