Learn About Illicit Financial Flows
Key Terms

Latest

Oct
21

Money Laundering: Too Important To Leave To The Experts Alone

Max Heywood

Starting tomorrow a group of government officials and experts belonging to the world’s leading anti-money laundering organisation – the Financial Action Task Force (FATF) – will be meeting in Paris. On the agenda is the adoption of a document on an issue that has major implications for the fight against crime, corruption and tax evasion around the world.

It’s a shame nobody outside of this small circle of experts from governments and international organisations has had a chance to see the document before it comes out.

According to the FATF website, at its upcoming plenary meeting the organisation will adopt guidance on beneficial ownership and company transparency.

Beneficial ownership is the term used to describe who actually benefits from the assets and profits of a company. At the moment many countries allow the formation of shell companies with proxy directors which obscure the real (beneficial) owner. When people are allowed to hide their identity behind a shell company in this way, there is a risk of this advantage being used to hide illicit money.

Oct
17

EU Savings Tax Directive to be repealed?

Nicholas Shaxson

The EU Savings Tax Directive (EUSTD) has been the EU’s flagship transparency initiative since its introduction in 2003, and we have written about it on many occasions. It complements another EU transparency scheme called the Directive on Administrative Co-operation, which was beefed up this week, as the Wall St. Journal reported:

“European Union finance ministers agreed Tuesday on a far-reaching crackdown on tax evasion that will bring the bloc’s standards on par with global rules by 2017, although Austria is getting an extra year to build up a data-exchange system with its banks.”

The DAC currently covers only EU Member states, while the EUSTD is extended by agreement to cover also a range of third countries in the EU’s orbit, including Switzerland and a bunch of British (and Dutch) tax havens. Both are systems ofautomatic information exchange (AIE), the new global financial transparency standard which TJN has been fighting for for years but only came into vogue in the past couple of years. The DAC was being beefed up to accommodate the new global Common Reporting Standards (CRS) led by the OECD. The CRS is another AIE system, which we have described as a vast improvement on a bad situation – but it still has various holes.

Oct
13

On the Eve of the Annual Conference

Christian Freymeyer

Untitled-1small

We’ve arrived at the eve of the our annual conference, co-hosted this year in Lima, Peru by FTC member Latin American Network on Debt, Development, and Rights (LATINDAD). While the main conference begins tomorrow, journalists, civil society leaders and researchers are already hard at work. The week began today with a journalist training that included presentations from renowned investigative journalists like Hernán CapielloÁngel Páez, and former Wall Street Journal reporter Glenn Simpson. The training brought together more than 15 journalists from 10 different countries in Latin America to discuss how investigative journalism can be a tool for uncovering illicit financial flows. Alongside the journalist training, members of civil society gathered to discuss illicit flows, corruption, and financial transparency.

As today’s sessions have come to a close, we’re looking forward to the launch of the conference tomorrow. You can view the full agenda for the event here. If you’re unable to join us in Lima, you don’t have to be left out. Follow along and add to the conversation on Twitter using the hashtag #FTC2014Lima and by following @FinTrCo.

Oct
9

Countdown to Lima Conference: Transforming the post-2015 momentum into an enduring fiscal justice movement

Financial Transparency Coalition

Experts, advocates, government officials and journalists from all regions of the globe will be gathering next week in Lima, Peru to scale-up strategic efforts to curb illicit financial flows in ways which ensure sufficient, equitable and accountable financing of sustainable development.

The timing couldn’t be more auspicious. As governments move into the final stages of negotiating a set of new Sustainable Development Goals (SDGs) to replace the Millennium Development Goals after their expiration date next year, this post-2015 momentum represents a once-in-a-generation opportunity to shape the contours of national government priorities, policies and financing decisions in areas from education to ecology, housing to health, climate change to care work. Beyond national commitments, the post-2015 process is also an important strategic opportunity to secure global commitments on tax cooperation in a truly multilateral institution whose reason of being and higher-order imperative—unlike other bodies like the G20—is to promote human rights in development.

Oct
8

Publishing tax breaks and subsidies for corporations – a good idea whose time has come

Nicholas Shaxson

The indefatigable US-based organisation Good Jobs Firsthas sent a fascinating email, which relates to the United States but could have general relevance for other countries. This one is located at the fascinating, busy intersection between tax and transparency.

Oct
8

Countdown to Lima Conference: Tackling some of the biggest problems in the Americas

Max Heywood

There is just a week to go before the start of the Hidden Money, Hidden Resources conference in Lima, organized by the Financial Transparency Coalition and Latindadd, and the agenda covers a number of topics which are highly relevant to the Americas.

The panel I´ve been invited to moderate, for example, will be exploring the links between citizen security, organized crime, corruption and money-laundering. Latin America and the Caribbean as a region has the highest levels of citizen insecurity in the world, and is the only region where criminal violence increased between 2000 and 2010 according to UNDP.

Oct
8

56 reasons why anonymous company ownership is the biggest problem you’ve never heard of

Rosie Sharpe

Anonymous company ownership doesn’t exactly trip off the tongue does it?  Nor is it a phrase that many people have heard of.  But it should be.  Anonymous company ownership is behind much of what is bad in the world.

It’s behind the fraudsters who cheat vulnerable people like the young, the old and the sick out of the resources they need to get by in life.  It’s behind the tax dodgers who don’t pay their fair share towards society.  It’s behind the dishonest public officials who use their positions for personal gain, and the corrupt multinationals that bribe their way into a lucrative contract.  It’s behind the people traffickers who condemn people to lives of modern-day slavery.  It’s even behind the terrorists, drug cartels and mobsters who run criminal enterprises.

Oct
7

PWC report endorses country by country reporting for banks

Nicholas Shaxson

9144964712_3a080060a2_zFrom Euractiv, a statement that would have been unthinkable even just a couple of years ago:

“Publishing turnover, staff numbers, taxes paid and subsidies received in every country banks operate in, could boost competitiveness, increase lending and bolster financial stability, the independent study by auditors PwC will find. It will fight tax evasion and not harm investment or result in excessive compliance costs for banks, the report will say once published.”

This research, carried out for the European Commission as due diligence for the fourth revision of the EU Capital Requirements Directive, is highly welcome, and it comes in the context of a statement by PwC’s chairman, summarised by the FT:

“The chairman of the world’s largest tax practice says tax advice has a moral dimension to it that professional services firms must keep in mind when advising clients.”

Oct
2

London Can’t Afford To Turn a Blind Eye To Corrupt Money

Transparency International

 

8704603297_92b41d11c1_k

This piece is cross-posted from the blog of Transparency International

Boris Johnson’s call for new homes in London to be sold first to Londoners, “not to oligarchs”, made headlines this week.

The Mayor of London making this demand at the Conservative party conference in Birmingham highlights a growing acknowledgement that a vast number of properties in the city are being used as safe investments by the world’s mega-wealthy.  In fact, foreign buyers bought up to 75% of new homes in central London over the past year, and foreign buyers reportedly accounted for 49% of all properties above £1m. £7bn of foreign investment was spent on high-end London homes in 2013.

But what Johnson must consider when addressing the overheated top-end of London’s property market is the ease with which an overseas buyer can invest in a London property using stolen assets – the proceeds of corruption.

Sep
30

How Shell Corporations Undermine Schools in California

Ann Hollingshead

California spends about $8,500 per year to educate its public school students. That’s about $3,300 less than the national average. In fact, according to Education Week in a national ranking of states and D.C., California ranks near the bottom, at 49th, in terms of per-pupil spending. There are reasons to believe that one cause of this problem is the system of property taxation in California—and its loopholes.

The biggest player in property taxation and its policy in California is Proposition 13. Approved by California’s voters in 1978, Proposition 13 sets limits on the annual increases of assessed value of real property by an inflation factor. Proposition 13 also prohibits the government from reassessing a property’s new base year unless that property changes ownership. Broadly speaking, this means that in California, unless you sell your home, your property taxes cannot increase by more than a fixed percentage each year.

In fact, the market value of properties in California has significantly outpaced this fixed percentage, leading to a discrepancy between what Californians would have paid in property taxes without Proposition 13 and what they actually pay.

Sep
30

The “Big Mo” in the Drive to Address Illicit Financial Flows

Tom Cardamone

tomOn September 24th, tucked away in a quiet conference room in the basement of the UN General Assembly building, an extraordinary conversation took place on the future of global development.  But, despite the gathering of representatives from the OECD, UN, World Bank, USAID and the Mexican, Australian, and Nigerian governments, the event received exactly zero media coverage.

Titled “Curbing Illicit Financial Flows for Domestic Resource Mobilization and Sustainable Development in the Post-2015 Era,” the focal point of the two-hour discussion was how the international community could, as the program description put it, “identify concrete international actions needed” to curtail illicit financial flows out of developing country economies.  While other events were given more airtime and other issues may require more immediate attention, some ideas presented at the panel could be transformational in terms of how countries address the scourge of illicit flows and how the development agenda is funded.

Sep
26

Exposed: Illegal gold, trade mis-invoicing and tax fraud in South Africa

Naomi Fowler

A powerful 20 minute film just out from Carte Blanche, a major South African investigative news programme lifts the lid on the country’s illegal mining sector.

The film takes us on a journey where “poor, desperate people” brave gunmen to go underground to look for gold in atrocious conditions. We witness illegal gold trades by a headteacher on his own school grounds during school hours and hear from gold traders making 10 million rand a month (about $900,000).

The film shows us the “new randlords” and organised crime syndicates who rake in billions buying black market gold. But the value of this gold is only part of the story. The real money-spinner from this activity is a massive tax fraud.

Pg 1 of 268 1234...1020...Last