Clark Gascoigne, +1 202 293 0740 ext. 222

World Leaders Called on to Embrace Transparency Measures to Curtail Illicit Financial Flows

WASHINGTON, DC – As world leaders gather in Australia this week, Global Financial Integrity (GFI) called on the G20 to take strong action against illicit financial flows by embracing simple corporate transparency measures. Specifically, the Washington, DC-based research and advocacy organization urged G20 leaders to endorse the creation of public registries of beneficial ownership information as well as require all multinational corporations to publicly report their sales, profits, and taxes-paid on a country-by-country basis, as necessary tools to detect and deter crime, corruption, and tax dodging.

“Illicit financial flows—fueled by anonymous companies and tax haven secrecy—pose a serious threat to the global financial system,” said GFI President Raymond Baker, a longtime authority on financial crime, who co-authored an open letter to G20 leaders on this topic yesterday. “Illicit financial flows undercut economic growth and tax revenues in the every economy, they drain roughly US$1 trillion per year from developing and emerging countries, and they facilitate crime and corruption on a grand scale. Curbing the abuse of anonymous companies and instituting country-by-country reporting for multinational corporations are straightforward ways to begin tackling this global scourge.”

“No G20 nation is immune to the consequences of money laundering and tax evasion. This is a global epidemic that world leaders ignore at their own peril,” added Baker.

Public Registries Key to Crackdown on Anonymous Companies

G20 leaders will meet this weekend for their annual Summit in Brisbane, Australia, where the abuse of anonymous companies is expected to be debated. GFI is explicitly calling on world leaders to embrace a strong commitment to combat anonymous companies by endorsing the creation of public registries of company ownership information.

“Anonymous companies are the number one tool for laundering the proceeds of crime, corruption, and tax evasion,” noted GFI policy counsel Joshua Simmons. “They facilitate the most heinous acts—from sex slavery, to arms trafficking, to bribery and corruption—anonymous companies enable criminals to carry out crime after crime with impunity.”

“And beyond the narrow law enforcement angle to this issue is a larger point: everyone should be able to determine with whom they are doing business. That is why it is so important that beneficial ownership information is not simply collected, but that it’s public and available to everyone,” continued Mr. Simmons. “We strongly urge the G20 to endorse public registries of beneficial ownership information when they meet this week.”

Such a commitment would follow an announcement this week by the Danish government, which declared its intent to create a public registry of beneficial ownership information. The British government announced that it would create a public registry last year, and the European Parliament voted overwhelmingly in favor of public registries in March as part of revisions to the EU’s anti-money laundering directive (AMLD).

Country-by-Country Reporting

Additionally, GFI called on G20 nations to move seriously toward curtailing abusive tax avoidance by multinational corporations by requiring that they publicly disclose revenues, profits made, losses, taxes paid, subsidiaries, and staff levels on a country-by-country basis.

“As recent hearings and articles exposing the profit shifting practices of Apple, Starbucks, and Google highlight, it is now common in international business for companies to artificially shift their profits out of the nations in which they were generated and into tax havens. Such behavior starves governments of much needed tax revenue at a time when rich and poor nations alike are struggling to make ends meet. Requiring companies to publicly disclose where they are operating, where they are making their profits, and where they are paying taxes is a common-sense approach to detect and deter corporate tax dodging,” said Mr. Simmons.

Last year, the European Union adopted requirements that all financial institutions disclose profits made, taxes paid, subsidiaries, and staff levels on a country-by-country basis, and EU leaders have announced that they are considering requiring all multinational companies to do the same.

“Global momentum is clearly moving toward requiring multinationals to publicly report information on a country-by-country basis, and the public has been demanding it. Now is the time for the G20 to fully embrace public country-by-country reporting for multinationals,” added Mr. Simmons.

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Notes to Editors:

Click here to read an HTML version of this press release on our website.

Click here to read a copy of the Open Letter to G20 Leaders—dated November 10, 2014—authored by 25 distinguished individuals including two Nobel Peace Prize Laureates and GFI President Raymond Baker ahead of the Brisbane Summit.

Click here to read a recent blog post by GFI’s Heather Lowe on why beneficial ownership information should be made public, published October 30, 2014.

Journalist Contacts:

Clark Gascoigne

cgascoigne@nullgfintegrity.org

+1 202 293 0740 x222 (Office)

+1 202 815 4029 (Mobile)

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Global Financial Integrity (GFI) is a Washington, DC-based research and advocacy organization, which promotes transparency in the international financial system as a means to global development.

For additional information please visit www.gfintegrity.org.

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