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Tag: Illicit Finance


A Call for Action on De-Risking – Podcast with US Treasury Under Secretary Nathan Sheets

Blog Post

Recently, CGD launched a major report about how laws designed to prevent money being sent overseas to terrorists and criminals can also have unintended consequences for innocent people in developing countries.

These laws impose huge fines on financial institutions that have done business with a dodgy client – knowingly or not. To avoid the risk of these fines, banks pull out of markets they see as potentially risky. That tends to mean developing countries.

US Treasury Under Secretary Nathan Sheets Calls for Action on De-risking at CGD Report Launch Event

Blog Post

Last Thursday, Under Secretary of the US Treasury Nathan Sheets spoke at CGD about anti–money laundering policies and the problem of de-risking, in connection with the launch of a new CGD working group report on the unintended consequences of anti–money laundering policies for poor countries. Sheets’s comments were consistent with the report’s key recommendations including the need for better data and for clearer guidance from financial regulators and standards setters.

Are Anti–Money Laundering Policies Hurting Poor Countries? – Podcast with Clay Lowery and Vijaya Ramachandran

Blog Post

Are laws designed to prevent money laundering, terrorism-finance and sanctions violations unintentionally hurting people in poor countries? That’s the question a recent CGD Report seeks to address. Anti-money laundering/combating the finance of terrorism laws (AML/CFT) are grounded in reasonable national security concerns – to prevent the cross-border flow of funds to terror or criminal groups. Banks, if unable to identify the end-customer of an international transaction, could find themselves (unwittingly or not) in breach of these laws, and facing stiff penalties.

Are Anti–Money Laundering Policies Hurting Poor Countries? – New CGD Working Group Report

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Next week, the G-20 Leaders will meet in Antalya, Turkey, to continue their conversation about the importance of financial inclusion in achieving strong, sustainable, balanced economic growth. One item on the agenda will be the cost of remittances. In 2009, G-8 Leaders set a goal of reducing remittance costs to 5 percent within 5 years, roughly a 5 percentage point decrease.

Talking about Tax Is Taxing: Pretending It Is Simple Will Hurt the Poor

Blog Post

Here’s an obvious truth: tax lost to trade misinvoicing in Africa does not equal tax lost to transfer mispricing by multinational corporations in Sierra Leone, which does not equal lost health-care spending. Unfortunately, a policy paper released on Tuesday by Oxfam makes exactly these equivalences. This sort of imprecision is widespread, and it’s not going to help the poor.

Extending the UK Charity Commission’s Anti-Terror Powers Could Backfire

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During the Queen’s Speech, newly re-elected British Prime Minister David Cameron proposed an extended counter-extremism bill in order to confront “head-on the poisonous Islamist extremist ideology.” A press release from the Prime Minister’s office said that the Bill would give new powers to the UK’s Charity Commission to identify charities that use their income to fund extremism and terrorism.

How Can We Make Illicit Finance Less Illicit?

Blog Post

The truth is: we don’t know much about illicit finance. We don’t have exact figures on the volume of transactions which could fall within this category, and we also don’t know whether these transactions have any significant impact in developing countries and elsewhere. Adding up estimates of different types of illicit flows provides lurid headline figures (one trillion dollars a year) but more specific analysis is needed to determine whether, and how much, better policies might improve development.