This report was submitted to the United Nations Special Rapporteur on Freedom of Opinion and Expression in support of the thematic report to the UN Human Rights Council: “Freedom of Opinion and Expression and Sustainable Development – Why Voice Matters”. The document underlines the linkages between tax justice, illicit financial flows, and sustainable development with special emphasis on the role of the freedom of expression and access to information on these areas. We briefly highlight the current policy context in which financial secrecy and illicit financial flows can flourish before setting out the progressive and credible policy measures that can safeguard democracy, public interest and the freedom of expression and strengthen sustainable development.
“Illicit financial flows, corruption, tax evasion and illegal activities…are major obstacles to sustainable development because they rob valuable national resources. Access to information, which is at the heart of freedom of expression, is a vital tool to expose and counter such activities. Transparency, civic space and independent media – which thrive in contexts where freedom of expression is upheld – are powerful drivers in ensuring that much-needed public funds or natural resources for sustainable development are not destroyed or diverted for private use.”
- The existing international financial system facilitates illicit financial flows which in turn reduces the domestic revenue available to states and further risks weakening progressive governance in which freedom of expression can be practiced.
- The ABCs of tax justice (Automatic Exchange of Information, Beneficial Ownership, and Country by Country Reporting) are inextricably linked to the right to freedom of expression and access to information in order for States and individuals to ensure that tax and financial systems contribute to a society in which human rights can flourish.
- The public has the right to openly accessible and comprehensive information, which should include information on the scale and enablers of illicit financial flows. Access to this information is crucial to detecting and deterring illicit financial flows of all types and is a critical foundation of sustainable development.
- Every country should publish Common Reporting Standard (CRS) statistics, following the examples of Australia and Germany to ensure full transparency.37 This increased transparency would enable any jurisdiction to review data on any non-resident (regardless of whether their country is participating in the OECD system) and allows regulation and enforcement authorities to trace illicit finance.
- Every country should provide information on planned actions on its tax and financial transparency policies and laws, and the extra-territorial impacts of these on the right to freedom of access to information
- Every country should establish a publicly accessible register, free of charge, of the beneficial owners of companies, trusts, foundations, and other relevant legal vehicles
- All countries should establish central beneficial ownership registries for all types of legal vehicles (companies, partnerships, foundations, trusts, etc). Once beneficial ownership registries are established, countries should connect their beneficial ownership registries to other national registries (e.g. real estate, aircraft, cars, vessels, etc). This expands the potential to identify the beneficial owners of assets, identify money laundering cases, ensure asset recovery, or apply wealth taxes, which are central to addressing global inequality. The final step to close the gap in the oversight of these complex interlinkages is to connect al local, national, and regional registries in on Global Asset Register. Oversight of these complex interlinkages and a global registry should take place under a UN Convention Framework
- The G20 should move the mandate for country by country reporting from the OECD to the United Nations.
- We encourage state parties, civil society and other stakeholders to support initiatives to strengthen meaningful, inclusive and transparent negotiations for an intergovernmental framework on tax including to:
– Amplify the unresolved issues on equitable taxation and financial transparency which will be identified by academics, civil society organisations, and the private sector which will be addressed in Bogota, 2-3 May 2023 and further to,
– Support the Colombian Ministry of Finance’s regional initiative to create a ministerial decision-making platform for aligning Latin American and Caribbean positions on international tax matters (Cartagena, 27-28 July 2023).