This week, the International Consortium of Investigative Journalists (ICIJ) marked the 5th anniversary of the groundbreaking Panama Papers investigation, which “energized anti-corruption activists,” by recognizing that “the fight against offshore financial secrecy and chicanery goes on — with a mix of victories and failures and more battles to come.” One of the more significant battles appears to be kicking off at the United Nations with a “high-level UN panel” now calling for “a complete overhaul of the global financial system.” According to Forbes, the United Nations is hosting two highly anticipated events, with one kicking off this month. For anti-corruption activists, the most significant development will be a U.N. General Assembly special session, which will represent the first corruption-related special session since the organization’s founding.
So, what’s on the table?
According to Forbes, the UN panel’s plans for overhauling the system includes “a new U.N. tax convention, a U.N. tax body, and a global minimum tax,” the latter of which received U.S. backing this week. In what the AP describes as “Yellen’s highest profile [speech] so far on international affairs,” the U.S. Treasury this week “urged the adoption of a minimum global corporate income tax,” as the U.S. administration presses ahead with its plan to raise the U.S. corporate tax rate. With governments facing a pandemic-related economic meltdown, the dawn of a new global tax order seems increasingly likely as nations look to claw back the estimated $800 billion in lost tax revenues annually.
For all the optimism surrounding the reforms, a great deal of credit goes to NGOs and anti-corruption/transparency advocates like the ICIJ and Transparency International. Reflecting on the Panama Papers anniversary, the ICIJ noted that governments around the world have now recovered more than a billion dollars in lost taxes and penalties as a direct result of its investigation. The group also emphasized that “the impact of the Panama Papers extends far beyond recovering lost tax revenue” with several jurisdictions pushing ahead with civil and criminal cases over allegations of illicit activities. Moreover, landmark legislation in the United States - and in other jurisdictions around the world - are also harbingers of greater transparency through mandated corporate registries that make it harder for companies and beneficial owners to hide in the shadows. With all the developments in the last 5 years, one thing that rings true is that greater transparency does pay off and remains a critical component in efforts to stem financial crime.