The United States now tops the global ranking of countries complicit in helping people hide their wealth, a pressure group said Tuesday and accused the world’s leading nations of blocking progress on reducing financial secrecy.
Ahead of a meeting of G7 finance ministers in Germany Wednesday, the Tax Justice Network called for the creation of a global asset register to end the ability of wealthy individuals to hide trillions in dollars.
“Globally, we’re starting to curb the financial secrecy used by Russian oligarchs, and also by tax evaders, corrupt politicians and organised crime around the world to hide and launder ill-gotten wealth,” said Alex Cobham, chief executive at the Tax Justice Network.
“But the US, UK, Germany, Italy and Japan cut back that global progress by more than half, fuelling financial secrecy instead of fighting it,” he added.
Tax Justice Network cited an EU estimate of $10 trillion being held offshore beyond the rule of law by wealthy individuals through secretive arrangements.
This is 2.5 times the value of all US dollar and euro bills and coins in circulation around the world today, the group noted.
The United States surged to the top of the organisation’s financial secrecy index, which scores each county’s financial and legal system on allowing individuals to hide money brought in from elsewhere.
It then multiplies this with the volume of financial services the country provides to non-residents.
By this measure the United States increased the amount of financial secrecy it provided by nearly a third, both registering a record score and providing double the amount of second-ranked Switzerland.
Certain US states have gained reputation for allowing the creation of companies and trusts with little oversight of the beneficial owners and low taxation.
The ranking also belies commitments by President Joe Biden to tackle global financial secrecy.
While many efforts by many smaller countries to require the disclosure of real owners led to a marginal decrease in the overall financial secrecy provided in 2021, the report found that excluding the United States, Britain, Germany, Japan and Italy, progress would have more than doubled.
“The G7 must make clear where they stand in the fight against financial secrecy by committing to a global asset register,” Cobham said.