Reports

Anonymous Companies Help Finance Illicit Commerce and Harm American Businesses and Citizens

Titled “Anonymous Companies Help Finance Illicit Commerce and Harm American Businesses and Citizens: A Need for Incorporation Transparency,” this May 2019 report from the Financial Accountability and Corporate Transparency Coalition (FACT Coalition) explains that the trafficking and smuggling of counterfeit and pirated goods is a very profitable illegal activity for many of today’s criminals and illicit networks and that these networks rely on the secrecy provided by anonymous entities to launder their ill-gotten-gains and escape detection.

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Trending Toward Transparency

There is a growing chorus of individuals and organizations speaking out on the value of tax transparency and, in particular, the public country-by-country reporting (CBCR) of certain financial information for multinational companies, according to this April 2019 report published by the Financial Accountability and Corporate Transparency Coalition (FACT Coalition).

Titled “Trending Toward Transparency: The Rise of Public Country-by-Country Reporting,” the report highlights the growing support among various sectors of the investing, business, and policymaking communities as well as several enacted and proposed rules around the world to mandate increased disclosures.

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Muddled Markets

Investors are at an increasing risk due to the lack of information disclosed by companies about their tax practices, according to this November 2018 report published by the Financial Accountability and Corporate Transparency Coalition (FACT Coalition). Titled “Muddled Markets: Investors Increasingly at Risk from Lack of Disclosures about Corporate Tax Practices,” the report finds that multinational companies have become increasingly reliant on offshore tax avoidance practices to boost short-term earnings in recent years, yet disclosure requirements haven’t kept pace with this changing world.

As governments around the globe struggle with growing budget deficits, tax authorities are increasingly cracking down on aggressive tax avoidance practices, which can have a significant impact on shareholder value. At the same time, shifting national policies around international taxation — including, but not limited to, the recent tax overhaul in the United States — create complexity and uncertainties with respect to returns for investors.

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ITEP Report: Understanding and Fixing the New International Corporate Tax System

The Tax Cuts and Jobs Act (TCJA) radically changed the international tax system. It slashed taxes on corporate income, both domestic and foreign. It encouraged U.S. multinational corporations to shift jobs, profits, and tangible property abroad, and keep intangibles home. This report describes the new international tax system—and its many gaps—and also provides a road map for how to fix these gaps and surveys recent legislative approaches.

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Countering Russian Kleptocracy

Kleptocratic regimes use corruption as a means of control at home and a weapon of influence abroad. Russian oligarchs and other Kremlin agents have become adept at exploiting the global financial system to launder illicit funds and convert them into new forms of power projection, including attacks on Western democratic institutions. This report outlines a policy checklist that, if implemented, would amount to a comprehensive and effective strategy for countering Russian kleptocracy.

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Small Business Owners Support Legislation Requiring Transparency in Business Formation

The survey, conducted by Chesapeake Beach Consulting for Small Business Majority, revealed that 77% of small business owners agree Congress should pass legislation that would require businesses to list the true identity of their owners when forming, with roughly half (49%) in strong agreement. The poll was an online survey of 500 small business owners nationwide conducted between March 5 and 11, 2018.

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Hidden in Plain Sight: How Corporate Secrecy Facilitates Human Trafficking in Illicit Massage Parlors

Illicit massage businesses, commonly known as “massage parlors,” have been ubiquitous in the American landscape for decades. Today, new research finds an estimated 9,000-plus of these businesses are operating in every state in the country, with earnings totaling nearly $2.5 billion a year across the industry.

What is unique about this form of trafficking is that massage parlor traffickers actually go through the process of registering their businesses as if they were legitimate. Conceivably then, it should be relatively simple to determine the basics about these businesses — such as what products or services they provide and who ultimately controls and makes money from the business. The actual or “beneficial” owner would then in most cases be the trafficker and could be prosecuted as such.

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Countering International Money Laundering

Worldwide anti-money laundering efforts are currently just a decimal point away from total failure, according to this August 2017 report published by the Financial Accountability and Corporate Transparency Coalition (FACT Coalition).

Authored by former Treasury Special Agent John Cassara, an internationally renown expert on financial crime, the study details the near failure of current efforts to combat money laundering and the rationale for comprehensive reform.

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Towards a Sustainable Economy

A Review of Comments to the SEC’s Disclosure Effectiveness Concept Release

The FACT Coalition joined eight other groups—the AFL-CIO; Americans for Financial Reform; the Center for American Progress; Ceres; the International Corporate Accountability Roundtable; Patriotic Millionaires; Public Citizen; and US SIF: The Forum for Sustainable and Responsible Investment—in releasing a report analyzing the more than 26,000 comments received in response to the U.S. Securities and Exchange Commission’s April 2016 concept release on “Business and Financial Disclosure Required by Regulation S-K”.

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