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THE GREAT ABYSS IN THE AUTOMATIC EXCHANGE OF INFORMATION

October 1st, 2020

Close to 100 countries have been engaging on automatic exchange of bank account information based on the OECD’s Common Reporting Standard (CRS). However, exchanges are confidential leaving stakeholders, including civil society unable to estimate foreign account holdings or hold authorities to account. Moreover, not all countries are able to join the automatic exchange system.

The Financial Transparency Coalition is calling for countries to publish statistics on automatic exchanges. Thanks to the research and advocacy by civil society organisations, Australia and Germany have published extremely useful statistics.

Following the launch of the FACTI panel’s interim report last week, the FTC hosted the webinar “Statistics on foreign bank accounts: Use for developing countries”, which aimed to continue enriching discussions and raising awareness on the urgent need of greater transparency and participation, especially from developing countries and civil society.

The webinar gathered more than 180 participants and experts, including Andres Knobel (Tax Justice Network), Ephraim Murenzi and Nana Amoako (African Tax Administration Forum (ATAF), Abdul Muheet Chowdhary (South Centre), Aurore Arcambal (Asian Development Bank), and Irene Ovonji-Odida (FACTI Panel member).

During the webinar, experts explored how to use these statistics both to detect undeclared money but also to find mistakes and schemes involving tax havens.

Andrés Knobel highlighted “After years advocating for automatic exchange of information for greater transparency and accountability, finally, we have some data. So we, as civil society, need to use these statistics to estimate offshore holdings; to continue advocating to join automatic exchanges and to hold authorities to account on the use of data, statistics on undeclared accounts and sanctions against tax dodgers”.

Irene Ovonji-Odida pointed out the need to engage citizens in financial issues by raising awareness of the implications of the global financial system. She also stressed the role of banks in financial crime as demonstrated by the recent expose FinCENFiles, which shows that self-regulation is not enough to close loopholes in the global financial system, especially at a time when governments and citizens lack the necessary funds and oversight to provide adequate social services such as health and education.

Experts also identified ways in which excluded countries from the automatic system may try to obtain at least some foreign account information.

The closing remarks by Sakshi Rai from the Centre for Budget and Governance Accountability reiterated the need for quality information that is also available to developing countries. She added that “we as the Financial Transparency Coalition will continue to engage on these issues to advance the global mandate to curtail illicit financial flows and establish a sustainable and resilient financial system that works for all.”

Please find the presentation made by Andres Knobel here and the video recording of the webinar here

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