The Guardian: $1.3tn of assets from Russia sitting offshore

11:21, 10 May 2016
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New research has revealed that $1.3 trillion of assets from Russia were sitting offshore by the end of 2014, according to the Guardian.

More than $12 trillion has been siphoned out of Russia, China and other emerging economies / Photo from ideamaniya.ru

The analysis, carried out by Columbia University professor James S Henry for theTax Justice Network (TJN), shows that by the end of 2014, $1.3 trillion of assets from Russia were sitting offshore, the Guardian wrote.

The figures, which came from compiling and cross-checking data from global institutions including the International Monetary Fund and the United Nations, follow the Panama Papers revelations of global, systemic tax avoidance.

Read alsoICIJ releases database revealing thousands of secret offshore companiesMore than $12 trillion (GBP8 trillion) has been siphoned out of Russia, China and other emerging economies into the secretive world of offshore finance, as David Cameron prepares to host world leaders for an anti-corruption summit, the Guardian said.

Chinese citizens have $1.2 trillion stashed away in tax havens, once estimates for Hong Kong and Macau are included. Malaysia, Thailand and Indonesia – all of which have seen high-profile corruption scandals in recent years – also come high on the list of the worst-affected countries.

Oil-rich countries including Nigeria and Angola feature as key sources of offshore funds, the research finds, as do Brazil and Argentina. Henry, a former chief economist at consultancy McKinsey, told the Guardian that the owners of this hidden capital were often so keen to secure secrecy and avoid their wealth being appropriated back home, that they were willing to accept paltry financial returns rather than investing it in ways that might promote economic development. Charging just 1% tax on this mountain of offshore wealth would yield more than $120 billion a year, almost equivalent to the entire $131 billion global aid budget.

Read alsoU.S. Embassy in Ukraine, FBI donate $500,000 worth of equipmentThe TJN is urging Cameron to push for agreement on a series of issues at an anti-corruption summit on Thursday, including a tougher crackdown on the banks, lawyers and other professionals who facilitate financial secrecy and an obligation on all politicians to make their personal financial situation transparent.

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