On Thursday, Prime Minister Imran Khan called upon the international community to take steps to counter illicit flows of money, saying the “stolen assets” of developing countries must be returned.
This occurred during a high-level panel on Financial Accountability, Transparency and Integrity (FACTI), as a side-event of the ongoing United Nations General Assembly session. The event was to present the interim report of the FACTI panel, which reviews current challenges and trends related to financial accountability, transparency and integrity, and aims to make evidence-based recommendations to close remaining gaps in the international system.
The interim report identifies several shortcomings in the existing international frameworks for tax cooperation, anti-corruption and anti-money laundering, yet such panels often miss the way that developing countries specifically are exploited due to loopholes in the tax systems of more developed countries. The report recognises that though abuses hit developing countries hardest, they (the developing countries) sometimes do not participate in setting international norms, weakening acceptability and implementation. While this is true, a large part of it is also due to little cooperation in tax matters between countries, with international tax norms not being well adapted to developing countries’ needs and circumstances.
The current circumstances indicate that foreign bribery and money laundering, committed by criminals from developing countries, who flee to other countries for refuge, are not taken seriously by the countries they seek flight to. There have been few convictions in haven destinations—court cases in developed countries, when they do go forward, often remained sealed in confidential court documents. No matter how the tax regimes are adjusted, if a culture of impunity will prevail, so will financial crimes, with the biggest victims being developing countries. Some of the solutions suggested by the premier shift correctly a good part of the responsibility on developed countries too, with measures like restoring the stolen assets of developing countries, including proceeds of corruption, bribery and other crimes, and a global minimum corporate tax. It is hoped these concerns will be heard and included in the final FACTI report, due in February 2021.
