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Nov
14

Monday’s Daily News Digest

Nathan Williams

Grand Theft
The Southern Times, November 14, 2011

The corruption risk for governance and business
livemint.com, November 12, 2011

Advani starts jan chenta yatra in Punjab on high note but loses sheen midway
The Times of India, November 13, 2011

Credit Suisse released 130 US client files: report
AFP, November 14, 2011

Banking on not getting sanctioned
Now Lebanon, November 12, 2011

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Nov
11

Friday’s Daily News Digest

Nathan Williams

US SEC OKs tougher reverse merger listing rules
Reuters, November 9, 2011

Siemens Charged With Bribery In Turkey
The Wall Street Journal (blog), November 10, 2011

EU Transparency rules: needed in all sectors
EURODAD, November 10, 2011

Swiss May Discipline Four Banks For Poor Due Diligence
The Wall Street Journal (blog), November 10, 2011

G20 action on tax and development: A progress report card
EURODAD, November 9, 2011

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Nov
10

Facts and Logic v. Senator McCain’s Gut

Ann Hollingshead
John McCain

Travlr/Flickr*

This entire blog post is devoted to three sentences that came out of Senator John McCain’s mouth on Tuesday. “A whole blog post for three sentences?” You might ask. Well, yes. Those sentences were just that shocking. But before I get down to exactly what Mr. McCain said here’s a little background.

In 2004 Congress passed the Homeland Investment Act, which provided a one-time tax holiday for the U.S. multinationals to repatriate foreign earnings. Normally, when companies bring back profits that are earned abroad, they are taxed at the standard 35% corporate tax rate. The Act allowed those companies to bring back their profits—one time only—at a 5% rate. The legislation even specified that the funds should be “earmarked for activities like hiring workers or conducting research” to prevent the companies from using the money for executive compensation or buying back stock.” Proponents argued the funds would generate jobs and other economic activity as companies took advantage of the tax break and brought dollars back to American soil.

It didn’t work.

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Nov
10

Thursday’s Daily News Digest

Nathan Williams

Would IRS rule prompt foreigners to yank billions from Florida banks?
Orlando Sentinel, November 8, 2011

Why Ethiopians must unite (Part IV)
AbugidaInfo.com, November 9, 2011

Olympus Hid Investing Losses in Big Merger Payout
The New York Times, November 7, 2011

Oldest Swiss private bank to offer U.S. client names
Reuters, November 9, 2011

French President names Botswana as tax haven
The Botswana Gazette, November 9, 2011

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Nov
9

EU Transparency Rules: Needed in All Sectors

Alex Marriage

flickr / ines saraiva

The European Commission released a proposal for country-by-country reporting on 25 October, this will help to address corruption surrounding extractive industries and logging. However this will not address the larger problem of tax dodging which is prevalent in these industries and widespread in all other sectors. European parliamentarians and member states could improve the proposal so that tax issues in all sectors are covered.

This is a very valuable reform which will help people in resource rich countries get a better deal for their resources from companies and their own governments. This would not have been possible, without the landmark Dodd Frank act in the USA. Positively this proposal goes beyond Dodd Frank, most notably large private companies will be covered (both listed and non listed) and the forestry sector, where corruption, human rights and environmental abuse are prevalent is included. Revenue Watch argued that this proposal will hopefully make US regulators see that Dodd Frank should be viewed as just a starting point, in the drive for transparency, which should apply to corporations as well as governments. The EU standards are weaker than Dodd Frank in some areas, for example they allows exemptions where host country laws prohibit disclosure of the information, such laws might proliferate if the bill is introduced.

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Nov
8

India: A Leader Ahead of its Time

Ann Hollingshead

About two weeks ago, I wrote about the “upward trajectory” of India’s stance on black money and transparency in international finance. I predicted that the country (eventually) would become a leader in this arena.

In case you’ve missed India’s catapult into this discussion, here’s the background.

In April of 2009, after becoming very upset by the evidence there are rivers of ‘black money’ flowing out of India, the president of the Bharatiya Janata Party (BJP), Rajnath Singh, told voters that if they elected his party into office he would, within 100 days, “bring back all the black money stashed in foreign banks and distribute [it] among ‘the common poor people.’” As we know, the BJP did not come to power inIndia in 2009 so fortunately for Rajnath Singh, his party never needed to prove this monumental task was possible. It’s not, by the way.

In the last two years there has been relentless pressure from Indian citizens and politicians on President Manomohan Singh to “bring it back;” a phrase which has become something of a common term in the world’s largest democracy. Unfortunately for India, this has proven to be a monumental—make that impossible—task.

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Nov
8

What International Pressure Can Do – Switzerland Edition

EJ Fagan

The hook from a story published by SwissInfo today:

The global pressure on Switzerland to cede further concessions in a tax evasion row is showing no signs of relenting after comments last week at the G20 summit.

French President Nicolas Sarkozy called on Switzerland and ten other so-called tax havens to be “excluded from the international community” for refusing to sign up to an automatic exchange of information agreement.

Switzerland is currently playing a game of chess with various other countries in an effort to manoeuvre itself through a global minefield of criticism and clear its reputation as a responsible international financial centre.

What did Credit Suisse do today? They announced to U.S. clients suspected of tax evasion that they would be handing information over to the IRS. Clients must either voluntarily allow the information to be sent to the IRS or hire a Swiss layer and contest the action. It is a huge victory for the United States, and a major blow to Swiss banking secrecy. Credit Suisse is the second-largest bank in Switzerland.

I’m very happy that the IRS is going to be able to track tax evasion, recover tax dollars, and maybe even find some justice for U.S. taxpayers. International pressure works – who thought a few years ago that the Switzerland would force its banks to give this kind of information to the United States?

What we shouldn’t mistake this for is a major victory for the developing world, at least for now. It’s great that the largest and most powerful economy in the world can penetrate the legendary banking secrecy of Switzerland and recover a few dollars stashed away, but the rest of the world needs access to that information as well. The United States demonstrated that international pressure can work to open up secrecy juridictions, but we’re going to need a whole lot more international pressure to make a real dent in poverty and create an equitable international finance system for the developing world.

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Nov
8

Misha Glenny, the Greek Oligarchs and the Offshore Laundry

Nicholas Shaxson

From the Tax Justice Network blog:

Misha Glenny has a good article in the FT today:

As the new Greek government struggles to convince Europe of its resolve to cut the country’s bloated public sector, it also has to decide whether to face down the real domestic threat to Greece’s stability: the network of oligarch families who control large parts of the Greek business, the financial sector, the media and, indeed, politicians.

The oligarchs have responded predictably: by accelerating their exports of cash. In the last year, the London property market alone has reported a surge of Greek money. And then there’s this, of course, not strictly a core tax justice issue, but these things are all intertwined:

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Nov
8

Tuesday’s Daily News Digest

Nathan Williams

Advani continues to target Congress on black money issue
News Track India, November 8, 2011

UPA must release white paper on black money: Advani
Times of India, November 8, 2011

Exclusive: Credit Suisse will disclose names of U.S. clients
Reuters, November 8, 2011

Money launderers pose national threat
The Sydney Morning Herald, November 7, 2011

Swiss tax evasion storm refuses to clear
Swissinfo.ch, November 8, 2011

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Nov
7

Civil Society Groups Take Aim At Corporate Bribe Payers And Tax Dodgers

Nathan Williams
Protester holds sign containing figures from a recent report

ProgressOhio/Flickr

Two prominent advocacy groups have released major reports last week exposing unsettling truths about bribery and tax dodging schemes among large corporations in the United States and around the world.  Berlin-based Transparency International published its annual Bribe Payers Index on Tuesday, ranking 28 countries on the perceived likelihood of bribery within their companies, followed only days later by the Corporate Tax Payers & Corporate Tax Dodgers 2008-2010 report by Citizens for Tax Justice and the Institute on Taxation and Economic Policy.

These reports might come as a windfall for Occupy demonstrators who have ramped up the scope of their protests by shutting down the nation’s fifth busiest port in Oakland, Calif. on Tuesday.

Even as prosecutions under the U.S. Foreign Corrupt Practices Act have produced record sentences in recent years, the United States’ bribery score according to Transparency International has remained stagnant since the organization first published the index in 2008, with many of Europe and Asia’s advanced economies scoring consistently higher.

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Nov
7

Who is paying for Jersey to be a tax haven?

Richard Murphy

The reason why places like Jersey became tax havens was to raise tax revenue from third parties. The tax revenues raised were, in effect, export earnings that kept their economies afloat.

Deputy Geoff Southern in Jersey has tabled an amendment to the current Jersey budget that shatters the myth that this is still the case. As his amendment says:

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Nov
7

Monday’s Daily News Digest

Nathan Williams

Ethiopia: To Catch Africa’s Biggest Thieves Hiding In America!
Nazret.com (blog), November 7, 2011

G20 hails India’s ratification of UN convention against graft
Daily News & Analysis, November 5, 2011

Foreign Policy: 20 Things The G-20 Could Have Done
NPR (blog), November 4, 2011

G-20 Disappointment? Not When It Comes To Tax Report
The Wall Street Journal (blog), November 4, 2011

Tax havens will be shunned
Oman Daily Observer, November 5, 2011

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

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