Every year, $1 trillion is spirited out of developing countries through corruption, smuggling, money laundering, and corporate tax evasion. These illicit financial flows out of developing countries dwarf the flow of development assistance going in. Illicit financial flows removed $10 for every dollar spent on overall development aid, and $80 for every dollar spent on basic social services.
By taking advantage of weak rules governing financial transactions, corporations, racketeers, and corrupt officials don’t merely enrich themselves. They greatly aggravate poverty and oppression by weakening the institutions that are intended to sustain the rights and livelihoods of the poor. This deprivation constitutes a massive violation of human rights; one-third of all deaths globally are the result of poverty and poverty-related conditions.
In December 2009, the Illicit Financial Flows project, in close collaboration with Global Financial Integrity (GFI), united the communities of activists addressing these two concerns—illicit financial flows and human rights. The result was the first New Haven Declaration on Human Rights and Financial Integrity. In December 2010, the initial signatories of the New Haven Declaration reconvened at Yale University. The New Haven Declaration on on Corporate Financial Transparency was the result of that meeting. Shortly thereafter, several participants—with over US$20 billion under management—sent a letter to the European Commission asking them to “require country-by-country reporting within the annual audited financial statements of all multinational corporations listed on a stock exchange.”
This project aims to establish a financial transparency and IFF-curtailing goal as part of the post-MDG framework.
It’s main objectives are to:
- Produce a research-based policy paper arguing for and articulating a politically feasible IFF development goal
- Build a broad coalition of academics, CSO’s and corporations supporting the policy
- Present and promote IFF development goal in the upcoming UNDP thematic consultations on the post-MDG framework.