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Developing countries lose 67 pct of exports through trade misinvoicing: UNMonday, July 18, 2016 > 11:26:33
(Naija 24/7 News)
Fraudulent misinvoicing of trade is hampering economic growth and potentially resulting in billions of U.S. dollars in lost tax revenue in some developing countries, the UN said in a report released in Kenyan capital Nairobi on Saturday.
The study released by the UN Conference on Trade and Development (UNCTAD) finds that some commodity dependent developing countries are losing as much as 67 percent of their exports worth billions of dollars.
“Importing countries and companies that want to protect their reputations should get ahead of the transparency game and partner with us to further research these issues,” UNCTAD Secretary-General Mukhisa Kituyi said in the report.
The study says that the over-and under-invoicing of trade transactions facilitated billions of U.S. dollars in illicit financial flows into or out of some developing nations.
It says between 2000 and 2014, under-invoicing of gold exports from South Africa amounted to 78.2 billion U.S. dollars, or 67 percent of total gold exports.
The study finds that trade misinvoicing is thought to be one of the largest drivers of illicit financial flows from developing countries.
Countries lose valuable foreign exchange earnings, taxes and income that might otherwise be spent on development, it says.
The report which was released during the Global Commodities Forum, uses up to two decades’ worth of data covering exports of commodities such as cocoa, copper, gold and oil from Chile, Côte d’Ivoire, Nigeria, South Africa and Zambia.
“This research provides new detail on the magnitude of this issue, made even worse by the fact that some developing countries depend on just a handful of commodities for their health and education budgets,” Kituyi said.
He said commodity exports may account for up to 90 percent of a developing country’s total export earnings, adding that the study generated fresh lines of inquiry to understand the problem of illicit trade flows.
The analysis shows patterns of trade misinvoicing for exports to China, Germany, Hong Kong (China), India, Italy, Japan, the Netherlands, Spain, Switzerland, Britain and Northern Ireland, the U.S.and others.
“Between 1996 and 2014, under-invoicing of oil exports from Nigeria to the U.S.was worth 69.8 billion dollars, or 24.9 per cent of all oil exports to the United States.,” UNCTAD said.
Between 1995 and 2014, Zambia recorded 28.9 billion dollars in copper exports to Switzerland, more than half of all its copper exports, yet these exports did not appear in Switzerland’s books.
“Between 1990 and 2014, Chile recorded 16.0 billion dollars in copper exports to the Netherlands, but these exports did not appear in the Netherlands’ books,” it said.
Between 1995 and 2014, Côte d’Ivoire recorded 17.2 billion dollars in cocoa exports to the Netherlands, of which 5.0 billion dollars (31.3 per cent) did not appear in the Netherlands’ books.