Two key moments stand out for me last week. On Monday I saw former Senator Lugar (R-IN) receiveTransparency International USA’s “Integrity Award” for his work to combat corruption, whether through his oversight hearings of World Bank projects or his leadership on the Dodd-Frank Act, specifically the Cardin-Lugar oil, gas and mining payment disclosure provision. . During a dinner co-sponsored by Exxon, Senator Lugar recounted his lobby visits from oil company representatives during the consideration of this legislation that now requires oil, gas and mining companies to disclose their payments to host governments. After hearing them out, Lugar and his staff simply weren’t persuaded by industry arguments about competitive harm or compliance costs. Looking forward, Lugar referenced the litigation that the American Petroleum Institute has launched against the provision bearing his name and said that no matter the outcome, “The trend is in our direction.”
Tax evasion poses an acute challenge to developing and developed countries. From 2000 to 2010, illicit financial flows deprived developing countries of US$5.86 trillion. Tax evasion is not a victimless crime – for people in the developing world, the consequences of tax evasion can be a matter of life and death. If developing countries could recover this untaxed wealth, it could mobilise enormous resources for improving their public services and their citizens’ lives.
Today’s international tax rules, which were drawn up nearly a century ago, have not kept pace with the massive changes in the world economy.
This manual helps interested parties to understand and address corruption risks associated with forest carbon accounting – particularly REDD+ – programmes and strategies at the national level. Users will learn how to identify corruption risks and instruments to help address these risks within the development of national Reducing Emissions from Deforestation and Forest Degradation (REDD+) action plans and strategies, and the implementation of REDD+ and other forest carbon projects.
The manual’s scope does not extend to corruption risks at the international level. Rather it is deliberately focused on processes that occur in country, to facilitate the participation of national and local groups in informing national policy, planning and project implementation. This tool is principally designed for civil society actors who may work with other NGOs, governments and the private sector to help design systems that are transparent, accountable, responsive and thus effective. It will help inform and guide forest carbon risk assessments, but should be adapted by users to fit their country contexts.
LONDON – Organisations representing over 1000 civil society groups have written to the EU calling on it to establish a new standard for company ownership transparency. NGO coalitions including Publish What You Pay, the UN Convention against Corruption civil society coalition and the Task Force on Financial Integrity and Economic Development, are asking for a new standard that companies have to publicly disclose their ultimate, or beneficial, owner.
To get to the bottom of corruption, Transparency International analyses a range of critical societal institutions (such as the business, media or political parties) and assesses their ability to prevent corruption. This ‘national integrity system’ assessment has been carried out in more than 70 countries worldwide, with 25 of the studies recently completed or being finalised across Europe.
The Greece report finds that several “pillars” of the Greek anti‐corruption system have fundamental flaws, the most significant of which is a crisis of values, typified by broad scale acceptance of and participation in corruption.
LONDON – The OECD’s Global Forum peer review, the main mechanism for assessing the effectiveness of Tax Information Exchange Agreements (TIEAs), is seriously flawed and therefore contributes to failure in reducing rampant tax evasion.
The findings of a new Tax Justice Network report published today run directly counter to claims made by the OECD that its TIEAs represent the new international standard on tax transparency.
Using consistently credible sources the resulting estimate of tax evasion in the European Union is approximately €860 billion a year. As the report notes, estimating tax avoidance, which is the other key component of the tax gap in Europe, is harder. However, an estimate that it might be €150 billion a year is made in this report. In combination it is therefore likely that tax evasion and tax avoidance might cost the governments of the European Union member states €1 trillion a year. These losses can only be accurately located with regard to tax evasion. Italy loses the most in Europe as a result of tax evasion. Its loss exceeds €180 billion a year. Estonia is, however, the biggest loser when the tax lost is expressed as a proportion of government spending. More than 28% of Estonia’s government spending is lost to tax evasion each year.
In August 2009, France and Switzerland amended their tax treaty. The new treaty stated that the two countries would from now on exchange upon request all information necessary for tax enforcement, including bank information otherwise protected by Swiss bank secrecy laws. In the following months, one of France’s richest persons and her wealth manager were taped discussing what to do with two undeclared Swiss bank accounts, worth $160 millions. After a visit to Switzerland, the wealth manager concluded that keeping the funds in Swiss banks or bringing them back to France would be too risky. He suggested that the funds be transferred to Hong-Kong, Singapore, or Uruguay, three tax havens which had not committed to exchange information with France. After the tapes were made public, they were widely commented in French newspapers and eventually the funds were repatriated to France.
Looking at 2012, experts from the Brookings Africa Growth Initiative (AGI) and colleagues from think tanks based in the region have come together to produce this year’s issue of Foresight Africa, where they outline the top priorities for the continent for 2012 and beyond. AGI scholars assess what they see as the major challenges for Africa in the coming year and provide policy recommendations on how to manage these challenges and leverage opportunities to catalyze and reignite growth in 2012. Similarly, AGI and its partner think tanks identify country-specific challenges in Nigeria, South Africa, Senegal and Kenya.
In a study conducted between November 2010 and February 2011 on ill-gotten money and the economy, the Financial Integrity team looked at the experiences of Malawi and Namibia. We approached the project with an open mind and without any assumptions, finding that for Malawi, corruption and tax evasion as a percentage of GDP represent a significant drag on economic development.
BERLIN – Corruption continues to plague too many countries around the world, according to Transparency International’s 2011 Corruption Perceptions Index released today. It shows some governments failing to protect citizens from corruption, be it abuse of public resources, bribery or secretive decision-making.
Transparency International warned that protests around the world, often fuelled by corruption and economic instability, clearly show citizens feel their leaders and public institutions are neither transparent nor accountable enough.