Three prominent South Africans – Corruption Watch chairperson Archbishop Njongonkulu Ndungane, Archbishop Emeritus and Nobel laureate Desmond Tutu, and former Constitutional Court judge Richard Goldstone – joined the call earlier in November to the leaders of the Group of Twenty major economies to adopt resolutions that would make it harder for unscrupulous people to launder their dirty money.
The G20, which came together in Brisbane, Australia, on 15 and 16 November, heard the call. In a communiqué briefing the public and the media on resolutions taken during the meeting, it has signalled its intent to act against poverty, unemployment, slow economic growth, and corruption. Among its priorities in the forthcoming period are a growth in G20 GDP of at least 2%, a strategy to boost private and public infrastructure investment, a reduction in youth unemployment, and an increase of the numbers of women in the labour force.
It has also endorsed a 2015-2016 anti-corruption action plan to enhance transparency and boost effectiveness in six critical areas of concern, including foreign bribery, and international co-operation. The plan also includes measures to make international tax rules more transparent, and to remove the opacity around the beneficial ownership of companies. Both of these factors allow corrupt individuals to channel their dirty money into foreign countries where they can spend it with impunity.
Transparency International’s Unmask the Corrupt campaign is targeted at exposing these people and secret companies, and aims to break down the structures that allow them to move vast sums of illicit money around the world.
They can run, but they can’t hide
According to the communiqué, the G20 will take action to “ensure the fairness of the international tax system and to secure countries’ revenue bases. Profits should be taxed where economic activities deriving the profits are performed and where value is created. We welcome the significant progress on the G20/OECD Base Erosion and Profit Shifting action plan to modernise international tax rules. We are committed to finalising this work in 2015, including transparency of taxpayer-specific rulings found to constitute harmful tax practices.”
To prevent cross-border tax evasion, the G20 has thrown its weight behind the global common reporting standard for the automatic exchange of tax information on a reciprocal basis. “We will begin to exchange information automatically with each other and with other countries by 2017 or end-2018, subject to completing necessary legislative procedures … we welcome further collaboration by our tax authorities on cross-border compliance activities.”
The G20 also committed to action that will “enhance mutual legal assistance, recovery of the proceeds of corruption and denial of safe haven to corrupt officials. We commit to improve the transparency of the public and private sectors, and of beneficial ownership by implementing the G20 High-Level Principles on Beneficial Ownership Transparency.”
Talking about the problem won’t make it go away
In a statement, Transparency International (TI) Australia welcomed these developments.
“Secret company ownership structures provide the smokescreen for the corrupt to hide,” said Maggie Murphy, a senior advocate with TI. “For such a politically and economically diverse set of countries as the G20 to adopt these principles, is testament to the severity of the problem.”
Murphy said that public registers in all G20 countries remains the “most efficient and effective way to share this crucial information. Major countries including the US, Germany and Australia still need to honour their existing commitments to clamp down, but the moral and political mandate for action has now been lifted to a new level.”
TI also welcomed the G20 2015-2016 anti-corruption action plan, but cautioned that strong action must follow the strong words.
“The devil will now be in the detail of what every country – including Australia – does post-Brisbane to implement these actions,” said Greg Thompson of TI Australia.
