Mark Bou Mansour ■ Final text for UN vote expected today as opposition shrinks

The UN Secretariat Headquarters building in New York

Final text for UN vote expected today as opposition shrinks

EU finance ministers, led by France, understood to be main obstacle to global consensus

UPDATE – 9:40am GMT 16 November 2023: The time of the Africa Group’s event today has been updated in our notes to editor below and an updated link has been provided. The Africa Group’s press conference will be held at 11am ET and will be livestreamed here.

A vigorous attempt on Tuesday this week, supported by the former President of South Africa Thabo Mbeki, to secure consensus among countries for a framework convention on tax ahead of next week’s UN vote was held up at the last minute by a shrinking minority of “blocker” countries.1 As a result of the failure to agree by consensus the text of the resolution tabled by the Africa Group at the UN,2 the Group will now bring forward its text for the UN General Assembly to vote on this coming Tuesday. The Africa Group is expected to publish the text today at a scheduled live event.3

The Tax Justice Network understands that the Africa Group will press on with an ambitious resolution to begin negotiations on a framework convention, after taking into account the various positions taken during the course of negotiations in recent weeks and in light of the strength of the support the group has received from around the world.

The Tax Justice Network also understands that the shrinking opposition to a framework convention on tax now primarily stems from EU countries at the UN, whose positions were locked in back in September by EU finance ministers at the EU’s Economic and Financial Affairs Council (ECOFIN).4 Moreover, France – the host of the OECD, from which the UN would take the reins over global tax rules if a UN tax convention is established – is also understood to have taken an unusually aggressive stance in its leadership of the EU bloc at the UN in opposition to the convention.

The Financial Times reported on Monday that EU countries and the UK were accused by negotiators at the UN of trying to “kill” any chance of a proposal for a UN tax convention coming before the UN General Assembly for a vote.5 President Mbeki’s subsequent intervention called for the EU and UK to join the consensus.

The latest rounds of negotiations this week at the UN have made it clear that the OECD no longer has the support of the vast majority of countries to lead on global tax rules. The Tax Justice Network understands that fewer than 1 in 5 UN member states objected to Tuesday’s draft resolution for a framework convention on tax, which largely aligned with “Option 2” from the UN Secretary General’s recommendations, under which decision-making on global tax rules would eventually move from the OECD to a globally inclusive setting at the UN.6 The number of countries that blocked the draft resolution on Tuesday is around a third less than the 56 countries who were reported last week by the Tax Justice Network to have publicly attempted to block, or publicly expressed their opposition to, a UN tax convention in the past.7

It is understood that all 27 EU countries, all of which are OECD members too, objected to the draft resolution on Tuesday as a bloc. Barely a single member of the OECD’s Inclusive Framework, which consists of over 100 non-OECD member countries, is understood to have opposed Tuesday’s draft resolution to move global tax rules away from the OECD to the UN.

Notably, not all OECD members objected to Tuesday’s draft resolution, further indicating the OECD’s dwindling support is now primarily coming from the EU.

EU finance ministers initially announced their support in September8 for “option 3” (a globally inclusive forum to discuss tax matters but without the power to agree legally-binding decisions) of the three options recommended by the UN Secretary General to the General Assembly on tackling rampant global tax abuse that costs the world nearly half a trillion dollars in losses to tax havens every year.9

However, EU countries doubled down last week by refusing even to enter negotiations that could yield other outcomes than “option 3”, in a move that was seen by many delegations at the UN as an attempt to “kill” the whole negotiation process. The Tax Justice Network first raised the alarm about EU countries’ obstruction last week.10 The FT confirmed the EU bloc’s backsliding negotiating position on Monday, after the FT was able to see documents and secure statements from delegations with knowledge of the negotiations.

The blocking stance taken by EU countries directly contradicts a resolution adopted by the EU Parliament in June this year calling on EU member countries to back a legally binding UN tax convention.11

That the Africa Group intends to press on with a resolution to begin negotiations on a framework convention on tax despite the blocking attempts by EU countries is an indication of the strength of global support for global tax rules to be moved to the UN.

Former President of South Africa Thabo Mbeki specifically called on EU countries and the UK, in his op-ed in the Financial Times on Tuesday, to join the majority at the UN in favour of UN tax leadership:

“Regrettably, the EU, together with the UK, continues to argue against the UN option. Obviously, it would be desirable if the current draft resolution before the General Assembly, which proposes that the UN should establish the bodies and processes to negotiate the tax convention, is adopted by consensus. Therefore, I appeal to the UK government and its counterparts in the EU to join the majority of UN member states, which represent the bulk of the world’s poor, and vote to sit at the same table as the representatives of developing countries.”12

Alex Cobham, chief executive at the Tax Justice Network, who is currently in New York for the negotiations, said:

“The great majority of countries are ready to move on from the OECD, and want to start negotiating global tax rules at the UN instead. But while the OECD has told people this is an existential threat, the organisation would actually be freed up to focus on what it does best: providing technical assistance to its members. The OECD was never designed to provide a forum for transparent, inclusive negotiations, and asking it to do so has been like asking a fish to climb a tree and then complaining when it fails. But sadly the OECD’s lobbying has led the EU to stand increasingly alone in seeking to block the biggest global demand in history at the UN for democratic tax reform.

“The EU knows the failings of international tax rules result in its own member states, and their citizens, losing more revenue to tax havens than any other region of the world.13 And the EU knows the global majority wants to sit together in a fair, transparent setting and agree more effective rules. But France and other EU countries are still digging their heels in and trying to block any chance the world has for change.

Tax is fundamental for countries to build effective states, and deliver on the promise of human rights for their people. It is unthinkable that the EU would continue to defend the exclusion of most of the world’s countries from meaningful participation in setting the international tax rules. It seems likely that the Africa Group’s resolution will find majority support, and that negotiations will move ahead. But the reputational damage for France and the EU may be significant.”


Watch the Africa Group’s event here(1:15pm ET 16 November 2023)

Notes to editor

  1. According to the Tax Justice Network’s knowledge of negotiations, only 19% of UN member countries objected to a draft resolution on Tuesday that sought to move forward with a framework convention. Support for the resolution was led by former President of South Africa Thabo Mbeki, who also led the highly influential High Level UN Panel on Illicit Financial Flows from Africa in the past.
  2. The Africa Group at the UN has long championed the establishment of a UN tax convention. The group brought forward the historic resolution last year that made this month’s planned UN vote possible. The draft resolution currently being negotiated ahead of this month’s vote was first tabled in October 2023 on behalf of the group by Nigeria.
  3. The Africa Group will hold a live press conference at 11am ET on Thursday 16 November 2023. We understand that the Africa Group will announce the resolution it plans to take to a vote next Tuesday.
  4. More information on the position taken by EU finance ministers in September 2023 is available here.
  5. See the FT’s reporting on attempts to “kill” a UN tax convention here.
  6. See note 1.
  7. The Tax Justice Network’s newly launched Tax Justice Policy Tracker reported last week that a total of 56 countries (29% of countries at the UN) oppose a UN tax convention, while 117 countries (60% of countries at the UN) support a UN tax convention (for more info, see our press release about the tracker here). The Policy Tracker reports countries’ positions based on public statements and public actions they make. The Tax Justice Network can report today that the number of opposing voices in private negotiations was about a third less than the number of opposing voices in public. Since the Tax Justice Policy Tracker basis its assessment of countries’ positions on statements and actions that are public, the positions taken in private negotiations on Tuesday are not reflected on the Policy Tracker.
  8. See note 4.
  9. For more information on how much tax countries lose to tax haven ever year, see our research here.
  10. Read the Tax Justice Network’s account of negotiations at the UN published on Friday last week here.
  11. More information on the resolution adopted by the EU Parliament in June 2023 backing a legally binding UN tax convention is available here.
  12. Read the full op-ed by the former President of South Africa Thabo Mbeki here.
  13. For more information on how much EU countries have lost to cross-border tax abuse by multinational corporations according to the OECD’s own data, see the new analysis we published on Friday.