Financial Transparency Coalition

Task Force member Global Witness's Rosie Sharp wrote the following op-ed in The Guardian on Monday. She expanded on the argument that she wrote about on this blog earlier this week, about the implications of the Guardian, the International Consortium of Investigative Journalists and the BBC's Panorama programme investigations into the nominee shareholders that make anonymous shell companies possible.

You're a criminal and you've got loads of cash. You really want that mansion in London. But how are you going to get it? You need a company service provider to set up an anonymous shell company to disguise who's behind the money and a bank willing to do business with your shell.

According to a recent editorial from The Guardian, the illicit activities that drive capital flight, such as drug trafficking and terrorist financing, are actually supported by legal infrastructure. Namely, the lack of transparency in regions designated as "tax havens" allows for elaborate tax avoidance schemes and money laundering that funds these sorts of activities. As an example, banking company HSBC reportedly held a Cayman Islands subsidiary that "handled some 60,000 accounts," which "drug lords used . . . to fuel their jet-set lives." According to the newspaper, politicians must address the issue of tax haven abuse. In affected countries such...

The recent global financial crisis highlighted the need to broaden the discussion about regulation and oversight of the financial system. Transparency and related risk assessments of financial institutions have surged to the top of the agenda. In our study on transparency and disclosure of measures for reducing corruption risk among the world’s largest companies published today, financial companies constitute the single largest industry sector. Among the 24 financial institutions in the survey there are 19 banks, four diversified financial service providers and one insurance company. They are incorporated in 11 different countries: six in the US, four in China, three...