1. Context

At global level, a large part of financial resources disappears due to fraud, tax avoidance, cor-ruption and poor governance. The resources concerned, which could be applied to education or health for example, represent very substantial sums of the order of $1,600 billion, compro-mise the mobilisation of national resources, reduce funding for development, facilitate corrup-tion and other criminal activities, weaken the responsibility of the countries concerned and aggravate inequality. In particular, the lack of transparency, supervision and regulation of onshore and offshore financial centres tends to facilitate the circulation of dirty money. The current economic and financial crisis has thrown a spotlight on such shortcomings.

 2. The role of the Leading Group

From the outset, the role of the Leading Group on Solidarity Levies to Fund Development has been to focus on illegal financial flows. Specifically, at its plenary meeting in Seoul in Sep-tember 2007 it tasked Norway with leading an international task force to assess the scale of such flows and their impact on development, to identify the actors in the phenomenon and their modus operandi, to clarify the existing legal framework and the obstacles to its effec-tiveness, and to identify possible partners and additional policy tools.

In the Conakry Declaration of October 2008, the Group stresses that “substantial amounts of funds that could have contributed to development disappear through tax evasion and other illegal means, both in the North and in the South. This global problem is particularly serious in the Least Developed Countries, however, depriving them of resources essential for the fi-nancing of public services and investments. The global, annual amount of illicit financial flows is considerable, and it constitutes an important drain on developing countries’ re-sources for development.” It was also decided at that time that the task force should work with new partners through a new “Global Task Force” in the Global Financial Integrity pro-gramme, under the direction of Norway and the Leading Group, and with participation by other interested countries and organisations in civil society. The first meeting of the task force was held in Washington in January 2009 and enabled the Leading Group to clarify the task force priorities for a number of forthcoming meetings (G20 in London on 2 April, the United Nations General Assembly in September 2009).

In this connection, the Leading Group re-called the direct link between illicit flows and the financing of development: “[the explicit goal is to […] ensure a fair share of the world’s resources is made available to its poorest people especially in developing countries.” [read more]

Please consult the Final report from the taskforce on the development impact of illicit financial flows, a task force led by Norway, set up under the Leading Group on Solidarity Levies to fund Development, published in November 2008:

Final report from the Taskforce on the development impact of illicit financial flows