For Immediate Release
Tuesday, January 15, 2002
202-285-0244
www.freedomandprosperity.org

New Study, Using U.S. Government Data,
Finds Dirty Money is More Likely to be Laundered
In High-Tax Nations than Tax Havens

Washington (January 15, 2001) -- The Center for Freedom and Prosperity Foundation today released a study , based on government data, demonstrating that there is no link between so-called tax havens and money laundering. Andrew Quinlan, President of the Center, remarked, "This new study uses State Department, CIA, IRS and FATF findings to show conclusively that countries with low tax burdens and financial privacy are not any more likely to be money laundering centers than high-tax countries. In fact, it shows the opposite. Dirty money is more likely to be laundered in high-tax countries because that is where the illegal activity is most likely to occur."

The report, entitled "U.S. Government Agencies Confirm That Low-Tax Jurisdictions Are Not Money Laundering Havens," is written by Heritage Foundation tax expert Daniel J. Mitchell.

The CFP Foundation study finds that the State Department, Central Intelligence Agency, and Internal Revenue Service each independently assess whether countries are money laundering centers and/or have systems that make them vulnerable to dirty money. All of these government agencies – as well as the OECD's Financial Action Task Force - conclude that tax havens do not attract a disproportionate share of the world's criminal loot. Indeed, the reports indicate that dirty money is far more likely to be laundered in high-tax nations.

"This paper puts an end to the malicious stereotype that low-tax jurisdictions attract a disproportionate share of the world's dirty money. It is time for politicians from high-tax countries to set aside their shameful demagoguery and put crime-fighting ahead of extra-territorial tax grabs," said Daniel Mitchell.

Veronique de Rugy, Cato Institute policy analyst added, "This paper exposes the fallacy used by the OECD and the EU. According the two international organizations, countries with low taxes and a strong commitment to privacy laws are by definition countries of money laundering concern. This paper shows that so-called tax havens are not less likely to shelter criminal activities and are not sanctuaries for criminals and terrorists. In fact, the two biggest money laundering centers are the United States and the United Kingdom. As such, it becomes obvious that the OECD and the EU's real agenda in their persecution of tax havens is not the fight against money laundering but the fight against low taxes."

The full report can be found on the Center for Freedom and Prosperity's web page (link below):
http://www.freedomandprosperity.org/Papers/blacklist/blacklist.shtml

PDF version:
http://www.freedomandprosperity.org/Papers/blacklist/Blacklist.pdf

For additional comments:

Andrew Quinlan can be reached at 202-285-0244, quinlan@freedomandprosperity.org
Dan Mitchell can be reached at 202-608-6224, dan.mitchell@heritage.org
Veronique de Rugy can be reached at 202-842-0200, vderugy@cato.org


The Center for Freedom and Prosperity Foundation is a nonprofit, nonpartisan public policy, research, and educational organization operating under Section 501(C)(3). The CFP Foundation is the research and educational affiliate of the Center for Freedom and Prosperity (CFP) and can be reached by calling 202-285-0244 or visiting our web site at www.freedomandprosperity.org.

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