Sophisticated financial services and legal specialists in the Global North are instrumental in facilitating the “systematic looting” of the Global South according to a founder of the Tax Justice Network.
In a comprehensive article published by the New Internationalist media organisation, John Christensen argues that the financial hubs of London, Zurich and New York, in cahoots with tax havens sheltering opaque shell companies, are at the forefront of enabling the systematic looting of oil and mineral resources and siphoning of proceeds of embezzlement and fraud.
US$1 trillion outflows
Christensen says while it is not possible to accurately measure these secretive illicit fund flows, it is estimated that outflows from less developed countries are in the region of US$1 trillion annually, roughly 10 times the volume of development assistance flowing in the other direction.
Very little of that illicit wealth returns to its source, he says, with much of it being used to buy real estate and luxury assets in the Global North.
Drawing attention to the Tax Justice Network’s Financial Secrecy Index, Christensen explores how tax havens adapt their laws and regulations to protect their allegedly criminal clients from investigation.
He says the secrecy given to clients comes in many guises, including shell companies, offshore trusts, bearer bonds, anonymous bank accounts, nominee company directors, minimalist accounting and lax reporting standards.
Christensen concludes that these facilitators of illicit financial flows are orchestrated by legions of lawyers, bankers, accountants and other enablers operating out of the world’s leading financial centres.
John Christensen’s article, Who’s the thief?, can be found here.
Categories: Trade Based Financial crimes News