The US tops the list of countries for enabling banking secrecy, shell companies, anonymous real estate ownership or other forms of financial secrecy, which in turn enable money laundering, tax evasion and the evasion of sanctions according to the Tax Justice Network’s (TJN’s) Financial Secrecy Index published this week.
Earning the worst rating ever recorded since the ranking began in 2009, the US is amongst five G7 countries, alongside the UK, Japan, Germany and Italy, that are responsible for slowing global progress against financial secrecy.
Singapore, Hong Kong, Luxembourg, British Virgin Islands, Guernsey and the UAE also appear in the top ten countries most complicit in helping individuals to hide their wealth from the rule of law.
Lack of information exchange
The US topped the index after it increased its supply of financial secrecy to the world by almost a third since 2020, resulting in the largest supply of financial secrecy ever measured by the index according to TJN.
It says the US’ supply of financial secrecy is now nearly twice as large as that of second-placed Switzerland, partly driven by the US worsening its secrecy score, mostly by again failing to meet international standards and practice on information exchange with other countries.
The increase is also driven by the US increasing the volume of financial services it provides to non-residents by 21 per cent.
The index does however report that the global supply of financial secrecy services is continuing to decrease globally due to transparency reforms. But TJN’s chief executive, Alex Cobham, is concerned that some developed countries are restraining progress.
“The Financial Secrecy Index 2022 confirms that transparency reforms are working,” he says. “But the US, UK, Germany, Italy and Japan cut back that global progress by more than half, fuelling financial secrecy instead of fighting it,” Cobham concludes.
The Tax Justice Network’s Financial Secrecy Index can be found here.
More detailed analysis of the index can be found here.
Categories: Trade Based Financial crimes News