GFI in the News
Africa Leaders Summit: America’s dirty little Secret
The Hill (US), August 6, 2014
By Diana Ohlbaum
This week’s U.S.-Africa Leaders Summit is designed to showcase Africa in a new light, focusing on its economic potential as a trading partner and investment opportunity. With 10 of the world’s 12 fastest-growing economies in Africa, both U.S. and African officials are keen to convince U.S. corporations that Africa is a wise place to do business.
What’s being left unsaid, or conveniently glossed over, is that international trade rules are part of what keeps Africans poor. It’s not just because these rules tend to benefit wealthy countries, which have teams of experienced lawyers and negotiators to ensure that their own interests and demands are met. It’s also because the system makes it easy to steal public resources and conceal the ill-gotten gains abroad. As a result, more money is leaving Africa than is going in.
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Banking Secrecy May Not Be Over: The Indian Predicament
International Policy Digest, August 3, 2014
By Jos Koppanalil
Black money stashed away in tax havens abroad has remained one of the most destabilizing forces facing developing nations. In fear of losing their reputation as a safe haven for investment, the financial institutions of the countries where these funds finally get routed, refuse to disclose details pertaining to the account holder citing reasons of confidentiality and banking ethics.
However, the implication of this denial on the ordinary population of the countries where these black monies have their origin is catastrophic. This should not be seen as an economic or financial phenomenon. Rather, this is blatant violation of the moral rights and dignity of poor tax paying citizens.
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Phantom Firms
Oil Companies Are Funding Mysterious Angolan Research Center That May Not Exist
The Huffington Post, August 6, 2014
By Kate Sheppard
Oil companies BP and Cobalt International Energy agreed in December 2011 to provide $350 million to construct a research institute in Angola, as a condition of gaining drilling rights for an offshore block of the African country’s coast. So far, the companies have paid half that amount — but there’s no evidence the project actually exists.
The United Kingdom-based nonprofit Global Witness flagged the project in a report released Tuesday, as leaders of African nations are in Washington for a summit with U.S. officials. The payments, the group says, show the need for greater transparency in oil and gas industry transactions abroad, particularly in regions with a history of corruption.
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Illicit Financial Flows
Follow the money to root out threat of financial crimes
The Hill (US), August 6, 2014
By William Danvers
Financial crime is one of the greatest threats to the economic and social well-being of people living in all countries. Tax evasion, corruption and money laundering cost developing countries alone well over $1 trillion every year. The proceeds from activities associated with financial crimes are estimated to account for some 3.6 percent of global GDP. The time is ripe for a discussion on what to do about this problem — and a perfect opportunity lies in the Obama administration’s work with African leaders.
Since 2000, Africa’s GDP has grown annually by more than 5 percent on average. In spite of headwinds from the global economy, growth remained strong in 2013. The 2014 outlook remains positive, in part, because Africa’s recent economic dynamism has been underpinned by some sound macroeconomic policies and stronger partnerships with major emerging markets.
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Tanzania: FIU Has No Powers to Investigate, Prosecute Cases
AllAfrica, August 6, 2014
By Finnigan Wa Simbeye
Treasury’s Financial Intelligence Unit has no powers to investigate or prosecute culprits of money laundering but simply analyze data from whistleblowers on the crime and forward their findings to relevant state organs.
Speaking in Dar es Salaam Monday, the acting Commissioner of FIU, Onesmo Makombe said their role was simply administrative which limits them to providing analytical information to state organs including Prevention and Combating of Corruption Bureau (PCCB), Tanzania Revenue Authority (TRA) and Tanzania Police Force.
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Of financial crimes and toothless tigers
The Financial Express (Bangladesh), August 6, 2014
By Shamsul Huq Zahid
The Central Bureau of Investigation (CBI) of India on August 02 night arrested the chief executive officer (CEO) of a state-run bank from southern city of Bengalore along with 11 others, allegedly, for taking bribes in exchange for loan extensions to private companies. The arrestees included two directors of Delhi-based private firms.
A CBI statement, released after the arrest, said its investigators had raided 20 places in four cities and found ‘incriminating’ documents. The CBI men also had recovered cash, jewellery and property papers at the residence of the bank’s CEO. The CBI also had laid a trap and recovered Rs.5.0 million paid as bribe to the CEO in question by the loan extension seekers.
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Money Laundering
Standard Chartered faces fresh US fines over money laundering rule breach
The Guardian, August 6, 2014
By Jill Treanor
Standard Chartered has warned that it faces fresh fines from the US authorities for breaches of money laundering rules as it posted a 20% fall in first-half profits.
Two years ago the Asian-focused bank was fined $667m (£396m) for scheming with Iran to hide billions of pounds of transactions from the US authorities. It said new issues have now arisen which could lead to fresh penalties from the New York State department of financial services (NYSDFS).
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Capital One Says Subpoenaed Over Anti-Money Laundering
Bloomberg, August 6, 2014
By Elizabeth Dexheimer
Capital One Financial Corp. (COF) said it received subpoenas from the New York District Attorney’s Office as part of a money-laundering probe.
The request relates to “certain check-casher clients of the commercial-banking business,” the McLean, Virginia-based firm said yesterday in a regulatory filing. Capital One said it’s cooperating with the investigation.
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Tax Evasion and Avoidance
Walgreens denies seeking tax haven abroad
The Telegraph (UK), August 6, 2014
Walgreen plans to keep its roots firmly planted in the United States, saying it will no longer pursue an overseas reorganisation that would have trimmed the amount of US taxes it pays.
America’s largest pharmacy chain said that, as previously planned, it will buy the remaining stake in Swiss health and beauty retailer Alliance Boots that it does not already own.
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Transnational Crime and Terrorist Financing
U.S. to host meeting on combating trafficking in West Africa
Reuters, August 6, 2014
By Stella Dawson
Trafficking from Latin America through West Africa has morphed into a multinational criminal business that trades in narcotics, people, wildlife and arms, the United States said in announcing a meeting on Friday with 15 West African governments to discuss the growing security challenge.
West Africa has become a major transit point for drugs heading for Europe, notably cocaine from South America since U.S. assistance to combat drug trafficking in Colombia and Central America has borne fruit.
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Bill defines smuggling as economic sabotage
The Philippine Daily Enquirer, August 6, 2014
The partylist group Abono has filed a bill to fight the smuggling of agricultural products, making the illegal activity a form of economic sabotage.
Rosendo So, Abono chair, said House Bill No. 4767, known as the “Direct and Technical Smuggling as Economic Sabotage Act of 2014,” would help local producers and manufacturers compete and eliminate unfair competition.
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