CGD Policy Blogs

As attention shifts from traditional foreign aid to private and domestic sources of finance for development, recovering stolen assets is not only a matter of justice but increasingly a development issue in its own right. That’s why organizations like the StAR initiative (a joint effort of the World Bank and UNODC) and NGOs like Transparency International and Global Witness have been making these points and successfully pushing the agenda.

News broke on April 9th of agreement between the UK, France, Germany, Italy and Spain to pilot “multilateral automatic tax information exchange.” In France, President Hollande went further – announcing a draft law aimed at ‘moralising’ French public life, as former budget minister Jerome Cahuzac was expelled from the governing party for repeatedly denying the existence of his Swiss bank account.

Last week saw a series of news stories break around the world, in what may have been the largest ever cross-border journalistic collaboration. The stories, coordinated by the International Consortium of Investigative Journalists (ICIJ), are based on a major leak of files from company formation agents operating primarily in the British Virgin Islands and the Cook Islands.

An obscure reference to reforming the taxation of multinationals in the UK budget speech might be more important for developing countries than the big increase in aid that was announced at the same time. Mandatory ‘combined reporting’ by multinationals could enable countries to tax multinationals properly.