Most attention at this week’s G20 summit focused on the euro crisis and the perilous state of the global economy. But the G20’s final communiqué and background papers indicate that financial transparency is integral to its high-level agenda.

The communiqué from Mexico highlighted 13 jurisdictions that have failed to meet the required standards of tax information exchange.

More significantly, world leaders gathered at the Los Cabos beach resort “expected” the Global Forum, an organisation composed of 108 countries overseen by the OECD designed to ensure international co-operation on tax matters, “to quickly start examining the effectiveness of information exchange practices.”

This is welcome given flaws identified by the OECD’s Global Forum Peer review process. These flaws, which include the withholding of relevant information by accountants and lawyers representing individuals and companies suspected of tax evasion and the failure to identify the individuals who control assets, contributes to continued rampant tax evasion and aggressive avoidance which globally is estimated to be worth $3.1 trillion (5.1% of global GDP).

So G20 suggestions that countries should move towards the multilateral adoption of automatic information exchange are encouraging.

G20 leaders acknowledged “efforts to enhance interagency cooperation to tackle illicit flows including the outcomes of the Rome meeting of the Oslo Dialogue” which were attended by the Task Force on Financial Integrity and Economic Development.

There was also recognition of “the need to prevent base erosion and profit shifting”. This opens up the possibility of a new front in efforts to rein in transfer pricing abuse which accounts for astronomical loss of income particularly for resource rich developing countries.

In this the G20 cited progress made by international and regional organisations to improve availability of tax revenue statistics and encouraged an expansion of this work.

Tellingly the G20 suggested “tackling tax havens and non-cooperative jurisdictions is also particularly important to Low Income Countries” and “welcomed” the recent introduction of a technical assistance coordination platform by the Global Forum to advance expertise in this respect.

Two pilots have been launched in Ghana and Kenya to help these countries implement international standards and prepare them for peer review.

Progress on these pilots will no doubt be checked at the Global Forum’s next meeting to be held in Cape Town in October where a number of African countries are expected to be present.

The confirmation that the G20’s Anti-Corruption Working Group’s mandate is to be renewal for another two years ensures this issue will remain central to efforts to curb illicit flows.

And the adoption by G20 countries of the Working Group’s recommendation to deny visas to “corrupt officials, and those who corrupt them” is probably the single tangible outcome of the G20 in the financial transparency agenda. It will be interesting to see how fast and effectively this measure is implemented. The Anti-Corruption Working Group’s progress report is to be published in November.

While curbing illicit flows through enhanced information exchange, efforts to improve technical assistance and the rooting out corruption were key outcomes of the G20, there was no mention of the failure to implement country-by-country reporting (CBCR) legislation in the US or any G20 pressure to introduce CBCR  legislation in Europe.

In addition, the failure by the G20 summit to address the ease with which criminals and high net worth individuals can set up anonymous shell companies in G20 nations is a serious omission which still offers opportunities for those who wish to launder illicit funds to do so.

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