Share

OECD Secretary-General

MSC Transnational Security Roundtable on The Other Pandemic - Illicit Financial Flows and COVID-19

 

Remarks by Angel Gurría,
OECD Secretary-General

20 October 2020

OECD, Paris

Ladies and Gentlemen,

I am delighted to participate in this High-level Roundtable on Illicit Financial Flows and COVID-19 at this year’s Munich Security Conference.

Illicit financial flows remain one of the most pressing challenges of our time. They undermine the rule of law, corrode public trust, weaken institutions, widen inequalities, and they occur at the expense of those already greatly disadvantaged and most vulnerable.

The amount of money lost through illicit financial flows is staggering. It is estimated to reach at least USD 40 billion annually on the African continent – outstripping both ODA and FDI flows.

Illicit financial flows are also the life-blood of transnational criminal networks. For example, in the Democratic Republic of Congo, around 98% of the net profits from illegal exploitation of natural resources, particularly gold, charcoal and timber, flow to organised crime groups operating in and outside of the country.

COVID-19 has exposed the urgency of this challenge. Criminal networks are increasingly penetrating businesses, taking advantage of emergency measures and low public trust in governments. Today, corruption, bribery, theft and tax evasion cost developing countries around USD 1.26 trillion annually.

It has rightly been said that we may all be in the same storm, but we are not all in the same boat. Many African countries entered this crisis with already severe structural impediments. Domestic resources have been put under immense strain at a time when money is needed to finance service delivery, mitigate health risks and ease macroeconomic pressure. Tax-to-GDP ratios across 26 African countries are just 17.2% on average, half of the ratio in the OECD.

Here, the OECD has been hard at work to build a fairer and more transparent international tax system. For example, our fight against tax evasion through Automatic Exchange of Information (AEOI) has borne significant results. Over 102 billion euros have already been collected from taxpayers – particularly relevant as countries focus on replenishing their public coffers in the aftermath of the pandemic. AEOI also resulted in the exchange of 84 million offshore accounts, with a total value of around 10 trillion EUR.

Through the OECD/UNDP Tax Inspectors Without Borders initiative, we are also providing on-site support to tax administrations in Africa. Of 39 ongoing TIWB programmes, 25 are taking place in African countries. TIWB has so far succeeded in collecting USD 537 million in additional tax revenues, including 354.1 million in Africa. The return on investment is tremendous: for every dollar spent on TIWB assistance, 70 dollars have been recovered in additional tax revenues.

The OECD is also tackling tax crimes and other financial crimes through its Oslo Dialogue, which includes the OECD International Academy for Tax Crime investigations, and working with partners to address challenges such as illicit trade in West Africa.

Ladies and Gentlemen,

Just like this pandemic, no country nor sector is immune to corruption. This means investing in co-ordinated, multilateral solutions.

The OECD remains committed to tackling illicit financial flows and corruption by working with all stakeholders, including our international and regional partners like the UN Office on Drugs and Crime (UNODC), the African Union Commission, the African Development Bank and NEPAD, ensuring that our different instruments remain up to speed, so together we can win the battle against corruption and COVID-19, and restore the trust of the people.

Thank you.

 

Related Documents