Secretive offshore tax havens help funnel billion of dollars out of the poorest countries and into the bank accounts of their corrupt officials. This video shows a how a dodgy politician could hypothetically abuse this shadowy financial network to enrich himself, and explains why we need greater financial transparency in the fight against international corruption.

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Money laundering allows gangsters, terrorists and corrupt politicians to profit from their crimes.

The offshore financial system makes it too easy for these criminals to hide their wealth and too difficult for the police to catch them.

Here is an example of how a politician could use the secrecy of tax havens to steal from a developing country rich in natural resources.

If you want to move dirty money then you need a shell company in a tax haven. Our politician chooses the Seychelles, where you can register a new firm online in under 10 minutes for just 690 euros.

This company needs directors, so he pays residents in another tax haven, such as the British Virgin Islands, to use their names on all official documents.

This practice is completely legal in the UK and its overseas territories. A recent investigation into these nominee directors found a group of 28 individuals who collectively controlled more than 21,500 companies worldwide.

The next step is to set up a corporate bank account somewhere with strict secrecy laws.

The crooked politician picks Panama, where the authorities makes life very difficult for anyone requesting information.

This creates another valuable layer of secrecy, letting money launderers stay one step ahead of the authorities.

The politician can then use the shell company to open a high street bank account, buy a fleet of supercars or invest in the prime real estate markets of London, Paris and New York.

Even if his bank questioned how a civil servant could afford a Bugatti Veyron, it would be next to impossible to prove he had stolen the money.

Offshore tax havens have made sure his name never appeared on a public register.

Until these secret jurisdictions become more transparent, corrupt politicians will be able to loot developing countries with little risk of being caught.

Design Rachel Gold
@wtwfinance