NEWS


African Panel Urges EU to Cooperate Curb Illicit Financial Outflows

By Omer Redi 

Addis Ababa, Ethiopia 22, April 2016 (IMC) – In the wake of the Panama Papers, the AU-ECA High Level Panel on Illicit Financial Flows from Africa urges Europe to cooperate with the Panel in its efforts to decisively curb illicit financial outflows from the continent.

 

At a meeting between Thabo Mbeki, Chair of the Panel, and the European Parliament in Brussels this week, the African side pointed out that the European legislative is one of several crucial bodies who can help address the problem.

 

The former President of South Africa, Mbeki led the African side in European tour to meet partners where the Panel explained the need for coherence, according to a press release the UN Economic Commission for Africa (ECA) sent to Ifriqiyah Media and Communications on Friday.   

 

“This is so that we can all act in a coordinated and concerted manner on this issue and ultimately address it once and for all,” Mbeki told the Parliament. Illicit financial flows “may be an African problem that ultimately requires a global solution … the need to deploy global efforts to deal with existing secrecy jurisdictions and tax havens is paramount.”

 

Both the Chair and members of the European Parliament highlighted the need to tackle several areas of importance together on this issue, including tax havens, secrecy jurisdictions and strengthening African countries’ institutional and legislative capacities, according to the press release.

 

The African Union (AU) - UN Economic Commission for Africa (ECA) joint High Level Panel engaged various committees of the EU legislative body as part of its renewed impetus to address illicit financial flows  (IFFs) from Africa in various forms.

 

The ECA press statement indicated that both parties agreed on the importance of establishing an institutional cooperation arrangement between the EU and the Panel, supported by the AU and the ECA which would effectively act on this matter. The EU stressed its desire to work with the Panel noting 'the matter of IFFs needs a global approach’.

 

This has come in the wake of the Panama Papers, a code given to a coordinated work several media which exposed nearly a dozen million documents on tax haven offshore accounts and companies handled by the Panamanian law firm, Mossack Fonseca.

The Panel, however, emphasized that Panama is not the only IFFs destination.

     

“The Panama Papers raised awareness on the issue of Illicit Financial Flows but Panama is not the only Tax Haven,” the African side is quoted as saying.  

But both Mbeki and Louis Michel, Chair of the ACP-EU Joint Parliamentary Assembly agreed that the publishing of the documents indeed raised awareness on the scourge of IFFs but it should never be forgotten that Panama is not the only tax haven.

 

“Even if some of these funds are legally moved to secrecy jurisdictions, in most cases it is an immoral behaviour,” Michel further pointed.

 

The importance of country-by-country reporting both by the EU and Africa was underlined as an important initiative that must be expanded in order to facilitate the tracking of economic activities by multinationals beyond European borders. The European Parliament Development Committee was, therefore, asked to examine the issue of expanding country by country reporting to effectively fight tax avoidance and tax evasion within European borders and outside of them.

 

“It is high time that both the EU and Africa reacted to the issue of political governance in Africa, while drawing attention to the inaction of European Union countries on stemming IFFs,” Michel stated.