Illicit Financial Flows and the Problem of Net Resource Transfers from Africa: 1980-2009
A new report jointly produced by Global Financial Integrity and the African Development Bank finds that developing countries lost $1.4 trillion in net resource transfers, which are comprised of both licit and illicit flows, including investment, remittances, debt relief, and illicit financial flows, from 1980-2009.
The implications of this report are broad. Despite foreign aid, natural resource exports, and other transfers, developed countries still take away more resources than they give to Africa.
Op-Ed: Tom Cardamone in the Huffington Post
In this op-ed, GFI Managing Direct Tom Cardamone argues that Canada should embrace the global movement toward tax transparency at the G8 summit in Northern Ireland. Mr. Cardamone writes,
"As a start, implementing transparency -- rather than regulatory -- measures will go a long way toward curtailing the offshore problem. Requiring that owners of companies, foundations, and trusts be available in public registries -- if not known to law enforcement -- in the jurisdiction in which they are created would be a master stroke to eliminate the current shadowy nature of offshore finance."
GFI in the News
Ralph Lauren Case Shows Bribery Enforcement Snaring Invoice Fraud
The Wall Street Journal, April 24, 2013
How the Fate of a Spanish Cold Cut Explains Global Finance
Pacific Standard Magazine, April 23, 2013
Govt not ready with Swiss billions probe results
The Guardian (Nigeria), April 20, 2013
G20 Pushes Tax Data Exchange, Swiss Seen as Laggards
Reuters, April 19, 2013
Bravo for Tunisia: Hope Springs Eternal
The Huffington Post (Op-Ed), April 19, 2013
Exclusive: Risk ranking: China revamps anti-money laundering rules - sources
Reuters, April 17, 2013
Further inquiry and action needed on banks and tax havens
The Guardian (Letter to the Editor), April 17, 2013
Tax haven menace must be addressed by Congress
The Hill (Op-Ed), April 16, 2013
The Trouble with Tax Havens
The Ottawa Citizen, April 12, 2013
EU warns Croatia on Corruption, Human Trafficking
EU Observer, March 27, 2013
Curbing Illicit Financial Flows and the MDGs
Academics Stand Against Poverty (ASAP) released a video arguing that the post-2015 Millenium Development Goals (MDGs) ought include measures to reduce illicit financial flows, one of the biggest drivers of global poverty.
Despite Acknowledging Dangers of Phantom Firms, Obama Administration & G8 Fail to Endorse Public Corporate Ownership Registries
G8 Leaders Allow Multinationals to Continue Aggressive Tax Avoidance in the Dark
World Leaders Endorse Global Automatic Exchange of Tax Information, Transparency in Extractive Industries at Lough Erne Summit
WASHINGTON, DC – Global Financial Integrity (GFI) welcomed the statements from G8 leaders today reiterating the significant progress that has been made to crack down on international tax evasion and supporting a global standard of automatic tax information exchange, but the research and advocacy organization expressed disappointment in the White House and world leaders for failing to fully address the need for transparency in multinational companies’ basic financial reporting and in corporate ownership.
“Today’s declaration really solidifies the progress made to-date on battling international tax evasion and extends it to countries not actively pursuing such initiatives like Japan and Russia,” said Heather Lowe, GFI’s Legal Counsel and Director of Government Affairs. “However, President Obama and world leaders generally failed to grasp the need for public transparency in corporate tax reporting and corporate ownership information.”
U.S. President Urged to Join David Cameron’s Call for Public Registries of Beneficial Ownership Information at G8 Summit Next Week
Multilateral Automatic Exchange of Tax Information Should Be Global Norm, Expanded to Developing Countries
Country-by-Country Reporting by Multinational Companies Essential to Deter & Expose Abusive Tax Dodging
June 14, 2013
Clark Gascoigne, +1 202 293 0740 x222
WASHINGTON, DC – As G8 leaders prepare to meet Monday and Tuesday in Northern Ireland, Global Financial Integrity (GFI) called on U.S. President Barack Obama to take aggressive action to curtail illicit financial flows and support public disclosure of corporate ownership information as essential to reducing crime, corruption, tax evasion, and terrorist financing. Under the leadership of British Prime Minister David Cameron, the G8 Summit is expected to focus on curbing abusive tax dodging and corruption.
“President Obama has the opportunity to serve as the lynchpin of a global deal cracking down on the most damaging problem in the international financial system,” said Raymond Baker, President of GFI and a longtime authority on financial crime. “Illicit financial flows drain roughly $1 trillion per year from developing countries. Tax haven secrecy and anonymous shell companies facilitated the illegal outflow of roughly $261 billion from the Greek economy in the lead-up to the European debt crisis, and tax haven abuse is estimated to cost U.S. taxpayers roughly $150 billion per year. Illicit financial flows facilitated by tax haven secrecy and anonymous shell companies are a global epidemic undermining rich and poor nations alike.”
European Parliament Passes Landmark Transparency Provisions for Oil, Gas, Mining, and Logging Companies
Canadian PM Harper Announces Intent to Adopt Similar Policies for Canadian Firms
G8 Urged to Make Disclosure Global Norm at Next Week’s Summit; Expand Country-by-Country Reporting to Firms in All Sectors
June 12, 2013
Clark Gascoigne, +1 202 293 0740 x222
WASHINGTON, DC – Global Financial Integrity (GFI) lauded the European Parliament today for adopting new transparency rules for all EU listed extractive industries companies as well as all large, privately held extractive industries companies incorporated in the EU. Announced informally by European leaders in April, the rules were officially adopted by the Parliament Wednesday in what GFI referred to as a major victory for anti-corruption proponents. Also on Wednesday, the Canadian government announced that it intended to move forward to enact similar rules, a move lauded by GFI, a Washington, DC-based research and advocacy organization.
"The new transparency rules in Europe and the announcement from the Canadian Prime Minister are two key advancements for anyone who cares about fighting poverty, protecting investors, making markets more efficient, or reducing corruption,” remarked GFI Director Raymond Baker. "Our research shows that the developing world loses roughly US$1 trillion per year to crime, corruption, and tax evasion. This is a systemic problem caused largely by the opaque, secretive global financial system. For citizens of resource-rich countries, the new EU rules—as well as the potential Canadian rules—will shine a light in places that need it most."
Illicit Financial Flows from Developing Countries 2001-2010
December 17, 2012
A new report from Global Financial Integrity finds that developing countries lost $5.86 trillion in illicit financial flows from 2001-2010.
Illicit financial flows, the proceeds of crime, corruption, and tax evasion, approached record high levels in 2010, after briefly dipping during the global financial crisis.
Recent Reports from GFI
China: Illicit Financial Flows and the Role of Trade Misinvoicing
January 2012 | Read more...
Transnational Crime In The Developing World
February 2011 | Read more...
Mexico: Illicit Financial Flows, Macroeconomic Imbalances, and the Underground Economy
January 2012 | Read more...
The Drivers & Dynamics of Illicit Financial Flows from India: 1948-2008
November 2010 | Read more...
Illicit Financial Flows from Africa: Hidden Resource for Development
March 2010 | Read more...