From Aidoghie Paulinus, Abuja
President Muhammadu Buhari, today, welcomed the report of the United Nations High Level Panel on International Financial Accountability, Transparency and Integrity (FACTI) for achieving the 2030 Agenda.
This was even as the panel, in its recommendations, called for sanctions on those perpetuating financial crimes, particularly bankers, accountants and lawyers.
The panel, it would be recalled, was convened by the President of the 74th United Nations General Assembly and the 75th President of the Economic and Social Council on March 2, 2020.
The objective of the panel was to contribute to the overall efforts undertaken by member states to implement the ambitious and transformational vision of the 2030 Agenda for Sustainable Development.
The panel was mandated to review current challenges and trends related to financial accountability, transparency, integrity, and to make evidence-based recommendations to close the remaining gaps in the international system.
The panel which is co-chaired by a former Prime Minister of Niger, Ibrahim Assane Mayaki, and former President of Lithuania, Dalia Grybauskaité, has among its members, the Chairman of the Independent Corrupt Practices and other Related Offences Commission (ICPC), Bolaji Owasanoye.
Buhari who was represented by the Minister of Foreign Affairs, Geoffrey Onyeama, expressed gratitude to the panel and its leadership for their transparent engagement with member states throughout the process leading up to its final report.
“The Government of Nigeria welcomes the Panel’s report and views its recommendations positively. However, given the bleak picture painted in the interim report and the confluence of challenges confronting the world in the era of the COVID-19, we had expected stronger recommendations in some parts of the report. Nonetheless, we consider this final report as reflective of the diversity of perspectives and the delicate views and priorities of different stakeholders on the subject of combating illicit financial flows (IFF) and strengthening good practices on assets recovery and return to foster sustainable development.
“We are of the view that the report covers, to a substantive extent, the enormity of efforts required to tackle the multifaceted dimensions of illicit financial flows, including harmful tax policies and practices, abusive transfer pricing, trade mis-pricing and mis-invoicing, illegal exploitation of natural resources as well as official corruption, and organized crime.
“We consider this report timely in the light of the international effort to mobilize resources to finance nationally and internationally agreed development agenda. The FACTI Panel report can also positively contribute to the ongoing efforts to broaden the awareness of the scale, scope, and cost of illicit financial flows, especially at a time when the widespread and intensifying impacts of the COVID-19 pandemic have disproportionately affected the resource base of most developing countries, thus narrowing their chances of achieving the 2030 Agenda,” Buhari said.
Buhari added that the FACTI Panel’s report clearly showed that the magnitude of the resources that was lost to illicit financial flows were enormous and that IFFs robbed the majority of citizens of a better future.
The president further said the report also revealed that IFFs divert substantive financial resources from public priorities and reduced fiscal expenditure on public services, including in areas where women and youth should be the major beneficiaries.
“IFFs also weaken the state’s ability to deliver the developmental expectations of the citizens as it diverts important resources that could otherwise have been used to enhance human and national security.
“In the era of the COVID-19 pandemic, such robbery and its subsequent limitation of fiscal space can lead to austerity which is the last thing that our economies need at a time of deep recession. We agree with the Panel that if not addressed at all levels, IFFs would continue to create myriad of criminal opportunities that ease the way for powerful individuals and more advanced economies to illegally accumulate resources, while hindering national reforms in developing countries as well as thwarting the global effort to improve financial integrity, transparency, and accountability.
“Let me emphasize that for the international community to recover better from the impact of the covid-19 pandemic and accelerate the achievement of the 2030 Agenda, we must implement all recommendations contained in the FACTI Panel’s final report. These recommendations, if implemented, have the potential to significantly reduce existing structures that make it impossible for countries to generate and retain a sizeable chunk of their resources,” Buhari also said.
Buhari further said the Panel underscored that “transformative change can only truly be possible when all countries commit to acting together for the greater good of the larger part of humanity.”
He stated that the global community must take collective action to combat illicit outflows and establish financial integrity in all countries and regions.
“I am convinced that the idea of a Pact and or Convention would help us to halt the flow, trace, recover and return assets of illicit origins, as well as ensure that all funds recouped from the process are directed to finance the 2030 Agenda and accelerate the achievement of the Sustainable Development Goals.
“We note the Panel’s acknowledgment of the fact that the contemporary international tax system uses a taxing rights regime that is not suitable for the current era as it makes combating tax abuses, especially by multinational corporations, a genuine dilemma for most developing countries. The report has also exposed the systemic imbalance and institutional deficiencies in the global tax treaties and structure, particularly as it is anything but inclusive, and its normative foundation framed over a century ago, when most developing countries were yet to be politically independent. We believe that unless the peculiarities of developing countries are recognized and properly incorporated, the outcome of the ongoing exercise by the OECD would obstruct practical paths to development in most developing countries.
“We are gratified that the FACTI Panel has made recommendations that can lead us towards a fairer international tax regime as well as address the continuing advocacy for country-by-country reporting, open disclosure and automatic exchange of information on beneficial ownership and eliminate financial secrecy jurisdictions and tax havens that facilitate base erosion and profit shifting. It has also made proposals that can help us mitigate the detrimental effects of profit shifting, harmful tax competition (the so called “race to the bottom”), and the taxation of the digital economy. It is therefore incumbent on us, as United Nations member states, to do our part in addressing this scourge. This we can do by resolving to establish a legitimate and transparent global system of laws, norms, standards, and institutions that can be fairer to all as well as hold all those using the secrecy structures accountable for their abuses, as proposed by the Panel.
“We would like to affirm that implementing these recommendations would help us move from secrecy to transparency as well as address loopholes in existing processes and structures that undermine efforts towards the achievement of financial integrity for sustainable development. It will also help in addressing cross-border financial crimes in a manner that serves both the interests of justice and the global fight against bribery.
“We equally note that the report has proved us right that the existing asset recovery architectural processes remain extremely burdensome and lengthy for requesting countries. We are convinced that creating a multilateral mechanism that can assist countries in resolving difficulties on international asset recovery and return in a fair manner would assist in transparently exposing those involved in practices that facilitate illicit financial flows, as well as help in the timely retrieval of such proceeds, deter perpetrators, rebuild the confidence of the citizenry, and compensate for the damage caused by such crimes.
“Indeed, the Panel was right in its assertion that “not everything can be left to State-level enforcement”. It is Nigeria’s position that addressing illicit financial flows and enthroning a global culture of financial integrity entails a fundamental change in how we operate and that the private sector, civil society, trade unions and professional groups must work with governments at all levels. The private sector, in particular, should more effectively foster a culture of integrity by bringing the model of accountability into their internal operations. Professional bodies, including those for lawyers, accountants, auditors, and bankers should observe ethical professional standards and hold their members to account if they abet tax evasion and aggressive tax avoidance. We must mobilize all relevant stakeholders in this global effort to curtail the menace of IFFs.
“Let me conclude by commending the Panel for realizing its mandates. The ball is in on our courts as global leaders to implement the laudable recommendations contained in the FACTI report. The Government of Nigeria will cooperate with other member states in both advancing the content of the report and in letting State actors realize that their inaction in tackling the scourge affects the lives of millions of people all over the world and deprives governments of developing countries, the resources they require to achieve the 2030 Agenda for Sustainable Development,” Buhari stated.