Learn About Illicit Financial Flows
Key Terms

Latest

May
29

Announcing the Financial Transparency Coalition

Porter McConnell

When the Task Force on Financial Integrity and Economic Development was created in 2009, only a handful of experts were following the issue of illicit financial flows. The subject was decipherable only to finance professionals taking advantage of tax havens, and a handful of civil society groups and finance journalists. Meanwhile, each year nearly a trillion dollars was being secreted out of developing countries, robbing them of revenue needed to build better lives for their citizens.

Over the last four years, a growing number of policymakers and citizens have begun to take heed. What good is pouring money into foreign assistance when ten times that amount leaves developing countries in corruption, crime, and corporate tax evasion, often arriving right back in rich country bank accounts? Meanwhile, activists in developing countries are pushing back against austerity, and demanding that foreign investors in oil, gas and mining and local elites pay their fair share.

Today, illicit financial flows are front page news:

These are exciting times, and we are changing with them:

As of today, we are changing our name to the Financial Transparency Coalition. We are a global group of experts, activists, and governments working together to blow away the smokescreen of financial secrecy and to build a more transparent financial system that works for everyone. It’s a simple premise, and it demands a simple name.

Continue Reading »

News
May
29

Taxcast: May 2013 Edition

Taxcast by Tax Justice Network

In the May 2013 Taxcast: Google and Apple are forced to defend their tax affairs in public, how anti-EU sentiment serves offshore interests and the Taxcast looks at tax havens and the arms trade: how secrecy kills. The Lord of War makes an appearance.

Continue Reading »

May
29

ONE Campaign’s 2013 Data Report: Financing the Fight for Africa’s Transformation

Ben Leo

Cross posted from ONE Campaign.

With less than 1,000 days to go until the deadline of the Millennium Development Goals (MDGs), ONE’s flagship DATA Report has a special focus in 2013, tracking how developing countries are progressing on these ambitious targets using the ‘MDG Progress Index’.   The 2013 DATA Report: Financing the Fight for Africa’s Transformation also measures how sub-Saharan African governments are faring against their own spending commitments in three poverty-busting sectors: health, agriculture and education. Finally, it offers recommendations for how the global community can intensify its efforts in a sprint to the MDG finish line.

We’ve uncovered remarkable progress:

  • There are 10 sub-Saharan African MDG ‘trailblazers’ and dozens of countries have improved their performance.
  • Sub-Saharan African resource flows have quadrupled since 2000, including domestic government expenditures, which account for almost 80% of all available finance. Domestic revenues, foreign investment, donor assistance and remittances are all playing an important role in boosting growth and development.
  • Countries that allocate more of their budget to health, agriculture and education are, on average, progressing faster on the MDGs. For example, over the last decade, Burkina Faso spent a whopping 52% of its national budget on these three sectors and is currently on track to achieve four MDG targets (out of eight) and partially on track for another two.

But here’s the bad news:

  • Some countries are falling behind on the MDG targets and slowing down regional progress. Nine of the fourteen global ‘laggard’ countries are in sub-Saharan Africa.
  • African governments are falling far short of their own spending targets, and this has very real consequences. Take a large country such as Nigeria, which alone accounts for 11% of annual child deaths – if it were to meet its health spending commitment over the next three years, the additional resources could amount to $22.5 billion. This could pay for vaccinations for every single child, anti-malarial bed nets for every citizen, and treatment for every HIV-positive person, saving millions of lives.
  • Many donors are also off track in delivering on their promises, such as reaching aid levels of 0.7% of GNI by 2015 and delivering half of those increases to Africa. While aid flows rose dramatically from 2000 to 2010, we have now seen two consecutive years of decline, and, shockingly, sub-Saharan Africa is bearing the brunt of these cuts.

Sub-Saharan African governments and donors must urgently step up to meet their promises. Smart aid investments make a huge difference to the lives of the world’s poorest people, and donors should prioritise funding to mechanisms that best serve the MDGs, such as the Global Fund, the World Bank’s International Development Agency and the African Development Fund; all of which have important replenishments this year.

Continue Reading »

Press Releases
May
28

New AfDB-GFI Joint Report: Africa A Net Creditor To The Rest Of The World

EJ Fagan

MARRAKECH, MOROCCO / WASHINGTON, DC – A new joint report by the African Development Bank (AfDB) and Global Financial Integrity (GFI), launched Wednesday at the 48th AfDB Annual Meetings in Marrakech, Morocco, reveals that the African continent has been a long-term net creditor to the rest of the world. The report [ HTML | PDF - 4.2 MB ] finds that Africa suffered between US$597 billion and US$1.4 trillion in net outflows between 1980 and 2009 after adjusting net recorded transfers for illicit financial outflows.

Continue Reading »

News
May
24

Video: TJN’s John Christensen discusses “The Finance Curse” on France24

EJ Fagan

Continue Reading »

Press Releases
May
21

EU Leaders Must End Financial Secrecy

Transparency International

BRUSSELS - EU leaders meeting tomorrow have an opportunity to end the financial secrecy that facilitates corruption and tax evasion. As many cases of proven corruption have shown, anonymous shell companies and other opaque legal structures based in secrecy jurisdictions are the favoured vehicles to hide illicit financial gain. Finding out who ultimately profits from these legal structures – the question of beneficial ownership – is central to efforts to close down this avenue for ill-gotten gain.

Continue Reading »

May
21

Job Posting: EU Advocacy Lead of The Financial Transparency Coalition

Financial Transparency Coalition

Do you care about stamping out corruption, money laundering and tax dodging? The Financial Transparency Coalition (formerly the Task Force on Financial Integrity and Economic Development) is looking for a dynamic individual, with a proven track record of achieving policy change, and ‘intelligence’ of the EU/Brussels environment and structure. This is an exciting opportunity to lead EU advocacy on an influential advocacy campaign to curb illicit financial flows. Further information about the Coalition can be found at www.financialtransparency.org

The next 18 months present important opportunities to influence EU legislation: The EU is now in a process to update its anti-money laundering directive, including by taking steps to increase transparency over the ownership of companies. Moreover the European Commission has launched an action plan to crack down on tax evasion and avoidance. There is also movement on the long stalled revision to the savings tax directive, which provides an opportunity to push for further steps automatic exchange of information.

This position involves leading the Coalition’s advocacy towards the EU. The successful candidate will lead an advocacy campaign towards the European Union’s review of the Anti-Money Laundering Directive (75%), and the Coalition’s advocacy towards the EU on other Coalition related areas (25%)

Key responsibilities:

  • Carry out advocacy towards the EU institutions to influence the Anti-Money Laundering Directive
  • Develop and maintain relationships with key European Commission staff, Cabinet members, Members of the European Parliament and Permanent Representative offices, NGOs, journalists and other private sector stakeholders relevant to the success of the campaign
  • Coordinate a NGO coalition working to influence the Anti-Money Laundering Directive
  • Revise and lead the implementation of the coalition’s advocacy strategy
  • Energise and coordinate  strategic thinking  on automatic information exchange (AIE),
  • Develop an AIE action plan, including identifying realistic targets and key ‘actors’ to help drive the  work forward
  • Prepare advocacy notes and frequent updates for coalition members
  • Write compelling advocacy materials for lobbying and the media
  • Be prepared to travel on short notice, if necessary
  • Other activities that are required to fulfil the role 

Continue Reading »

News
May
20

Infographic: Tax Havens Of The Wealthy And Powerful

EJ Fagan

Below the jump: a fantastic infographic on how money is hidden by large U.S. corporations in tax havens. Definitely worth clicking a “read more.”

Continue Reading »

May
20

A New Perspective On The Problem Of Global Hunger

Ann Hollingshead
swdsd

flickr / chadskeers

The solutions to problems are often implicit in the way they are framed. If I tell you my car won’t start, you might tell me to consult a mechanic. If, on the other hand, I tell you I can’t find my keys, well, we have a completely different problem. In public policy, frames can often conflate symptoms with causes, other times, such as with the example I gave, they just obscure a possible solution.

But frames turn out to be fundamentally important to the problems’ solutions. As Albert Einstein once said, “If I had an hour to solve a problem and my life depended on the solution, I would spend the first fifty-five minutes determining the proper question to ask, for once I know the proper question, I could solve the problem in less than five minutes.”

As a report recently released by Christian Aid shows, this is the case with world hunger. One of every eight people in the world—that’s nearly 868 million people—are hungry. This number has come down a bit over the last few years, down from a high of 1.02 billion in 2009 and 925 million in 2010. Of course, we’re still a long way off from meeting the United Nation’s 2001 Millennium Development Goal of eradicating hunger. Specifically, the organization hoped—and still hopes—to halve, between 1990 and 2015, the number of people who suffer from hunger.

Depending on how you frame the question of world hunger you might get a different answer. For example, you might say flood and droughts ruin crops and lead to shortages of food in many parts of the world and that, with climate change, these problems will get worse. Well then, I might reply that we need to address carbon emissions (in the long-term) and improve barriers to trade in food commodities between regions in the short. Suppose, on the other hand, you told me that subsidies for biofuels have encouraged the proliferation of large-scale cash-crop plantations, pushing small-scale farmers off the land, and pushed up the prices of important dietary grains. Well then I might respond we need to rethink our subsidy schemes. We could also address investments in farmers, conflicts, corruption, and women’s cooperatives, and food aid. Each frame would have a different solution.

Continue Reading »

Reports/Studies
May
20

Anonymous companies: A Global Witness briefing

Global Witness PDF

Money launderers, corrupt politicians, terrorists, arms traffickers, drug smugglers, and tax evaders all rely on two things to move their dirty money: company structures that allow them to hide their identity, and banks and other professionals willing to do business with them. Both are all-too available.

This Global Witness briefing explains the problem of hidden company ownership, the ease with which the corrupt can set up anonymous companies and trusts, and how this is a major barrier in the fight against poverty. With this issue quickly rising up the political agenda, this briefing also explains what can be done to combat this problem.

Continue Reading »

May
6

Kofi Annan: Imagine an African continent, where leaders use mineral wealth wisely

EJ Fagan

Former United Nations Secretary General Kofi Annan released a statement late last week, in advance of the Africa Progress Panel’s May 10th report, Equity in Extractives. The statement is short, but sweet:

“Imagine an African continent, where leaders use mineral wealth wisely to fund better health, education, energy, and infrastructure too. Africa, our continent has oil, gas, platinum, diamonds, cobalt, copper, and more. If we use these resources wisely, they will improve the lives of millions of Africans. If we don’t, they can fuel corruption, conflict, and social instability. Transparency and accountability are key. The US and Europe are demanding new transparency from companies who work in Africa. We must also take responsibility. Our governments may have become more open. Big businesses may have improved their ways of working.

But we — Africans –must do so much more. This issue is too big for the politicians and big business to manage without the involvement of civil society. I’m Kofi Annan, former Secretary-General of the United Nations and Chair of the Africa Progress Panel. Work with me to demand more transparency from Africa’s national leaders and foreign investors. What are they doing? How much is it worth? And how will the money be spent? Because this is our continent, our minerals, our children’s and grandchildren’s future.”

 

Continue Reading »

May
3

New draft paper: Emerging Countries and the Taxation of Offshore Accounts

Nicholas Shaxson

Cross-posted from the TJN blog

flickr / Images of Money

Last year Itai Grinberg, Associate Professor at Georgetown University Law Center in the U.S., published an important paper entitled Beyond FATCA: An Evolutionary Moment for the International Tax System, providing a comprehensive overview of the emerging international architecture of financial transparency, with different models of information exchange (see below) jostling for supremacy.

It is a most useful paper which remains relevant for analysing the rapid changes that are now underway.

Now Grinberg has a new draft working paper available entitled Emerging Countries and the Taxation of Offshore Accounts, which provides further illumination. There’s far too much in here for us to summarise comprehensively, so we’ll just pick out a few points that catch our attention. The abstract begins:

“A new international regime in which financial institutions function as cross- border tax intermediaries is emerging. The contours of that regime will be established during a narrow window of opportunity over the span of the next few years. The resulting regime will have especially important consequences for emerging countries. A uniform, multilateral automatic information exchange system would improve both these jurisdictions’ ability to tax the offshore accounts of their residents and their capacity to tax certain domestic-source income from capital.”

Clearly, these are all issues that are dear to our hearts.

The paper skips through a recent history of information exchange, with a look at the four models. The first is the OECD’s original, only slightly better than useless, “on request” information exchange model. Next comes the gold standard principle, automatic information exchange, which is currently in the ascendant partly due to the political muscle of the United States and the European Union. The U.S. and the EU each have major systems for automatic information exchange systems up and running and in the process of expansion and improvement.

The core U.S. process is FATCA, which recruits financial institutions to find out the relevant information about beneficial owners. Potentially, financial institutions a going to ferret out hidden assets wherever in the world they are held, and we think this a highly effective broad principle. It is currently mostly a unilateral system, but we are now seeing the first steps towards a broader and more multilateral framework, with the U.S. reciprocating with other changes.

Continue Reading »

Pg 20 of 180 First...10...19202122...3040...Last
Latest Press Releases

Press Release: No Role for Public Scrutiny in OECD Plan to Curb Corporate Tax Dodging

Financial Transparency Coalition · September 16, 2014

WASHINGTON, D.C. — The Organization for Economic Cooperation and Development’s (OECD) new recommendations to fight multinational corporate tax avoidance look robust from ...

US$401.6 Billion Flowed Illegally out of Brazil from 1960 to 2012, Finds New GFI Report

Global Financial Integrity · September 8, 2014

RIO DE JANEIRO, Brazil / WASHINGTON, DC – More than US$400 billion flowed illegally out of Brazil between 1960 and 2012— draining domestic ...

New Standard Chartered Settlement Underscores Insufficiency of Fines & Monitoring in Deterring Illicit Activity at International Banks

Global Financial Integrity · August 20, 2014

WASHINGTON, DC – As New York regulators announced that British bank Standard Chartered ...