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US$400 Billion Smuggled into China from Hong Kong through Trade Misinvoicing Since 2006

Fraudulent Trade Misinvoicing Fueling Currency and Housing Speculation within the Country


January 7, 2014
Clark Gascoigne, +1 202 293 0740 x222


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.


The Chinese government has expressed concern that illicit inflows aimed at circumventing capital controls are fueling currency and housing speculation in the country.  Mr. LeBlanc—utilizing official trade data from the IMF and the Hong Kong Customs and Excise Department—finds that US$101 billion was illicitly smuggled into China via export over-invoicing in 2012, with an additional US$54 billion flowing in illegally in just the first quarter of 2013. Total illicit inflows via trade misinvoicing dating back to 2006 are pegged at a massive US$400 billion.  GFI believes these are the first public estimates of the amount of illicit money flowing into China from Hong Kong.


Landmark OECD Report Finds Rich Countries Failing to Effectively Tackle Illicit Financial Flows

OECD Member Countries Not Compliant with International Standards for Fighting Money Laundering, Tax Evasion, and Corruption


Report from Intergovernmental Body Published 1 Week after GFI Study Found Developing World Lost Nearly $1 Trillion in Illicit Outflows in 2011


December 18, 2013
Clark Gascoigne, +1 202 293 0740 x222


WASHINGTON, DC – A landmark report published today by the Paris-based Organization for Economic Co-operation and Development (OECD) takes its members—some of the richest countries in the world—to task for failing to implement policies to curtail illicit financial flows in the developing world.  The OECD study—which was quietly posted on the multilateral institution’s website this morning—comes just one week after Global Financial Integrity (GFI) released its annual update on illicit financial outflows from the developing world, finding that the world’s poorest countries lost nearly US$946.7 billion in illegal capital flight in 2011, a 13.7 percent rise from the year before.


“Illicit financial flows drained nearly US$1 trillion from the developing world in 2011, and it’s clear that the richest countries in the world bear a lot of responsibility for this,” said GFI President Raymond Baker, a longtime authority on financial crime. “We are thrilled that the OECD is focusing attention on illicit flows.  When I launched GFI in 2006, the OECD wouldn’t touch this issue with a ten-foot pole.  We’ve made a lot of progress since then.”


Study Finds Crime, Corruption, Tax Evasion Drained $946.7bn from Developing Countries in 2011

Illicit Financial Outflows from Developing World Up 13.7% from 2010

Nearly $6 Trillion Stolen from Developing Countries in Decade between 2002 and 2011

China, Russia, Mexico, Malaysia, India—in Declining Order—are Biggest Exporters of Illicit Capital over Decade; Sub-Saharan Africa Suffers Biggest Illicit Outflows as Percent of GDP

Study Is First GFI Analysis to Incorporate Re-Exporting Data from Hong Kong and First GFI Report to Utilize Disaggregated Trade Data in Methodology

December 11, 2013
Clark Gascoigne, +1 202 293 0740 x222

WASHINGTON, DC – Crime, corruption, and tax evasion drained US$946.7 billion from the developing world in 2011, up more than 13.7 percent from 2010—when illicit financial outflows totaled US$832.4 billion.  The findings—which peg cumulative illicit financial outflows from developing countries at US$5.9 trillion between 2002 and 2011—are part of a new study published today by Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization.

The report, “Illicit Financial Flows from Developing Countries: 2002-2011,” [ PDF | HTML ] is GFI’s 2013 annual update on the amount of money flowing out of developing economies as a result of crime, corruption and tax evasion, and it is the first of GFI’s reports to include data for the year 2011.

On International Anti-Corruption Day, GFI Reviews Major Developments from 2013

December 9, 2013
Clark Gascoigne, +1 202 293 0740 x222
E.J. Fagan, +1 202 2093 0740 x227


WASHINGTON, DC – As the world commemorates International Anti-Corruption Day on Monday, December 9, 2013, Global Financial Integrity (GFI)—a Washington-based, non-profit research and advocacy organization—reviewed many of the most notable achievements, developments, and shortcomings in fighting corruption and illicit financial flows for 2013.


“2013 has proven to be a landmark year in terms of policy advancements to curtail corruption and illicit financial flows,” said GFI President Raymond Baker, a longtime authority on financial crime. “Years of hard work by policymakers, researchers, and advocates culminated in real, on-the-ground policy achievements that will directly impact the amount of money leaving developing countries. We saw a few setbacks, but overall the year was very encouraging.”


International Action Leads to Multilateral Automatic Exchange of Tax Information


At the G20 St. Petersburg Summit in September, leaders of the world’s largest economies for the first time committed to automatically exchange tax information with each other by the end of 2015.


Illicit Financial Flows in Africa Pushing Billions of Dollars Away from Continent

Recent Study Shows Integrity Institutions Lack Effectiveness in Controlling Looting of Wealth


December 8, 2013
Amanda Fortier, +221 77 644 5186
Ibrahima Aidara, +221 77 645 6928
Clark Gascoigne, +1 202 293-0740 ext 222


DAKAR, Senegal – Economies in Africa have lost between $597 billion and $1.4 trillion in net resource transfers in the past three decades, despite the growth in integrity institutions on the continent, according to a recent study conducted by Global Financial Integrity (GFI).  Illicit financial flows are the topic of a two-day forum organized by the Open Society Initiative for West Africa (OSIWA) and TrustAfrica on December 9th and 10th, at Terrou Bi Hotel in Dakar, Senegal.


“While most development observers acknowledged that Africa is rising, at the same time, there is a growing challenge to retain the wealth created within the continent and to benefit to its citizens,” says Abdul Tejan-Cole, Executive Director of OSIWA.


Global Financial Integrity Remembers Nelson Mandela

The Right Leader for South Africa—and the World—at the Right Time

December 6, 2013
Clark Gascoigne, +1 202 293-0740 ext 222

WASHINGTON DC – Global Financial Integrity today mourned the passing of civil rights leader and former South African President Nelson Mandela, who died yesterday at his home in South Africa at the age of 95. Global Financial Integrity expressed sympathy for the people of South Africa for losing an iconic leader.

After nearly three decades of imprisonment, Mandela was freed in 1990. He publicly responded with a message of reconciliation, rather than vengeance, and helped unite South Africa after the end of apartheid. Later, Mandela was elected as the first black President of South Africa, and pursued an agenda of social welfare and inclusion.


GFI Applauds David Cameron’s Historic Move to Establish Public Registries of UK Corporations

New UK Public Registries to Become the Gold Standard to Combat Illicit Financial Flows

President Obama Ought Follow Cameron’s Leadership

October 31, 2013
E.J. Fagan, +1 202 293-0740 ext 227

WASHINGTON DC – Prime Minister David Cameron announced today that the United Kingdom plans to create a central public registry of corporate beneficial ownership information, and called on other countries to join the United Kingdom by establishing their own public registries.

Heather Lowe, Director of Government Affairs at Global Financial Integrity, praised the historic move, “David Cameron is proving to be the true global leader on tackling the kind of financial opacity that has stymied growth in developed and developing nations alike. Today’s announcement that the United Kingdom will not only be the first nation to collect information on who owns and controls the companies created in the UK, but that the information will be available to the public is truly groundbreaking.”


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