November 30, 2023

"Just the FACTs" is a round-up of news stories and information regarding efforts to combat corrupt financial practices, including offshore tax haven abuses, corporate secrecy, and money laundering through the financial system.

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Here's the State of Play:
"Unstoppable Momentum" for Greater Tax Transparency and Public Country-by-Country Reporting Clear at UN Development Dialogue

Earlier this month, FACT executive director Ian Gary appeared alongside experts and government officials at the UN to make the case for public country-by-country reporting (public CbCR) as an important element of ongoing efforts to raise global revenues and finance the Sustainable Development Goals (SDGs). The panel discussion, organized by FACT, Oxfam America, and the United Nations Development Programme (UNDP), was held as a part of the UNDP Dialogue on Tax for SDGs in New York.

The inevitability of enhanced public tax disclosures was a consistent theme throughout the panel. Referencing the upcoming implementation of the European Union's limited public CbCR regime, as well as the expected passage of comprehensive disclosure requirements in Australia, Gary noted that: "We're on the verge of a transformational reform with public country by country reporting. This information is going to start to be disclosed next year, and will be extremely valuable for tax administrations right away. And so I think that's the big takeaway, that we're at a breakthrough moment, not five years from now, but a year from now."

Public CbCR - even if only initially implemented in a small number of major market jurisdictions - has transformative potential as a tool for global tax transparency. Australia's world-leading draft legislation would, if implemented in its current form, introduce public reporting requirements for thousands of major multinationals, including the likes of Nike, Microsoft, and Amazon.

As noted by Chenai Mukumba, executive director of Tax Justice Network Africa, making this information public could significantly improve the ability of tax authorities in jurisdictions frozen out of extant information sharing networks to carry out enforcement actions with limited resources: "One of the reasons that... as civil society we really advocate for public country-by-country reporting is because the benefit of that transparency, particularly for African countries, is immense."

During the panel, the Chairman of the Nigerian Presidential Committee on Fiscal Policy and Tax Reforms Taiwo Oyedele emphasized that, while Nigeria has not yet taken an official stance on public CbCR, "We have no reason to object to that."

"That would be my recommendation as well, to come on board in terms supporting public CbCR," he said. "The more information we have, the better for everyone. And I usually say that if you do not have anything to hide, then why hide in the first place?"

Canada Passes Law Establishing Public Federal Beneficial Ownership Database

On November 2, a bill establishing Canada's first public federal beneficial ownership register received royal assent after passing both houses of Parliament.

The success of the bill in question, Bill C-42, represents the outcome of years of campaigning by the three members of the End Snow-Washing Coalition: Publish What You Pay Canada, Transparency International Canada, and Canadians For Tax Fairness.

Unlike the U.S. beneficial ownership registry soon to be established under the Corporate Transparency Act (CTA), Canada's federal registry will be fully public, searchable, and free to use. While the registry will only cover federally registered companies - the vast majority of Canadian companies being incorporated at the provincial or territorial level - the database is designed to be able to "scale out" to cover provinces and territories.

In a statement released following the bill receiving royal assent, the End Snow-Washing Coalition called on "the federal government to reach an agreement with provinces and territories and to offer a flexible choice: send beneficial ownership information directly into the federal registry, or create their own using the same federal standard."

UN Votes to Begin Process of Establishing Framework Convention on Global Tax

On November 22, the UN General Assembly adopted a landmark resolution to begin negotiations on a new UN Framework Convention on International Tax Cooperation. Under the resolution, negotiations on the framework convention are expected to begin in 2024.

The resolution - tabled by Nigeria on behalf of the 54 members of the Group of African States, or African Group - was welcomed by global tax justice groups including the Global Alliance for Tax Justice, Tax Justice Network, and Eurodad, among others.

In a statement, Tax Justice Network Africa executive director Chenai Mukumba said that "We wish to congratulate the African Group for remaining resolute in pushing this through the UN negotiation... It is now incumbent on all governments to support the work of the UN in its historic effort to correct the imbalances that currently exist. It is high time that the current tax system, which remains ineffective, exclusive and accommodating only of the interests of a few is replaced by effective and inclusive international tax cooperation."

Latest from FACT

Blog: What the Microsoft Tax Case Shows Us About Tax Transparency

Read FACT policy director Zorka Milin's blog detailing the ongoing multi-billion dollar profit shifting dispute between the IRS and U.S. tech giant Microsoft, and the case's implications for global tax transparency policy.

"Last year, investors with more than $305 billion in assets voted in favor of a shareholder proposal calling on Microsoft to publicly disclose information about its taxes and offshore operations on a country-by-country basis... If Microsoft had published CbCR information for relevant years, investors would have spotted the striking mismatch between its insignificant operations in Puerto Rico and multi-billion dollar tax profits booked there."

Public Letter: 61 Labor Groups and NGOs Call on Congress to Close International Tax Loopholes

Sixty-one labor groups and NGOs, including more than a dozen FACT members, signed a letter to Congress this month urging the passage of the No Tax Breaks for Outsourcing Act (NTBOA), which would remove harmful incentives for U.S. multinational companies to shift profits and jobs to low-tax jurisdictions.

Specifically, the NTBOA would ensure that U.S. multinationals pay at least the U.S. statutory tax rate on their income in every country where they operate. If passed and implemented, estimates suggest that this measure could raise more than three quarters of a trillion dollars in additional revenue over the next decade.

Now Hiring: Policy Fellow

The FACT Coalition seeks a driven, dynamic Policy Fellow to support the Coalition's work tackling dirty money in the U.S. financial system and promoting fair and transparent multinational corporate taxation.

The ideal candidate will be a recent graduate, or be pursuing a Master's Degree in public policy, international affairs, economics, or related fields, or a JD or other advanced law degree.

Prospective candidates should send a cover letter, resume, and relevant writing sample to the hiring manager through this link.

Comment Letter: FACT Submits Statement on Beneficial Ownership Transparency Ahead of UN Anti-Corruption Conference

FACT submitted comments ahead of the 10th Conference of the State Parties (COSP10) to the UN Convention Against Corruption (UNCAC) calling for enhanced multilateral cooperation to establish, improve, and ultimately leverage beneficial ownership registers as tools for asset recovery.

From the comment: "Countries committed to asset recovery and return must work together to advance beneficial ownership reforms, and to share information for effective and efficient investigations into cases of corruption. Further, policymakers in both contexts must take steps to ensure that beneficial ownership data information is complemented by strong anti-money laundering (AML) protections to prevent, detect, and recover illicit financial flows derived from the proceeds of corruption."

Recent and Upcoming Events

December 4: The Country by Country Path to Global Justice

Register now for a discussion of recent progress and setbacks on multinational tax transparency hosted by the Tax Justice Network, and featuring comments from FACT policy director Zorka Milin. The roundtable will cover tax transparency developments around the globe, with a particular focus on the current state of Australia's groundbreaking public CbCR draft legislation.

Panelists include:

* Zorka Milin, Policy Director, FACT Coalition
* Olivia Lally, Senior Policy and Advocacy Officer, Eurodad
* Everlyn Muendo, Policy Advisor, Tax Justice Network Africa
* Paul Monaghan, Chief Executive, Fair Tax Mark
* Jason Ward, Principal Analyst, CICTAR/Tax Justice Australia

December 10: UNCAC COSP10 Civil Society Forum

Ahead of the launch of the tenth Conference of State Parties to the UN Convention Against Corruption (UNCAC COSP10) in Atlanta, join FACT at the State Department's U.S. Civil Society Forum.

This day-long forum will recognize and celebrate the role civil society plays in anti-corruption efforts, and allow civil society organizations to have their voices heard ahead of negotiations surrounding Conference resolutions. The Forum is open to all interested NGOs, International Organizations, and States Parties. NGOs do not need accredited COSP Observer Status to participate.

The COSP constitutes the main policy making body of the UN Convention Against Corruption. Held every two years, it is the largest gathering of global governments on anti-corruption matters, and represents the only legally binding international policy instrument on anti-corruption.

December 12: Unlocking the Treasure Chest - Leveraging Beneficial Ownership Transparency for Asset Recovery

FACT government affairs director Erica Hanichak will join experts from the U.S. and Nigerian governments for a panel on beneficial ownership transparency as a part of Asset Recovery Day during UNCAC COSP10.

Click here to read FACT's official comment on beneficial ownership as a tool for asset recovery ahead of the event. Further information, including instructions to livestream the event, will be made available on the official UNCAC COSP10 webpage.

December 13: Action Now - Combating Corruption to Protect the Environment

Join FACT executive director Ian Gary, as well as experts and practitioners from the Brazilian and Malawian governments, the Pan African Network for the Conservation of Africa's Natural Resources (PANCANR), Transparency International, and the Nature Crime Alliance for a roundtable discussion of the linkages between systemic deforestation and corruption.

The roundtable - held as a part of the Combating Corruption to Protect the Environment special event at UNCAC COSP10, organized by 24 state parties and NGOs - will be preceded by a presentation of case studies from the Brazilian government.

Click here to register to watch online, or join us in person if you are attending the COSP!

About the FACT Coalition

The Financial Accountability and Corporate Transparency (FACT) Coalition is a non-partisan coalition of more than 100 state, national, and international organizations working toward a fair and honest tax system that addresses the challenges of a global economy and promotes policies to combat the harmful impacts of corrupt financial practices.

For more information, visit www.thefactcoalition.org

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