It's time to talk about what I've been doing in DC.
I've been attending the first meeting of the Co-ordinating Committee of the Task Force on Financial Integrity and Economic Development . This task force is being administered in DC by my good friends at Global Financial Integrity (GFI), but its importance is the unique way in which it brings together civil society (currently represented by GFI, the Tax Justice Network and Global Witness) and a great many governments to work together to tackle the multiple problems we face in developing a transparent economic system. As the press release issued after our meeting said:
A unique global coalition of civil society organizations and more than 50 governments was launched today to address the inequalities in the financial system that penalize billions of people. The Task Force on Financial Integrity and Economic Development advocates for greatly improved transparency and accountability in the global financial system. The opacity and complexity of the financial system, enabled by financial institutions, laundering techniques and more than 70 secrecy jurisdictions, is at the heart of the current financial crisis and significantly impedes the ability of poor countries to develop their economies.
"The Task Force will promote increased transparency and international cooperation to enhance the integrity and governance of markets," said Raymond Baker who is Director of Washington, DC-based Global Financial Integrity which heads the Task Force. According to John Christensen of the Tax Justice Network in London, "Illicit financial flows drain money out of poor countries, enable criminal activity, and undermine international development." Julien Meimon of the Leading Group on Solidarity Levies to Fund Development noted that "the explicit goal is to facilitate innovative financing mechanisms to ensure a fair share of the world's resources are made available to its poorest people especially in developing countries."
The Task Force advocates:
‚Ä¢ That systems be put in place to curtail the practice of mispricing trade;
‚Ä¢ That country-by-country reporting of sales profits and tax paid by multinational corporations be required in audited annual reports and tax returns;
‚Ä¢ That the beneficial ownership, control and accounts of companies, trusts and foundations be readily available on public record to facilitate due diligence;
‚Ä¢ That automatic exchange of information between tax and governmental authorities on income, gains and property received by non-resident individuals, corporations, and trusts, be made mandatory;
‚Ä¢ That predicate offenses for a money laundering charge be harmonized and codified.
Norway is the first funder of the Task Force and Harald Tollan from the Ministry of Foreign Affairs said that "the Task Force is a natural extension of Development Minister Erik Solheim's focus on the damaging effects of illicit financial flows, and the continuation of the constructive partnership formed by civil society, international organizations and governments under the Norwegian-led efforts to address illicit financial flows."
Dorothee Richter, from the German Federal Ministry for Economic Cooperation and Development, noted that "the new coalition is indispensable in the fight against illicit financial flows. Our initiative at the International Tax Compact strongly supports the work of the Task Force."
In the near term the Task Force will focus on the April meeting of G20 nations in London to promote its agenda with governments.
I want to add to that though some thoughts I offered in my concluding remarks to the meeting. A few years ago a few us in a number of different countries set out on a journey to tackle the problems secrecy jurisdictions and the financial architecture that supports them cause within our own economies and most especially for the poorest people and developing countries of the world. People can say what they will of us, but it's clear we travelled in hope, and in the face of considerable opposition from those whose behaviour we questioned. To have the explicit backing of several governments present at the meeting, both financially and explicitly, plus the clear support from the more than fifty nations aligned to the Leading Group of Nations, ably represented by France in DC, is an extraordinary boost to the partnership we are seeking to create that wants to create a new financial architecture that can be integrated into a sustainable future economy.
It was a good time to do this. DC is clearly very excited about the inauguration of Obama, and rightly so I think. As one well informed commentator at the meeting put it, we might now see a US administration that recognises the real need for reform in this area.
But let's just borrow a phrase from Obama for a moment. We left our meeting quite sure that if asked if we can deliver the reform that is essential in this area we can reply "Yes we can".
And we mean it.