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Biden wins landslide vote for global minimum tax

Biden’s 15% global tax proposal has worldwide approval, USA’s financial crime watchdog creates cryptocurrency crime role.

Napier AI
July 9, 2021

USA’s 15% global corporate tax rate backed by 130 countries

The announcement was made last week by US Treasury Secretary, Janet Yellen. The proposal has been a priority for President Biden’s administration, which wants the tax hikes in place to fund improved social services and infrastructural projects in the United States.

Describing the adoption of the policy as “an historic day for economic diplomacy,” Ms Yellen explained that “for decades, the United States has participated in a self-defeating international tax competition, lowering our corporate tax rates only to watch other nations lower theirs in response.”

The announcement is pivotal, since the 130 signatory countries account for 90% of global GDP. It is hoped the policy will reduce the competitive lowering of tax rates amongst countries competing for foreign investment, and rein in multi-national corporations which try to avoid taxation by shifting profits from country to country.

The Organisation for Economic Co-operation and Development (OECD) co-hosted the announcement, adding that widespread adoption of the policy upgrades “the century-old international tax system, which is no longer fit for purpose in a globalized and digitalized 21st-century economy.”

Read more on this story at Forbes.

USA financial Crime Watchdog appoints first Chief Digital Currency Advisor

The USA’s Financial Crime Enforcement Network (FinCEN) confirmed the additional advisory role in an announcement made earlier this week. FinCEN acting Director Michael Mosier announced Ms Michele Korver as the inaugural holder of the position. She hails from the US Department of Justice (DoJ) Criminal Division, where she has been the Digital Currency Counsel since late 2017.

The creation of the role and appointment of Ms Korver are further indicators that FinCEN is amplifying its drive to combat money laundering and other financial crime through cryptocurrencies trading. Ms Korver recently wrote a paper on the subject in the DoJ Journal of Federal Law and Practice. Mr Mosier himself entered his role from a cryptocurrency surveillance background.

Welcoming Ms Korver into the new position, Mr Mosier noted that her contribution will be key in “co-ordinated efforts to maximize FinCEN’s contribution to the innovative potential for financial expansion of opportunity while minimizing illicit finance risk.”

Read more on this story at Coindesk.

Malta and three others in sights of world anti-money laundering agency

Malta became the first European country to be added to the ‘grey list’ of the Financial Action Task Force on Money Laundering (FATF). The announcement was made late last month. Joining the first and only EU member on the grey list are Haiti, South Sudan, and the Philippines.

Being on FATF’s grey list means that a country’s anti-money laundering and counter financing of terrorism (AML-CFT) regimen has been assessed as having weaknesses which require attention. This means that it will require closer monitoring and scrutiny while it improves and tightens its AML-CFT protocols, in preparation for re-assessment after an agreed passage of time.

Malta’s Prime Minister Robert Abela responded with concern about the potential damage to the country’s economy but gave assurance that his office’s Financial Intelligence and Analysis Unit would “intensify [its] resolve to fight money laundering and the financing of international terrorism."

In May, the International Monetary Fund (IMF) published an analysis of the grey listing’s potential economic impact on affected countries. The report indicated that a sizable reduction in capital inflows can be expected as investors respond by moving funds to more favourable destinations. However, Ghana also demonstrated last month that proven strengthening of AML/CFT systems can result in removal from the grey list, potentially restoring investor confidence.

Read more on this story at Reuters.

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