Global Financial Integrity - Policy Focus

Policy Focus

Global Financial Integrity's areas of research apply primarily to stemming illicit financial flows, an illegal form of capital flight. GFI argues that illicit financial flows make poverty endemic; for every $1 poor nations receive in foreign aid, $10 in dirty money is taken abroad illicitly. The lack of controls on illicit outflows enable drug cartels, terrorist organizations and tax evaders to secretly move money around the world. The billions of dollars taken out of the third world embeds poverty, strips developing nations of critical resources, and contributes to failed states.

One notable area of focus is trade mispricing, the practice of shifting profits overseas by over or under invoicing intracompany transactions. Extractive Industries tend to be the focus of this initiative, as their international presence makes it easy to conduct trade mispricing to shift profits into low-tax jurisdictions. A major initiative of GFI was pushing for the Energy Security Through Transparency amendment to the Dodd-Frank Financial Reform Bill. The amendment mandated that extractive industries report on the profits earned and taxes paid in every country in which they operate, increasing transparency and making transfer pricing abuse more difficult.