Financial Transparency Coalition

Global Financial Integrity released the following statement last night urging G20 Finance Ministers meeting in St Andrews today and tomorrow to make the connection between illicit financial flows from developing countries, their absorption by secrecy jurisdictions/tax havens, and the devastating effect this has on global poverty.  From GFI:

Washington, DC — As the Group of Twenty Finance Ministers meet tomorrow in St Andrews, Global Financial Integrity (GFI) urges leaders to acknowledge the devastating link between illicit financial flows from developing countries, secrecy jurisdictions (tax havens), and global poverty.

“Every year the developing world loses as much as $1 trillion to secrecy jurisdictions via government corruption, criminal activity, and tax evasion,” said GFI Director Raymond Baker. “Overwhelming official development assistance by roughly 10 times, curtailing these flows is critical to alleviating global poverty and enabling economic development.”

Thus, GFI is requesting that the G20 Ministers adopt the following language in any official communiqué resulting from the summit:

“We recognize the link between illicit outflows of capital from developing countries, absorption of those resources by tax havens and secrecy jurisdictions, and the adverse impact those flows have on poverty alleviation and economic development.

We welcome work by the FATF to help detect and deter the proceeds of corruption by prioritizing efforts to strengthen standards on customer due diligence, beneficial ownership and transparency. To build on those advances we call on the FATF to further its work by recommending that the beneficial ownership of all companies, trusts and foundations be made a matter of public record. We also ask the FATF to amend recommendation number 1 to list tax evasion as a predicate crime for a money laundering charge.”

Additionally, GFI and other civil society organizations sent a letter to G20 Finance Ministers last week welcoming the G20’s recent focus on tax haven secrecy, while also calling on the G20 to a) support a truly multilateral agreement for automatic exchange of tax information between jurisdictions, including the disclosure of beneficial ownership of assets and trusts , and b) support an international accounting standard requiring multinational companies to report profits on a country-by-country basis. To read the full text of the letter, click here…