A REPORT by the High-Level Panel on International Financial Accountability, Transparency and Integrity for achieving the 2030 agenda (FACTI Panel) has proposed a Global Pact for Financial Integrity for Sustainable Development based on countries’ priorities.
In the 85-page report titled “Financial Integrity for Sustainable Development”, which was released on Thursday, the panel reasoned that given the magnitude of resources that could be unlocked with financial integrity, the Global Pact could have a substantial impact on the well-being of people and planet in developing and developed countries, as well as constitute a major contribution to improving multilateral and national governance.
While noting that countries have varying standards of financial transparency, with some States’ policies allowing secrecy to flourish, the FACTI Panel maintained that the global financial system must be reformed, redesigned and revitalized so that it conforms to the four core values of accountability, legitimacy, transparency, and fairness.
It said these values could lay the foundations for States, businesses, and others’ concrete actions towards financial integrity for sustainable development and undo the harmful effects of Illicit financial flows (IFFs) from tax abuse, cross-border corruption, and transnational financial crime.
“Aside from values, policies are needed to promote financial integrity. Those financial institutions, lawyers and accountants that enable illicit financial flows to course through the international financial system must be held accountable on an equivalent basis as those that commit the abuses. Civil society and the media play a critical role in building the support for financial integrity,” the panel noted.
“To address the lack of cooperation presently hampering efforts against cross-border corruption and tax abuse, governments must adopt unified approaches at the national level built on shared information. States must also facilitate the global exchange of financial information to strengthen enforcement,” it added.
It also urged the international community to develop minimum protection standards for human rights defenders, anti-corruption advocates, investigative journalists, and whistleblowers.
The 2030 Agenda for Sustainable Development envisioned extensive global transformation to end poverty and shift the world onto a sustainable and resilient path. The Addis Ababa Action Agenda on Financing for Development provided the framework for aligning all financing to implement the Sustainable Development Goals (SDGs) and targets. However, six years after these agreements in 2015, the world has fallen short in achieving transformative change.
The FACTI Panel was convened by the 74th President of the United Nations General Assembly and the 75th President of the Economic and Social Council on 2 March 2020. Its mandate was to assess the limitations of current systems, their impact on financing the SDGs, and recommend ways to address the challenges. Given the magnitude of illicit outflows, these resources have immense transformative potential if recovered or retained.
The Panel is co-chaired by H.E. Ibrahim Assane Mayaki, former prime minister of Niger, and H.E. Dalia Grybauskaitė, former president of Lithuania. The members include Annet Wanyana Oguttu, Benedicte Schilbred Fasmer, Bolaji Owasanoye, Heidemarie Wieczorek-Zeul, Irene Ovonji-Odida, José Antonio Ocampo, Karim Daher, Magdalena Sepúlveda, Manorma Soeknandan, Shahid Hafiz Kardar, Susan Rose-Ackerman, Tarisa Watanagase, Thomas Stelzer, Yu Yongding and Yury Fedotov.
The Panel is supported by an independent secretariat, hosted by the United Nations Department of Economic and Social Affairs, Financing for Sustainable Development Office led by its Director, Navid Hanif. At the same time, the Government of Norway has provided funding to support the FACTI Panel’s work.