By Dike Onwuamaeze
The report of the United Nations’ High Level Panel on International Financial Accountability, Transparency and Integrity (FACTI) for achieving the Sustainable Development Goals (SDGs) 2030 agenda has called for the development of a blueprint that would free the global economy from illicit financial practices and enable the realisation of the goals of sustainable development for all, everywhere.
The report, which was launched yesterday, is titled the “Financial Integrity for Sustainable Development.” It stated that illicit financial flows could be tackled by fostering a system of, “financial integrity for sustainable development.”
It described Illicit Financial Flows (IFFs) as, “financial flows that are illicit in origin, transfer or use, that reflect an exchange of value and that cross country borders,” adding that tax avoidance is a component of IFFs.
It observed that IFFs represented a double theft and illustrated an expropriation of funds that robs billions of people of a better future. It, therefore, called for “strengthening integrity within global finance, so that “resources, instead of vanishing into an offshore maze, will be used to benefit the people and places from which they were generated.”
The panel stated that IFFs drained resources from sustainable development, worsen inequalities and fuel instability.
The report noted that: “IFFs are a systemic problem requiring a systemic solution. An entire ecosystem approach is needed to address the shortcomings of the present patchwork of structures and adapt them to ever-evolving risks.”
The solution would be aimed at fostering integrity for sustainable development by, “reinforcing values for integrity, strengthening policy frameworks and redesigning institutions.”
The panel recommendations for addressing IFFs include accountability, legitimacy, transparency, fairness, international cooperation, capacity building, national and global governance.
The report stated: “All countries should enact legislation providing for the widest possible range of legal tools to pursue cross-border financial crimes. The international community should develop and agree on common international standards for settlements in cross-border corruption cases.
“Businesses should hold accountable all executives, staff and board members who foster or tolerate illicit financial flows in the name of their businesses.”
The panel further recommended that international tax norms, particularly tax-transparency standards, should be established through an open and inclusive legal instrument with universal participation, which implied that, “the international community should initiate a process for a UN Tax Convention.”
The report also stated that, “international anti-money-laundering standards should require that all countries create a centralised registry for holding beneficial ownership information on all legal vehicles. The standards should encourage countries to make the information public.”
The recommendations contained, “ambitious set of measures to reform, redesign and revitalise the global architecture, so it can effectively foster financial integrity for sustainable development.”
It, however, noted that recommendations were not enough and enjoined on all people to contribute through their actions.
“Governments must come together to agree on new solutions for financial integrity. The private sector must meet higher standards. Civil society and the media have to help hold the powerful accountable,” the panel said.