The Financial Secrecy Index is designed to identify the greatest suppliers of financial secrecy risks and to understand their origins, so that people and the policymakers that represent them can take informed action.
Using Secrecy Score breakdowns to tackle financial secrecy at home
A jurisdiction’s Secrecy Score breakdown is more than just a report card. It’s a troubleshooting manual that spots the laws and loopholes that policymakers can amend to tackle financial secrecy.
Each jurisdiction’s financial and legal systems are graded against 20 Secrecy Indicators to arrive at a final Secrecy Score, which is a measure of how much scope for financial secrecy the jurisdiction’s financial and legal systems allow. Secrecy Indicators cover a range of laws, policies and practices such as banking secrecy, anti-money laundering safeguards and registration of real estate owners. Indicators consist of several sub-indicators, making for more than 70 data points against which every jurisdiction is graded. For each data point, the Financial Secrecy Index provides evidence to explain the jurisdiction’s grading. All this data can be viewed in the “Secrecy Score breakdown” section of each jurisdiction’s country profile here.
All jurisdictions enable some degree of financial secrecy, whether knowingly or not. Secrecy jurisdictions are often thought of in black and white; this country is or is not a secrecy jurisdiction. This binary idea of secrecy has particularly been popularised by “tax haven blacklists” like the EU’s list of noncooperative jurisdictions. In practice, all jurisdictions fall somewhere on the spectrum of financial secrecy. That’s why the Financial Secrecy Index is an index, not a list. It’s designed to evaluate where countries fall on the spectrum of financial secrecy.
This means that all jurisdictions have a responsibility to reduce their contribution to financial secrecy, big or small.
The proposal for a global asset register has rapidly gained traction after Italian Prime Minister Mario Draghi called in March 2022 for a public international asset register for individuals with assets of more than €10 million. The commissioners of the Independent Commission for the Reform of International Corporate Taxation (ICRICT), including leading economists Gabriel Zucman, Joseph Stiglitz and Thomas Piketty, and the French investigative judge Eva Joly, called on the G20 in an open letter in April 2022 to establish a global asset register.
A global asset register is a comprehensive international registry of all high-value wealth and assets, along with their real beneficial owners. It could take the form of a networked resource linking up national and regional asset registries around the world. By providing a centralised global resource detailing who owns what, and where they own it, a global asset register would bring the rule of law to trillions in wealth and assets hidden offshore and would provide a means to measure, understand and address global inequality.
There is more wealth hidden offshore beyond the rule of the law than there are US dollars and Euros changing hands today – more than twice more to be specific. That lawless wealth is a threat to our democracies, our economies and our safety. Governments must establish and link up national asset registers to bring law and transparency to the trillions hidden offshore, and end the wild west era of wealth.