Financial Transparency Coalition

As the revelations from the Paradise Papers continue to emerge, we see that this latest in a succession of leaks demonstrates how the global network of tax havens and the secrecy they enable continue to thrive. Though many focus on the ‘scandals’ the leaks have created for users of this secrecy system, the true injustice is the absence of political progress to curtail this system and the harmful effects it has upon developing countries.

“The Paradise Papers comes at an opportune time in Africa where recent revelations show the complicit actions of big accountancy firms enabling wealthy elites and politicians to siphon off billions of dollars from Africa to offshore tax havens. The Paradise papers further illustrate how the fractured global financial system disproportionately impacts the poor on the continent,” said Jason Rosario Braganza, Deputy Executive Director of Tax Justice Network Africa. “These revelations add to the catalogue of evidence that demonstrates illicit financial flows as being a global problem and not just an African problem. It is time for an overhaul of the global financial system under the auspices of the United Nations to ensure developing country voices are heard.”

The majority of transparency and anti-tax abuse standards are still being set by the Organization for Economic Cooperation and Development (OECD) and the G20, exclusive groups of rich countries. Developing countries have not been a part of the design of these global rules, and they are increasingly seen as piecemeal.

“Revelations by Paradise Papers are at once big news and tediously familiar – increasing inequality and corruption in already cash-strapped developing countries are directly aided by financial secrecy offered to multi-national corporations and the elite through tax havens and intermediaries such as lawyers, bankers and accountants. Especially crucial is the role played by shell companies, which are often anonymously held and conceal the true human owner who ultimately benefits from the proceeds of the company, i.e. the beneficial owner,” said Neeti Biyani, Programme Consultant at the Centre for Budget and Governance Accountability. “Transparency is key to establishing a fair global financial system that works for everyone. Governments across the world therefore must implement public country-by-country reporting and establish centralized registries of beneficial owners of all legal entities in their jurisdiction, which should be publicly accessible.”

This is a global systemic issue that cannot be addressed at the national level alone. It’s time for governments to agree a global agreement under the United Nations that ensures all countries are democratically represented and that reforms are guided by the overarching aim of fulfillment of human rights, sustainable development and gender equality.

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Notes to Editors: