The United Arab Emirates: A key piece in the global money laundering puzzle Transparency International May 11, 2020
Doors wide open: Corruption and real estate in four key markets Maíra Martini Transparency International 2017 (40 page PDF file)
The United States, Canada, Great Britain, and Australia are the real estate markets analyzed. The real estate market has long provided a way for individuals to secretly launder or invest stolen money and other illicitly gained funds. Not only do expensive apartments in New York, London or Vancouver raise the social status of their owners and enhance their luxurious lifestyles, but they are also an easy and convenient place to hide hundreds of millions of dollars from criminal investigators, tax authorities or others tracking criminal behavior and the proceeds of crime. According to the Financial Action Task Force (FATF), real estate accounted for up to 30 per cent of criminal assets confiscated worldwide between 2011 and 2013.
Shell companies let a ‘parade of horribles’ into the U.S. financial system Scott Greytak Transparency International February 4, 2020
How U.S. firms helped Africa’s richest women exploit her country’s wealth Michael Forsythe, Kyra Gurney, Scilla Alecci and Ben Hallman New York Times January 19, 2020
Tech giants shift profits to avoid paying taxes. There is a plan to stop them. Jim Tankersley New York Times October 9, 2019
Tackling tax havens Nicholas Shaxson Finance and Development September 2019
Tax havens collectively cost governments between $500 billion and $600 billion a year in lost corporate tax revenue … through legal and not-so-legal means. Of that lost revenue, low-income economies account for some $200 billion—a larger hit as a percentage of GDP than advanced economies and more than the $150 billion or so they receive each year in foreign development assistance. American Fortune 500 companies alone held an estimated $2.6 trillion offshore in 2017, though a small portion of that has been repatriated following US tax reforms in 2018. And individuals have stashed $8.7 trillion in tax havens.
The rise of phantom investments Jannick Damgaard, Thomas Elkjaer, and Niels Johannesen International Monetary Fund September 2019 Some worthwhile and interesting (even astounding) points in this article including:
- Luxembourg has as much Foreign Direct Investment (FDI) as the United States, and more than China.
- In practice, FDI is defined as cross-border financial investments between firms belonging to the same multinational group, and much of it is phantom in nature—investments that pass through empty corporate shells.
- Total world FDI is $40 trillion. Phantom investments are $15 trillion or 30 percent of FDI, a percentage which has increased in recent years in spite of efforts to crack down on tax avoidance.
- A few well-known tax havens host the vast majority of the world’s phantom FDI. Luxembourg and the Netherlands host nearly half. And adding Hong Kong SAR, the British Virgin Islands, Bermuda, Singapore, the Cayman Islands, Switzerland, Ireland, and Mauritius to the list, these 10 economies host more than 85 percent of all phantom investments.
- The firms, individuals and others who set up these empty corporate shells abroad receive substantial investments from such entities, with averages across all income groups exceeding 25 percent of total FDI.
Corporate Tax Haven Index 2019 Tax Justice Network May 28, 2019
The Corporate Tax Haven Index ranks the world’s most important tax havens for multinational corporations, according to how aggressively and how extensively each jurisdiction contributes to helping the world’s multinational enterprises escape paying tax, and erodes the tax revenues of other countries around the world. It also indicates how much each place contributes to a global ”race to the bottom” on corporate taxes. The top three tax havens were the British Virgin Islands, Bermuda and the Cayman Islands, which are either a British overseas territory or crown dependency. If Britain’s network were assessed together, it would be at the top.
Financial secrecy index 2018 Tax Justice Network May 28, 2019
The Financial Secrecy Index ranks jurisdictions according to their secrecy and the scale of their offshore financial activities. A politically neutral ranking, it is a tool for understanding global financial secrecy, tax havens or secrecy jurisdictions, and illicit financial flows or capital flight. The top three countries for secrecy are Switzerland, the United States, and the Cayman Islands.
An estimated $21 to $32 trillion of private financial wealth is located, untaxed or lightly taxed, in secrecy jurisdictions around the world. Secrecy jurisdictions – a term we often use as an alternative to the more widely used term tax havens – use secrecy to attract illicit and illegitimate or abusive financial flows.
Illicit cross-border financial flows have been estimated at $1-1.6 trillion per year: dwarfing the US$135 billion or so in global foreign aid. Since the 1970s African countries alone have lost over $1 trillion in capital flight, while combined external debts are less than $200 billion. So Africa is a major net creditor to the world – but its assets are in the hands of a wealthy élite, protected by offshore secrecy; while the debts are shouldered by broad African populations.
Deutsche Bank faces criminal investigation for potential money laundering lapses David Enrich, Ben Protess and William K. Rashbaum New York Times June 19, 2019
Why Scandinavian banks clean reputations are threatened by dirty money Jack Ewing New York Times April 6, 2019
The New York attorney general alleges that as investigations focused on Perdue Pharma, the family that owned the company began shifting hundreds of million of dollars from the business to themselves, using offshore entities.
New York sues Sackler family members and drug distributors Roni Caryn Rabin New York Times March 28, 2019
Most of these unrecorded outflows take place through the international trade system. Basically, corporations – foreign and domestic alike – report false prices on their trade invoices in order to spirit money out of developing countries directly into tax havens and secrecy jurisdictions, a practice known as “ trade misinvoicing ”. Usually the goal is to evade taxes, but sometimes this practice is used to launder money or circumvent capital controls. In 2012, developing countries lost $7n through trade misinvoicing, which outstripped aid receipts that year by a factor of five. Multinational companies also steal money from developing countries through “same-invoice faking”, shifting profits illegally between their own subsidiaries by mutually faking trade invoice prices on both sides. For example, a subsidiary in Nigeria might dodge local taxes by shifting money to a related subsidiary in the British Virgin Islands, where the tax rate is effectively zero and where stolen funds can’t be traced.