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GFI in the News

Kenyan AG Vows to Fight Money Laundering Kingpins
Standard Media (Kenya), September 27, 2013

By James Mbaka

NAIROBI – The Attorney-General (AG) Prof Githu Muigai has warned that the Government will crackdown on perpetrators of illicit capital flows in the country.

Speaking in a Nairobi hotel, when he officially opened a workshop on Illicit Financial Flows (IFFs), the AG said the State has put in place measures to combat illegal transfer of cash into and out the country.

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Can Xi’s Governing Strategy Succeed?
Brookings Institution, September 26, 2013
By Cheng Li and Ryan McElveen

When Xi Jinping assumed his position as the new face of the Chinese leadership in November 2012, the optimism was palpable. Emerging from what some considered to be a “lost decade” under the leadership of Hu Jintao, China was ready for a new approach to steering the Middle Kingdom’s continued global rise. In his first days, Xi earned deserved praise at home and abroad as he embarked on an anti-corruption campaign, called on officials to use plain language and avoid ostentation, proclaimed the ultimate importance of the rule of law, and followed in Deng Xiaoping’s economic reformist footsteps by traveling south to Shenzhen, the site of China’s first special economic zone.

As Xi’s honeymoon has progressed, however, the initial deluge of optimism has slowed to a trickle. Many watchers of the Chinese leadership have become dispirited by a lack of substantive progress toward much-needed political reform, while Chinese public intellectuals have been dismayed by orders instructing them not to speak about seven sensitive issues: universal values, freedom of the press, civil society, civil rights, past mistakes by the Chinese Communist Party (CCP), crony capitalism, and judicial independence. Media censorship has tightened, and participants in human rights activities have encountered increasing political harassment and even arrest.

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Government study to assess quantum of black money yet to complete
PTI, September 30, 2013

NEW DELHI – The much-touted study to assess the estimate of black money stashed in the country and abroad is yet to be completed despite an assurance given by Government in 2011 to finish the task within 18 months.

The study was constituted in March 2011 when the nation was debating on the amount of black money stashed within as well as outside the country with figures being projected by politicians and civil society to lakh of crores.

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Money changing businesses at heart of Saddle River Valley Bank case
The Record (Bergen County, NJ), September 30, 2013

By Hugh R. Morley

The presence of four casas de cambio, or money-changing businesses, at the heart of allegations that the former Saddle River Valley Bank violated federal anti-money-laundering laws was, in some ways, not surprising.

Similar Latin American money-changing businesses, which provide a combination of currency exchange, wire transfer and check-cashing services, have for years come under scrutiny from federal authorities trying to clamp down on money laundering, especially drug money.

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Financial Transparency Coalition Conference

Tanzania has shown how civil society can contribute to economic justice
The Guardian (Op-Ed), September 30, 2013

By Semkae Kilonzo

DAR ES SALAAM, Tanzania – In the Ileje district of southern Tanzania, expectant mothers about to give birth had to cross a crocodile-infested river into Malawi because a local medical centre did not have enough money to pay for a midwife.

It took a campaign by civil society organsations and citizens to uncover that there was money available, but that it had somehow been diverted. Once it became clear there was a staff budget, remedial action was taken. Now the women of Ileje receive pregnancy and birth delivery services without risking their lives on a needless, long and hazardous journey.

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Money Laundering

Nigeria central bank cracks down on money laundering
Reuters, September 27, 2013

LAGOS – Nigeria’s central bank has announced new measures to tackle money laundering it says is weakening the naira currency and risks pushing up inflation, and which it suspects is linked to early political campaigning for 2015 elections.

“Available statistics indicate that Nigeria has become the largest importer of U.S. dollars,” the regulator said in Friday’s notice explaining that its twice-weekly wholesale foreign exchange auction will be replaced with a retail version requiring dealers to reveal the identity of their buyers.

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Money-Laundering Continues to Plague Brokers
The Wall Street Journal, September 27, 2013

By Matthias Rieker

Money-laundering enforcement actions against brokers are rising steadily, along with shortcomings exposed in regulatory examinations, even as most brokerage firms contend that the issue is under control.

Since the Bank Secrecy Act began to apply to brokers in 2002, firms have set up procedures to fish out suspicious activities and have put anti-money laundering officers in charge. But problems persist below the surface. This month alone, four firms got dinged with anti-money laundering violations by the Financial Industry Regulatory Authority Inc.; so far this year, Finra said 23 disciplinary cases included such violations.

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Tax Evasion and Avoidance

U.S., Panama in talks on tax evasion pact –Treasury
Reuters, September 27, 2013

By Patrick Temple-West

WASHINGTON – The United States and Panama are in talks on a tax evasion agreement, the U.S. Treasury Department said on Friday, a sign of U.S. progress in implementing a crackdown on U.S. tax cheats.

The Foreign Account Tax Compliance Act (FATCA), enacted in 2010, takes effect in July 2014. It requires foreign financial institutions to tell the U.S. Internal Revenue Service about Americans’ offshore accounts worth more than $50,000.

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Google pays $55 million tax in Britain on 2012 sales of $5.5 billion
Reuters, September 30, 2013
By Tom Bergin

LONDON – Google, which has been grilled twice in the past year by a UK parliamentary committee over its tax practices, had a UK tax bill of 35 million pounds ($55 million) in 2012, on sales of $5.5 billion to British customers, its accounts showed.

The Internet search giant paid a tax rate of 2.6 percent on $8.1 billion in non-U.S. income in 2012, because it channeled almost all of its overseas profits to a subsidiary in Bermuda which levies no corporate income tax, the group’s accounts show.

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Footballer Lionel Messi appears in court over tax evasion allegations
Financial Times, September 27, 2013
By Miles Johnson

Lionel Messi, the Barcelona and Argentina footballer, appeared in a Spanish court on Friday to defend himself against allegations of evading €4.2m of taxes related to the four-time world player of the year’s image rights and sponsorships.

The 26-year old forward, whose prolific scoring for Barcelona has won him recognition as one of the best footballers of his generation, has been accused by prosecutors alongside his father, Jorge, of using a complex network of shell companies in Belize and Uruguay to avoid paying Spanish taxes on the earnings.

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Phantom Firms

Cargill may have broken law over Colombia land buying: Oxfam
Reuters, September 27, 2013
By Peter Murphy

BOGOTA – U.S. commodities trader Cargill bought a large area of farming land in Colombia many times bigger than the legal limit by setting up dozens of “shell companies”, violating the spirit of agrarian reform laws, charity Oxfam said in a report Friday.

In the research report “Divide and Purchase,” Oxfam says Cargill set up the companies to buy land up to the legal limit for any individual or company, to farm all of the adjoining land as a single plantation and get around restrictions designed to promote distribution of land to smallholder farmers.



France opens corruption probe into uncle of Syria’s Assad
Reuters, September 30, 2013
By Gerard Bon and Alexandria Sage

PARIS – Paris prosecutors said on Monday they had opened a preliminary investigation into whether an uncle of Syrian President Bashar al-Assad illegally acquired millions of dollars of assets in France.

Two French anti-corruption campaign groups, Sherpa and Transparency International France, filed a complaint earlier this month alleging corruption, money-laundering, embezzlement of public funds and misuse of corporate assets by Rifaat al-Assad, a former military commander.

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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.