Who really owns companies, bank accounts and other financial assets within their borders

WORLD BANK CALL FOR CRACKDOWN ON FINANCIAL SECRECY IS WELCOME

22 Jul 2011 09:21

Source: member // Christian Aid

Christian Aid has welcomed a new from the World Bank for countries to exchange information about who really owns companies, bank accounts and other financial assets within their borders, in a bid to help recover the billions currently stolen from poor countries each year.

‘Christian Aid is delighted that the Bank is speaking out about the urgent need for countries to lift the financial secrecy which criminals abuse to hide dirty money,’ said Dr David McNair, the agency’s Senior Adviser on Economic Justice.

‘At present, some countries obstruct investigators who are attempting to trace and recover the staggering amounts of money stolen from poor countries, by claiming that they do not have the information sought.

‘The Bank’s recommendation that countries should create publicly-available registries of who owns what within their borders could make a dramatic difference to poor countries, which currently struggle to trace and recover even a small fraction of the billions they lose to tax dodging, corruption and other financial crimes.

‘Christian Aid estimates that at present, the amount developing countries lose to tax dodging by companies trading across borders is some $160 billion a year, which is one-and-a-half times the amount they get in aid from rich countries.

‘Access to information is also crucial for tax authorities wanting to pursue suspected international tax dodgers. At present, many developing countries cannot access this information – global financial secrecy works powerfully against them.’

The Bank’s recommendations about reforms needed to help recover stolen assets come in a new 196-page report called Barriers to Asset Recovery.

It states: ‘Establishing a national bank registry of account holder information is a powerful tool to facilitate the tracing of assets and to accelerate and assist international cooperation.’

The World Bank also notes: ‘Because criminals often use other individuals, attorneys, and legal persons to hide assets, such tools would be even more useful if they identify the beneficial owner of the account and any power of attorney related to the account. By helping to identify accounts, central bank registries…speed the work of law enforcement authorities in asset recovery cases.’

As well as recommending the creation of such registries, the report makes a host of other suggestions aimed at helping developing countries recover more of the $20 to $40 billion which it estimates they currently lose through corruption each year. The Bank also estimates that of this huge outflow, only $5 billion of stolen assets has been repatriated over the last 15 years.

‘Christian Aid is also pleased to see the Bank recognising that what it calls ‘excessive banking secrecy’ is part of the problem facing poor countries and that greater exchange of financial information between countries is part of the solution,’ added Dr McNair.

Christian Aid is part of the End Tax Haven Secrecy campaign, which is calling on G20 leaders to agree at their November summit in Cannes, France, on action to effectively end tax haven secrecy. A new system through which all countries can automatically share financial information with each other is a critical part of such action.



For more information please contact Rachel Baird on 0207 523 2446, 07545 501 749 or rbaird@christian-aid.org