Financial Transparency Coalition

Global Financial Integrity just put out a statement lauding the G20’s commitment to end banking secrecy, increase transparency in global finance and curtail illicit financial flows from developing economies.  Check out the full text of the speech below:

Washington, DC — The G-20 reaffirmed its commitment to pressing uncooperative secrecy jurisdictions to adopt more rigorous reporting standards, tackle banking secrecy, and increase overall transparency in global finance in a communiqué released at the conclusion of today’s summit in Pittsburgh.

“Transparency and accountability in global finance are the cornerstones of a strong and robust world economy,” said Global Financial Integrity (GFI) director Raymond Baker. “The critical next step will be defining the rules of play with respect to improving the standards of information exchange and best practices for financial institutions.”

Today’s announcement contained an ambitious range of initiatives including strengthening financial regulation, clamping down on illicit outflows from developing countries, and improving tax transparency and exchange of information in tax law enforcement.

Language in today’s communiqué closely echoed language in a letter submitted to G-20 delegates on Monday by the Task Force on Financial integrity and Economic Development, as well as language in a briefing paper prepared by Task Force members GFI, Christian Aid, Global Witness, and Tax Justice Network.

From the G-20 Communiqué:

As we increase the flow of capital to developing countries, we also need to prevent its illicit outflow… We ask the FATF to help detect and deter the proceeds of corruption by prioritizing work to strengthen standards on customer due diligence, beneficial ownership and transparency. (paragraph 42)

“Combating illicit outflows from developing countries as part of economic development and poverty alleviation efforts may prove to be the game changer as we move ahead,” said Baker. “GFI estimates that developing countries lose as much as $1 trillion every year in illicit financial outflows.”

On the G-20 language on non-cooperative jurisdictions (paragraph 15) GFI noted the inclusion of money laundering, proceeds of corruption, and terrorist financing as problems to be tackled alongside tax evasion.

“What is needed now are automatic tax information exchange agreements and financial institution protocols which will make it more difficult for the proceeds of corruption, tax evasion, money laundering, and other illicit financial practices to be moved across borders and into secrecy jurisdictions,” said Mr. Baker. “The G-20 has made achieving these critical aims far more likely today with their statement of strong support for tax transparency and exchange of information.”

###