It has been revealed that an estimated $21 to $32 trillion of private financial wealth is located, untaxed or lightly taxed, in secrecy jurisdictions around the world. Illegal cross-border financial flows add up to $1-1.6 trillion each year.
Secrecy jurisdictions, or else called tax havens, use secrecy to attract illicit and illegitimate or abusive financial flows.
A global industry has developed involving the world's biggest banks, law practices and accounting firms which provide secretive offshore structures to their tax and law-dodging clients. Competition between jurisdictions to provide secrecy facilities has become a central feature of global financial markets.
In identifying the providers of international financial secrecy, the Financial Secrecy Index reveals that the traditional stereotype of tax havens is misconceived. The world’s most important providers of financial secrecy are not small islands as many suppose, but some of the world’s biggest and wealthiest countries, as seen in the following Top-10 2013 Secrecy Ranking:
3. Hong Kong
4. Cayman Islands
It is noteworthy that Cyprus has been ranked 41 in this list.
It shows that the illicit financial flows that keep developing nations poor are predominantly enabled by rich OECD member countries, which are the main recipients of or conduits for these illicit flows.
The Index concludes the only realistic way to address these problems comprehensively is to tackle them at root, namely by directly confronting offshore secrecy and the global infrastructure that creates it.