The United States is the country that, with its financial system, legislation, and economic weight, contributes the most to concealing the wealth of high-income earners. The facilities offered by the world’s largest economy to hide assets are twice that of Switzerland, according to the Tax Justice Network’s Financial Secrecy Index.
“The provision of financial secrecy services, such as those used by Russian oligarchs, tax evaders, and corrupt politicians, is declining worldwide due to transparency reforms,” but the United States, the United Kingdom, Japan, Germany and Italy are responsible for halting that progress by more than half, according to the report. The Tax Justice Network decries the existence of a hidden fortune estimated at $10 billion through opaque agreements across third countries. This amount is equivalent to more than 2.5 times the value of all dollar bills, euros and coins currently in circulation around the world.
According to the report, the countries that top the Financial Secrecy Index are the United States, Switzerland, Singapore, Hong Kong, Luxembourg, Japan, Germany, the United Arab Emirates, the British Virgin Islands (British Overseas Territories) and Guernsey (British Crown dependency). Mexico is in 82nd place.
The index identifies that the United States’ refusal to mutually share information with tax authorities in other countries is one of its main contributions to the opacity of asset transparency; That is, while 100 economies automatically share data about the financial accounts of non-residents in their jurisdictions.
In 2020, the Organization for Economic Co-operation and Development reported that this automatic exchange of information has brought transparency to more than $11 trillion in hidden wealth and assets, according to a Tax Justice Network report.
“It is hypocritical for the United States, under the Foreign Account Tax Compliance Act (FATCA) and associated intergovernmental agreements, to require all countries to share information about U.S. taxpayers’ foreign financial accounts, while in turn sharing little or no information,” the report condemns.
The G7 nations are expected to commit this week to imposing sanctions on the hidden assets of Russian oligarchs, but the United States, the United Kingdom, Germany, Japan and Italy are among the countries that contribute the most to the opacity of financial information. , 12.7 percent worldwide.
In practice, this means that the world’s seven most important economies, with the exception of France and Canada, top the lists of wealth-hiding facilitators. Alex Cobham, executive director of the Tax Justice Network, demanded, “The G7 must clarify its position in combating financial secrecy by adhering to a global asset registry.”
The report adds that Russia increased its contribution to global financial secrecy by 5.5 percent, moving from 44th place to 43rd place in the ranking, after enacting a law allowing the creation of private foundations or “personal funds” without the need to register their holders. Registered with a public body and after it stopped sharing bilateral banking statistics with the BIS.
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