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Estimating Illicit Flows of Capital via Trade Mispricing: A Forensic Analysis of Data on Switzerland

Added 12 Feb 2014

This paper by Eurodad partner Center for Global Development and co-authored by Eurodad member Christian Aid assesses whether there is evidence of systematic mispricing in commodity trade with Switzerland, the world’s largest commodity hub and a major secrecy jurisdiction. Evidence suggests that developing countries trading with Switzerland may have suffered illicit outflows of capital through trade mispricing.

Some of the key findings include:

  • The average prices for commodity exports from developing countries to Switzerland are lower than those to other jurisdictions; and
  • Switzerland declares higher (re-)export prices for those commodities than other jurisdictions do, which implies a potential capital loss for commodity exporting developing countries. 

Estimations suggest that the scale of this capital loss is substantial and demands more research and policy attention. Therefore, the paper calls on the Swiss government to meet international norms of trade transparency.