Cyprus a “Laundry Machine for Dirty Russian Money”

Illegal Inflows of Capital Estimated at US$552.9 Billion; Driving Underground Economy, Crime, Tax Evasion

US$764.3 Billion in Total Illicit Flows (Inflows + Outflows) Measured

Russia’s Underground Economy Averages 46% of GDP, 35% in 2011; Weak Governance and Endemic Tax Evasion Lead to Increasing Outflows

February 13, 2013
Clark Gascoigne, +1 202 293 0740 x222

WASHINGTON, DC – The Russian economy hemorrhaged US$211.5 billion in illicit financial outflows from 1994—the earliest year for which data is available following the dissolution of the Soviet Union—through 2011, according to a new report released Wednesday by Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization.   The study, titled “Russia: Illicit Financial Flows and the Role of the Underground Economy,” [HTML | PDF] also measures massive illicit inflows to the Russian economy of $552.9 billion over the 18-year time-span, raising serious questions about the economic and political stability of the nation currently chairing the G20.

“Russia has a severe problem with illegal flows of money,” said GFI Director Raymond Baker.  “Hundreds of billions of dollars have been lost that could have been used to invest in Russian healthcare, education, and infrastructure.  At the same time, more than a half trillion dollars has illegally flowed into the Russian underground economy, fueling crime and corruption.”

Senator Carl Levin (D-MI) and Senator Sheldon Whitehouse (D-RI) Introduce CUT Loopholes Act

February 11, 2013
E.J. Fagan, +1 202 293 0740 x227

WASHINGTON DC – In the midst of a Congressional and White House showdown over the impending sequestration, and growing calls for corporate tax reform, Senator Carl Levin (D-MI) and Senator Sheldon Whitehouse (D-RI) put forth the Cut Unjustified Tax Loopholes Act (S. 268, CUT Loopholes Act). This bill, which closes loopholes and strengthens enforcement measures against offshore tax haven abuse, could raise nearly $200 billion over ten years.

While large multi-national corporations are making record profits, many of them take advantage of a tax code riddled with loopholes that helps them winnow their tax bills down significantly.  In fact, thirty Fortune 500 companies paid no federal income taxes in 2008-2010 while collectively earning almost $160 billion in profits, according to financial data analyzed by Citizens for Tax Justice.  Offshore tax abuses cost the U.S. Treasury an estimated $150 billion per year in lost revenues.

Illicit Financial Outflows Cost Developing World $859 Billion in 2010, Rebounding Rapidly from Financial Crisis

Nearly $6 Trillion Stolen from Poor Countries in Decade between 2001 and 2010

December 17, 2012
Clark Gascoigne, +1 202 293 0740 x222

WASHINGTON, DC – Crime, corruption, and tax evasion cost the developing world $858.8 billion in 2010, just below the all-time high of $871.3 billion set in 2008—the year preceding the global financial crisis.  The findings are part of a new study released today by Global Financial Integrity (GFI), a Washington-based research and advocacy organization.

The report, “Illicit Financial Flows from Developing Countries: 2001-2010,” is GFI’s annual update on the amount of money flowing out of developing economies via crime, corruption and tax evasion, and it is the first of GFI’s reports to include data for the year 2010.

Co-authored by GFI Lead Economist Dev Kar and GFI Economist Sarah Freitas, the study is the first by GFI to incorporate a new, more conservative, estimate of illicit financial flows, facilitating comparisons with previous estimates from GFI updates.

Latest Global Financial Integrity Research Places India as Decade’s 8^th Largest Exporter of Illicit Capital

Illicit Outflows Cost Developing World US$859 Billion in 2010, Rebounding Rapidly from Financial Crisis

December 17, 2012
Clark Gascoigne, +1 202 293 0740 x222

WASHINGTON, DC – The Indian economy suffered US$1.6 billion in illicit financial outflows in 2010, capping-off a decade in which the world’s largest democracy experienced black money loses of US$123 billion, according to the latest report released today by Global Financial Integrity, a Washington-based research and advocacy organization.

The GFI study, titled “Illicit Financial Flows from Developing Countries: 2001-2010,” ranks India as the decade’s 8^th largest victim of illicit capital flight behind China, Mexico, Malaysia, Saudi Arabia, Russia, the Philippines, and Nigeria, respectively.

“While progress has been made in recent years, India continues to lose a large amount of wealth in illicit financial outflows,” said GFI Director Raymond Baker.  “Much focus has been paid in the media on recovering the Indian black money that has already been lost.  This focus is for naught as long as the Indian economy continues to hemorrhage illicit money.  Policymakers and commentators should make curtailing the ongoing outflow of money priority number one.”

Capital Flight Fueling Poverty In One of the World’s Poorest Nations, Writes GFI Economist

December 13, 2012
Clark Gascoigne, +1 202-293-0740 ext.222

WASHINGTON DC – Illicit financial flows due to crime, corruption, and tax evasion cost Zambia $8.8 billion from 2001-2010, finds a forthcoming report from Global Financial Integrity (GFI).

Sarah Freitas, a GFI Economist who co-authored the report with GFI Lead Economist Dev Kar, previewed some findings from the report, which looks at every country in the developing world, for the nation of Zambia in a blog post on the website of the Task Force on Financial Integrity and Economic Development.

Ms. Freitas argues that capital flight—both licit and illicit—is draining tremendous amounts of money from the Zambian economy, which remains poor despite massive natural resource wealth. She writes:

December 7, 2012
Clark Gascoigne, +1 202 293 0740 x222

WASHINGTON, DC – As the world observes International Anti-Corruption Day this Sunday, December 9, 2012, Global Financial Integrity highlighted some of the most notable achievements, developments, and short-comings in the fight against corruption over the past year. 

Dodd-Frank Section 1504 (Cardin-Lugar) Enacted

Perhaps the greatest anti-corruption victory of the year, the Securities and Exchange Commission adopted a strong set of rules enabling the Cardin-Lugar provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act to take effect last month.  Cardin-Lugar requires companies registered with the SEC that operate in the oil, gas, and mining sectors to publicly report the payments they make to foreign governments. 

The provisions have garnered praise from civil society groups around the world as an historic measure to bring increased stability, accountability, and transparency to a multi-billion dollar, global industry, and similar provisions are now being considered in the European Union.