Most large-scale corruption cases involve using legal entities to conceal ownership and control of corrupt proceeds, and policymakers should take steps to improve transparency to reduce opportunities for wrongdoing, according to a study released today by the Stolen Asset Recovery (StAR) Initiative of the World Bank and the United Nations Office on Drugs and Crime.
The report, The Puppet Masters: How the Corrupt Use Legal Structures to Hide Stolen Assets and What to Do About It, examines how bribes, embezzled state assets and other criminal proceeds are being hidden via legal structures – shell companies, foundations, trusts and others. The study also provides policy makers with practical recommendations on how to step up ongoing international efforts to uncover flows of criminal funds and prevent criminals from misusing shell companies and other legal entities.
The 2011 Financial Secrecy Index (FSI) focuses on 73 secrecy jurisdictions. These places set up laws and systems which provide legal and financial secrecy to others, elsewhere.
The FSI combines two measurements, one qualitative and one quantitative. The qualitative measure looks at a jurisdiction’s laws and regulations, international treaties, and so on, to assess how secretive it is. The assessment is given in the form of a secrecy score: the higher the score, the more secretive the jurisdiction. The second, quantitative, measurement attaches a weighting to take account of the jurisdiction’s size and overall importance to the global financial markets. In combining the two scores, we mathematically emphasise the secrecy score and de-emphasise the weighting, in order to give secrecy its due importance.
International oil companies such as the U.S. giant Chevron are beginning exploration off of Liberia’s coastline. However, this new research by Global Witness and Liberian Oil and Gas Initiative (LOGI) 1 suggests that while Liberia has come a long way from the devastating set of resource-financed civil wars that claimed the lives of 250,000 people between 1989 and 2003, serious governance problems persist, and the warning signs for the emerging oil sector are stark.
This report is the first that PCS has produced on the subject of tax havens. It has prepared it for four reasons. First, PCS is committed to a fair, progressive tax system. It sees tax havens (or secrecy jurisdictions as we prefer to call them) as a threat to the establishment of such a
system. This report notes that the UK might lose up to £18 billion a year as a result of the use of tax havens. This loss contributes significantly to the overall UK tax gap that PCS believes currently amounts to at least £120 billion.
In 1999 leaders from OECD countries took a big step. They committed to holding their companies to account for their behaviour abroad. Until then, bribing abroad to win contracts had largely been tacitly accepted and was even a tax deductible expense in at least 14 OECD countries.
The global financial and economic crisis has accelerated vast transformations in the current landscape of development finance. While ODA budgets are increasingly under threat, public development finance is increasingly being used to leverage private financial resources. This is taking place at a time when the patterns in private flows are swiftly changing – including through the increasing prominence of capital flows from emerging economies, and the changing landscape in global finance in the wake of the global crisis.
The Global Corruption Report is the first comprehensive publication of its kind to explore the corruption risks related to tackling climate change. From international policy-making to national level mitigation and adaptation strategies and with a special focus on the forestry sector, the GCR draws on the expertise of more than 50 experts and practitioners from the anti-corruption movement and the climate change field.
This report includes a summary of all the presentations from the 2010 Task Force annual conference and concludes with priorities for 2011.
Tax Research UK published a new report this weekend on the administration of the UK’s Register of Companies by Companies House, the agency responsible for it on behalf of the UK government’s Department of Business, Innovation and Skills. The report extended the review to look at the administration of corporation tax returns by H M Revenue & Customs, the UK’s tax agency. In combination these are the two main agencies with responsibility for registering and regulating companies in the UK. The Task Force on Financial Integrity and Economic Development funded the study.
The report explains illicit capital flight, how it happens, its magnitude and its consequences for development, measures taken so far and measures needed to end it. It also includes a specific chapter on capital flight from Africa and presents illustrative case studies from Kenya, South Africa and Tanzania. These are written by Attiya Waris from Tax Justice Network Africa and by the Budget Working Group of Policy Forum in Tanzania.
In December 2008, Global Financial Integrity (GFI) published a report entitled Illicit Financial Flows from Developing Countries: 2002-2006 (referred to as the 2008 IFF report). The 2010 IFF report is an update of the first with the added value of a focus on Asia. This study analyzes outflows from Asia in somewhat greater depth with particular reference to outflows from the top five Asian exporters of illicit capital. In response to several requests for more up-to-date analysis of illicit flows, the present update also estimates the volume and pattern of illicit flows in 2009 based on macroeconomic projections and assumptions underlying the IMF’s latest World Economic Outlook. In the process, the 2010 IFF Report seeks to gauge the impact of the current global economic crisis on the volume and pattern of illicit flows from developing countries.
Tax is the foundation of all civilisations. The act of tracing tax policies and practices reveals the history of the relationship between the ruler and the ruled, state and citizen.
In Africa this relationship can be traced back over millennia. For instance, Egypt’s famed Rosetta Stone, created in 196 BC during the Ptolemaic era, was an agreement granting a tax exemption to priests, and certain reductions to the military and other ruling classes, including traders approved by the king. it was an early example of the special privileges that continue to proliferate across the continent.
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