(Washington, DC) - The United States should press for greater transparency and accountability in the global financial system at the G20 Summit meeting in Seoul, a coalition of civil society organizations said today. The G20 Advocacy Coalition brings together varied organizations that share the view that increased transparency is essential to promoting economic development, alleviating poverty, and realizing enjoyment of economic and social rights.
Every year developing countries lose approximately $1 trillion in illicit financial flows, the proceeds of crime, corruption, and tax evasion. That is roughly 10 times the amount of official development assistance for the developing world.
"This is a crucial time for the global economy," said Tom Cardamone, managing director of Global Financial Integrity, a coalition member. "Our goal is to raise awareness of how illicit financial flows undermine economic development efforts in poor countries and contribute to corruption, crime, and poverty. We're pressing for changes that will curtail these harmful outflows."
The coalition of civil society organizations represents a broad array of issues and interests, including human rights, poverty alleviation, economic development, business policy, and international security. It includes Oxfam America, Human Rights Watch, EarthRights International, ONE, Tax Justice Network USA, New Rules for Global Finance, and the Center for International Policy.
In a letter circulated to key figures on the US G20 delegation, the coalition states: "The G20 has claimed, ‘The era of bank secrecy is over.' It is now time for the United States to step forward and make that claim a reality."
The group's main recommendations are:
• Recognize the links between illicit outflows of capital from developing countries, absorption of those resources by tax havens and financial institutions in international financial centers, and the adverse impact those flows have on alleviating poverty, economic development, and meeting economic and social rights obligations;
• Call on the Financial Action Task Force to amend its recommendations 33, 34, and VIII to make the beneficial ownership of all companies, trusts, foundations, and charities a matter of public record; and
• Recommend that the International Accounting Standards Board adopt a standard requiring all multinational corporations to report their income and taxes paid on a country-by-country basis.
"These steps would inject much-needed transparency into the global financial system and help ensure that governments are accountable to their people and that public funds are invested to help them realize their rights," said Arvind Ganesan, director of business and human rights at Human Rights Watch.
Click here for a complete list of G20 Advocacy Coalition organizations.