The United States ranks first in the world for financial secrecy for 2022 enabling wealthy individuals to hide assets, according to Financial Secrecy Index which ranks countries based on how much financial secrecy they supply to the world. Jurisdictions are ranked by their FSI value to identify the world’s biggest suppliers of financial secrecy. Switzerland and Singapore take the second and third spot for 2022. The UAE, Qatar, Cayman, Panama, Switzerland, BVI have very high secrecy scores in the index.
Here are the top 10 countries offering financial secrecy..
|Country||FSI score||Secrecy score|
|United Arab Emirates||648||79|
|British Virgin Islands (BVI)||621||71|
Source: FSI Index 2022
An estimated $10 trillion is held offshore beyond the rule of law by wealthy individuals through secretive arrangements – equivalent to 2.5 times more than the value of all US dollar and EURO bills and coins in circulation around the world today.
Why United States?
The United States remains a secrecy capital of the World. The US topped the index after it increased its supply of financial secrecy to the world by almost a third (31 per cent) since 2020, resulting in the largest supply of financial secrecy ever measured by the index. The US’s supply of financial secrecy is now nearly twice as large as that of second-placed Switzerland. The jump is also driven by the US increasing the volume of financial services it provides to non-residents by 21 per cent and US’s refusal to reciprocally exchange information with OECD countries’ tax authorities while enforcing FATCA to other countries. The US currently has no laws or policies in place systematically requiring all trusts to register their existence nor information about their owners and beneficiaries. The US adopted a historic CTA law in January 2021 requiring beneficial owners of corporations to be identified, but opaque financial services offered to foreign clients, including private investment vehicles such as real estate, private equity, venture capital, and investment consultation is a cause of concern.
The Tax Justice Network reported that the US is responsible for costing the rest of the world $20 billion in lost tax a year by enabling non-residents to hide their finances and evade tax. US Treasury Secretary Yellen remarked in December 2021 that the US may be “the best place to hide and launder ill-gotten gains.”.