Capital Flight
When capital flies, but corruption stays behind
Reuters, March 28, 2013
By Chrystia Freeland
One of the most important political and economic facts of this young century is that capital has been slipping the traces of the nation-state. Business is global; government is national. That mismatch is one of the big sources of tension in the world today: Whether it comes to taxes, bank regulation or immigration, the fact that money and politics no longer live in the same neighborhood makes consensus harder to achieve.
For Exhibit A, you could point to the flood of Russian rubles into Cypriot banks- and the dramatic consequences.
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GFI in the News
Li Huabo, Corrupt Chinese Bureaucrat or Fall Guy?
Businessweek, March 28, 2013
By Shai Oster and Andrea Tan
On a typically humid Singapore afternoon, Li Huabo leads visitors through the gates of his luxury condo complex—past the swimming pool, Jacuzzi, and reflexology center—to his three-bedroom apartment. He puts a stack of files on the dark marble dining room table while his wife gets juice from the kitchen, which looks out on a nature preserve.
Li, 51, is stocky, with a boyish face framed by dark wire-rimmed glasses and black hair. He’s as ordinary as a man could be. You’d never know he’s facing charges related to alleged crimes in his native China, where Li claims he could have received the death penalty.
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When national discourse on corruption turned political
The Guardian (Nigeria), March 28, 2013
By John Ogiji
The one-day seminar on national discourse on corruption, organised by the Niger State government, couldn’t have come at a better time, especially in view of the devastating effect of corruption on the national economy in the last five decades.
According to the United Nations office on drug and crime, not less than $400 billion was stolen from the Nigerian Treasury between 1960 and 1999.
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Combating Illicit Financial Flows
The Edge (Malaysia), March 27, 2013
By Shankaran Nambiar
It has been reported that Malaysia is among the countries with high illicit outflows. The Global Financial Integrity (GFI) report ranks Malaysia as having the third largest illicit outflows in the world, falling two slots below China and Mexico.
GFI is a Washington, DC-based non-government organization (NGO) that undertakes research and advocacy on cross-border flows of illegal money. GFI aims to curtail illegal financial flows and it seeks to suggest safeguards and solutions toward this end.
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Phantom Firms
Hong Kong government postpones plan to limit company information amid transparency fears
The Associated Press, March 28, 2013
Hong Kong’s government said Thursday it is postponing a plan to restrict public access to personal information about company directors after protests from journalists and business groups.
Information gleaned from the database was used in investigative news reports last year to help expose fortunes linked to Chinese leaders. Plans to limit who could see the data raised fears that Hong Kong’s position as a transparent and open financial center was slipping.
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Tax Havens
U.S. asks Liechtenstein for data in tax evasion probe
Reuters, March 27, 2013
By Katharina Bart
United States prosecutors have asked Liechtenstein to hand over data on foundations and other financial vehicles as part of their investigation into tax evasion by wealthy Americans.
Roughly 20 Liechtenstein-based fiduciary firms have been given a Friday deadline to tell U.S. officials how many Americans maintained financial ties in the principality, Katja Gey, head of Liechtenstein’s office for international tax matters, said on Wednesday.
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Cyprus crisis puts Austrian bank secrecy on agenda
Reuters, March 25, 2013
By Michael Shields
Cyprus’s financial crisis has put Austria’s centuries-old tradition of banking secrecy under fresh scrutiny, posing a potential political problem for Vienna as it faces European Union and U.S. pressure to crack down on tax cheats.
Austria and Luxembourg are the only countries that do not share with other EU members the identities of EU residents with cross-border bank accounts. Instead Austria taxes interest income at source and returns the money to other EU states.
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Indian banks open 55 branches in global tax havens
The Times of India, March 29, 2013
By Pradeep Thakur
With the country’s economic expansion, Indian banks are becoming more global than ever before. Ten banks have opened 100 branches in foreign jurisdictions as of February, 2013.
But, interestingly, these branches are more in tax havens than in countries which are India’s biggest trading partners. For instance, the US and China, one of India’s biggest trading partners, each account for only three of these bank branches. On the contrary, jurisdictions considered as tax havens such as Mauritius, Singapore, Hong Kong and the UAE account for 35%. And if UK-controlled provinces are added to the list, 55 of the 100 branches are in these countries alone.
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Money Laundering
Regulators target use of prepaid cards for money laundering
The Hill, March 28, 2013
By Megan R. Wilson
The White House is reviewing new regulations aimed at thwarting the use of prepaid credit cards to launder money across the border.
The Financial Crimes Enforcement Network (FinCEN) within the Treasury Department has been working on rules since 2011 that would require travelers to tell customs officials if they’re carrying more than $10,000 on the cards. Currently, travelers must only declare cash and travelers cheques above that amount.
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Two women plead guilty in Zetas money laundering case
The Austin American-Statesman, March 29, 2013
By Jazmine Ulloa
Two family members of one of the top leaders of the violent Zetas Mexican drug trafficking organization have pleaded guilty to their roles in a scheme that law enforcement agents said poured millions of dollars in drug proceeds into the U.S. quarter horse industry.
Zulema Trevino-Morales and Alexandra Trevino, relatives of the purported co-leader of the cartel, Miguel Angel Trevino Morales, are facing up to 20 years in prison and three years in prison, respectively, according to a plea agreement Friday in U.S. district court in Austin.
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