In its list of Most Influential People this year, TIME magazine called Pope Francis a “moral leader in word and deed.” In the commentary on this accolade, President Obama said this of the pope: “His Holiness has moved us with his message of inclusion, especially for the poor, the marginalized and the outcast. But it […]
Are you an ambitious journalist in Africa with an interest in probing illicit finance, money laundering, and tax related abuses? Or, perhaps, you represent an outstanding, independent media organization based in Africa with a desire and reputation for exposing financial crime and corruption?
Either way, the Thomson Reuters Foundation is launching a new three-year program assisting African media on the reporting of illicit finance and tax abuse, and they are hoping that you will apply.
Last week, the International Consortium of Investigative Journalists (ICIJ) announced that it had received troves of data on a number of wealthy UK individuals that held money in an offshore bank in the Channel Isles, a British crown dependency and well known tax haven.
The ICIJ, along with The Guardian newspaper, dissected the documents, and released a number of stories outlining some of their findings. One of the more interesting tax arrangements uncovered seems to be that of the owners of Nando’s, the worldwide restaurant chain famous for its chicken dishes.
Late last year, David Cameron announced that the UK would put the names of the people who own and control British companies into the public domain – something that we at Global Witness have long been campaigning for, alongside other NGOs such as ONE and Christian Aid. Such transparency is important because it’s well known that people who want to hide dirty money use the anonymity provided by companies to do so. There are plenty of examples of British companies being abused in this way.
Bitcoin can be sent from anywhere to anywhere at a very low cost, while simultaneously keeping a user’s identity hidden. This all sounds convenient for online payments, but without proper regulations, the use of crypto-currency could easily lead to tax evasion.
Bitcoin was launched in 2009, as the world’s first crypto-currency. Satoshi Nakamoto, a pseudonym for the unknown person or group of people responsible, created the revolutionary currency. One key feature of Bitcoin is its decentralized nature, which doesn’t require regulators or bankers, resulting in low transaction costs. However, this also poses severe challenges for revenue authorities trying to trace and tax the digital currency.
In late June, we met with members of the Tax Justice Network Africa (TJN-A) and the Africa International Trade Union Confederation (Africa ITUC) for a training and strategy session in Naivasha, a town northwest of Nairobi. The goal of the event was to bring people together to discuss and analyze the problem of illicit financial flows and the lack of transparency, particularly within the extractive sector.
It wasn’t long after we left the city limits of Nairobi that the landscape changed dramatically, quickly shifting from shopping malls and apartment complexes to dirt roads and shacks. The drive, which should only take about an hour, took twice as long because the roads aren’t build to sufficiently accommodate the regular traffic from tourists, vacationers, and large trucks.
For about five years now, nations around the world have called on Switzerland to change its secret ways. Over these years Switzerland’s banks, which hold nearly one-third of the estimated $7 trillion in global wealth kept offshore, have borne much of the brunt of the U.S. Department of Justice’s campaign against banks facilitating tax evasion by American citizens. Other nations, such as India, have also followed suit. And although Switzerland has attempted to cultivate an image of international cooperation – the reality of Swiss banking secrecy has been more of the same.
For the purposes of outward appearances, at least, Switzerland has caved to some of the international pressure. After much debate in 2009, Switzerland surprised the world when, at the last moment, it decided not to step in and forbid banking giant UBS from handing over the names of tax-evading Americans to the Internal Revenue Service. In 2012 Switzerland began making overtures toward cooperation when it agreed to make anonymous advance payments to German tax authorities for undeclared money. In 2013 Switzerland joined the OECD’s Multilateral Convention on Mutual Administrative Assistance on Tax Matters. Under this agreement, participants must aid each other in tax collection efforts, and the agreement also includes some provisions on automatic exchange of financial information.
While these public agreements and appearances represent, in many ways, a new voice for this nation, for all practical purposes they do not represent a shift from the status quo.
The International Consortium of Investigative Journalists (ICIJ) and The Guardian have received troves of documents exposing the offshore banking activities of thousands of wealthy individuals. The information, which was leaked to the ICIJ, highlights the activities of a major private bank in the Channel Islands, a British crown dependency.
According to ICIJ, the list of clients includes “donors to the British government, which has been outspoken against tax havens, and some of the most prominent people in British life.”
While Brazil is the only member of the BRICS (Brazil, Russia, Indian, China, South Africa) bloc still alive in this year’s World Cup, members from all five nations will reconvene on the Brazilian town of Fortaleza, just days after the tournament’s conclusion.
The 2013 BRICS Summit, held in South Africa, reaffirmed the group’s commitment to economic development and stability. Ahead of this year’s summit, which will be held July 15-17, the FTC offered a submission to the group on how and why financial transparency issues are vital to BRICS’ agenda.
You can read the full submission here.
In March, we released the first edition of the newly-reinstated FTC Newsletter. The aim of the document is to help inform journalists, allied organizations, governments, and the general public on the work we’re doing, as well as the progress made on our policy issues.
We’ve now released the second edition, which covers our work from April to June.
In the process to revise Europe’s 4th Anti-Money Laundering Directive (AMLD), European Parliament voted overwhelmingly to approve the creation of public registers of information on the real owners of companies, trusts, and other legal entities in the EU. Public registers of the beneficial owners (real owners), would help greatly in the fight against corruption, trafficking, tax evasion, and other types of illicit financial flows that are perpetrated with the help of anonymous companies with hidden ownership.
However, the European Parliament’s input is only one piece of the puzzle.
Since February of last year, the European Union has made money laundering and terrorist financing a central focus. In reviewing and updating the third Anti-Money Laundering Directive (AMLD), the European Union has tried to target the process by which criminal proceeds and illicit funds are moved throughout the continent and beyond.
We’ve been following their progress closely, and have advocated for sensible reform to allow the EU to set the standard on anti-money laundering. But to be the standard-bearer on financial transparency, EU decision-makers must regulate the anonymous legal entities that help hide the identity of criminal and corrupt individuals. Right now, it’s still too easy to get away with shady deals.