FACT COALITION WEIGHS IN ON UN PANEL FOR FINANCIAL TRANSPARENCY

The FACT Coalition submitted comments last week to the UN High Panel for Financial Accountability, Transparency, and Integrity for its 2030 agenda—making the case that the COVID-19 emergency response requires key financial reforms.

The COVID-19 related public health and economic crises have been fueled by long-standing fundamental flaws in the global financial system around tax injustice and corporate secrecy. A failure to close tax loopholes and enact key financial transparency measures will only prolong the U.S. and global economic recovery, and undermine UN development goals.

Selected recommendations can be found below. See here for the full submission.

• Public Country by Country Reporting — Require that all multinational corporations publicly disclose key financial information (e.g. taxes, profits, revenues, number of employees) on a country-by-country basis in line with the standard promulgated by the Global Reporting Initiative.

• Global Minimum Tax — Strengthen safeguards against offshore corporate tax avoidance, by instituting a strong, global corporate minimum tax that is no less than the current U.S. domestic corporate tax rate and is applied on a per-country basis (rather than as a global average).

• Beneficial Ownership Transparency — Ensure that all legal entities disclose their beneficial ownership information at the time of formation and update it upon any changes.

• Automatic Exchange of Financial Information — Harmonize the U.S. Foreign Account Tax Compliance Act (FATCA) with the Common Reporting Standard (CRS) to ensure that all countries share information automatically with lower-income countries while providing the necessary technical and financial assistance to developing countries to support them in reciprocating the sharing of information with others. In doing so, it is important to: 1) maintain the citizenship-based aspect of FATCA for U.S. tax collection purposes, and 2) to strengthen the CRS by extending FATCA’s 30 percent withholding tax for non-compliance to the CRS.

• Gatekeeper Anti-Money Laundering Requirements — Expand anti-money laundering and anti-corruption due diligence obligations to all gatekeepers to the financial system.