Campaigners for greater financial transparency are determined to keep up the pressure on world leaders to do more to stop tax evasion and the hiding of assets offshore in tax havens, in order to help developing economies keep revenue at home and wean themselves off aid
LONDON (Thomson Reuters Foundation) – Campaigners have already begun their lobbying efforts to ensure that financial transparency remains a priority at the November G20 Summit in Brisbane, Australia, the head of a US-based transparency watchdog said.
Tom Cardamone, managing director of watchdog Global Financial Integrity, told Thomson Reuters Foundation that he had travelled to Australia to raise awareness about financial transparency, meet fellow campaigners and lobby government officials ahead of the November meeting.
“Given that Australia has the presidency of the G20, what we are trying to accomplish is to connect with the government officials focused on the G20 to promote several issues to the country, to see if they will take up the ball and run with it,” Cardamone said in an interview from Canberra.
“These issues have to do with financial transparency, tax fairness and ways to curtail illicit financial flows from developing country economies,” Cardamone said.
“At the end of the day it’s going to take additional transparency measures to help poor economies to develop to the point where they no longer need aid,” Cardamone added.
Tax evasion, by corporations exploiting legal loopholes that allow them to book profits in low tax countries or by individuals who take advantage of complex networks of tax shelters and move money offshore, deprives developing countries of money needed to tackle poverty.
Civil society members from the G20 countries will meet in June at the C20 Summit in Melbourne, Australia to agree on an agenda on which to lobby the G20 countries. ‘Governance’ is one of the C20’s four policy themes. Inclusive growth and employment, infrastructure and climate and sustainability are the other policy themes up for discussion.
BUILDING ON G8 PROGRESS
The leaders of the Group of 8 (G8) richest countries signed a sweeping 10-point pledge last summer to combat money laundering and tax evasion. They also promised to draw up national action plans to share tax information, crack down on shell companies that hide the names of the assets’ true owners, and to require companies to report earnings broken down by country.
The moves were the strongest yet in world leaders’ four-year-old drive to reduce tax avoidance and plug holes in their public budgets, while also helping developing economies crack down on illicit finance and keep revenues in their own countries.
While transparency watchdogs were cautiously happy with progress at the G8, they are looking to the G20 to build on and broaden the G8 initiative.
Since the G8 Summit, only UK Prime Minister David Cameron has said he will create a public registry of the beneficial owners of UK-based companies, a move that transparency campaigners say is key to reducing illicit financial flows from developing countries.
“We would like to build on that within the G20 to see if it might be possible to do that from a broader context,” Cardamone said.
“This is not just a UK issue... it’s an issue that’s moving forward and we hope to promote and steer it in Canberra,” he added.
CAUTIOUS OPTIMISM
Cardamone expressed optimism that G20 leaders would agree to promote greater financial transparency but said that transparency campaigners still had a lot to do to push them to take the next step.
“There is a new government here (in Australia) and I think the G20 presidency being held by a country with a relatively small population is understood to be a real opportunity for the new government to have a global role that they might otherwise not have,” Cardamone said.
“I come here understanding that the process on our issues of beneficial ownership, country-by-country reporting, anti-money laundering work is continually a work in progress, nothing happens overnight and you don’t get everything you want in the first try.
“I think we can make some real progress on some of these issues and we look forward to engaging with the Australian government as much as we can,” he added.
Global tax evasion could be costing more than $3 trillion (1.9 trillion pounds) a year, according to researchers from Tax Justice Network, while as much as $32 trillion - twice the size of U.S. gross domestic product – may be hidden by individuals in tax havens.
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