Today’s Top Stories from GFI: How Canada’s banks help money move in and out of tax havens

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How Canada’s banks help money move in and out of tax havens
CBC News, June 25, 2013

By Nicole Reinert and Zach Dubinsky

The murky world of offshore finance physically resides mainly in tropical islands, but it is not a world unto itself. As the recent leak of secret tax-haven files attests, offshore havens rely for their existence on the financial infrastructure of the big wealthy countries.

Scotiabank’s name appears 1,839 times in the leaked offshore files. Royal Bank comes up more than 2,000 times. CIBC is named in 1,347 leaked documents..

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Obama urged to prioritize development on Africa trip
Radio Netherlands Worldwide, June 26, 2013

By Cydney Hargis

Starting 26 June, Obama will visit Senegal, South Africa and Tanzania on what will be his second trip to the continent as president. His advisors say he hopes to focus on increasing trade, investments and other economic opportunities.

“This shouldn’t be a light-hearted and easy trip,” said Adotei Akwei, Africa advocacy director for Amnesty International. “It shouldn’t just be about economics and investing, because there are some serious issues that need to be addressed.”

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A Small Victory in the War on Corruption
Foreign Policy, June 21, 2013

By Laurence Cockcroft

The civil war in Syria overshadowed coverage of this week’s G8 Summit in Northern Ireland. Yet that wasn’t the only item on the world leaders’ to-do list. Little noticed by reporters, the summit ended up producing some small but important advances in the global fight against corruption.

British Prime Minister David Cameron pushed hard to convince his colleagues of the virtues of his transparency agenda, which he believes will foster global prosperity by curtailing tax evasion by multinational companies and the use of so-called “offshore centers” by businesses, corrupt officials, and organized crime.

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Tax Havens

Tax havens are here to stay, thanks to ‘City UK’
The Guardian, June 25, 2013

By Mark Donne

The British media is now in moving-on mode on the issue of tax havens. It would do well to pause, be less excitable about the pantomime of brand shaming and actually examine the depth to which tax havenry is hardwired into our economic model and columns of state.

Among the millions of column inches generated in the past two years on this issue, three words you will not find in sequential order are “City of London”. Extraordinary, when one considers the critical advantage our tax haven network offers the preponderance of offshore lawyers and accountants that cluster the Square Mile, siphoning off the rewards of capital flight. And that network that is growing, not receding.

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Money Laundering

Europol joins hunt on EU-Russia money laundering
EU Observer, June 25, 2013

By Andrew Rettman

The EU’s joint police body, Europol, is hunting Russian mafia money laundered in EU banks.The operation was revealed in a report by an investigator in the Strasbourg-based Council of Europe, Swiss MP Andreas Gross, outon Tuesday (25 June).

The paper says: “On 25 April 2013, a meeting took place at Europol in The Hague to … co-ordinate the investigation by anti-money-laundering experts of a number of countries concerned by transfers of funds originating in the tax reimbursement fraud denounced by Sergei Magnitsky.”

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Lebanon: Bank Settles Case With U.S.
The New York Times, June 25, 2013

By Rick Gladstone

Federal prosecutors announced Tuesday that a Lebanese bank linked to what they described as a vast money-laundering operation by Hezbollah, the militant Lebanese Shiite organization, had agreed to a $102 million settlement.

The settlement will come from $150 million impounded by the Justice Department last August from the bank, the Lebanese Canadian Bank, which is now in liquidation. Preet Bharara, the United States attorney for the Southern District of New York, said in a statement that the settlement “shows that banks laundering money for terrorists and narco-traffickers will face consequences for their actions, wherever they may be located.”

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Banking Secrecy

Cayman Islands Issues Action Plan On Beneficial Ownership
Tax-News, June 26, 2013

By Mike Godfrey

The Cayman Islands has said that it is committed to continue working with other nations towards the full implementation of the revised Financial Action Task Force (FATF) standards, in order to improve transparency of the ownership and control of companies in a way that ensures a level playing field across the world. This is a matter of good governance, as well as a means to tackle a wide range of illicit activities.

Collection and maintenance of beneficial ownership information by corporate service providers and trustees of express trusts has been a legal requirement in Cayman for more than a decade. The obligation on trust and corporate service providers to collect, update and retain such data is enforced through a regime that mandates a licensing process for trust and corporate service and an ongoing program of supervision and enforcement action that involves onsite regulatory inspections.

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Tax Evasion and Avoidance

Mexico aims to bring shadow economy into the light
Reuters, June 26, 2013

By Krista Hughes

Seeking to dismantle a black economy dragging on economic growth, Mexico wants to lure informal workers into the social security net – and the reach of the tax man.

Six in 10 Mexican workers, or 30 million people, live in the informal economy, eroding Mexico’s already-low tax base and hindering plans to set up a universal social security system.

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UBS’s French Unit Fined €10 million in Tax-Evasion Inquiry
Politico, June 26, 2013

By David Jolly

French authorities said Wednesday they fined the local unit of UBS, the largest Swiss bank, 10 million euros — the most possible under French law — for lax internal controls that enabled the bank’s sales representatives to help French clients evade taxes.

UBS France, based in Paris, and three current and former employees are already facing possible criminal charges on suspicion of having illegally sold banking services in the case, French prosecutors said on June 7.

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Illicit Financial Flows

Experts Weekly: What Next for US-Africa Relations?
Think Africa Press, June 26, 2013

By James Wan

Today, US President Barack Obama begins a weeklong trip to Africa where he will visit Senegal, South Africa and Tanzania. His mission, according to US officials, is to push US investment and help strengthen Africa’s democratic institutions.

US-Africa relations under Obama have been relatively low-key. This will be only the president’s second visit to the continent, and while the likes of Brazil, India and China have been increasingly active in Africa over the past few years, US engagement has been notably restrained.

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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.


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