{"id":187417,"date":"2019-04-23T19:09:39","date_gmt":"2019-04-23T23:09:39","guid":{"rendered":"https:\/\/www.un.org\/pga\/73\/?post_type=tribe_events&p=187417"},"modified":"2019-05-15T19:35:51","modified_gmt":"2019-05-15T23:35:51","slug":"international-cooperation-to-combat-illicit-financial-flows-and-strengthen-good-practices-on-asset-returns","status":"publish","type":"tribe_events","link":"https:\/\/www.un.org\/pga\/73\/event\/international-cooperation-to-combat-illicit-financial-flows-and-strengthen-good-practices-on-asset-returns\/","title":{"rendered":"International Cooperation to Combat Illicit Financial Flows and Strengthen Good Practices on Asset Returns"},"content":{"rendered":"

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HIGH-LEVEL MEETING ON<\/h2>\n

\u201cINTERNATIONAL COOPERATION TO COMBAT ILLICIT FINANCIAL FLOWS AND STRENGTHEN GOOD PRACTICES ON ASSET RETURN\u201d<\/h2>\n

United Nations Headquarters, New York <\/strong><\/p>\n

16 May 2019<\/p>\n

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BACKGROÄ¢¹½ÊÓƵD<\/h2>\n

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Ä¢¹½ÊÓƵ General Assembly, in its resolution A\/RES\/72\/207 entitled \u201cPromotion of international cooperation to combat illicit financial flows and strengthen good practices on asset returns to foster sustainable deve<\/em>lopment\u201d, invited the President of the General Assembly to convene, in coordination with all stakeholders, a high-level meeting on international cooperation to combat illicit financial flows and strengthen good practices on asset return to foster sustainable development. The General Assembly reiterated this call on the President of the Assembly in its resolution A\/RES\/73\/222.<\/p>\n

Illicit financial flows and sustainable development <\/em><\/h3>\n

There is international recognition that current public and private initiatives to finance the 2030 Agenda are insufficient. While estimates of the current financing gap vary, almost all cite trillions rather than billions per year. Ä¢¹½ÊÓƵCTAD, for example, suggests that, at current levels of investment in core SDG-related sectors, developing countries face an annual financing gap of $2.5 trillion.<\/p>\n

Domestic resource mobilization is one of the core pillars identified in the Addis Ababa Action Agenda and the 2030 Agenda to help close this gap, with particular emphasis given to improving domestic capacities for tax and other revenue collection. Illicit financial flows (IFFs), pose a significant threat to this objective, as well as to related wider security, rule of law, and developmental concerns, such as building strong and resilient institutions to support structural transformation.<\/p>\n

Smaller and poorer developing countries are disproportionally affected by the negative developmental consequences of IFFs; compounded by already weak governance structures that are necessary to prevent and counter IFFs, as well as low tax revenues that can be particularly severe in developing countries dependent on natural resource extraction. Strengthening intervention to combat IFFs arguably is one of the most cost-effective strategies to be pursued by the international community to facilitate the timely implementation of the 2030 Agenda and support vulnerable developing countries in this regard.<\/p>\n

In recognition of the threat posed by IFFs, the 2030 Agenda includes the reduction of IFFs as one of the targets of Sustainable Development Goal 16 (Peace, Justice and Strong Institutions). The AAAA similarly states that \u201cmeasures to combat corruption and curb illicit financial flows will be integral to our efforts\u201d (\u00a718), calls upon member States to \u201credouble efforts to substantially reduce illicit financial flows by 2030\u201d (\u00a723), and commits to \u201cwork to strengthen regulatory frameworks at all levels to further increase transparency and accountability of financial institutions and the corporate sector, as well as public administrations\u201d (\u00a725).<\/p>\n

Main achievements and remaining challenges<\/em><\/h3>\n

Since the drain on development emanating from IFFs first caught the attention of wider audiences in governments, civil society and multilateral fora, considerable progress has been made in tackling such flows through a multitude of initiatives at national and international levels.<\/p>\n

This includes the United Nations Convention against Corruption and the United Nations Convention against Transnational Organized Crime that provide the most comprehensive and universal instruments to-date to reduce IFFs originating from corruption and organized crime. Important steps forward are being taken to advance the recovery and return of \u2018stolen assets\u2019 (or the proceeds of corruption that have been transferred abroad) including through the joint World Bank\/Ä¢¹½ÊÓƵODC Stolen Asset Recovery (StAR) Initiative, its Asset Recovery Watch database, and the Global Forum on Asset Recovery (GFAR).<\/p>\n

Similarly, the United Nations Tax Committee, the Financial Action Task Force, the OECD\u2019s Global Forum for Transparency and Exchange of Information for Tax Purposes, its Multilateral Convention on Mutual Cooperation in Tax Matters and its Base Erosion and Profit Shifting Project (in cooperation with the Group of 20) have all contributed to debates on and the implementation of measures to increase tax administration, tax transparency and cross-border information exchange mechanism, alongside numerous national initiatives. The World Bank\u2019s IFFs Risk Assessment Framework will also help countries to enhance their capacities to develop economic and other policies to address IFFs more effectively.<\/p>\n

Yet, important challenges remain:<\/h4>\n

Definitional challenge:<\/u><\/strong> There remains no universally agreed-on definition of what constitutes IFFs, though there are some parameters for identifying IFFs. IFFs are often defined as constituting money that is illegally earned, transferred or used and that crosses borders. Second, there are generally three categories of IFFs, although these are not mutually exclusive or comprehensive: IFFs originating from transnational criminal activity; corruption-related IFFs; and tax-related IFFs.<\/p>\n

Measurement<\/u>:<\/strong> The deliberately hidden nature of IFFs poses formidable problems for the reliable measurement of these flows. Existing estimates provide a partial picture, by regions and types of flows, and underlying statistical methods to estimate the volume of IFFs as well as conceptual frameworks for a comprehensive definition of the components of IFFs remain contentious. Ä¢¹½ÊÓƵODC and Ä¢¹½ÊÓƵCTAD, as co-custodians of SDG indicator 16.4. to reduce IFFs, are engaged, in cooperation with Ä¢¹½ÊÓƵECLAC and Ä¢¹½ÊÓƵECA, with testing and developing common statistical methods to measure IFFs and to provide data for the aggregate scale indicator under SDG target 16.4. Similarly, while certain mutual accountability frameworks do exist at the global level for preventing and countering IFFs \u2013 such as the Ä¢¹½ÊÓƵCAC Implementation Review Mechanism and the FATF monitoring process \u2013 few quantitative tools and standards exist to objectively measure IFFs and international efforts to combat IFFs and ensure returns.<\/p>\n

Technology<\/u>:<\/strong> The fast-growing role of information and communication technologies also requires close attention in the context of IFFs. Criminals \u2013 including transnational organized crime groups \u2013 can increasingly use digital avenues to facilitate cross-border trade and associated financial flows, for example through the criminal misuse of so-called \u2018cryptocurrencies\u2019. At the same time, big data analytics, machine learning and neural network programming also provide an array of tools and methods to better predict illicit behavior and measure IFFs more accurately.<\/p>\n

Participation<\/u>:<\/strong> For a variety of reasons, the participation of developing countries in multilateral initiatives to enhance tax transparency, such as the Automatic Exchange of Information initiative of the OECD, the G20 and the G7, remains limited. While there is a range of regional initiatives in developing countries, such as the Asset Recovery Inter-Agency Network of Southern Africa, the African Legal Support Facility and similar organizations in Latin America and Asia, these require closer interaction and integration with advanced-country led initiatives. There also is a need, more generally, for capacity-building support to combat IFFs in developing countries.<\/p>\n

Ä¢¹½ÊÓƵ, international cooperation on financial transparency and best practice on asset recovery and repatriation<\/em><\/h3>\n

The underlying problems of financial secrecy, without which IFFs would be on a much lower scale, are global and systemic. Countries can and should take powerful domestic steps, such as implementing requirements of publication of country-by-country reporting under the new standard of the OECD and taking forward country-level capacities to ensure best practice in asset recovery and repatriation, consistent with international agreements and established norms and taking into account multilateral initiatives to promote global regulatory frameworks in this regard. Yet there is an inherent need for global and inclusive debate, that takes on board the interests of all countries, to achieve meaningful progress in combating IFFs of all kinds.<\/p>\n

Ä¢¹½ÊÓƵ System is a natural forum for such debate. As mentioned above, it has already played a pivotal role in promoting inclusive debate as well as global regulatory frameworks to combat IFFs, for example through the United Nations Convention against Corruption, the United Nations Convention against Transnational Organized Crime, ongoing efforts to provide a transparent and comprehensive statistical framework to measure IFFs and substantive progress in promoting best practices on asset recovery and repatriation. But further progress is urgently required to further advance the promotion and comprehensive implementation of existing initiatives and frameworks, as well as to address remaining challenges and consider new and additional initiatives to support these efforts.\u00a0 Collaboration between the United Nations System and other international organizations and frameworks is also essential in supporting this action, including the area of anti-money laundering and countering terrorist financing.<\/p>\n

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OBJECTIVE<\/h2>\n

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This high-level meeting is being organized to take stock of progress made and ways to address remaining challenges to reduce IFFs and promote best practices in asset recovery and repatriation, as an important means to support the timely implementation of the 2030 Agenda, in cooperation with all relevant stakeholders. The main objectives of the meeting are to:<\/p>\n