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Inter-agency co-operation in combating tax crimes, money laundering and other financial frauds could heighten financial integrity and good governance by improving the effectiveness of countries' abilities to fight financial crimes.
This is the major conclusion of the first tax and crime conference hosted by the Norwegian Government in which 54 delegation including countries from India, the UK, the US, Australia, Belgium and Canada and tax havens such as Liechtenstein and global bodies such as the European Union and Financial Action Task Force (FATF) and Transparency International took part recently in Oslo, Norway.
In a terse statement issued by the rich countries' club the Organisation for Economic Cooperation and Development (OECD) it was stated that issues of financial crime and illicit flows remain the concern of all countries and more particularly of the developing countries.
It said illicit financial flows resulting from financial crimes strip resources from developing countries that could finance their long-term development.
Illicit financial flows are linked to organised crime, illicit goods such as drugs and illegal arms, all of which impact the quality of governance, violent conflict and state fragility in the developing world. It is estimated that more than two-thirds of these flows entail tax evasion. In India, money stashed abroad by non-resident and Indian entities has been a burning issue rocking Parliament with demand for recovery and repatriation of these tax evaded and ill-gotten wealth through effective anti-money laundering measures.
The Oslo Conference contended that countering these financial crimes requires “greater transparency, more strategic intelligence gathering and improved efforts to harness the capacity of different government agencies to work in concert to detect, deter and prosecute these crimes. It said in a world where criminals operate across organisational and geographic boundaries, inter-agency co-operation both domestically and globally is the “only viable response”.
Crucial calls
It is against this backdrop the conference took crucial calls with participants hailing the discussions within FATF on tax crimes as a predicate offence. The conference said there is “a clear benefit to inter-agency cooperation covering tax, law enforcement, anti-money laundering authorities and where appropriate other agencies”.
Stating that there is a need to identify and fill the legislative, policy and operational gaps that preclude effective domestic and global co-operation, the conference concluded that developing countries could also benefit and score significant achievements through early detection, effective investigation, prosecution and recovery of assets by use of appropriate tools.
In the light of the Oslo Conference decisions to continue, the inter-agency dialogue and sharing of experiences commenced in Oslo, OECD said it would, working with other global bodies and interested parties establish “a global dialogue in inter-agency cooperation to better fight financial crimes”.
It said a platform for sharing operational experiences could bolster this dialogue.
OECD would immediately advance the issues discussed at Oslo through a Task Force on Tax Crimes and Other Crimes, besides presenting the outcomes of the Oslo Conference to the OECD Ministerial Meeting to be held on May 25-26 in Paris.
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