tax, good governance and the problem of illicit financial flows from africa

Tax, Good governance and the problem of illicit financial flows

from AfricaAU PERMANENT MISSION IN BRUSSELS MISSION PERMANENTE A BRUXELLES

Workshop

ASSESSING THE PROGRESS AND CHALLENGES IN THE IMPLEMENTATION OF ADDIS ABABA AGENDA FOR ACTION (AAAA)

Wednesday, 21 September, 2016

Luckystar Miyandazi & Faten Aggad

ECDPM

• Framing the IFFs debate: the PCSD agenda

• Spotlight on illicit financial flows (IFFs)

• On-going Efforts to Curb IFFs

• Areas of potential Cooperation

• Conclusion

• Q&A

Structure

Spotlight on illicit financial flows (IFFs)

Source: TrustAfrica infographics on “track it, stop it and get it” Report of the High-Level. Panel on Illicit Financial Flows from Africa, Commissioned by the AU/ECA Conference of Ministers of Finance, Planning and Economic Development in 2015.

▪ National and Regional Efforts:

▪ AU: The adoption of the HLP Report on IFFs as a declaration during the

24th AU Summit and AAAA para 24 on IFFs

▪ AU Convention on Preventing and Combating Corruption

▪ APRM (African Peer Review Mechanism)

▪ Efforts to recover frozen assets (STAR)

▪ GIABA: Inter-Governmental Action Group against Money Laundering in

West Africa (GIABA)

On-going Efforts to Curb IFFs-Africa

• Anti-Tax Avoidance Package adopted by the European Commission on

28 January 2016

-agreement for the automatic exchange of information on country-by-

country reports (CbCR) of multinational companies, subject to UK

scrutiny

-agreement by Member States on their general approach for far-reaching

new rules to eliminate the most common corporate tax avoidance

practices. 21 June 2016

-agreement by Member States on the automatic exchange of information

on cross-border tax rulings, just seven months after the presentation

of the Commission's ambitious proposal on the subject.

-Platform for Tax Good Governance (Includes non-government members)

EU & Global Efforts

• The Global Forum on Transparency and Exchange of Information forTax Purposes (OECD);

• Multilateral Convention on Mutual Administrative Assistance in TaxMatters (OECD);

• Extractive Industries Transparency Initiative;

• Article 1504 of the Dodd-Frank Act (United States of America);

• Foreign Account Tax Compliance Act (United States of America);

• Public register (United Kingdom);

• G20 instigated base erosion and profit shifting (BEPS) Action plan ledby OECD process

• Calls for UN like global body to deal with tax matters-Para 29

Global Efforts

• One key principle that is emerging with regard to tacklingIFFs at the global level is improving transparency;

I.automatic exchange of information

II.country-by-country and project-by-project reporting;

III.public registries of beneficial ownership

Areas of Cooperation

Can PCSD serve as a framework for dialogue on approaches to curb

IFFs?

• Goal 16.4: “by 2030 significantly reduce illicit financial and armsflows, strengthen recovery and return stolen assets, and combat allforms of organised crime”

• Goal 17.14: “enhance policy coherence for sustainabledevelopment” – One of the key innovations of the SDGs agenda

• What is PCSD? “ An Approach and policy tool to integrate theeconomic, social, environmental and governance dimensions ofsustainable development at all stages of domestic andinternational policy making… As policy tool, PCSD aims to increasegovernments’ capacities to identify synergies, consider trade-offsbetween multiple objectives – for example between economicgrowth, environmental protection and reduction of carbonemissions – and address potential spillovers of domestic policies”

The SDGs and the PCSD Agenda

Framing the IFFs debate: the PCSD agenda

Sectors of attention to tackle IFFs

Linkages between interventions

• EU has a strong track record championing PolicyCoherence for Development. Anticipated strongcommitment to PCSD

• Key opportunities for engagement around policyframework: the revision of the EuropeanConsensus on Development

Opportunities for engagement

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Faten Aggad-Clerx- Head of Programme Africa’s Change Dynamics

Luckystar Miyandazi- Policy Officer Africa's Change Dynamics Programme

E-mail [email protected]@ecdpm.org

Twitter @FatenClerx@Lustarnde

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tax, good governance and the problem of illicit financial flows from africa

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