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NEW YORK (June 28, 2022) — The Human Rights Foundation (HRF), in partnership with Life+Liberty Indexes, is proud to announce the launch of the Defund Dictators Tool. This tool is part of HRF’s Responsible Finance Program, a new initiative aimed at studying the influence of authoritarian regimes in the world’s most important financial systems and at proposing solutions so that global business transactions become more conducive to advancing democracy and human rights.

The Defund Dictators Tool focuses on Emerging Markets Exchange Traded Funds (EM ETFs), one of the fastest growing investment vehicles in the world. The tool allows investors and the public in general to identify how much of the funds in each US-listed EM ETF are being allocated to countries ruled by authoritarian regimes.

Among the large countries classified as Emerging Markets, there are several that are ruled by dictatorial regimes, most notably China, Russia, and Saudi Arabia. As most funds are capitalization weighted, the massive size of China’s economy, for example, makes it very likely that a lot of the EM ETFs being offered to investors in democracies will include Chinese companies or bonds. Even today, as we continue to learn more about the ongoing genocide against the Uyghur population, investment firms in the United States are promoting investment products such as EM ETFs with large allocations or complete focus on China.

“Under fully authoritarian regimes, such as those in power today in China and Russia, the lines between private and public enterprises are blurry, and the absence of the rule of law and a general lack of transparency make any capital flows into those countries very likely to empower their dictatorships and even help finance repression,” said HRF’s Senior Policy Officer Alvaro Piaggio. “Investors from free countries should be well informed of the human rights situation in the countries they seek to invest in and always consider democracies as the safer, more ethical choice,” added Piaggio.

The Human Rights Foundation (HRF) is a nonpartisan nonprofit organization that promotes and protects human rights globally, with a focus on closed societies.

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