A financial watchdog group said in a new report that crime, corruption and tax evasion have cost the developing world nearly $6 trillion over the past decade, and that illicit funds keep growing, led by China. In this report, Global Financial Integrity (GFI), a Washington-based group that campaigns for financial accountability, states that China accounted for almost half of the $858.8 billion in “dirty money” that flowed into tax havens and Western banks in 2010, more than eight times the amounts for runner-ups Malaysia and Mexico. Total illicit outflows increased by 11 percent from the prior year. GFI said in its latest report released on December 17, 2012. Raymond Baker, director of GFI, stated:
Astronomical sums of dirty money continue to flow out of the developing world and into offshore tax havens and developed country banks. Developing countries are hemorrhaging more and more money at a time when rich and poor nations alike are struggling to spur economic growth. This report should be a wake-up call to world leaders that more must be done to address these harmful outflows.
All the countries in the top ten, which this year saw India, Nigeria, and the Philippines join the ranks, face significant problems with corruption, and in most there are vast gaps between rich and poor citizens as well as internal security problems. GFI called on world leaders to accelerate efforts to curtail the flow of dirty money by clamping down on secret bank accounts and ownership of shell companies; reforming customs and trade protocols so that export/import payments cannot be used to hide illegal fund transfers; requiring multinational companies to report their profits by country to prevent tax avoidance; and strongly enforcing anti money-laundering laws.
Source: Insurance Journal
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