Recession-hit nations unanimous about preventing flight of capital
Monday, 27 April 2009
From Fazle Rashid
NEW YORK, April 26: One positive aspect of the global economic meltdown is the unanimity among nations about preventing flight of capital to places called "tax havens". The affected nations are pressing states that encourage "secrecy in banking" to return to international standard of banking.
Switzerland, Singapore, Macao and some other European countries are home to billions of stolen money. Most countries have agreed to make their banking system more transparent to make it difficult for holders of stolen money to stash their money in countries known as "tax havens".
Most famous of them, Switzerland, which has the largest chunk of stolen money is reluctant to change its banking system. Several nations have raised alarm about illicit capital flight.
The total illicit outflows of capital from developing countries, according to one estimate, will run into $1000 billion. The countries that suffer flight of capital includes in descending order China ($233 billion), Saudi Arabia ($54 billion), Mexico ($41 billion) Russia ($32 billion) and India ($22 billion).
The flight of capital from China is mainly due to trade mispricing, a common practice in which the multinationals corporations manipulate figures on earnings to minimise tax liabilities. The money earned through criminal activity, corruption, corporate tax evasions flow to financial centres with "low regulations" and high secrecy.
High profile scandals have made G20 nations to demand greater cooperation in tracking down stolen money and tackling the shadow financial system. Jurisdictions allowing secrecy, disguised corporations, anonymous trust accounts, fake foundations and money laundering are principal features of tax havens. It is designed to move money and obscure its sources.
The G20 nations are now demanding concrete reforms to dismantle the
shadowy network and enforce greater transparency and accountability in the global financial system. The G20 nations will accept international banking standard set by Organisation for Economic Cooperation and Development. The analysts say that unless the flight of capital is effectively stopped much of gains made by poor countries will come to naught.
The World Malaria Day has come and gone without any notice in Bangladesh. The day was observed on Saturday.
NEW YORK, April 26: One positive aspect of the global economic meltdown is the unanimity among nations about preventing flight of capital to places called "tax havens". The affected nations are pressing states that encourage "secrecy in banking" to return to international standard of banking.
Switzerland, Singapore, Macao and some other European countries are home to billions of stolen money. Most countries have agreed to make their banking system more transparent to make it difficult for holders of stolen money to stash their money in countries known as "tax havens".
Most famous of them, Switzerland, which has the largest chunk of stolen money is reluctant to change its banking system. Several nations have raised alarm about illicit capital flight.
The total illicit outflows of capital from developing countries, according to one estimate, will run into $1000 billion. The countries that suffer flight of capital includes in descending order China ($233 billion), Saudi Arabia ($54 billion), Mexico ($41 billion) Russia ($32 billion) and India ($22 billion).
The flight of capital from China is mainly due to trade mispricing, a common practice in which the multinationals corporations manipulate figures on earnings to minimise tax liabilities. The money earned through criminal activity, corruption, corporate tax evasions flow to financial centres with "low regulations" and high secrecy.
High profile scandals have made G20 nations to demand greater cooperation in tracking down stolen money and tackling the shadow financial system. Jurisdictions allowing secrecy, disguised corporations, anonymous trust accounts, fake foundations and money laundering are principal features of tax havens. It is designed to move money and obscure its sources.
The G20 nations are now demanding concrete reforms to dismantle the
shadowy network and enforce greater transparency and accountability in the global financial system. The G20 nations will accept international banking standard set by Organisation for Economic Cooperation and Development. The analysts say that unless the flight of capital is effectively stopped much of gains made by poor countries will come to naught.
The World Malaria Day has come and gone without any notice in Bangladesh. The day was observed on Saturday.