Paradise Papers point to networks that facilitate trade-based financial crime

Recently leaked documents dubbed the Paradise Papers point to a global shadow financial system in which illicit fund flows (IFFs) are facilitated according to Global Financial Integrity (GFI).

The research and lobby group that raises awareness of and campaigns against IFFs also maintains that the shadow system, with its anonymous companies and lack of information about their beneficial owners, significantly helps facilitate trade-based financial crime.

Shadow financial system

According to GFI, the Paradise Papers revealed by the International Consortium of Investigative Journalists show how global offshore law firm Appleby has shown on paper that it is aware of its requirements to conduct thorough and honest customer due diligence with potential and existing clients.

But the papers also show that the Bermuda-based law firm rarely puts this into practice according to GFI.

Abuse of secrecy

“Doing legitimate business in offshore secrecy jurisdictions like Bermuda is not illegal, but the Paradise Papers investigation is yet another example of how individuals and businesses…are systematically abusing the secrecy they provide,” according to GFI president, Raymond Baker.

GFI research estimates that opacity in the global financial system, thanks to trade-based money laundering, tax haven secrecy, anonymous companies, and lax financial crime enforcement, churns billions of US dollars of IFFs in and out of developing countries.

Categories: Trade Based Financial crimes News

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