MENTORS
  • News
  • Business
  • Self Growth
  • Mentors Collective Podcast
    • Apply As Guest
    • Listen on Spotify
    • Listen on Apple
No Result
View All Result
  • Login
  • Register
MENTORS
  • News
  • Business
  • Self Growth
  • Mentors Collective Podcast
    • Apply As Guest
    • Listen on Spotify
    • Listen on Apple
No Result
View All Result
MENTORS
No Result
View All Result

Trade Misinvoicing a Massive and Persistent Problem

Mentors Collective Staff<span class="bp-verified-badge"></span> by Mentors Collective Staff
December 16, 2021
in Economy
Trade Misinvoicing a Massive and Persistent Problem
Share on FacebookShare on TwitterShare on LinkedIn

Report Finds Trade Misinvoicing Continues to be a Massive and Persistent Problem

US$1.6 Trillion in Potential Trade Misinvoicing Identified

WASHINGTON D.C. – A report published today by Global Financial Integrity (GFI) finds an estimated US$1.6 trillion in potential trade misinvoicing among 134 developing countries, of which US$835 billion occurred between developing countries and 36 advanced economies, in 2018. This report, Trade Related Illicit Financial Flows in 134 Developing Countries 2009-2018, shows trade misinvoicing is a persistent problem across developing nations, resulting in potentially massive revenue losses and facilitating illicit financial flows across international borders.

GFI’s President and CEO Tom Cardamone said that “during a time when developing countries are scrambling for every penny to fund vaccines and medicines to fight COVID-19 infections, billions of dollars in duties and taxes are going uncollected. It is absolutely shocking,” he continued, “how few governments are paying any attention to these massive losses.”

Trade misinvoicing occurs when importers and exporters deliberately falsify the declared value of goods on invoices submitted to customs authorities. This allows traders to illegally move money across international borders, evade tax and/or customs duties, launder the proceeds of criminal activity, circumvent currency controls, and hide profits in offshore bank accounts.

Value gaps, or mismatches in international trade transactions, indicate that developing countries are not collecting the correct amount of trade-related taxes and duties that are owed, leading to potentially massive amounts of revenue losses. While these value gaps are only estimates of misinvoicing, they indicate the scale of the problem. 

In order to identify potential trade misinvoicing, GFI examined official trade data reported to the United Nations to identify value gaps, or mismatches, in the data regarding what any two countries reported about their trade with one another. While there are reasons for some mismatches to regularly show up in the international trade data, GFI believes that the majority of the gaps identified are indicative of trade misinvoicing activity. GFI looked at all bilateral trade data for 134 developing countries, as well as trade between those countries and 36 advanced economies.

Key Findings

  • US$1.6 trillion value gap identified in trade between 134 developing countries and all of their global trading partners in 2018;
  • US$835.0 billion value gap identified in trade between 134 developing countries and a set of 36 advanced economies in 2018;
  • The developing countries with the largest value gaps identified in trade with 36 advanced economies in 2018 are China (US$305.0 billion), Poland (US$62.3 billion), India (US$38.9 billion), Russia (US$32.6 billion) and Malaysia (US$30.7 billion);
  • The developing countries with the largest value gaps identified in trade with 36 advanced economies in 2018 as a percent of total trade are The Gambia (45.0%), Malawi (36.6%), Suriname (31.9%), Kyrgyzstan (30.6%) and Belize (29.2%).

Key Recommendations
At the national level, countries should:

  • Make trade misinvoicing illegal;
  • Strengthen law enforcement capacities of customs authorities;
  • Establish multi-agency teams to address customs fraud, tax evasion and other financial crimes;
  • Implement readily available trade misinvoicing risk assessment tools;
  • Strengthen customs oversight of Free Trade Zones (FTZs);
  • Establish National Trade Facilitation Committees.

Internationally countries should work together to:

  • Expand information-sharing between importing and exporting countries;
  • Explore the use of distributed ledger technology to identify trade misinvoicing.

GFI hopes this analysis will help developing countries understand the magnitude of trade misinvoicing activity and the potentially massive revenue losses they are incurring due to uncollected taxes and duties. Taking concrete steps to reduce trade misinvoicing is necessary to address the broader problem of illicit financial flows across international borders.

Tags: exporterfinancial lossGFIimportermassivereporttaxtradetrade misinvoicing
Mentors Collective Staff<span class="bp-verified-badge"></span>

Mentors Collective Staff

Mentors Collective is a premier news source for business, entrepreneurship, finance, and cryptocurrency. Follow us on social media for daily news and updates.

Related Posts

edit post
Financial World
Economy

Achieving Success in the Financial World: 5 Tips for Long-Term Prosperity From Ziad K. Abdelnour

Achieving success in the financial world requires a unique set of skills, determination, and strategic thinking.

by Lewis Schenk
July 18, 2023
257
edit post
The Next League Program: Your Ultimate Guide to Applying for the EB1-A Green Card
Economy

The Next League Program: Your Ultimate Guide to Applying for the EB1-A Green Card

If you're an extraordinary professional looking to expand your opportunities, you may have heard of the EB1-A Green Card....

by Dawn Wells
May 19, 2023
365
edit post
Economy

Professor Lingyun Xiang, an economist residing in the United States, was appointed as a specially invited economic advisor to the Republic of Liberia

On April 28, 2023, the Embassy of the Republic of Liberia in China appointed Professor Lingyun Xiang, an economist...

by Dawn Wells
May 12, 2023
256
edit post
daxsen bank wallet
Economy

Daxsen Bank: Why Digital Banking is Your Best Option Navigating an Economic Downturn

businesses are looking for ways to protect their finances and prepare for a potential recession. One option that is...

by David Daxsen
January 20, 2023
253
Next Post
edit post
2 in 5 holiday shoppers already impacted by supply chain issues

2 in 5 holiday shoppers already impacted by supply chain issues

Popular posts

  • Unveiling Kirsten Pickworth: Where Value Meets Marketing Magic
  • Unlocking the Power of PR: Annie Scranton and Pace Public Relations
  • A Radical Shift in Inspired Action: Meet Conscious Business!
  • Easy Mode: Why Video Game Adaptations Have Never Made More Sense
  • HeyBambu – Making an Environmental Difference, One Flush at a Time

Popular Tags

American Benefits brand Business business tips career coach covid-19 digital marketing economy employee Entrepreneur entrepreneurship featured finance Health inflation influencer investment Investor job leadership marketing Medical School mentor mentorship money News pandemic personal development plan recession Residency retirement small business social media sponsored startup strategy success tax technology tips work workplace
ADVERTISEMENT
  • About
  • Free Mentorship
  • Show Your Support
  • Become a Contributor
  • Apply As Guest
  • Listen on Apple
  • Listen on Spotify
Mentors Collective Success Magazine

Owned by Otter Love LLC

No Result
View All Result
  • News
  • Business
  • Self Growth
  • Mentors Collective Podcast
    • Apply As Guest
    • Listen on Spotify
    • Listen on Apple

Owned by Otter Love LLC

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms bellow to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Go to mobile version