THE Global
Financial Integrity (GFI) has urged members of the European Parliament
to support the creation of public registries of corporate ownership information
in the upcoming vote on key revisions to the European Union (EU) Anti-Money
Laundering Directive (AMLD). The pressure comes as GFI revealed that nearly
US$70 billion in illicit financial flows-the proceeds of crime, corruption,
and tax evasion-flowed into or out of developing and emerging EU member-states
in 2011.
GFI
has noted that the February 13th vote would be a key moment for the future
of financial transparency.
Developing EU Countries Hit By 'Devastating' Illicit Financial Flows
Research
published yesterday by GFI finds that USD 68.9 billion flowed illegally into
and out of developing and emerging EU member-states in 2011. The analysis,
compiled by GFI Junior Economist Brian LeBlanc, reveals that Bulgaria, Croatia,
Latvia, Lithuania, Poland, and Romania hemorrhaged US$20.8 billion in illicit
financial outflows in 2011. GFI further found that a massive US$48.1 billion
of capital and merchandise was illegally smuggled into these five countries
in 2011, fueling crime and driving the underground economy.
"The scale of illicit capital and merchandise moving into and out of developing
EU member states is devastating," said Brian LeBlanc, an economist at GFI.
"We're seeing an incredibly worrying acceleration in both illicit inflows and
outflows. There is an urgent need to eliminate anonymous shell companies by
establishing public registries of corporate ownership information."
"Illicit financial flows increase the size of the underground economy, decrease
tax revenues, facilitate corruption, and allow organized crime to flourish,"
continued Mr. LeBlanc, "They are an important factor holding back economic
growth in developing EU member states."
Global Financial Integrity produces estimates of illicit financial flows for
countries classified by the IMF as developing and emerging economies. They
have not produced estimates of other EU member states.
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