Financial Transparency Coalition

$1 trillion in illicit financial flows leaves the developing world every year, ten times the amount of foreign aid that flows in. This amounts to a tremendous loss for the developing world, and directly contributes to untold amounts of poverty and lost opportunity. Exactly what illicit financial flows are and how they affect the developing world can often be abstract and difficult to understand. Task Force blogger and former Global Financial Integrity economist Ann Hollingshead, using Prezi, attempted to explain these concepts in an easy-to-understand, graphical format.

This week, the influential German magazine Der Speigel published a report based on research from Global Financial Integrity, which found that $261 billion in illicit money flowed out of the country from 2003-2011. The summary (in German) is available here.

The United Kingdom is shifting some tax laws to make it easier for multinational corporations to avoid taxes via tax havens, through vehicles known as Controlled Foreign Corporations (CFCs). These vehicles are commonly used in the United States, and elsewhere, to shift profits to low tax jurisdictions. They are a legal way of pretending you made more where you did not. You would think that any smart country would be moving toward stricter laws to prevent the use of tax havens for profit shifting and corporate tax avoidance, but that's not the most important part of the law's impact....

Today was a very big day for advocates of financial transparency. The Securities and Exchange Commission (SEC) voted to approve the final rules for Dodd-Frank Section 1504, which was passed over two years ago. The rules will immediately go into effect. 1504 requires oil, gas, and mining companies to publish all payments they make to governments.