Asia: civil society organisations urge ESCAP to curb Illicit Financial Flows

Published on 
01/04/2018

Early December, 6 Asia-based organisations wrote to the United Nations Economic and Social Commission of Asia Pacific (ESCAP) an official address titled “Advocating Adoption of Curbing Illicit Financial Flows ahead of the Committee on Macroeconomic Policy, Poverty Reduction and Financing for Development”. ESCAP is one of the five regional commissions of the United Nations Economic and Social Council, established to encourage economic cooperation among its member states.

The civil society organisations, from India, Bangladesh, Nepal, Afghanistan, Indonesia and Cambodia (of which the majority are members of Global Alliance for Tax Justice's regional network member Tax and Fiscal Justice Asia) addressed the letter to ESCAP “urging the Commission to adopt curbing illicit financial flows under their mandate of domestic resource mobilisation and financing for development” ahead of the Committee on Macroeconomic Policy, Poverty Reduction and Financing for Development (December 6-8).

“We strongly believe, they say, that curtailing illicit financial flows (IFFs) is central to the debate of domestic resource mobilisation. Illicit financial flows - funds generated through a range of activities including tax evasion, misappropriation of state assets, laundering   proceeds of crime as well as profit shifting by multinational corporations (MNCs) by abusing domestic tax laws, bilateral tax treaties, trade and investment agreements - impact and undermine national efforts to raise revenue to invest in social security, secure human rights, strive to reduce inequality and finance development.

IFFs are a key part of the Financing for Development (FfD) agenda, which includes tax evasion and corruption in its scope, but also recognises tax avoidance and abuse of tax treaties as potential avenues for the generation of illicit financial flows. Illicit financial flows are a tier 3 indicator under Goal 16.4 of globally adopted Sustainable Development Goals (SDGs), without a set definition, agency or work plan for national governments to prioritise. We therefore call up on the Economic and Social Commission of Asia and Pacific (ESCAP) to recognise that curtailment of illicit financial flows is crucial for all countries, especially developing countries, and is significant within the mandate of domestic resource mobilisation and financing for development. ESCAP also must truly strive to adopt a progressive definition of illicit financial flows that goes beyond illegal activities like tax evasion, crime and corruption, and recognizes socially unpalatable and abusive practices such as tax avoidance by multinational corporations and the elite as equally corrosive towards the tax base of countries”.

You can find the letter here.

Below are the full names of all 6 signatories of the letter:

  • Centre for Budget and Governance Accountability, India
  • Centre for Policy Dialogue, Bangladesh
  • Equity BD, Bangladesh
  • Global South Initiative, Nepal
  • Integrity Watch Afghanistan, Afghanistan
  • Perkumpulan Prakarsa, Indonesia
  • South Asia Alliance for Poverty Eradication, Nepal
  • Transparency International, Cambodia

For more information, feel free to contact directly CBGA’s Neeti Biyani or Sakshi Rai.

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