Financial Transparency Coalition

WASHINGTON, DC – Global Financial Integrity (GFI) today called upon G20 leaders meeting this week in Los Cabos, Mexico to tackle the issue of tax haven secrecy and the illicit financial flows it facilitates as a necessary means to ensuring stability in the international financial system.

MEXICO CITY / WASHINGTON, DC – Crime, corruption and tax evasion cost the Mexican economy US$872 billion between 1970 and 2010 according to a new report from Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization. The illicit financial outflows, which averaged a massive 5.2% of GDP, grew significantly over the 41-year period studied from just US$1 billion in 1970 to US$68.5 billion in 2010.

Regulating cross-border financial flows can contribute to financial stability and help countries develop, according to new research to be published on 15 December by the Bretton Woods Project and Latindadd. The report find that sudden surges and stops in cross-border financial flows, which have been increasing in frequency, risk generating new financial crises in both rich and poor countries.

Today, Global Financial Integrity released our newest report, Illicit Financial Flows from Developing Countries Over the Decade Ending 2009. In the report, we found that despite the global financial crisis and subsequent drop in international trade and foreign direct investment, illicit financial flows still approached US$1 trillion out of the developing world. This represents a decline from the US$1.55 trillion we estimated flowed out of the developing world in 2008, but still represents a horrible tragedy for developing countries.