Nigeria: EFCC to Probe Mortgage Firms, Discount Houses
The Daily Trust, November 24, 2009

Malta: The Prevention Of Money Laundering And Funding Of Terrorism Activities In Malta
Mondaq News Service, November 24, 2009

World Bank urges FG to extend EITI to solid mineral
The Vanguard, November 24, 2009

Tax Treaty Trumped by Domestic Withholding Rate, Australian Tax Office Rules
Tax Analysts (Subscription Only), November 24, 2009

IMF Executive Board completes sixth review under the policy support instrument, first review under the exogenous shock facility for Tanzania
IMF Statement, November 24, 2009

Ethiopia – House passes ‘anti-money laundering’ bill
Nazret.com, November 23, 2009

Christian Aid seeks ‘tax superheroes’
Christian Today, November 21, 2009

$1.5 million money laundering case bound for the Supreme Court
Amandala Online, November 24, 2009

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Global Financial Integrity is now accepting applications for its Spring 2010 Internship positions.  We’re looking for communications interns, economics interns, legal interns, and policy interns to work 30-40 hours per week in our Washington, DC office.  You can find out more about the internships and apply here…

Please pass this listing along to anyone you think may be interested.

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Swiss get tough on corruption
Financial Times, November 23 2009

British lawyer laundered bribes to Nigeria, court told
The Guardian, November 23, 2009

Senior Chinese official calls for greater efforts against commercial bribery
Xinhua, November 23, 2009

How can tax evasion be curbed?
Economic Times, November 23, 2009

Screws turn on tax havens
Sydney Morning Herald, November 23, 2009

Ex-GM of Texas Business Arrested for Role in Mexican Bribery Scheme
US Department of Justice, November 23, 2009

Queen’s speech 2009: bribery bill
The Guardian, November 19, 2009

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Swiss seize $350 mln from late Nigeria dictator’s son
AFP, November 20, 2009

Mauritania banks to repay ‘illicit transfers’
Agence France-Presse, November 20, 2009

A definition of corruption needed
Financial Express, November 20, 2009

Russia’s shocking corruption belies Medvedev’s tough rhetoric
Reuters Blog, November 20, 2009

ATO ups attack on tax cheats
Sydney Morning Hearald, November 20, 2009

Africa: Opacity Blamed for Bad Oil Deals in Africa
All Africa.com, November 19, 2009

News Analysis: Should South American Countries Sign OECD Model Treaties? Part 2
Tax Analysts, November 20, 2009

Analysis: Outlook for tough Iran sanctions is dim
Associated Press, November 20, 2009

Companies urged to meet deadline for documentation
Transfer Pricing Week, November 17, 2009

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Christian Aid today launches its latest Alternative Tax Award – Tax Superhero of the Year – and invites nominations of suitably qualified firms and individuals.

The award has been introduced to highlight the  tremendous potential accountants have to change the world for the better by helping developing countries collect more of the billions of dollars’ tax that they are owed.

‘Do you know of an individual accountant, or perhaps a firm which deserves recognition for its outstanding contribution to the health of developing countries’ tax administrations or revenues?’, asks Dr David McNair, Christian Aid’s tax policy expert.

‘This could be, for instance, by seconding members of staff to work in poorer countries’ tax authorities, or by working to strict ethical criteria about the type of accounting work a firm is prepared to do.’

Christian Aid estimates that at present, poor countries lose more than $160bn each year through tax dodging by unscrupulous companies trading internationally.

If that money were available and allocated according to current spending practices, the lives of 350,000 children under the age of five could be saved in the developing world every year.

Abuses include ‘transfer mispricing’ where subsidiaries of multinational corporations sell goods and services to subsidiaries of the same concern at prices manipulated to lower the tax liability.

Another abuse, ‘false invoicing’, involves similar transactions taking place between unrelated companies.

Christian Aid introduced its Alternative Tax Awards  in May this year. Categories included Tax Haven Enthusiast of the Year, Most Surprising Use of Tax Havens and a Low Tax Rate Achievement Award.

The Big 4 accounting firms and the International Accounting Standards Board won a joint award for having the Greatest Potential for Tax Reform.

Christian Aid is calling on them to take the lead in establishing a new accounting standard that would require companies to declare the profits they make and tax they pay in every country where they operate.

Such a measure would help the revenue authorities in developing countries quickly spot abuses. Christian Aid is also calling for the automatic exchange of information between tax jurisdictions to help remove the secrecy that tax havens offer.

Nominations for the Tax Superhero of the Year should be submitted to rbaird@christian-aid.org. The winner will be announced early next year.

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This week Transparency International (TI) released their corruption perceptions index, which measures the perceived level of public-sector corruption in 180 countries and territories around the world. TI notes that “the plundering of public resources feeds insecurity and impunity” and erodes “trust in the very institutions and nascent governments charged with ensuring survival and stability.”

We often think of corruption as “their” problem; “they” being the developing world and “us” being the rich.  We see chronic poverty as a choice; an exploitation of resources by corrupt leaders and dictators who rob their countries blind.  “Alas,” we say to ourselves, “that is certainly unfortunate, but we can’t help them if they aren’t willing to help themselves.”

Unfortunately for our nations—beacons of political rights and equality—it’s not so simple.

Let me tell you about a man named Teodoro Nguema Obiang.  Obiang has controlled Equatorial Guinea since he overthrew and executed his uncle in a bloody coup d’état in 1979. And he’s been quite a leader.  In July 2003, state-operated radio declared Obiang to be a God who is “in permanent contact with the Almighty” and “can decide to kill without anyone calling him to account and without going to hell.”   Obiang rules Equatorial Guinea with an iron hand and has been called Africa’s “worst dictator.” Obiang also presides over one of the largest oil reserves in Africa and 75% of his population lives below $2 per day.

Enter Riggs.

In the mid-1990s Riggs National Bank opened and handled 60 accounts for Obiang and his family members.  The bank handled six cash deposits to the president’s account, totaling $11.5 million.  The senior Riggs official overseeing Obiang’s account even hauled suitcases stuffed with cash into the bank for deposit.  At no point did this bank file a Suspicious Activities Report, as required by law. Finally, in 2004, a Senate panel caught on and Riggs Bank was fined more than $25 million for its crimes and several of the bank’s directors were criminally prosecuted.

So we can absolve the U.S. of guilt, right? Our country cracked down on the crooked bank and did its part to fight corruption worldwide…right?  RIGHT?!?!

Sorry to say… not right.  Confidential U.S. government documents uncovered by campaign group Global Witness show that Obiang’s son recently purchased a $33 million private jet, a $35 million Malibu mansion, speedboats and a fleet of fast cars in the United States.  Given his salary of $4,000 – $5,000 a month as a minister, we must wonder where this grip of cash came from.  (Maybe he won the lottery?)   Global Witness also notes the U.S. government continues to allow Obiang into the country, despite the fact the State Department is legally obligated to deny visas to foreign officials for whom there is credible evidence of corruption.

We have an extensive network of laws against allowing the proceeds of corruption to enter our borders and against allowing those individuals from entering the country.  But yet for the last five years, even after a far-reaching investigation and the collapse of a major bank, the same corrupt family is hauling millions onto our shores and freely traveling to the homes they own here.  Which makes us all a little more complicit than we would like.

End note: Though U.S. laws prohibit the proceeds of corruption from being held in the United States, the proceeds from many other unlawful activities can be deposited within our borders, provided that the original activity took place in a foreign country.  These activities include (among many others): alien smuggling, espionage, racketeering, sex trafficking, and the sexual exploitation of children.   Raymond Baker, Director of Global Financial Integrity, has many times noted that this is “quite the loophole” in U.S. anti-money laundering laws.

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Task Force Member Global Witness released a new report yesterday detailing the corrupt lifestyle of Equatorial Guinea’s Teodorin Obiang, while also detailing the conspicuous inaction on the part of the U.S. government. Global Witness issued the following statement in releasing the report:

Confidential U.S. government documents uncovered by campaign group Global Witness and reported on in today’s New York Times, strongly suggest that Teodorin Obiang, son of the dictator of oil-rich Equatorial Guinea, purchased a $33 million private jet, a $35 million Malibu mansion, speedboats and a fleet of fast cars using corruptly acquired funds.

A new Global Witness report, ‘The Secret Life of a Shopaholic’, explains how, despite the ample evidence against him, the investigation is going nowhere and Teodorin continues to be allowed into the U.S. He is reported to be building a custom 200 foot yacht with shark tank but the ordinary citizens of the West African nation continue to exist in poverty and oppression.

“U.S. law requires the State Department to deny visas to foreign officials when there is credible evidence they are involved in corruption; yet the authorities have continued to allow Teodorin to come and go as he pleases. The only possible excuse would be if there was an active investigation and a need to continue gathering evidence, but the investigation is inactive. One wonders whether the U.S. is inclined to turn a blind eye to the evidence of corruption-fuelled excess because of its desire to retain access to his country’s oil,” said Anthea Lawson, a senior investigator at Global Witness.

According to the documents from the Justice Department and Immigration and Customs Enforcement (ICE), Teodorin, who earns a few thousand dollars a month as a minister in his father’s government, transferred about $75 million into U.S. banks between 2005 and 2007, via wire transfers processed by Bank of America, Wachovia, UBS, Union Bank of California and First American Trust.

The first two of these banks filed suspicious activity reports to the authorities about the transactions and eventually blacklisted him as a customer – but not until after they had helped him move tens of millions of dollars into the country.

“This was a spectacular moral failing by the banks, and reveals a disturbing chain of gaps in the design and implementation of the anti-money laundering laws. In 2004, the U.S. bank, Riggs, was fined $41 million and sold off at a discount after a Senate inquiry uncovered it was banking for the corrupt Obiang family. Have no lessons been learnt at all?” Ms Lawson said.

The documents were written by investigators from the Justice Department and ICE to request information from French law enforcement agencies as some of the transfers had come via French banks. They relate to a preliminary money laundering investigation. No charges have been made and sources have told Global Witness that the investigation has effectively stalled.

“With its plentiful oil, paid for by American companies, Equatorial Guinea should be one of the richest countries in the world. Instead its people are among the poorest, and the government is an extreme example of a kleptocracy in action. The U.S. has generally taken a far more effective and robust approach to tackling foreign corruption and bribery than many of its international peers but it seems to have a blind spot when it comes to Equatorial Guinea,” said Ms Lawson.

/ Ends

Read the report

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Global Financial Integrity released the following statement today in response to the release of the long-awaited annex to the US-Swiss settlement agreement in the UBS legal case:

Further Steps Needed in Crackdown on Tax Evasion, Financial Secrecy Jurisdictions, Says Global Financial Integrity

WASHINGTON, DC — Global Financial Integrity (GFI) applauds the on-going work of the U.S. Department of Justice and the Internal Revenue Service towards bringing wealthy tax evading citizens to justice.   Following the release today of the previously confidential “annex” of criteria UBS will use to choose which accounts it remits information on, GFI urges consideration of further comprehensive reform of global financial protocols as significant shortcomings remain in the diplomatic and regulatory landscape.

“The annex released today sets forward a piecemeal approach to enforcement which is slow and requires a large amount of resources.  We need to focus on the root of the problem: the prevalence of banking secrecy around the world,” said GFI director Raymond Baker.

GFI makes the following recommendations as components of an effective global strategy to combat banking secrecy:

• Passage of the Baucus-Rangel Foreign Account Tax Compliance Act of 2009, introduced earlier this month, this anti-tax-evasion legislation would increase transparency in offshore financial jurisdictions and prove a powerful deterrent to U.S. tax evaders;
• Expansion of the mandate for application of the European Union Savings Tax Directive (similar to the U.S. Qualified Intermediary program);
• Continuance of G20 work on establishing rules for increased transparency and accountability in global finance;
• Automatic exchange of information in tax information exchange agreements and tax treaties in lieu of the current “on demand” standard.

“The UBS case is but one example — one bank in one country which peddled secrecy to those who had something to hide — but the scope and scale of the banking secrecy problem is far larger and requires a commensurately larger solution,” said Mr. Baker.  “Today we’re seeing U.S. tax evaders who hid assets in Swiss bank accounts take a dose of punitive medicine, but around the world there are countless other tax evaders, corrupt governments, and criminals utilizing this same system of financial opacity to carry out their nefarious activity.  The time has come for the U.S., EU, and G20 nations to work together to continue the process towards greater transparency and accountability in the global financial system.”

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I.R.S. Releases Criteria to Get Names in UBS Case
New York Times, November 17, 2009

Swiss to hand over U.S. names of wealthy UBS clients
Reuters, November 17, 2009

Democrats Say Treaty Would Help to Fight International Tax Evasion
Congressional Quarterly, November 17, 2009

U.S. offshore tax amnesty yields big response: IRS
Reuters, November 17, 2009

Members of House, Senate Banking Committees Rake in Wall Street Campaign Cash, New Report Shows
Public Citizen News Release, November 17, 2009

Taint of Corruption Is No Barrier to U.S. Visa
New York Times, November 16, 2009

Corruption threatens global economic recovery, greatly challenges countries in conflict
Transparency International News Release, November 17, 2009

Will Kabul’s new anti-corruption task force establish itself as Afghan FBI?
China View, November 17, 2009

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Today, the United States and Switzerland released the long-awaited annex to the settlement agreement in the UBS case.  The annex details the criteria that needs to be met before the exchange of tax information can be met under the August 2009 settlement.

In a statement released by the Justice Department this morning, the US describes the criteria as follows:

The criteria cover accounts of various amounts and types, including bank-only accounts, custody accounts in which securities or other investment assets were held and offshore company nominee accounts through which an individual indirectly held beneficial ownership.  These criteria allow the IRS and the Justice Department to target the most egregious foreign account holders.

However, Senator Carl Levin, a leading advocate in the fight against secrecy jurisdictions was disappointed by the annex, stating:

“…the U.S.–Swiss Annex disclosed today, designed to compel disclosure of the names of U.S persons with Swiss accounts at UBS, is very disappointing.  It complicates and muddies what should have been a straightforward agreement by UBS and the Swiss Government to disclose Swiss accounts hidden from the United States by U.S. accountholders.  UBS admitted last year that it “participated in a scheme to defraud the United States” out of tax revenue.  Since then, UBS has been prohibited by its government from simply turning over the names of the 52,000 U.S. clients suspected of participating in that tax evasion scheme with UBS.  Instead, the tortured wording and the many limitations in this Annex shows the Swiss Government trying to preserve as much bank secrecy as it can for the future, while pushing to conceal the names of tens of thousands of suspected U.S. tax cheats.  It is disappointing that the U.S. government went along.”

The full text of the criteria can be read here…

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