Bahamas leaks: What else do we need to know to take action? UN rights experts ask

10 October by Juan Pablo Bohoslavsky

The UN Independent Expert on foreign debt and human rights, Juan Pablo Bohoslavsky, and two members of the Human Rights Council Advisory Committee, Obiora Okafor and Jean Ziegler, urged governments to act in concert and establish a United Nations body working to eliminate tax haven Tax haven A territory characterized by the following five independent criteria:
(a) opacity (via bank secrecy or another mechanism such as trusts);
(b) low taxes, sometimes as low as zero for non-residents;
(c) easy regulations permitting the creation of front companies and no necessity for these companies to have a real activity on the territory;
(d) lack of cooperation with the inland revenue, customs and/or judicial departments of other countries;
(e) weak or non-existent financial regulation. Switzerland, the City of London and Luxembourg receive the majority of the capital placed in tax havens. Others exist, of course, such as the Cayman Islands, the Channel Islands, Hong Kong and other exotic locations.
secrecy and offshore tax avoidance and evasion.

“While offshore structures can reflect legitimate business activity, individuals are estimated to hold between US$7 and US$25 trillion of wealth offshore, and the tax income lost by many countries could total hundreds of billions of dollars each year.

When individuals and corporations hide unreported assets abroad to escape taxes or launder money, they are effectively stealing from the public. The proceeds from these illicit activities could and should be devoted to funding public services, such as health care, housing, schools, transportation infrastructure, social security, law enforcement and courts.

We need to recall that illicit financial flows |1| include funds that, through legal loopholes and other artificial arrangements, circumvent the spirit of the law, including, for example, tax avoidance schemes facilitated by the use of offshore corporations.

Thanks to the work of investigative journalists, the taxpaying public is now aware of these immoral and illegal strategies, and understands how tax abuse undermines economic, social and cultural rights. States must prove they take seriously the interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. of billions of people all around the world who suffer from the erosion of public services owing to massive fiscal misconduct.

It is time for the United Nations to take efficient measures to prevent illegal activities of offshore companies located in tax havens. Worldwide tax justice and the successful fight against money laundering will not be possible unless states cooperate to monitor and regulate the fiscal activities of offshore companies.

Transparency and accountability for offshore financial activity needs to be established. States must set uniform minimum taxation floors, to prevent individuals and business entities from shopping for the lowest possible tax rates.

Public disclosure of beneficial ownership information must be made legally binding in all countries, and the financial transparency of all banking jurisdictions should be ranked in an annual public report by independent experts appointed by the United Nations. This ranking should be based on a transparent set of criteria.

States and financial institutions should be required to automatically share Share A unit of ownership interest in a corporation or financial asset, representing one part of the total capital stock. Its owner (a shareholder) is entitled to receive an equal distribution of any profits distributed (a dividend) and to attend shareholder meetings. information with foreign taxation authorities for the purpose of detecting offshore taxable income. In this way, the secrecy and anonymity that enshrouds illicit offshore financial activity can be lifted, and money intended to promote shared prosperity can be returned to its rightful owners: the public.

Mr. Juan Pablo Bohoslavsky (Argentina) is part of what is known as the Special Procedures of the Human Rights Council. Special Procedures, the largest body of independent experts in the UN Human Rights system, is the general name of the Council’s independent fact-finding and monitoring mechanisms that address either specific country situations or thematic issues in all parts of the world. Special Procedures’ experts work on a voluntary basis; they are not UN staff and do not receive a salary for their work. They are independent from any government or organization and serve in their individual capacity. Learn more, log on to:

http://www.ohchr.org/EN/Issues/Deve...

Mr. Jean Ziegler (Switzerland) and Mr. Obiora Okafor (Nigeria) are members of the Advisory Committee of the Human Rights Council and co-rapporteurs of the Advisory Committee’s study on the negative impact of the non-repatriation of funds of illicit origin on the enjoyment of human rights, which will be presented to the Human Rights Council at its 36th session in September 2017. The Advisory Committee is composed of 18 experts serving in their personal capacity, and was established to function as a think-tank for the Council and work at its direction, focusing on research-based advice. It meets twice a year. For more information, visit: http://www.ohchr.org/EN/HRBodies/HR...

For further information and media enquiries, please contact Anjali Balasingham (+ 41 22 917 9143 / abalasingham@ohchr.org) or Dina Rossbacher (+ 41 22 917 9632 / drossbacher@ohchr.org)

You can access this media statement at: http://www.ohchr.org/EN/NewsEvents/...

For media inquiries related to other UN independent experts:

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Footnotes

|1| See the Independent Expert’s study on illicit financial flows: www.undocs.org/A/HRC/31/61

Author

Juan Pablo Bohoslavsky

Independent Expert on the effects of foreign debt and other related financial obligations of States on the full enjoyment of all human rights, particularly economic, social and cultural rights


Translation(s)

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