Financial Transparency Coalition

PARIS, Sep 16 (IPS) - Illegal capital flight in the form of corrupt, criminal and illicit commercial proceeds out of developing economies could be as high as one trillion dollars a year.

Ngozi Ikonjo-Iweala is MD of the World Bank. She’s spoken here and is saying that the importance of the issue we’re talking about – illicit financial flows – has not yet struck home. It’s time for it to take centre stage. She has directly endorsed action. Direct action, on the street, she says. She’s directly thanked the small coterie of us from civil society who are working on this issue – and has said this is the #1 issue for civil society and development now. There must be, she says, people on the streets demanding change. Placards are needed. And we must...

A new joint briefing paper by Global Witness, Tax Justice Network, Christian Aid and Global Financial Integrity explains how illicit financial flows out of the developing world is entrenching poverty. These flows include tax evasion, abusive transfer mispricing and the proceeds of corruption. All of these illicit financial flows are facilitated by global financial opacity, both in tax havens and major financial centres. As a result of the financial crisis, which was largely created by global financial opacity, governments are now starting to tackle these issues, particularly through the G20 process. Describing a problem is not enough though: the paper...

David McNair, senior economic justice advisor at Christian Aid and a contributor to this blog, wrote a fantastic essay for politics.co.uk today, in which he highlights the disastrous ramifications posed by tax havens for developing countries and calls for the adoption of country-by-country reporting standards and automatic exchange of tax information. McNair specifically notes that transfer mispricing alone (an illicit technique used by multinational corporations to evade paying taxes) costs developing countries $160 billion per year according to Christian Aid research. Indeed, the problem is likely even larger than this as Global Financial Integrity has published...