G-20: join the dots between illicit financial flows, tax havens and poverty

Washington-based Global Financial Integrity has issued the following release ahead of today's G-20 Finance Ministers meeting in Washington:

G20 Ministers Should Connect Link Between Illicit Financial Flows, Tax Havens, Poverty

WASHINGTON, DC - As the Group of Twenty (G20) finance ministers meets in Washington, Global Financial Integrity (GFI) urges leaders to acknowledge the devastating link between illicit financial flows from developing countries, secrecy jurisdictions (tax havens), and global poverty.

"Every year the developing world loses as much as $1 trillion to secrecy jurisdictions via government corruption, criminal activity, and commercial tax evasion," said GFI director Raymond Baker. "This overwhelms official development assistance by a magnitude of 10; curtailing these flows is critical to alleviating global poverty and enabling economic development."

Therefore, GFI asks the G20 ministers to adopt the following language in any official communiqué resulting from the summit:

"We recognize the link between illicit outflows of capital from developing countries, absorption of those resources by tax havens and secrecy jurisdictions, and the adverse impact those flows have on poverty alleviation and economic development.

We welcome work by the FATF to help detect and deter the proceeds of corruption by prioritizing efforts to strengthen standards on customer due diligence, beneficial ownership and transparency. To build on those advances we call on the FATF to further its work by recommending that the beneficial ownership of all companies, trusts and foundations be made a matter of public record. We also ask the FATF to amend recommendation number 1 to list tax evasion as a predicate crime for a money laundering charge."

GFI is spearheading an effort asking the G20 to demand financial transparency; its recently-launched G20 Transparency campaign enables people around the world to demand action from the G20 on illicit financial flows. The campaign invites people to sign-on in favor of greater transparency and accountability in the global financial system.