G20 fails to make substantive progress on black money; claims GFI president

G20 fails to make substantive progress on black money; claims GFI president

G20 fails to make substantive progress on black money; claims GFI president

The G-20 summit in Australia failed to make substantial progress on financial transparency and illicit flows, an eminent international think-tank famous for its pioneering work on black money has claimed.

"The G20 passed up a golden opportunity to begin tackling this global scourge by curbing the abuse of anonymous companies and instituting public country-by-country reporting for multinational corporations," said Raymond Baker,the president of Global Financial Integrity (GFI).

Considered to be a longtime authority on financial crime, Baker had recently co-authored an open letter to G20 leaders on the topic prior to the summit.

"Illicit financial flows — fuelled by anonymous companies and tax haven secrecy — undercut economic growth and tax revenues, drain roughly USD 1 trillion per year from developing and emerging countries and facilitate crime and corruption on a grand scale," Baker said.

G20 summit noticeably lacked in responses to illicit financial flows, one of the largest drags on development worldwide, a statement said.

The GFI has long advocated for basic financial transparency measures to hinder common methods of moving illicit money—specifically, public registries of company ownership information, public country-by-country reporting, and global automatic exchange of financial information.

All of these issues have enjoyed a worldwide surge of public momentum in recent years, but the G20's statements this weekend fell short of capitalising on this movement, the statement said.

According to the GFI, the G-20 commitment to automatic exchange of tax information is welcome but incomplete.

"While this is a welcome culmination of the G20's long track record of leadership on automatic exchange, the G20 failed to address the extension of tax information exchange to the other 100+ countries in the world," it said.

"For a couple of years, the G20 has declared that automatic exchange of financial information is 'the new global standard' and now we are proudly seeing that claim come to fruition," said GFI Policy Counsel Joshua Simmons.

"However, it's critical that the new framework for making information exchange a reality is able to accommodate the world's poorest countries, who suffer the effects of tax evasion and money laundering at least as much as and often substantially more than—rich countries," he added.