OECD, 2nd Task Force Meeting on Charting Illicit Trade - Alessandra Fontana

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This presentation by Alessandra Fontana was made at the 2nd Task Force Meeting on Charting Illicit Trade held on 5-7 March 2014. www.oecd.org/gov/risk/charting-illicit-trade-second-task-force-meeting.htm

News & Politics

Alessandra Fontana,
Governance Advisor,
Development Cooperation Directorate
2nd Meeting of the Task Force on Charting Illicit Trade
Paris, March 6th, 2014

• We are measuring policy and practice
‘effort’ by OECD countries in addressing
illicit flows originating from the
developing world.
• We are NOT saying anything about the
RELATIVE importance of the various
parts of the IFF phenomenon.
• Output: comparative report based on
open source data, with recommendations.
Measuring OECD Responses to
Illicit Financial Flows

• Innovative way to promote
development
• Acknowledges that certain
development challenges require
action at home as well as
through aid overseas
• Effective to boost development as
it increases resources available
• Builds local capacity
Towards a new approach to
development policy

International action on IFF
“We reiterate our commitment (…)
in fighting money laundering (…)
We commit to ensure that we meet
FATF standards regarding the
identification of the beneficial
owners of companies and other
legal arrangements.(…) The G20
has the potential to create
momentum towards a culture of
intolerance of corruption. We will
redouble our efforts (…) by
enhancing transparency and
closing enforcement gaps.”
G20 Leaders' Declaration
September 6, 2013, St Petersburg
G20 action:
• Tax agreements
• AML rules
• Beneficial ownership
• Anti-Corruption efforts
“Developing countries must grapple
with such challenges as tax base
erosion and profit shifting (BEPS),
transfer pricing and illicit financial
flows which are further amplified
by severe capacity constraints.”
Saint Petersburg
September 5, 2013 2013

Illicit Financial Flows and Development
Assistance
All DAC Countries, ODA 2012
Total
USD 126.9 billion
Public Finance Mgmt. Legal and Judicial Development Financial Policy
Anti-corruption institutions Rest
97%
3%

Money Laundering
Average OECD
Score on all 40
FATF
Recommendations
Beneficial
Ownership
CDD
PEPs
Correspondent
Banking
CDD by
DNFBPs
Supervision
of DNFBPs

Money Laundering
2 Approaches to rank countries

Tax evasion
Summary of Global
Forum peer review
determinations for
OECD members
Source: OECD (2013), “Tax Transparency
2013 Report on Progress”, OECD, Paris; and
published peer review reports.

Tax evasion
Exchange of Information Agreements signed between OECD countries and developing countries, 2000-2013

Number of individuals and legal persons sanctioned or acquitted, 1999-2012
Transnational bribery
Source: Adapted
from OECD
Working Group
on Bribery: 2013
Annual Report,
OECD, Paris.

• Comply
– Continue to improve implementation of the international standards
(FATF Recommendations, Global Forum Standard,…)
• Promote
– Use presence in international fora to raise awareness about this issue
and push for compliance
• Understand
- research domestic risk related to IFF/ how a countries’ policies impact
IFF internationally ?
- support international initiatives (by NGOs, multilateral
organizations…)
• Support
- government authorities beyond development agencies need to be
involved in capacity building in developing countries
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