Illicit Financial Outflows Average Over 5% of GDP, Driven by Underground Economy, Spiked in Wake of NAFTA

Study Recommends Policies Be Implemented to Address Trade Mispricing, Money Laundering, Tax Evasion

January 29, 2012
Clark Gascoigne,+1 202 293 0740 x222 

MEXICO CITY / WASHINGTON, DC – Crime, corruption and tax evasion cost the Mexican economy US$872 billion between 1970 and 2010 according to a new report from Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization. The illicit financial outflows, which averaged a massive 5.2% of GDP, grew significantly over the 41-year period studied from just US$1 billion in 1970 to US$68.5 billion in 2010.

“This is a devastatingly large amount of money for any developing country to lose,” said Raymond W. Baker, director of GFI. “$872 billion is gone, which could have been used to develop the Mexican economy, to invest in education, to build roads, or to fight the drug cartels. The negative ramifications are huge for everyday Mexicans.”

The study, which was authored by Dr. Dev Kar, GFI lead economist, saw illicit outflows explode from an annual average of US$3.0 billion in the 1970s, to US$10.4 billion in the 1980s, to US$17.4 billion in the 1990s, and US$49.6 billion in the decade ending 2009.

January 26, 2011

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

Event Advisory

Mexico City Press Briefing:
New Report on Illicit Financial Flows out of Mexico

Study Tracks Money Lost to Crime, Corruption, Tax Evasion

What: Press Conference
Time: 11:00am Local Time
Date: Monday, January 30, 2012
Room: Doña Sol
Venue: Hilton Mexico City Reforma Hotel (Map/Directions)
Where: Mexico City, Mexico

On Monday, January 30, 2012, Global Financial Integrity, a research and advocacy organization based in Washington, DC, will be releasing a study on illicit financial flows out of Mexico.  The report, “Mexico: Illicit Financial Flows, Macroeconomic Imbalances, and the Underground Economy,” measures and tracks the amount of illicit money (the proceeds of crime, corruption, and tax evasion) that left the country illegally over the 41 years between 1970 and 2010.

Proposals to Amend Foreign Bribery Law Could Significantly Undermine Human Rights, Commerce, U.S. Standing in the World

January 12, 2012
Clark Gascoigne, +1 202-293-0740 ext.222
Stefanie Ostfeld, +1 202-621-6674

WASHINGTON, DC – Earlier today more than 30 civil society and business groups, including human rights and anticorruption organizations, sent a letter to every member of the U.S. House of Representatives and U.S. Senate expressing their opposition to any efforts to amend the world’s flagship anticorruption legislation, the U.S. Foreign Corrupt Practices Act (FCPA).

The signatories, who include, among others¹, Amnesty International, Calvert Investments, Citizens for Responsibility and Ethics in Washington, EarthRights International, Global Financial Integrity, Global Witness, Human Rights Watch, International Corporate Accountability Roundtable, Jubilee USA Network, Open Society Policy Center, Oxfam America, Revenue Watch Institute and Transparency International-USA are concerned that Members of Congress in both the House and Senate are considering introducing legislation that would weaken the decades old law.

The organizations stated in their correspondence that any narrowing of the law, which serves as the model for other international anticorruption conventions and foreign anticorruption laws, would have a negative effect on global commerce, human rights, and the standing of the U.S. in the world.