Today’s Top Stories from GFI: Cyprus to be Audited

Jay Owen Reforming Global Finance, SRI/ESG News

Global Financial Integrity Logo

Global Financial Integrity Logo


Contribute Here...

Take Action


Money Laundering in Cyprus

Money-Laundering Suspicion Stalls Europe’s Latest Bailout
The Wall Street Journal, March 4, 2013

By Charles Forelle and Matina Stevis

Cyprus’s newly elected government is bargaining for a €17 billion bailout from its euro-zone peers.

But the little island won’t get a cent until it wrestles with a long-standing issue: money laundering. Cyprus’s reputation as a transit point for shady cash, and its unusual connections to Russia, are making many of its would-be rescuers nervous.

Read More…

Cyprus agrees to independent audit of money-laundering policies
Associated Press, March 5, 2013

By Juergen Baetz

European finance ministers on Monday pushed cash-strapped Cyprus into accepting an independent audit on the implementation of the country’s policies aimed at combating money laundering to secure a bailout, officials said.

Cyprus, the euro region’s third-smallest economy, urgently needs money to prop up its ailing banks and keep its government afloat after getting caught up in Greece’s debt crisis.

Read More…

Beneficial Ownership

EITI board raises bar on global standards to report natural resource revenues
Trust Law, March 1, 2013

By Stella Dawson

The board of the Extractive Industry Transparency Initiative has raised the global standard for countries to disclose in greater detail the revenues they receive from natural resource wealth.

The decision by the EITI, a voluntary group that sets global standards on transparency for extractive industries, taken at a board meeting in Oslo this week, is designed to improve community access to information about oil, gas and mining projects, as a way to funnel more of that money into economic and social development.

Read More…

Abusive Transfer Pricing

Denmark to slap Microsoft with $1B in taxes after funneling profits overseas
TechSpot, March 4, 2013

By Rick Burgess

Microsoft’s clever accounting techniques may have been a little too clever, at least according to Danish authorities. Denmark officials are considering a tax levy of 5.8 billion kroner — or roughly 1.01 billion USD at current exchange rates — over Microsoft’s 2002 acquisition of financial software-maker Navavision. According to the report (Danish), this is Denmark’s largest ever tax case.

Reportedly, Microsoft has been using Carribean-based shell companies to operate Navavision’s enterprise planning and account units. This has enabled the Redmond software maker to funnel its profits away from Denmark — a country with a relatively modest 25 percent corporate tax rate. Naturally though, it’s difficult for any country to compete with commonly used tax havens like Bermuda, where the effective corporate tax rate is zero percent.

Read More…

UK firms to be forced to reveal where they pay tax
This is Money, March 2, 2013

By Alex Hawkes

Britain is to drop its opposition to plans that will force all European companies to say what tax they pay wherever they operate.

After agreement in Brussels last week that Europe’s banks must reveal the taxes paid in each country, the Treasury is understood to be backing proposals to widen this to all firms.

Read More…

How Cameron can show leadership on aid at the G8 this summer
The New Statesman, March 3, 2013

By Joe Powell

Sometimes good news isn’t boring. Since 2005, when hundreds of thousands of people marched on Edinburgh ahead of the G8 in support of the Make Poverty History campaign, child mortality in sub-Saharan Africa is down by 18 per cent and 21 million more children are in school. African leadership, with financial support from the G8 and other donors, has delivered a remarkable success story that far too few people know about.

The ONE campaign’s new report Summit in Sight: The G8 and Africa from Gleneagles to Lough Erne shows that this progress has not happened by accident. African leadership has helped the region to grow by an average of 5 per cent GDP for the past eight years, increasing the resources that governments have to spend on health and education. It was also a deliberate decision by Tony Blair and Gordon Brown to put African development issues at the top of the agenda for the Gleneagles summit in 2005 and to give it the political attention necessary to deliver a strong agreement. Eight years later there is an extra £7bn in development aid going to sub-Saharan Africa every year from G8 countries, and the agreement on debt relief has wiped out £22bn. Like all ventures, some of this aid fails but the vast majority improves the lives of some of the world’s poorest people, for example by paying for 5.4 million more people to access anti HIV/AIDS treatment.

Read More…


Iraq 10 years on: How Baghdad became a city of corruption
The Independent, March 4, 2013

By Patrick Cockburn

Iraqis are not naïve. Grim experience of their country’s rulers over the past 50 years leads many to suspect them of being self-serving, greedy, brutal, and incompetent. Ten years ago, some had hoped Iraqis might escape living in a permanent state of emergency as the US and Britain prepared to overthrow Saddam Hussein. Others were wary of Iraqis returning from abroad who promised to build a new nation.

A few months before the invasion, an Iraqi civil servant secretly interviewed in Baghdad made a gloomy forecast. “The exiled Iraqis are the exact replica of those who currently govern us… with the sole difference that the latter are already satiated since they have been robbing us for the past 30 years,” he said. “Those who accompany the US troops will be ravenous.”

Read More…

Kabul Bank Heads Sentenced for Corruption
Voice of America, March 5, 2013

An Afghan judge has sentenced the two former heads of what was once Afghanistan’s largest bank to five years in prison for involvement in the massive fraud scandal that brought the bank down in 2010.

Judge Shamsul Rahman Shams on Tuesday sentenced former Kabul Bank chairman Sherkhan Farnood and the bank’s former chief executive officer, Khalilullah Ferozi. The two men are also required to pay back the money stolen — some $531 million by Ferozi and $279 million by Farnood.

Read More…

Tax Evasion and Tax Avoidance

Swiss Bank’s Tax Evasion Sentence is Really Death
Forbes, March 5, 2013

By Robert W. Wood

The criminal sentencing of Switzerland’s oldest bank was sobering. Founded in 1741, Wegelin & Co. is closing, the first foreign bank in history indicted for facilitating tax evasion by U.S. taxpayers, the first to plead guilty and be sentenced. The sentencing caps an inglorious story. See Swiss bank Wegelin to close after U.S. tax evasion fine.

UBS turned over Americans and paid $780 million in fines but did not plead guilty to a crime. See UBS’ Bradley Birkenfeld Gets $104 Million, Blows Doors Off IRS Whistleblower Program. The older Wegelin wasn’t so lucky. It pleaded guilty and was sentenced to pay some $58 Million for conspiring to evade taxes. With $20 million of restitution, a $22 million fine and $15.8 million for fees Wegelin earned on the undeclared accounts, the U.S. recovered about $74 million.

Read More…

Illicit Wealth

Listing The World’s Billionaires: A Not-So-Exact Science
NPR, March 4, 2013

By Bill Chappell

There are more than 1,400 billionaires in the world right now, according to two sources — one in the U.S., and one in China. But the tallies by Forbes and Hurun Report differ on key points, including whether there are now more billionaires in Asia than anywhere else.

Forbes says its list of billionaires, released Monday, “now boasts 1,426 names, with an aggregate net worth of $5.4 trillion, up from $4.6 trillion.” Shanghai’s Hurun Report, which compiled its first global list this year after long tracking China’s wealthy, says it found 1,453 billionaires, with $5.5 trillion in combined worth.

Read More…

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

Support GFI, make a tax-deductable contribution today:

Contribute here...

Click here to unsubscribe