Civil Society urge East African Legislative Assembly members to address harmful tax competition

Civil Society urge East African Legislative Assembly members to 
address harmful tax competition 

Civil society representatives from Burundi, Tanzania, Kenya and Uganda this week met with the East African Legislative Assembly (EALA), Committee on Communications, Trade and Investments (CTI) in Bujumbura
to discuss harmful tax competition between their countries that deny
governments critically needed revenue. 

The representatives, who are all members of the Tax Justice Network –
Africa (TJN-A), urged the the East African Community legislators to
focus fresh attention on taxation and look at ways in which more
domestic resources can be raised and channeled to provision of
improved public services and development. 

In particular, TJN-A members advised that improved tax policies should
focus on the reduction in the use of tax incentives designed to
attract investments to a country. “The popularity of these incentives
is due, firstly, to the assumption that corporations and other
investors make decisions about where to invest, or even what business
to engage in, in large part on the basis of calculations of the tax
obligations they would incur, and secondly on the competition that
develops among countries, particularly those in the same region, for
investment, particularly from foreign investors,” reads part of the
briefing not prepared for the legislators. 

The tax justice advocates believe that there is enough evidence to
demonstrate that even though companies and investors lobby for
incentives, tax bills are a relatively minor consideration in their
investment decisions, and that the tax competition among East African
countries is costing them an unacceptable volume of revenues that
would be crucial for improving public services and advancing
development plans. They cite a 2006 report by the IMF, focusing on
East Africa, that notes that “investment incentives’ particularly tax
incentives – are not an important factor in attracting foreign
investment .” More important factors are good quality infrastructure,
low administrative costs of setting up and predictable macro-economic
policy, the IMF study advises. Similarly, a 2010 report found that the
main reasons for firms investing in Kenya are access to the local and
regional market, political and economic stability and favorable
bilateral trade agreements. Fiscal concessions offered by Export
Processing Zones (EPZs) were mentioned by only 1% of the businesses
sampled, TJN-A notes. 

The Tax Justice Network – Africa believes that the EAC is best placed
to break the stalemate in which no East African country wants to risk
being the first to withdraw some of its incentives, for fear that
other countries will hold back in order to benefit from investors
looking for greener pastures. Although that fear is probably
misplaced, it is precisely in this sort of situation that a regional
body like the EAC in invaluable, for it requires a decision that will
only work if it is made collectively. 

The EALA CTI committee members received the tax justice advocates’
message warmly and were keen to learn more about the harmful nature of
tax competition in East Africa and more particularly, what they could
do address the problem. TJN-A and Actionaid International commissioned
studies on the impact of tax incentives and exemptions in each of the
EAC countries under the collective title ‘Tax Competition in East
Africa: a race to the bottom?’ 

Malawi Lost Usd 4691 Million In Illicit Financial Flows Between 2001 And 2010

Malawi Lost Usd 4691 Million In Illicit Financial Flows Between 2001 And
2010

Malawi lost USD 4,691 million between 2001 and 2010 due to illicit  financial flows and if policy recommendations are not taken on board, the country could lose even more in the next decade. Currently, Malawi ranks 75th out of 143 countries for largest average illicit financial flow estimates for 2001 to 2010. 

IMAGE Heat Map of Total Illicit Financial Flows 2001-2010 (USD Millions)
(Global Financial Integrity, 2012) 

The term, illicit financial flows refers to the cross-border movement
of money that is illegally earned, transferred, or utilized , and on
average 80% of illicity flows are a result of trade mispricing. 

According to Global Financial Integrity s December 2012 report on
illicit flows, USD 5.86 trillion left developing countries in the
previous decade. In practice, this means that for every USD 1 developing
countries receive in official development assistance, usually from
nations that are home to the head quarters of companies engaged in
nefarious financial practices, they lose USD 10 through illicit
outflows. Sadly, Sub-Saharan African has witnessed a 23.8% increase in
outflows, driven primarily by trade mispricing. 

Companies and individuals are able to avoid paying taxes by shifting
large sums of money from one jurisdiction to another. Transfer pricing
is used by multinationals; goods are sold between two subsidiaries of
the same parent company. This is a legitimate practice as long as the
transfer price, or an arm s length price , used between the
subsidiaries is a fair market price, i.e. the same as if the two
companies involved in the transaction were two independents and not part
of the same corporate structure. 

However, some companies may wish to artificially distort the prices to
minimise overall taxes paid and record as much profit in an area with
low or no taxes. This phenomenon trade mispricing explains a
significant proportion of illicit financial flows. 

The Tax Justice Network provides a hypothetical example to illustrate
how trade mispricing occurs and who the losers are: 

For example, take a company called World Inc., which produces a type of
food in Africa, then processes it and sells the finished product in the
United States. World Inc. does this via three subsidiaries: Africa Inc.
(in Africa), Haven Inc. (in a tax haven, with zero taxes) and America
Inc. (in the United States). 

Now Africa Inc. sells the produce to Haven Inc. at an artificially low
price, resulting in Africa Inc. having artificially low profits and
consequently an artificially low tax bill in Africa. Then Haven Inc.
sells the product to America Inc. at a very high price almost as high
as the final retail price at which America Inc. sells the processed
product. As a result, America Inc. also has artificially low
profitability, and an artificially low tax bill in America. By contrast,
however, Haven Inc. has bought at a very low price, and sold at a very
high price, artificially creating very high profits. However, it is
located in a tax haven so it pays no taxes on those profits. 

What has happened here? This has not resulted in more efficient or
cost-effective production, transport, distribution or retail processes
in the real world. The end result is, instead, that World Inc. has
shifted its profits artificially out of both Africa and the United
States, and into a tax haven. As a result, tax dollars have been shifted
artificially away from both African and U.S. tax authorities, and have
been converted into higher profits for the multinational. 

This is a core issue of tax justice and unlike many issues which are
considered to be either developing country issues or developed
country issues in this case the citizens of both rich and poor
nations alike share a common set of concerns. Even so, developing
countries are the most vulnerable to transfer mispricing by
multinational corporations. 

Given that 60% of world trade now takes place within multinationals, the
potential for countries to lose important tax revenue is increasing and
it is becoming evermore difficult to track. In fact, a Christian Aid
study, False Profits: Robbing the Poor to Keep the Rich Tax-Free ,
(March 2009) suggests that USD1.1 trillion in bilateral trade mispricing
flowed into the European Union (EU) and the United States of America
alone from non-EU countries between 2005 and 2007. 

This week at the Alternative Mining Indaba, held to coincide with the
Investing in African Mining Indaba, both held in South Africa, Alvin
Mosioma of the Tax Justice Network Africa told the participants that the
top 10 global mining companies have an estimated 6 000 subsidiaries. As
a result, he explained that 

It is impossible for any government to know how much profit is generated
from its mineral wealth. 

How is it possible that you have 3 000 employees in Malawi and three in
the Cayman Islands and you can attribute 70 percent of your profit to
the operation in the Cayman Islands? 

[There is] very limited capacity within governments to negotiate good
mining contracts especially with multinational companies. In most cases,
the multinational companies have skilled personnel and negotiators while
governments do not. Mining companies may bring consultants, bankers,
economists and lawyers to the negotiating table and often outnumber
government [ ] teams. 

Access to this many resources, knowledge and expertise too often means
that contracts ultimately benefit the mining companies and the
government will always get the short end of the stick. 

Malawi faces a challenge in ensuring illicit financial flows do not grow
in the next few years with the increasing number of mining companies
operating within her borders. 

TJN-A at the Alternative Mining Indaba/ Tax avoidance blamed for Africa's loss of resource income

TJN-A at the Alternative Mining Indaba/ Tax avoidance blamed for Africa's loss of resource income

Tax avoidance blamed for Africa's loss of resource income 

The top 10 global mining companies have an estimated 6 000 subsidiaries,
many of which are located in tax havens, Alvin Mosioma of Tax Justice
Network Africa told delegates at the Alternative Mining Indaba yesterday. 

Mosioma said this complicated network of companies was part of "the flawed
financial infrastructure" that resulted in Africa losing a significant
portion of its resource income through complex tax avoidance schemes. 

He said one of the difficulties facing African governments in their bid to
secure a greater share of the wealth generated by their resources was that
as a result of the use of complicated corporate structures and tax havens,
"it is impossible for any government to know how much profit is generated
from its mineral wealth". 

Mosioma said it was not just the mining companies at fault but also their
banks, lawyers and accountants who assisted in setting up the financial
structures. "How is it possible that you have 3 000 employees in Malawi and
three in the Cayman Islands and you can attribute 70 percent of your profit
to the operation in the Cayman Islands?" Mosioma said. 

He called for greater transparency and also for African governments to stop
providing tax incentives, as these merely created avenues for countries to
lose their resources. 

The indaba, which was attended by hundreds of delegates from across Africa,
heard from representatives of communities around the continent about the
need for a more equitable redistribution of wealth from mining activities. 

A note prepared for the indaba argued that one of the major problems facing
Africa was the "very limited capacity within governments to negotiate good
mining contracts especially with multinational companies". 

"In most cases, the multinational companies have skilled personnel and
negotiators while governments do not. Mining companies may bring
consultants, bankers, economists and lawyers to the negotiating table and
often outnumber government. teams. 

"Access to this many resources, knowledge and expertise too often means that
contracts ultimately benefit the mining companies and the government will
always get the short end of the stick," the Economic Justice Network's
briefing note said. 

John Capel of the Bench Marks Foundation told Business Report that while
mines might bring in revenue for the government and shareholders, the land
on which they operated belonged to communities. "A legal licence does not
equal a social licence to operate." 

Capel urged mining houses in South Africa to reconsider the way in which
they operated. 

In the short term, they should review their corporate social investment,
which "must be done in-house and not outsourced to so called experts" and
should involve consultation with communities. 

With regard to wages, Capel said mining houses needed to develop a policy
that allowed workers to "justly benefit from their labour and that meets
their basic needs". 

The mining houses should steadily increase the numbers of local community
members and should stop using chiefs and local councillors to recruit. 

Capel also urged mining houses to stop actively recruiting "politically
connected individuals, senior administrative and government personnel onto
company boards or as shareholders". - Ann Crotty 

http://www.iol.co.za/business/business-news/tax-avoidance-blamed-for-...
s-loss-of-resource-income-1.1464104#.U 

ACTIONAID EXPOSES TAX AVOIDANCE BY ASSOCIATED BRITISH FOODS GROUP IN ZAMBIA

ACTIONAID EXPOSES TAX AVOIDANCE BY ASSOCIATED BRITISH FOODS GROUP IN ZAMBIA

A new investigation released today by ActionAid has revealed that the Associated British Foods group (ABF), owner of Silver Spoon sugar, Ryvita and Primark, is dodging its tax bill in Zambia, one of the world’s poorest countries.

The report, Sweet Nothings, which is the result of 12 months of research focussing on the multinational’s sugar operations in Zambia, has discovered that since 2007:

·       Zambia Sugar has generated profits of $123 million, but admits to paying “virtually no corporate tax” in Zambia.

·       It has found legal ways to siphon over US$83.7 million (US$13 million a year) – a third of pre-tax profits – out of Zambia into tax havens including Ireland, Mauritius and the Netherlands.

·       Zambian public services have lost an estimated US$27 million as a result of the company’s tax avoidance schemes and special tax breaks which is enough money to put 48,000 children in school.

·       The revenues lost to tax havens is 10 times bigger than the amount the UK gives Zambia in aid for education each year.

Chris Jordan, a tax specialist at ActionAid and co-author of the report, said: “International corporate tax avoidance is like a cancer eating away at both rich and poor countries. As we’ve seen with Starbucks and Amazon, many multinationals are not paying their fair share of tax and this hurts ordinary people in the UK and in the developing world. Tax avoidance by Associated British Foods in Zambia is helping to keep people locked in hunger. We know that business can be a force for good in Africa, but this is massively undermined when a company doesn’t pay its fair share of tax.”

In Zambia 45% of children are malnourished and two thirds of the population live on less than $2 a day. Yet ordinary people pay their taxes. Shockingly, Caroline Muchanga, a market trader who lives next to the sugar plantation, has paid more corporation tax in some years than the giant company, while her children go to bed hungry at night.

Zambia is currently dependent on foreign aid and if this is ever going to end, it must first be able to raise the money needed to provide for its own citizens. George Sumatama, headmaster of Nakambala School in Mazabuka, where Zambia Sugar is based, told ActionAid: “Our school has no windows, doors or floors. Over a thousand children have to fit into just 12 classrooms, sitting in shifts and taught by 20 teachers. I think companies operating in Zambia should be paying more (tax) than they currently pay.”

Chris Jordan added: “This situation has got to change. Associated British Foods must pay its fair share of tax in Zambia. But this case also demonstrates that international tax rules are simply not fit for purpose. David Cameron must deliver on his commitment to secure a deal to stop rampant tax avoidance when he chairs the G8 this year. He has an amazing opportunity and he must seize it.”

ActionAid is part of the Enough Food For Everyone IF campaign which aims to tackle global hunger by calling on governments to close tax loopholes which enable corporates to avoid paying their fair share of tax.

ENDS

For interviews in the UK and in Zambia and for more information contact:

Anjali Kwatra on +44 (0) 7941371357 or Anjali.kwatra@actionaid.org

Or visit www.actionaid.org.uk/taxjustice

Notes to editors:

·         Download the full report here: http://www.actionaid.org.uk/doc_lib/sweet_nothings.pdf

·         See the company response here: http://www.actionaid.org.uk/doc_lib/company_response.pdf

·         ActionAid’s research found that the Associated British Foods group was using legal tax avoidance techniques. ActionAid is not accusing ABF of illegal tax evasion.

How is ABF’s Zambian subsidiary shifting its profits into overseas tax havens?

1.       Mystery management in Ireland

Since Associated British Foods bought out Zambia Sugar in 2007, it has paid its Irish arm over $47.6 million for ‘management fees’, despite the company accounts stating they have no employees. The company says this was an error, but in any case Zambia has lost an estimated $7.4 million in corporate and withholding taxes as a result.

2.        Dublin dog leg

In November 2007 Zambia sugar took a bank loan of US$70 million. On paper this loan is routed through Ireland to avoid Zambian tax on the interest charges. This has cost Zambia an estimated US$3 million in withholding taxes.

3.       Tax free take away

By shuffling the ownership of Zambia Sugar between the tax havens of Ireland, the Netherlands and Mauritius the company has reduced the withholding tax its pays on dividends in Zambian by an estimated $7.4 million since 2007.

4.       Get your own tax haven

In 2007 the company took the Zambian government to court to get a tax break designed to help smallholder farmers.  As a result, its tax rate has tumbled from 35% to just 10%. Tax breaks have cost Zambia $9.3 million in total.

CALL FOR PAPERS: A TAX JUSTICE NETWORK- AFRICA RESEARCH SEMINAR

CALL FOR PAPERS:

Financing development through Taxation: Opportunities and Challenges from Developing countries perspectives.

A TAX JUSTICE NETWORK- AFRICA RESEARCH SEMINAR

Tax Justice Network-Africa (TJN-A) will be holding a Tax Justice Research Seminar on the 25^th and 26^th of March 2013, in Tunis, Tunisia prior to the World Social Forum (WSF). The research seminar  will bring together researchers, academicians, students, senior scholars, policy staff from civil society and other international organisations, tax practitioners and other interested professionals. The conference presents a platform for the advancement of research supporting the tax justice agenda, focusing on interaction and innovation. The conference hence offers a wide international perspective, audience and atmosphere for interactive and mutual exchange among scholars, activists and practitioners in the tax justice discourse.

TJN-A therefore invites submission of original, unpublished and substantial papers on aspects of Tax Justice, including but not limited to:

• ·         Domestic Taxation
• ·         Taxation and Natural Resource Governance
• ·         Tax Competition and other Harmful Tax Practices
• ·         Illicit Financial Flows

TJN-A will cater for travel expenses and accommodation for the authors whose papers will be selected for presentation.

Important Dates

Submission of Abstracts: 31 January 2013

Submission of Full Paper:           1 March 2013

Send full papers to: research@taxjustice.net

For more information on the research seminar contact Johannes Chiminya, Research Officer on:research@taxjustice.net

Please find attached the full Call for Papers.

Europe must clamp down on secret company structures used by drug cartels and tax cheats The European Union this month is expected to outline important new anti-money laundering rules. But a new report from Eurodad today argues this initiative will fail unless governments remove the ability for companies and other legal set-ups to be used as anonymous fronts through which illicit cash is siphoned. Today Eurodad’s report, Secret structures, hidden crimes urges EU legislators to ensure all countries create registries to disclose the names of individuals who own companies and trusts. If this information was available in a public register, it would allow authorities to investigate wrongdoing quickly. Countries around the world are under increasing pressure to tighten up efforts to combat money laundering. Recent scandals at major banks such as HSBC have added urgency to this process. The European Commission is expected to propose new rules at the end of January. The US government announced it would overhaul its standards in November. But most countries permit concealed ownership and control of companies, trusts, foundations and other such vehicles. Out of 68 jurisdictions surveyed only six require companies to be registered in the name of the real owners. Of these, only two - India and Andorra - require that the information is updated. Real owners and controllers can conceal their identity by paying others known as nominees to put their names as shareholders or directors. Two Latvian nominee directors notionally presided over hundreds of companies some of which were alleged to have been involved in tax evasion, defrauding investors and even arms smuggling. Opaque ownership facilitates: • Tax Evasion: An estimated US$21-32 trillion of untaxed wealth is stashed offshore much of it in opaque legal structures like companies and trusts. • VAT fraud linked to carbon credits which cost the EU €5 billion in 2009. • Corruption: crooked politicians hide their assets in such vehicles or use them to carry out scams- The World Bank and UNODOC Stolen Asset Recovery initiative lists 150 cases of large scale corruption involving corporate vehicles. The banking crisis: Bailed-out banks such as Northern Rock used secret vehicles to hide their losses before the financial crisis. • Illegal logging and forest burning: A significant number of Indonesian paper and pulp companies which are contributing to environmental damage and climate change, are using opaque shell companies in the EU to disguise their involvement and dodge taxes. • Human rights abuses: multinationals can use complex company structures to avoid liability in human rights violation cases. Rui Tavares MEP, Vice-Chair CRIM Special Committee on Organised Crime, Corruption and Money Laundering, said: "An official register recording the real owners of companies would be a key step to tackle economic crime, which damages society and impedes a just recovery” Alvin Mosioma, Director, Tax Justice Network –Africa, said “Tax evasion has a significant human cost in developing countries so anti-money laundering systems should discourage or catch the professionals who facilitate tax crimes.” Alex Marriage, Eurodad Policy and Outreach Analyst said: “vast amounts of money that should have been spent on public services is hidden in opaque legal structures.” “It is important not only that the current weak rules are improved but also that there is much more effective enforcement and compliance.” The report finds that whilst many countries consider tax evasion to predicate money laundering, some significant jurisdictions still do not. This allows unscrupulous bankers, accountants and lawyers to facilitate tax evasion. In the EU helping tax evaders, can trigger money laundering charges but only where the initial tax evasion is viewed as a serious crime, meaning one with a guideline maximum sentence of over a year or minimum sentence of over 6 months. This means in some member states, which take a lenient view of tax evasion even large scale infringements would not be covered, even if the initial crime took place in another country which did consider the offence serious. New rules should lower or remove this threshold, there are no sentencing guideline thresholds for fraud or corruption. The Eurodad report shows enforcement and compliance with the current anti-money laundering rules is inadequate. For further details or comment, contact Alex Marriage, Eurodad Policy and Outreach Analyst, on amarriage@eurodad.org or + 32 2 894 46 40; or +32 4 89476529 Notes to Editors 1) The report, “Secret structures, hidden crimes: Urgent steps to address hidden ownership, money laundering and tax evasion from developing countries” embargoed until 14/01/2013it will be available at: http://eurodad.org/category/documents/reports/ 2.) Eurodad (the European Network on Debt and Development) unites 49 non-governmental organisations from 19 European nations working on issues related to debt development finance and poverty reduction. 3) The Financial Action Task Force is the Paris-based organisation which oversees efforts to combat international money laundering and the financing of terrorism. It has issued guidelines in February 2012 requiring countries to make tax evasion a predicate offence of money laundering and ensure information about the real owners of vehicles is available. 4. Data on laws in various jurisdictions is available from Tax Justice Network, Mapping Financial Secrecy http://www.secrecyjurisdictions.com/sj_database/menu.xml 5. James Henry Tax Justice Network (2012). The Price of Offshore Revisited New Estimates for Missing Global Private Wealth, Income, Inequality, and Lost Taxes (see http://www.taxjustice.net/cms/upload/pdf/Price_of_Offshore_Revisited_120722.pdf ). End Notes 6. Europol, Further Investigation of VAT fraud linked to the Carbon Emissions Trading System. 28 December 2010 (see https://www.europol.europa.eu/content/press/furtherinvestigations-vat-fraud-linked-carbon-emissionstrading-system-641 7. STAR Corruption Cases Search Centre http://star.worldbank.org/corruptioncases/assetrecovery/?f%5B0%5D=bundle%3Apuppet_masters 8. Nicholas Shaxon (2011). Treasure Islands: Tax Havens and the Men Who Stole the World, p. 230.

Europe must clamp down on secret company structures used by drug cartels and tax cheats

The European Union this month is expected to outline important new anti-money laundering rules. But a new report from Eurodad today argues this initiative will fail unless governments remove the ability for companies and other legal set-ups to be used as anonymous fronts through which illicit cash is siphoned.

Today Eurodad’s report, Secret structures, hidden crimes urges EU legislators to ensure all countries create registries to disclose the names of individuals who own companies and trusts.  

If this information was available in a public register, it would allow authorities to investigate wrongdoing quickly.

Countries around the world are under increasing pressure to tighten up efforts to combat money laundering. Recent scandals at major banks such as HSBC have added urgency to this process. The European Commission is expected to propose new rules at the end of January. The US government announced it would overhaul its standards in November.

But most countries permit concealed ownership and control of companies, trusts, foundations and other such vehicles. Out of 68 jurisdictions surveyed only six require companies to be registered in the name of the real owners. Of these, only two - India and Andorra - require that the information is updated.

Real owners and controllers can conceal their identity by paying others known as nominees to put their names as shareholders or directors.

Two Latvian nominee directors notionally presided over hundreds of companies some of which were alleged to have been involved in tax evasion, defrauding investors and even arms smuggling.

Opaque ownership facilitates:

·         Tax Evasion: An estimated US$21-32 trillion of untaxed wealth is stashed offshore much of it in opaque legal structures like companies and trusts.

·         VAT fraud linked to carbon credits which cost the EU €5 billion in 2009.

·         Corruption: crooked politicians hide their assets in such vehicles or use them to carry out scams- The World Bank and UNODOC Stolen Asset Recovery initiative lists 150 cases of large scale corruption involving corporate vehicles.
The banking crisis: Bailed-out banks such as Northern Rock used secret vehicles to hide their losses before the financial crisis.

·         Illegal logging and forest burning: A significant number of Indonesian paper and pulp companies which are contributing to environmental damage and climate change, are using opaque shell companies in the EU to disguise their involvement and dodge taxes.

·         Human rights abuses: multinationals can use complex company structures to avoid liability in human rights violation cases. 

Rui Tavares MEP, Vice-Chair CRIM Special Committee on Organised Crime, Corruption and Money Laundering, said:

"An official register recording the real owners of companies would be a key step to tackle economic crime, which damages society and impedes a just recovery”

Alvin Mosioma, Director, Tax Justice Network –Africa, said

“Tax evasion has a significant human cost in developing countries so anti-money laundering systems should discourage or catch the professionals who facilitate tax crimes.”

Alex Marriage, Eurodad Policy and Outreach Analyst said:

“vast amounts of money that should have been spent on public services is hidden in opaque legal structures.”

“It is important not only that the current weak rules are improved but also that there is much more effective enforcement and compliance.”

The report finds that whilst many countries consider tax evasion to predicate money laundering, some significant jurisdictions still do not. This allows unscrupulous bankers, accountants and lawyers to facilitate tax evasion.

In the EU helping tax evaders, can trigger money laundering charges but only where the initial tax evasion is viewed as a serious crime, meaning one with a guideline maximum sentence of over a year or minimum sentence of over 6 months. This means in some member states, which take a lenient view of tax evasion even large scale infringements would not be covered, even if the initial crime took place in another country which did consider the offence serious. New rules should lower or remove this threshold, there are no sentencing guideline thresholds for fraud or corruption. The Eurodad report shows enforcement and compliance with the current anti-money laundering rules is inadequate.

For further details or comment, contact Alex Marriage, Eurodad Policy and Outreach Analyst, on amarriage@eurodad.org or + 32 2 894 46 40; or +32 4 89476529

Notes to Editors

1) The report, “Secret structures, hidden crimes: Urgent steps to address hidden ownership, money laundering and tax evasion from developing countries” embargoed until 14/01/2013it will be available  at: http://eurodad.org/category/documents/reports/

2.) Eurodad (the European Network on Debt and Development) unites 49 non-governmental organisations from 19 European nations working on issues related to debt development finance and poverty reduction.

3) The Financial Action Task Force is the Paris-based organisation which oversees efforts to combat international money laundering and the financing of terrorism. It has issued guidelines in February 2012 requiring countries to make tax evasion a predicate offence of money laundering and ensure information about the real owners of vehicles is available. 

4. Data on laws in various jurisdictions is available from Tax Justice Network, Mapping Financial Secrecy http://www.secrecyjurisdictions.com/sj_database/menu.xml

5. James Henry Tax Justice Network (2012). The Price of Offshore Revisited New Estimates for Missing Global Private Wealth, Income, Inequality, and Lost Taxes (see http://www.taxjustice.net/cms/upload/pdf/Price_of_Offshore_Revisited_120722.pdf ).

End Notes 

6. Europol, Further Investigation of VAT fraud linked to the Carbon Emissions Trading System. 28 December 2010 (see https://www.europol.europa.eu/content/press/furtherinvestigations-vat-fraud-linked-carbon-emissionstrading-system-641

7. STAR Corruption Cases Search Centre http://star.worldbank.org/corruptioncases/assetrecovery/?f%5B0%5D=bundle%3Apuppet_masters

8. Nicholas Shaxon (2011). Treasure Islands: Tax Havens and the Men Who Stole the World, p. 230.

Time to Make the Financial Sector Accountable to Human Rights

Time to Make the Financial Sector Accountable to Human Rights:

 https://www.coc.org/rbw/new-website-human-rights-abuses-linked-financial-sector-launched-december-2012

New Website to Expose Financial Sector Abuses, Launched on International Human Rights Day

Washington DC, New York, Johannesburg, Montevideo and Rio de Janeiro,  December 10 2012 -  A task force of human rights organizations and networks launched today a website devoted to highlighting the globally growing concern about the impact of financial regulation on human rights.

The financial crisis harm to conditions of human rights enjoyment worldwide is well documented. Livelihoods, poverty, human rights, freedom of expression and mobility, identity and sexuality have come under pressure and been radically altered since the financial crisis.

“Yet, financial regulation continues to be treated as if human rights did not need to be part of the discussion,” said Aldo Caliari, of Center of Concern, which coordinates the initiative. “We have set out to change that.”

The website –accessible at www.rightingfinance.org-- was developed by the “A bottom up approach to righting financial regulation” initiative. Its members are Association for Women’s Rights in Development (AWID), Center for Economic and Social Rights (CESR), CIVICUS Alliance, Center of Concern, ESCR-Net, Development Alternatives with Women for a New Era (DAWN), IBASE, Social Watch and the Norwegian Center for Human Rights.

Especially since the eruption of the Great Recession in 2008, human rights experts, monitoring bodies, social movements and diverse civil society organizations have become increasingly vocal on the connections between finance and human rights. Earlier this year, a UN committee in charge of monitoring economic and social rights issued a letterto governments expressing concern about the protection of economic and social rights in the context of austerity programs implemented in the wake of the crises. Women’s organizations have found that women bear the brunt of these programs which eliminate or reduce social services.

In the European context, the budget cuts are steps backward in fulfilling human rights commitments, and come in the throes of budgetary commitments of some EUR 4.5 trillion made to rescue financial institutions. “Unforeseen levels of spending for bank rescues highlight the unacceptable injustice of not placing human rights at the heart of the financial regulation process –from beginning to end,” said Nicholas Lusiani, of CESR.

The website will serve to capture views from a human rights perspective on all areas of financial regulation, such as financial sector taxation, derivatives regulation and the impact of hedge and private equity funds. It is being launched on a highly symbolic day that commemorates the anniversary of the Universal Declaration on Human Rights. This year’s celebrations focus on the human rights principle of participation in the decisions which affect people’s lives—particularly pertinent as people worldwide fight to engage in better oversight of global financial markets. “Today of all days we should remember actions and inactions by governments in regulating financial markets are to be judged by the same Universal Declaration on Human Rights that applies to any other government (and third parties) activity,” said Roberto Bissio, of Social Watch.

The website can be accessed at www.rightingfinance.org

Contacts:

Center of Concern: Aldo Caliari, on aldo@coc.org or +1 202 635 2757

Center for Economic and Social Rights: Luke Holland on lholland@cesr.org, or + 1 718 237 9145

Association for Women’s Rights in Development: Alejandra Scampini Franco on ascampini@awid.org, or +598 2 604 6506