Financial Transparency Coalition

WASHINGTON DC – South Africa announced today that it has joined the Partnership Panel of the Task Force on Financial Integrity and Economic Development. Partnership Panel members also include the governments of Chile, Denmark, France, Germany, Greece, India, the Netherlands, Norway and Spain, the Canadian International Development Agency, and the Ford Foundation.

South Africa is the first African country to join the Task Force. Its experience, expertise and influence as both a regional and international power will be of great benefit to The Task Force as it works to promote greater transparency and fairness in the international financial system.

The issue of illicit financial flows is particularly important in Africa as a 2010 report [1] calculated that from 1970-2008, US$854 billion left the continent as a result of this underground economy. Furthermore, a 2011 report [2] found that the continent lost US$79 billion in revenue to tax evasion in 2010 alone.

These illicit capital outflows represent money that could contribute significantly toward poverty alleviation and economic development both in Africa and elsewhere.

Launched in January 2009, the Task Force on Financial Integrity and Economic Development is a unique global coalition of civil society organizations and governments, which advocates for greatly improved transparency and accountability in the global financial system. Task Force membership is organized by the following component groups: a Coordinating Committee, composed of international Civil Society organizations, [3] the Partnership Panel, an Economist Advisory Council, and Allied Organizations.

The Partnership Panel’s mandate is to facilitate meetings with other government officials, provide information on discussions and conferences that are relevant to the Task Force, and strategize on how to best promote Task Force goals within governments, multilateral organizations, and other institutions. In turn, the Task Force helps support efforts by member governments to stem their own illicit financial flows by providing data, expertise and proven policy prescriptions.

The Task Force advocates five recommendations for addressing the current global financial crisis, each one focusing on transparency and extending initiatives that have already begun to be put into place:

• Curtailment of mispricing in trade imports and exports;
• Country-by-country accounting of sales, profits, and taxes paid by multinational corporations;
• Require that the beneficial ownership of companies, trusts and foundations be readily available on public record;
• Automatic cross-border exchange of tax information on personal and business accounts;
• and Harmonization of predicate offenses under anti-money laundering laws across all Financial Action Task Force cooperating countries.

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Notes to Editors:

[1] Global Financial Integrity report, “Illicit Financial Flows from Africa: Hidden Resource for Development” (available online here).
[2] Tax Justice Network report, “The Cost of Tax Abuse” (available online here). (PDF)
[3] The Task Force Coordinating Committee comprises Christian Aid, Eurodad, Global Financial Integrity, Global Witness, Tax Justice Network, Tax Research LLP, Transparency International, and the Secretariat for the Leading Group on Innovative Financing for Development.

Contact:

Dietlind Lerner
dlerner@financialtransparency.org
+1 202.577.3455

Nick Mathiason
nmathiason@financialtransparency.org
+44 7799.3486.19

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