Financial Transparency Coalition

The World Bank Group’s new policy on offshore financial centers will aim to improve the effectiveness of its private sector arm by helping countries tackle tax evasion but effective rules must be made for partner companies. As part of the World Bank Group, The International Finance Corporation (IFC) has a mission to promote development. The IFC uses public aid money, to fund private companies’ operations in poor countries, which should generate growth and increased government revenues. But reports by IBIS and Eurodad found these companies using tax havens, taking revenue from those countries that they are meant to benefit.

Should the World Bank’s private sector lending arm, the International Finance Corporation (IFC) set a clear policy regulating its investments in companies registered in tax havens? This question led a few weeks ago to one of the most heated discussions ever on the Executive Board of this institution. Last year, European NGOs asked their Executive Directors at the World Bank to set up binding guidelines to ban IFC investments in companies operating through tax havens. In response to pressure by civil society, the World Bank has taken swift action to start up this discussion; however, the Bank has not gone...