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GFI in the News

African Development Bank, AfDB shines a new light on capital flight
The Africa Report, August 26, 2013

By Nicholas Norbrook

New research from the African Development Bank (AfDB), in conjunction with the US think tank Global Financial Integrity and supported by the Norwegian government, revealed in May that in the three decades from 1980 to 2009, African countries lost up to $1.4trn in illicit financial flows, known as capital flight.

“It’s a staggering figure,” says AfDB chief economist Mthuli Ncube. “Around $30-40bn is leaving the continent each year.”

Read More…

French Laundry: Are French Wineries Cleaning Dirty Money? Does It Matter?
City Weekly, August 26, 2013

By Ted Scheffler

Normally, I discuss specific wines, beers and such in these pages. However, recent news about the French wine industry suggested to me that we might take a small detour this week. If you’re enough of a wine geek to care about the financial underpinnings of Bordeaux and Cognac, I think you too will find this of interest.

Let’s say you’ve got Walter White’s Breaking Bad-size cash-flow problems—that is, not too little cash, but too much of it. Mountains of the stuff—piles of ill-gotten gains, but no off-shore bank account in which to stash it. Where you gonna turn? Well, how about the French laundry? And, no, I’m not talking about Thomas Keller’s nifty Napa restaurant. I’m talking about laundering money in France.

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Biggest Threats to India’s Sinking Economy
Silicon India, August 26, 2013

The foreign banks are loaded with Indian black money and has cost a lot to the economy during the last decade. According to Global Financial Integrity, a Washington-based research organization, India stands at 8th position among the countries to route out most illegal funds.

The black money is acting like a termite, weakening the economy. Some large international private sector banks does not follow the regulations laid down by central banks and cash in a lot of black money in gold and other assets.

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Illicit Financial Flows from Africa

Mbeki leads team tracking illegal cash flows from DRC
African Manager, August 26, 2013

Africa’s 10-member High Level Panel on Illicit Financial Flows will next week embark on a three-day visit to the Democratic Republic of Congo (DRC) to examine the seriousness and complexity of the problem of illegal money outflows from the troubled mineral-rich country, it was officially announced here Friday.

Headed by former South African President Thabo Mbeki, members of the panel will explore the key drivers of the flows, what the authorities in Kinshasa and other stakeholders are doing to reverse the situation and what obstacles stand in the way of their efforts.

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African Union’s panel moves against illicit financial outflows
The Guardian (Nigeria), August 26, 2013

By Mathias Okwe

The fleecing of the African continent of her most needed resources through illicit means by the well-advanced nations of the world has reached a fever height of a whooping $50 billion yearly, thus eliciting a reaction from the African Union (AU) on the review of the processes of these financial outflows aimed at halting them and retaining the resources on the continent for development.

This initiative is coming on the heels of a recommendation as contained in a communique by a Civil Society Forum on the African Growth and Opportunity Act (AGOA) last week in Ethiopia for increased flow of foreign direct investments from the United States (U.S.) into Africa to create opportunities for Africans to leverage on the AGOA provisions.

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Bribery

Microsoft Bribe Probe Reaches Into Pakistan, Russia Deals
The Wall Street Journal, August 21, 2013

By Christopher M. Matthews and Shira Ovide

A U.S. investigation into Microsoft Corp.’s relationships with business partners that allegedly bribed foreign officials in return for contracts includes activity in Russia and Pakistan, a sign that the probe is wider reaching than previously known, according to people familiar with the matter.

The Wall Street Journal reported this year lawyers from the U.S. Justice Department and the Securities and Exchange Commission had been conducting a preliminary investigation into kickback allegations made by a former Microsoft representative in China, as well as the company’s relationships with certain resellers and consultants in Romania and Italy.

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Bo Xilai Trial

China’s Corruption Trial Turns into Steamy Soap Opera
ABC News, August 26, 2013

By Karson You

A murder and corruption scandal that has rocked China’s Communist Party unraveled when a prominent police chief fell in love with a top official’s wife who had killed a British businessman.

The police chief then got slapped by the husband and ran to a U.S. consulate for protection, triggering the scandal.

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Tax Evasion and Tax Avoidance

Tax evaders feel the heat in havens
South China Morning Post, August 24, 2013

By Toh Han Shih

Plans by well-known corporate havens such as the British Virgin Islands (BVI) and Cayman Islands to comply with a US law to fight tax evasion will have a significant impact on Hong Kong and the mainland, say tax analysts.

“If the BVI and Caymans comply with the FATCA [Foreign Account Tax Compliance Act], this speaks volumes about the importance of this legislation to the world at large, let alone China and Hong Kong,” said Patrick Yip, deputy national mergers and acquisitions leader at Deloitte Touche Tohmatsu.

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UBS sets deadline for German customers to confess tax evasion
Banking Business Review, August 26, 2013

Swiss global financial services company UBS has asked its German customers to admit the tax evasion fraud or exit the bank in the next 16 months.

Under pressure from the German government to reveal the name of secret account holders, the lender has set a December 2014 deadline and asked the offshore account holders to admit their wrongdoings, as reported by Reuters.

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Public urge crackdown on company secrecy by UK and its tax havens
Ekklesia, August 26, 2013

The majority of Britons (57 per cent) believe that company owners should not be allowed to keep their identities secret, with most (57 per cent) saying they are suspicious of the owners’ motives where that is the case.

Key reasons cited by the public as to why a company owner would remain anonymous were tax avoidance and evasion (78 per cent), to hide their true wealth (70 per cent) and the hiding of criminal behaviour (59 per cent).

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Global Financial Integrity (GFI) promotes national and multilateral policies, safeguards, and agreements aimed at curtailing the cross-border flow of illegal money. In putting forward solutions, facilitating strategic partnerships, and conducting groundbreaking research, GFI is leading the way in efforts to curtail illicit financial flows and enhance global development and security.

For additional information please visit http://www.gfintegrity.org.


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