This weekend, G20 leaders should roll up their sleeves and work on common sense measures to curb illicit cash

November 14th, 2014

BRISBANE—While G20 leaders are poised to address many of the vehicles that are integral to allowing almost one trillion dollars to flow out of developing countries each year, political pressures should not force talks to backtrack.

“The fact that so many of the world’s leaders are in one place is a rare opportunity to get things done,” said Porter McConnell, Manager of the Financial Transparency Coalition. “The summit should not be seen as a rubber stamping process; heads of state should use their 48 hours in Brisbane wisely to reach consensus on some common sense measures before them to curb illicit financial flows.”

The Luxembourg Leaks investigation demonstrated that tax dodging and profit shifting aren’t just a problem for the tax havens that enable them; the affects are felt in countries all over the world.  

“Often the most detrimental affects are felt by developing country governments that see profits magically shifted out of their jurisdictions and into tax havens,” said Savior Mwambwa, Policy and Advocacy Manager for Tax Justice Network Africa and FTC board member.

Last week, the FTC’s Chair Alvin Mosioma co-signed an open letter calling on G20 leaders to show leadership on financial transparency in Brisbane by putting “people at the heart of (their) decision”.

Meanwhile, the European Commission and European Parliament continue to move the ball forward around the creation of public registers of beneficial ownership. Just last week, Denmark became the latest country to announce plans to create a public register of the real owners of companies operating within its borders.

“G20 leaders don’t want to be on the wrong side of history,” said McConnell. “As financial transparency becomes more and more central to the strength of the global economy, G20 leaders can take concrete steps to ensure a healthy financial system.”

The Financial Transparency Coalition calls on the G20 to act on three priority areas:

  • Beneficial ownership—as political pressure mounts from some wishing to block new standards on the collection of company ownership information, G20 leaders cannot back down from setting up a system to know who really owns a company. There’s no legitimate reason for an anonymous company to exist. The G20 should endorse the creation of public registers of beneficial ownership information.
  • Automatic Information Exchange—the OECD’s common reporting standard is a step in the right direction, but many loopholes remain. Tax evaders, money launderers and corrupt politicians will continue to exploit these loopholes if given the chance. Developing countries must be fully included in the system, since some of the most egregious cases of tax evasion and financial exploitation rob them of much needed revenue. The proposed standard was created by a group of 44 rich countries, but for automatic exchange to be effective, developing countries need to play a role in how it’s designed.
  • Public Country by country reporting— The OECD and G20 effort on Base Erosion and Profit Shifting (BEPS) is aimed at making sure multinational corporations are paying taxes in the jurisdictions where profits are actually made. The BEPS process should require public country by country reporting as the common sense way to curb corporate tax evasion. A recent study carried out by Price Waterhouse Coopers for the European Commission found that public country by country reporting for financial institutions would not have a negative economic impact, and would actually boost stability. Starting in 2015, the European Union is requiring public country-by-country reporting for all financial institutions. G20 economies should follow suit.

Notes to Editors:

[1] Members of the FTC team will be inside the International Media Center at the G20 Summit and other experts will be available in global markets.

Christian Freymeyer,, +1.410.490.6850

Verena von Derschau,, +

[2] The Financial Transparency Coalition is a global network of over 150 NGOs spanning five continents, 13 governments, and dozens of experts. We work to curtail illicit financial flows through the promotion of a transparent, accountable, and sustainable financial system that works for everyone.

Written by Financial Transparency Coalition

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