New Index Ranks U.S. #1 in Offering Financial Secrecy to the Criminal and Corrupt
A statement from Transparency International U.S.
May 17, 2022
On Tuesday, the Tax Justice Network released its 2022 Financial Secrecy Index, ranking nations around the world based on “how intensely the country’s financial and legal system allows individuals to hide and launder money extracted from around the world.”
That report identified the United States as the most secretive financial jurisdiction in the world, a fact that significantly complicates U.S. efforts to root out global financial corruption and hold Russian oligarchs accountable for their dirty financial dealings.
Statement from Transparency International U.S. Executive Director Gary Kalman:
The Index confirms a worrying trend in the United States: despite taking bold stances against illicit finance and money laundering, the U.S. has moved to the top of the Financial Secrecy Index. That isn’t a prize the U.S. wants to claim for itself.
The combination of secrecy and size of our financial system puts the U.S. ahead of other notorious secrecy havens like the Cayman Islands and Switzerland. That’s a shameful distinction.
Over the past year, the U.S. has taken major steps toward creating a more transparent and accountable financial sector, from passing a landmark law to unmask anonymously owned shell companies used to launder dirty money to stepping up funding for investigative tools to go after criminal and corrupt actors. But the positives don’t excuse the fact that much more needs to be done, and our policymakers cannot afford to deprioritize this critical front in the fight against global kleptocracy and creeping authoritarianism.
The report specifically calls out the U.S. for a lack of oversight of trusts which several investigations have identified as vehicles for money laundering. The U.S. should not allow trusts to serve as financial black boxes, ready for exploitation by kleptocrats and criminals.
We should also extend anti-money laundering rules to all the gatekeepers to our financial system. This means that the lawyers, accountants, real estate professionals, and investment advisors need to know their clients. They must ask the questions to identify if the people behind the anonymous companies they help create and assist are sanctioned Russian oligarchs or other corrupt or criminal actors. Right now, there is no such obligation.
The transnational task force created to look for Russian assets should consider how the cross-border communication and information sharing can be continued beyond the current crisis and expanded to track all illicit funds.
In doing all this, lawmakers must provide the funding to properly implement and enforce any new rules.
Only with strong, focused, comprehensive laws will our country secure its financial future from manipulation by foreign kleptocrats and transnational corruption.
Transparency International U.S. is part of the world’s largest coalition against corruption. In collaboration with national chapters in more than 100 countries, through research, policy development, and advocacy, we are leading the fight to turn our vision of a world free from corruption into reality.
- Explore Tax Justice Network’s 2022 Financial Secrecy Index.
- Read TI U.S.’s bipartisan plan to combat global corruption.
- Read TI’s 2021 Trouble at the Top Report, highlighting the role of countries that score best on the Corruption Perceptions Index in facilitating transnational corruption.
Gary Kalman, Executive Director, Transparency International U.S.
Telephone: +1 215-439-7090