OECD: rich countries in 'appalling' failure to crack down on dirty money inflows
"Rich countries are failing to stem the enormous flow of dirty money from developing countries, and are essentially becoming havens for funds from money laundering, tax evasion and bribery, while depriving poor source countries of much-needed public funds, according to a report released on Wednesday."The report is here. This is exactly in line with our own findings in our recent and widely reported Financial Secrecy Index - and pretty much what we've been saying all along. We recently pointed to a GFI report estimating that developing countries lost nearly $900 billion (with a 'b') in illicit outflows in 2010, up 11 percent from 2009. We congratulate the OECD for being so forthright: it is quite rare for international organisations to take their own members to task.
The Economist magazine, in an article entitled Dirty Money, Rich Smell, accurately describes this as "an overdue mea culpa."
The Guardian adds:
"The results are appalling," said an OECD official. "It's striking how poorly G8 countries score on core recommendations, which have to do with due diligence and beneficial ownership. They are weakest on issues where they make the grandest statements. . . The G8 are the laggards on beneficial ownership," said the OECD official."Right on the money.
Take a look at Britain's pathetic, hypocritical performance - just for example. (Let's not let the likes Luxembourg or Switzerland off the hook though.) There are some bright spots here and there - read the articles for more details, or the report if you're not busy - but still it's a very dark picture.
Update 2014: For more information on capital flight and illicit flows see here.