The world can’t afford to exclude developing countries from new anti-tax evasion system

March 16th, 2015

 In the wake of ‘SwissLeaks’, European Commission expert group publishes recommendations on new anti-tax evasion measures 

For Immediate Release

BRUSSELS—Weeks after the shocking revelations of wide-spread tax evasion at HSBC’s Swiss branch, a new report from a European Commission expert group on the Automatic Exchange of Financial Information (AEFI) makes it clear that the world can’t afford to exclude developing countries from new anti-tax evasion measures.

The expert group set out to address a number of questions around new efforts to clamp down on tax evasion through the automatic exchange of financial information between governments. Composed of business and industry associations, as well as some civil society groups, including the Financial Transparency Coalition (FTC), the panel concluded that the strongest cross-border exchange is one that includes all countries, not just the ones who are deemed ready to participate from the start.

“If you set up a system that is poised to leave some countries out, you risk creating a vacuum that’s easily filled by secrecy and a system that lacks accountability, said Koen Roovers, Lead EU Advocate for the FTC and member of the expert group. “By excluding some countries, you may actually be helping to create new tax havens, which is completely contrary to the purpose of the new system.”

The current global standard being developed contains a reciprocity clause, meaning that a country can only receive information about its citizens’ accounts abroad if it can share information from its own financial institutions. But many low-income countries don’t yet have the capacity or technological requirements needed.

The expert group suggested the possibility of a “phased approach” for developing countries, allowing them to receive information while they build the capacity and technological requirements to share their own.

“Such a relatively small amount of money is moving from rich countries to poor ones, yet vast sums are moving the other way. For a global system to truly be global countries that are disproportionately affected have to be included,” said Roovers. “It is vital that developing countries losing billions to tax evasion receive information from the start.”

“This money isn’t simply vanishing, and we shouldn’t have to wait until the next leak from a bank to learn where it’s going,” Roovers added. “With a robust information exchange, we’d be able to prevent tax evasion from the start, rather than curing a problem that’s already run rampant.”


Notes to Editors:

[1] The Financial Transparency Coalition is a global network of more than 150 allied civil society organizations, fourteen governments, and dozens of the world’s foremost experts on illicit financial flows.

[2] Journalist Contact:

Christian Freymeyer, Press & Digital Media Coordinator

+1.410.490.6850 (USA),

Written by Financial Transparency Coalition

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