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GFI in the News

Africans call on rich nations to crack down on money laundering in new drive against illicit flows
Reuters, August 8, 2014

By Stella Dawson

The world’s richest nations must toughen their laws against money laundering, tax havens and tax evasion if a global drive against corruption and illicit finance is to deliver results, senior African diplomats said on Thursday.

“There are two sides to this coin. If there were no facilitators on their side, the miscreants on our side would not have succour,” said Liberia’s Foreign Minister Augustine Kpehe Ngafuan in an interview.

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International trade rules glossed over at U.S.-Africa Summit
SpyGhana News, August 8, 2014

By Diana L. Ohlbaum

This week’s U.S.-africa Leaders Summit is designed to showcase africa in a new light, focusing on its economic potential as a trading partner and investment opportunity. With 10 of the world’s 12 fastest-growing economies in Africa, both U.S. and African officials are keen to convince U.S. corporations that Africa is a wise place to do business.

What’s being left unsaid, or conveniently glossed over, is that international trade rules are part of what keeps Africans poor. It’s not just because these rules tend to benefit wealthy countries, which have teams of experienced lawyers and negotiators to ensure that their own interests and demands are met. It’s also because the system makes it easy to steal public resources and conceal the ill-gotten gains abroad. As a result, more money is leaving Africa than is going in.

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US pledges $34bn to Africa as push for transparency deepens
The Observer (Uganda), August 7, 2014

By Jeff Mbanga

As a number of African leaders flew out of Washington this week with a $34bn investment pledge from American companies, a group of civil society organizations held closed-door meetings right after to push for deeper transparency on how these funds would be used, and brainstormed on ways to tackle illicit financial flows into Africa.

In a telephone interview from Washington before the civil society groups held their meeting, Heather Lowe, the legal counsel for Global Financial Integrity, told The Observer that they would like to see more initiatives to promote transparency.

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Illicit Financial Flows

Tax dodging won’t be curbed until poorest countries have a fairer say
The Guardian, August 8, 2014

By Anders Dahlbeck

Last year, tax justice campaigners were celebrating a milestone in the battle to prevent international tax avoidance as world leaders agreed to take action on corporate tax dodging. These measures included introducing greater transparency to make sure that companies investing money through tax havens could be openly identified and plans to shut down major tax loopholes.

At the time, the G20 made clear the beneficiaries of any measures should include developing countries, as did last year’s G8 summit. Poor nations lose an estimated three times as much to tax havens as they receive in aid. This amounts to billions of pounds that disappear into the pockets of wealthy corporations. It is missing tax money that otherwise could have a major effect on countries where many people go hungry or die of easily preventable diseases.

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$128 Billion In Bank Fines, In 1 Chart
The Huffington Post, August 8, 2014

By Kevin Short and Mark Gongloff

Bank of America’s reported $17 billion settlement over bad mortgages would be the biggest in a string of increasingly expensive bank punishments. But don’t cry for the banks — they seem more than capable of handling it.

Since 2009, big banks in the U.S. and Europe have paid at least $128 billion to regulators, according to data compiled by the Wall Street Journal, Reuters, and The Huffington Post, for issues tied to the housing collapse and other financial misdeeds, including aiding and abetting money laundering and tax evasion.

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Fresh move underway to help check capital flight
Financial Express (Bangladesh), August 8, 2014

A fresh move is underway to strengthen coordination among all the agencies concerned to help check capital flight from the country, officials said Thursday.

According to them, the National Coordination Committee on Anti-money laundering and Combating the Financing of Terrorism in its next meeting is expected to discuss as to how well-coordinated efforts can be made for preventing money laundering.

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Tax Havens

The Unbelievable, Unknowable Wealth of the World’s Super-Rich
Slate, August 8, 2014

By Jordan Weissmann

Back in May, when the Financial Times published an attempted takedown of the data on wealth inequality underpinning Thomas Piketty’s Capital in the Twenty-First Century, the newspaper managed to prove pretty much one thing. It wasn’t that Piketty had misled readers or botched his math, as the paper claimed—by almost all accounts, his response put those criticisms to rest. Rather, it was that measuring the riches of the global elite is a complicated, inexact science that economists are only beginning to grapple with. Even Piketty says that the data set he used in Capital to illustrate the American wealth gap is probably outdated. He prefers a new set that shows an even greater disparity.

That’s why we probably need to get to used to headlines like this one from Bloomberg: “The 1% May Be Richer Than You Think, Research Shows.” The piece is a roundup of some recent and provocative papers arguing that wealth inequality is probably worse than we know. But precisely how much worse is tough to say.

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Money Laundering

StanChart executive – banks treated like ‘criminals’ for anti-money laundering lapses
Reuters, August 7, 2014

By Lawrence White

Banks are being penalised too harshly for lapses in anti-money laundering efforts, Standard Chartered Plc’s (STAN.L) head of Asia operations said – the second senior bank executive this week to voice frustration over what many in the industry see as overzealous regulation.

StanChart said on Wednesday that a computer error in a surveillance system which forms part of its anti-money laundering controls was likely to lead to a fine and remedial action.

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Insufficient Anti-Money Laundering and Terrorist Financing Methods Uncovered in Cyprus
Forex Magnantes, August 7, 2014

By Avi Mizrahi

The Cyprus Securities and Exchange Commission (CySEC) sent a letter earlier this week to Cyprus Investment Firms (CIFs), Administrative Services Providers (ASPs) and all other regulated entities warning them of compliance issues.

According to the letter, during the years 2013 and 2014, the commission visited a number of firms for the purpose of conducting on-site inspections assessing the compliance with their obligations deriving from the country’s Prevention and Suppression of money laundering and Terrorist Financing Law. In carrying out the said inspections, CySEC said that it found the measures and procedures adopted by a number of regulated entities for compliance with their obligations under the law to be insufficient.

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Romanian media mogul, others get prison sentences for fraud, money laundering
Fox Business, August 8, 2014

A Romanian court has handed a media mogul a 10-year prison sentence for money laundering and fraudulently privatizing an agricultural institute. Six other people were also given prison sentences in the 2003 sale.

The Bucharest Appeals Court on Friday sentenced Dan Voiculescu for using his political influence to buy the Food Research Institute for 100,000 euros ($135,000) — a fraction of its estimated value of 7.7 million euros ($10.3 million). The court also ordered the confiscation of property, television studios and land belonging to his Antena media group to cover damages.

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Transnational Crime and Terrorist Financing

U.S. Treasury Sanctions 3 Kuwait-Based Financiers for Alleged Terrorism Funding
The Wall Street Journal, August 6, 2014

By Jay Solomon

The Treasury Department sanctioned three Kuwait-based financiers on Wednesday for allegedly funding extremist groups in Syria and Iraq, underscoring the Obama administration’s growing concern about Kuwaitis’ links to al Qaeda and other terror groups.

The Treasury Department’s counterterrorism arm has grown increasingly vocal in recent months about Kuwaitis’ alleged role in raising funds for such groups, specifically those known as the Al Nusra Front and the Islamic State, through social media and other financing channels.

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Corruption

US Seizes $480 Million in Abacha Assets
The Wall Street Journal, August 7, 2014

By Samuel Rubenfeld

The U.S. Justice Department said Thursday it seized more than $480 million in assets hidden around the world by former Nigerian military dictator Sani Abacha and his associates.

U.S. officials called the haul, which represented proceeds of corruption stolen during Mr. Abacha’s rule, the largest forfeiture ever obtained through a kleptocracy action. A judgement entered Wednesday by U.S. District Judge John Bates in Washington, D.C. federal court follows a civil asset forfeiture complaint filed in November 2013 by the Justice Department alleging that Mr. Abacha, his son, an associate and others embezzled, misappropriated and extorted billions of dollars from the Nigerian government, and then laundered it through U.S. financial institutions and the purchase of U.S.-backed bonds.

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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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