The challenge of financial transparency

Krishen Mehta

A developing country perspective

Why is recovery of funds so difficult?

The principle of layering

How does layering affect information exchange?

  Licit accounts subject to information exchange, but only a small amount

    Illicit accounts, real owner is unknown, and the majority of the funds are here

Who protects these accounts?

Switzerland, Singapore, Dubai

Island nations like Cayman, Jersey, Isle of Man (UK)

Enclaves like Delaware, Wyoming, Florida (US) 

The cost benefit of "Swiss Banking”

Who wins, who loses? Implications, long-term

How beneficial are DTAA, TIEA and AEI

to developing countries?

Some Solutions to Consider

A. Rein in the informal economy that feeds into the Hawala system

B: Strengthen the beneficial ownership laws in each country, 'un layer' the layers

C: Automatic withholding on anonymous accounts, will require cross-border agreements

D: Domestic disclosure of overseas bank accounts

and other assets

E: Strengthening of Financial Intelligence Units (FIU) and

AML policies and procedures

F: Heavier penalties on banks, financial institutions, and

individuals for transgressions

12 Conclusion

the way forward...