Financial Transparency Coalition

WASHINGTON, DC – A letter published yesterday by two influential U.S. Congressmen suggests that Wal-Mart de Mexico (Walmex), the Mexican subsidiary of U.S. retailer Wal-Mart Stores Inc., which recently came under fire for possible violations of the Foreign Corrupt Practices Act, may have been engaged in money laundering and tax evasion in Mexico.

“While Global Financial Integrity does not know the veracity of the lawmakers contentions, or whether Walmex, specifically, has engaged in money laundering or tax evasion, it’s important to know that illicit financial flows—predominantly from trade-based money laundering techniques and tax evasion—cost the Mexican economy roughly $50 billion per year,” said Tom Cardamone, managing director of Global Financial Integrity (GFI), citing a January 2012 GFI report on the topic.

Further, the report, which was authored by GFI Lead Economist Dev Kar, found that much of the illicit money outflows end up in the United States.

“Tax evasion, money laundering, and corruption are extremely costly to the Mexican economy,” added Heather Lowe, GFI’s legal counsel and director of government affairs.  “We’re talking about the loss of $50 billion per year which otherwise could have been directed toward developing the Mexican economy, toward building roads and hospitals, or toward fighting the drug cartels. This has hugely negative consequence for the Mexican people.”

To schedule an interview with Mr. Cardamone, Dr. Kar, or Ms. Lowe, please contact Clark Gascoigne at cgascoigne@gfintegrity.org or +1 202-293-0740 ext. 222.

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Notes to Editors:

• GFI’s report finds that 73.7% of illicit outflows from Mexico each year are due to trade mispricing between unrelated parties.  Trade Mispricing is the act of misrepresenting the price or quantity of imports or exports in order to hide money in other jurisdictions. The motive could be to evade taxes, avoid customs duties, transfer a kickback, launder money or for some other purpose.
• Click here to read GFI’s press release on the January 2012 report.
• Click here to download GFI’s report, “Mexico: Illicit Financial Flows, Macroeconomic Imbalances, and the Underground Economy.”
• Click here for more information on the U.S. Congressmen’s letter to Wal-Mart via The Wall Street Journal.

Contact:

Clark Gascoigne
cgascoigne@gfintegrity.org
+1 202-293-0740 ext.222

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Global Financial Integrity (GFI) is a Washington, DC-based research and advocacy organization which promotes transparency in the international financial system.

For additional information please visit www.gfintegrity.org.

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