The Economist Calls on U.S., U.K., Developed Countries to Clean Up their Own Back Yard
Clark Gascoigne, +1 202 293 0740 x222
WASHINGTON, DC – A 10-article exposé accompanied by a cover-page editorial in this week’s edition of The Economist highlights the damaging role of anonymous shell companies, banking secrecy, and lax money laundering regulations and enforcement in places like the United States, Great Britain, and offshore tax havens. The influential British magazine—which hits newsstands tomorrow—calls on developed western economies like the United States, Great Britain, and Europe to “focus… on cleaning up their own back yards and reforming their tax systems.”
Raymond Baker, the director of Global Financial Integrity (GFI), a Washington, DC-based research and advocacy organization, released the following statement:
“Offshore secrecy jurisdictions and developed western economies facilitated the illicit outflow of nearly $6 trillion in dirty moneyfrom developing countries over the past decade. This is an astronomically large amount of money. We’re talking about nearly $6 trillion that could have been used to invest in healthcare, education, and infrastructure in the world’s poorest countries. It’s nearly a $6 trillion dollars that could have been used to pull people out of poverty and save lives.
“Instead, the money is sitting in bank accounts in Miami, London, and Zurich owned by anonymous shell companies and trusts registered in Delaware, the British Virgin Islands, and Luxembourg. It’s facilitating transnational crime, enriching corrupt dictators, and undermining the Euro-zone, instead of contributing the productive capacity of society.
“This report should be a wake-up call to G20 leaders meeting in Moscow this week, as well as legislators in Washington and London, that action must be taken to eliminate anonymous shell companies, to enforce strong anti-money laundering controls at international banks, to force multinational corporations to open their books and to collect and exchange tax information automatically between jurisdictions.”
Mr. Baker, GFI, and its research are cited repeatedly throughout the report.
A new GFI report released yesterday, co-authored by GFI Lead Economist Dev Kar and GFI Economist Sarah Freitas, found that $764.3 Billion in illicit money flowed into and out of Russia since the fall of the Soviet Union—undermining the rule of law and fueling crime and corruption—much of it facilitated by offshore tax havens like Switzerland and Cyprus as well as developed countries like the United States and United Kingdom.
Notes to Editors:
- The full report from The Economist on offshore finance, titled “Storm Survivors” can be accessed here.
- The full editorial from The Economist, titled “Tax havens: The missing $20 trillion,” can be accessed here.
- Click here for more on GFI’s new report on illicit financial flows to and from Russia.
- Click here for more on GFI’s latest global report on the illicit flow of money out of the developing world.
+1 202-293-0740 ext.222