2022 Index: US World’s Largest Supplier of Financial Secrecy

Published: 18 May 2022

Bank Deposit BoxesThe U.S. tops the Tax Justice Network's 2022 financial secrecy index. (Photo: ptone805, Pxhere, License)

By Lara Dihmis

The United States has climbed to the top of a 2022 financial secrecy index which ranks countries most complicit in helping individuals hide their wealth and is followed by the likes of Switzerland, Luxembourg, the United Arab Emirates and the British Virgin Islands.

The index, published by the U.K.-based Tax Justice Network (TJN) on Tuesday, considers financial secrecy services used by tax evaders, oligarchs and corrupt politicians looking to stash their illicit wealth offshore, and takes into account the degree to which a country’s financial and legal system allows individuals - namely non-residents - to hide and launder their money.

The amount of financial secrecy the U.S. enables is the biggest ever recorded by the index, and is nearly twice as big as Switzerland, which ranks second.

The ranking focuses on a jurisdiction’s global role in facilitating financial crime, such as money laundering and tax evasion, by providing the infrastructure and services to enable such activity through secretive arrangements, including anonymous real estate and company ownership and banking secrecy practices.

Such services, which have allowed an estimated US$10 trillion in “lawless wealth” to move offshore, have generally decreased around the world as a result of transparency campaigns and reforms against financial secrecy, but TJN’s latest index found that five G7 countries - the U.S., U.K., Japan, Germany and Italy - have hindered such progress.

TJN’s chief executive Alex Cobham said that these five countries alone have “cut back that global progress by more than half, fuelling financial secrecy instead of fighting it,” and called on the G7 to “make clear where they stand in the fight against financial secrecy by committing to a global asset register.”

Despite this, the index found that overall, global financial secrecy continues to shrink, noting a 2% reduction in financial secrecy practices in 2022.

The index cited OCCRP’s Russian Asset Tracker to note how such financial services have come under scrutiny in the wake of the Russian invasion of Ukraine, in relation to Russian oligarchs using trusts as a “secrecy weapon of choice” to hide their assets.

The Tracker cataloged the vast wealth held outside of Russia by Russian oligarchs and allies of President Vladimir Putin, in the form of superyachts, private jets, mansions and other luxury items. The assets, registered all over the world, often lie behind complex offshore ownership structures in jurisdictions which allow the true owner to remain hidden.