The United Nations High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel) has solicited global support to strengthen financial integrity for sustainable development.
The call was among the 14 recommendations made by the UN panel at the launch of its new report titled “Financial Integrity for Sustainable Development”.
The panel urged governments across the world to create robust and coordinated national governance mechanisms that efficiently reinforce financial integrity for sustainable development.
In addition, the FACTI Panel asked governments to publish national reviews evaluating their own performance as part of measures to improve financial integrity, while also recommending the establishment of an inclusive and legitimate global coordination mechanism at United Nations Economic and Social Council (ECOSOC).
The inclusive and legitimate global coordination mechanism, it noted, will address financial integrity on a systemic level.
The Panel, in the newly released report, urged governments to redirect the trillions of dollars recovered from curbing tax abuse, corruption and money-laundering to financing critical action on the climate crisis, COVID-19 recovery and extreme poverty.
In its 14 recommendations, the FACTI Panel outlined an ambitious set of measures to reform, redesign and revitalize the global architecture, so it can effectively foster financial integrity for sustainable development.
The recommendations by the high-level body include building up on existing structures, create an inclusive inter-governmental body on tax matters under the United Nations; creating the legal foundation for an inclusive intergovernmental body on money-laundering; enacting legislation providing for the widest possible range of legal tools to pursue cross-border financial crimes; and establishing tax-transparency standards through an open and inclusive legal instrument with universal participation.
Others are, requiring all countries to create a centralised registry for holding beneficial ownership information on all legal vehicles; requiring taxpayers, especially multinational corporations, to pay their fair share of taxes. The UN Tax Convention should provide for effective capital gains taxation; creating a multilateral mediation mechanism to fairly assist countries in resolving difficulties on international asset recovery and return, and to strengthen compensation. Governments should develop and agree global standards/guidelines for financial, legal, accounting and other relevant professionals, with input of the international community.
The Panelists also charged international organizations must provide timely advice related to Illicit Financial Flows, so that procedures, norms and policies can be updated regularly.
Speaking at the virtual launch of the report, Prime Minister Imran Khan of Pakistan, advocated concrete steps to stem the flow of illicit money from developing countries to tax havens and to ensure the return of stolen assets, saying that it could have a “transformational impact on their development prospects”.
“These steps should include a commitment by countries that were currently acting as tax havens to immediately and unconditionally return all foreign assets that are shown to be stolen or whose legitimacy cannot be explained.
“The United Nations should initiate negotiations on the new international tax corporation and anti-money laundering legal instruments like the Convention on Corruption, adopt common principles identified by the FACTI panel that will apply to all financial transactions and establish a UN coordination, adjudication and mediation mechanism on illicit financial flows,” Khan added
The Pakistani Prime Minister also supported the proposal of the Organisation for Economic Co-operation and Development’s (OECD) to freeze and return the unexplained assets of foreign politically exposed persons.
Khan, it would be recalled, had during the presentation of the FACTI panel’s interim report in September 2020, suggested several global policy actions including the immediate return of stolen assets, penalties on the financial institutions, lawyers, accountants and other enablers of corruption crime and tax evasion, disclosure of beneficial ownership of companies, a global minimum corporate tax, fair digital taxation, review and revision of unequal investment treaties and a coherent mechanism for monitoring illicit financial flows set up under the UN.
The High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel) was convened by the 74th President of United Nations General Assembly and the 75th President of the Economic and Social Council on 2 March 2020.
The objective of the FACTI Panel is to contribute to the overall efforts undertaken by Member-States to implement the ambitious and transformational vision of the 2030 Agenda for Sustainable Development.
It is mandated to review current challenges and trends related to financial accountability, transparency and integrity, and to make evidence-based recommendations to close remaining gaps in the international system.
The Panel is co-chaired by former Prime Minister of Niger, Ibrahim Assane Mayaki and former President of Lithuania, Dalia Grybauskaitė.
Members of the Panel include the Chairman of Nigeria’s Independent Corrupt Practices and Other Related Offences Commission (ICPC), Prof. Bolaji Owasanoye; Annet Wanyana Oguttu, Benedicte Schilbred Fasmer, Heidemarie Wieczorek-Zeul, Irene Ovonji-Odida, José Antonio Ocampo, Karim Daher, Magdalena Sepúlveda, Manorma Soeknandan, Shahid Hafiz Kardar, Susan Rose-Ackerman, Tarisa Watanagase, Thomas Stelzer, Yu Yongding and Yury Fedotov.