Former South African president Thabo Mbeki is working hard to garner support for his fight against illicit financial flows (IFFs).
Trade-based financial crime is a specific issue for Mbeki, who is concerned about IFFs facilitated by substantial over- and under-invoicing of Africa’s rich store of natural resources.
As head of the African Union’s 10-member High-Level Panel on IFFs, Mbeki takes the view that Africa’s problems cannot be tackled alone.
“Illicit financial flows are a challenge to us as Africans, but clearly the solution is global. We couldn’t resolve this thing by just acting on our own as Africans,” Mbeki said in an interview with the UN’s Africa Renewal programme.
“Africa is a net creditor to the rest of the world,” he maintains, in what seems to be a clear indication that IFFs from the continent far outstrip official development aid.
Mbeki is adamant that a substantial cause of this is that some companies engage in over-invoicing or under-pricing trade deals, transfer pricing (avoiding taxes by setting prices in trading between their divisions), offshore banking and the use of tax havens.
In February, Mbeki led his panel to the US and spoke at various forums in New York and Washington where he urged global action against IFFs.
“The G7 and the G20 have been discussing how to deal with the illicit financial flows because it is a matter of concern to everybody,” Mbeki says.
The panel has already enlisted the support of international institutions such as the UN, IMF, OECD and the World Bank.
The panel has twice met with officials of the US government (in 2014 and in 2016), including Vice President Joe Biden.
The full version of Mbeki’s interview with Africa Renewal can be found here.
Categories: Trade Based Financial crimes News