|New Report Finds Developing Country Governments Lose $100 Billion Annually Due to Trade Mispricing|
February 12, 2010
Monique Perry Danziger, 202-293-0740
Washington, DC -- Developing country treasuries are losing approximately $100 billion dollars every year due to trade mispricing, according to a new report available today from Global Financial Integrity (GFI).
“Every year crime, corruption, and tax evasion drain $1 trillion out of developing countries,” said GFI director Raymond Baker, citing figures from GFI’s 2008 report, “Illicit Financial Flows from Developing Countries 2002—2006.” This report builds on the analysis put forward in our “Illicit Flows” report by more closely examining one particular form of financial outflow – trade mispricing – and showing how it removes money from a developing economy, in this case by depriving the government of tax revenue.”
Report findings include:
“Trade mispricing moves more illicit money across borders than any other single phenomenon,” noted Mr. Baker. “To curtail these tax losses, developing and developed countries alike must work to curb the global shadow financial system that facilitates illicit financial flows.”
Encouraging governments worldwide to take action, GFI recently launched its G20 Transparency Initiative which seeks to build massive grassroots support from around the world for increased transparency and accountability in the global financial system. “The G20 Transparency Campaign seeks to give people around the world the chance to weigh in on a crucial issue at a critical time,” said Baker.