Announcing the Financial Transparency Coalition
Announcing The Financial Transparency Coalition
By Porter McConnell
When the Task Force on Financial Integrity and Economic Development was created in 2009, only a handful of experts were following the issue of illicit financial flows. The subject was decipherable only to finance professionals taking advantage of tax havens, and a handful of civil society groups and finance journalists. Meanwhile, each year nearly a trillion dollars was being secreted out of developing countries, robbing them of revenue needed to build better lives for their citizens.
Over the last four years, a growing number of policymakers and citizens have begun to take heed. What good is pouring money into foreign assistance when ten times that amount leaves developing countries in corruption, crime, and corporate tax evasion, often arriving right back in rich country bank accounts? Meanwhile, activists in developing countries are pushing back against austerity, and demanding that foreign investors in oil, gas and mining and local elites pay their fair share.
Today, illicit financial flows are front page news:
- The US Senate is now investigating Apple’s tax avoidance schemes in Ireland and the US
- This spring, it was revealed that French budget minister Jerome Cahuzac had been secretly funneling money into a swiss bank account for years; he is being investigated for tax fraud.
- Global Witness recently uncovered evidence that Malaysia’s ruling party is selling off its country’s timber wealth for personal gain through shell corporations
As of today, we are changing our name to the Financial Transparency Coalition. We are a global group of experts, activists, and governments working together to blow away the smokescreen of financial secrecy and to build a more transparent financial system that works for everyone. It’s a simple premise, and it demands a simple name.
I joined the Coalition in March as part of the changes. In a decade in the development field, I heard the same message from colleagues in civil society groups from Malawi to Bangladesh: foreign assistance is great, but managing our own domestic resources with transparency and accountability is better. In joining this truly global Coalition, I hope to honor their sentiment.
The Financial Transparency Coalition will build on the incredible foundation that the Task Force has created. We are continuing to invest in our global network of over 150 civil society groups, economists, and governments. Our growing global reach has allowed us to respond to political opportunities from Africa, Asia, and Latin America and the Caribbean, and we hope to expand this work in the coming year.
We are energized by recent signs of progress, but the battle is far from over. Developing countries lost an estimated $859 billion in illicit outflows in 2010 alone, up from 2009. The Coalition has committed to an ambitious work plan for this year and next, ranging from training journalists in developing countries on illicit financial flows to advocating that the U.S. Congress pass legislation to name the true owners of shell companies.
Be sure to check out our new website, FinancialTransparency.org, where we will continue to bring you the latest news on illicit financial flows and the resources you need to interpret it. We’ve consolidated most of our sections into one feed, to create the most informative experience possible.
And to witness for yourself the movement that we’ve created together, join us at the Financial Transparency Coalition annual conference in Dar es Salaam, Tanzania, on October 1-2, 2013.
Here is the press release:
Global Coalition Cracking Down on Illicit Financial Flows
The Task Force on Financial Integrity and Economic Development is today renamed the Financial Transparency Coalition (FTC).
Formed in early 2009 with the goal of creating greater transparency and accountability in the global financial system in order to curb illicit financial flows (IFFs), the coalition is composed of six coordinating NGOs - Christian Aid, Eurodad, Global Financial Integrity, Global Witness, Tax Justice Network and Transparency International - as well as leading experts and a rapidly growing number of government representatives (on May 22 Belgium became the thirteenth country to join the FTC’s partnership panel).
“When we started working together, the damage caused by illicit financial flows in developing countries was recognised by only a handful of people,” said the FTC’s new manager Ms. Porter McConnell. “Today, thanks in part to the work of our coalition, it is now widely understood that this kind of criminal activity is incredibly harmful to people in developing countries, where for every $1 received in aid about $10 is lost to illicit financial flows.“
“As an international coalition composed of partners bringing a great diversity of expertise, we are able to draw attention to the inter-connections between financial secrecy, corruption, money laundering, and systemic tax abuse. Each of our NGO coordinating members has played an essential role in our push for greater transparency and accountability in the international financial sector. We will now place increasing emphasis on the important work done by our regional advocates based in Africa, India and Latin America and the Caribbean, as well as our network of some 150 allied organizations around the globe in order to make the movement for financial transparency truly global.”
While applauding the tremendous recent developments in automatic disclosure of tax information and transparency measures in the banking sector, the FTC will continue to campaign until these changes are universal - starting with next month's G8 summit in Northern Ireland. In addition, the FTC will pursue campaigns for updated money laundering legislation that includes public registries of the real (or “beneficial”) owners of companies, and monitor the OECD Base Erosion and Profit Shifting process to ensure that developing countries are included in the deliberations and proposals are based on independent research into possible reforms. We will also campaign internationally for greater transparency in corporate reporting with country-by-country reporting in all sectors.
In addition to working as it has done with the OECD, G8 and G20, the FTC plans to look at what contributions the United Nations and governments not yet actively involved can make to changing the agreements, treaties and laws that facilitate financial crimes. The coalition also welcomes participation from other bodies, including international corporations that understand the value for business of ensuring strong and financially stable markets in the developing world
“Now that these illicit flows have become front page news, and the general public wants more information about how complex financial dealings can serve as a smokescreen for trafficking, tax evasion, and corruption, our coalition is adapting to speak to those audiences,” McConnell continued. “The FTC’s mission is to blow away that smokescreen of financial secrecy and complex loopholes, so that those who would use them to steal from citizens of developing countries are exposed and their harmful activities stopped. Cracking down on IFFs will also benefit citizens of richer countries, who are losing out on much-needed revenue and feeling the pinch of austerity budgets.”
G8 June 17-18 June, 2013: FTC members, including Porter McConnell, will be available to comment on secrecy jurisdictions, beneficial ownership, automatic exchange of financial information and money laundering as related to the G8 agenda..
The FTC’s recommendations are:
- Requiring corporations to report their sales, profits and taxes in each country where they operate
- Making public the true or “beneficial” owners of companies, trusts, and foundations
- Requiring governments to collect and automatically exchange the tax information of non-resident individuals, companies and trust
- New regulations to curb the practice of transfer pricing
Taken together, these reforms would help people in developing countries advance their economies and achieve greater financial stability and independence, as well as strengthening the global financial system.
- Reforms to prevent money laundering by making it illegal for banks to accept the proceeds of international crime
For further information about the work of the Financial Transparency Coalition or to request interviews, please visit our website www.financialtransparency.org, or contact:
Dietlind Lerner: firstname.lastname@example.org, (+1) 202.577.3455
Nick Mathiason: email@example.com (+44) 77.9934.8619
The Financial Transparency Coalition addresses inequalities in the global financial system that penalize billions of people, and advocates for improved transparency and accountability.
For additional information please visit http://www.financialtransparency.org
Follow us on: Twitter | Facebook | YouTube