In its report, titled: “Illicit Financial Flows from Developing Countries: 2003-2012,” Global Financial Integrity (GFI) placed the country 15th out of 145 economies from 2003 to 2012 with illicit financial flows (IFF) reaching $93.49 billion in that period or an average of $9.35 billion yearly.
Last year, the Philippines ranked 13th out of 150 countries with illicit outflows totaling $88.87 billion from 2002 to 2011, or an average of $8.89 billion per year.
GFI defined “IFFs” as “illegal movements of money or capital from one country to another.”
Examples of IFFs, GFI said, include a drug cartel using laundering schemes to mix legally and illegally obtained money, an importer underdeclaring value of shipments to evade payment of duties, a public official using a shell firm to transfer illicit money to a bank account, a human trafficker carrying a briefcase of cash and depositing them in a foreign bank and a terrorist wiring money from one continent to another.
Sought for comment, Internal Revenue Commissioner Kim S. Jacinto-Henares said in a telephone interview that the country’s ranking could be due to existing laws that still limit the ability of regulators from going after suspected money launderers.
“We cannot really trace the flow of money because of the bank secrecy law,” she said. “We have been asking to lift the bank secrecy law since time immemorial.”
Ms. Henares said tax evasion should also be listed as a “predicate crime” under the anti-money laundering law. Predicate crimes are activities that generate money or property unlawfully, according to the Anti-Money Laundering Council’s Web site.
GFI said developing economies lost a total of $6.59 trillion in illicit outflows from 2003 to 2012, increasing 9.4% annually.
“After a brief slowdown during the financial crisis, illicit outflows are once again on the rise, hitting a new peak of $991.2 billion in 2012,” GFI said.
By country, China had the highest IFF at $125.24 billion on average, followed by the Russian Federation ($97.39 billion), Mexico ($51.43 billion), India ($43.96 billion), Malaysia ($39.49 billion), Saudi Arabia ($30.86 billion), Brazil ($21.71 billion), Indonesia ($18.78 billion), Thailand ($17.17 billion) and Nigeria ($15.75 billion).
Asia had the highest volume of IFF, comprising 40.3% of the total, followed by developing Europe (21%), the Western Hemisphere (19.9%), Middle East and North Africa (10.8%) and Sub-Saharan Africa (8%).
“Illicit financial flows from developing countries are facilitated and perpetuated primarily by opacity in the global financial system,” GFI said.
“This endemic issue is reflected in many well-known ways, such as the existence of tax havens and secrecy jurisdictions, anonymous companies and other legal entities, and innumerable techniques available to launder dirty money.”
GFI gave nine recommendations “on curbing opacity in the global financial system”: governments should form public registries of meaningful beneficial ownership information on all legal entities; financial regulators should compel banks to identify the true beneficial owner of an account; adoption of Financial Action Task Force recommendations on anti-money laundering; ensuring that anti-money laundering regulations are enforced strongly; requiring multinational companies to fully disclose financial information on a country-by-country basis; participation in an automatic exchange of tax information; closer scrutiny of trade transactions involving tax haven territories; boosting customs enforcement; and adopting a “clear and concise Sustainable Development Goal to halve trade-related illicit financial flows by 2030.”
Click to enlarge
No comments:
Post a Comment