De Developing eloping le legal gal instr instruments uments to - - PowerPoint PPT Presentation

First Sub-regional Workshop on Curbing Illicit Financial Flows (IFFs) from Africa, Nairobi, Kenya 14 – 15 September 2015

De Developing eloping le legal gal instr instruments uments to stem to stem IFFs IFFs fr from Afr

• m Africa

ica

• Presen

sented ted by Don n Deya, a,

• CEO,

, Pan African rican Lawy wyer ers Union ion

Building our understanding of IFFs

Surveys of IFFs, globally, have been broken down as follows: -

• Commercial Transactions by Multinational Companies (MNCs): 60%
• Criminal Activities (e.g. trafficking in human beings, drugs, weapons):

35%

• Corruption: 5%
• Trade misinvoicing alone, accounts for 80% of IFFs
• Transfer pricing: OECD estimates that about 1/3 of global trade involves

intra-firm transactions among subsidiaries of MNCs, aimed at tax avoidance and evasion

• The state of governance of a particular State is a crucial determinant

Baker, RW (2005); Kar & Cartwright-Smith (2010); Kar & Le Blanc (2013

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3

Breaking down IFFs in a programme of action (that might appeal to lawyers, or at least this lawyer)

(a) Corruption as an overarching driver of IFFs (b) IFFs through commercial transactions (60%) (c) Other drivers of IFFs i.e. criminal activities (35%) (d) IFFs through Extractive Industries

(a) Cor (a) Corruption uption as an as an over erar arching hing driv driver er of

• f IFFs

IFFs

• United Nations Convention Against Corruption (UNCAC)

Africa: - 1. African Union Convention on Prevention and Combating Corruption (AU Convention on Corruption) 2. The Southern African Development Community Protocol against Corruption (SADC Protocol on Corruption) 3. Economic Community of West African States Protocol on the fight against Corruption (ECOWAS Convention on Corruption) The common objectives of these 3 instruments are: 1. Promotion and strengthening of mechanisms for preventing, detecting and eradication of corruption and its related offences 2. Encourage cooperation amongst States parties in order to prevent, detect and eradicate corruption 3. Harmonization of policies and legislations between States Parties.

(b) IFFs (b) IFFs thr through commer

• ugh commercial

cial tr transactions ansactions

Internationally

• OECD Guidelines on Transfer Pricing
• OECD Guidelines on Multinational Enterprises
• NB: NOT legally binding, but lay out important principles

Africa:

• Is there need for continental Rules on transfer pricing?
• Encouragement to all African States to implement them in

their domestic legislation?

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(c) (c) Other driv Other driver ers of s of IFFs i IFFs i.e. .e. criminal criminal activities activities

Internationally 1. UN Convention on Transnational Organized Crime (UNTOC) 2. Protocol to Prevent, Suppress and Punish Trafficking in Persons, Especially Women and Children, Supplementing the United Nations Convention against Transnational Organized Crime, 15 November 2000. 3. Protocol against the Smuggling of Migrants by Land, Sea and Air, Supplementing the United Nations Convention against Transnational Organized Crime, 15 November 2000. 4. Protocol against the Illicit Manufacturing of and Trafficking in Firearms, Their Parts and Components and Ammunition, Supplementing the United Nations Convention against Transnational Organized Crime, 31 May 2001, A/RES/55/255. Money Laundering

• In addition, the Financial Action Task Force (FATF)

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Africa Africa

FATF-styled regional bodies 1. Eastern and Southern African Anti Money Laundering Group (ESAAMLG) 2. Inter-Governmental Action Group against Money Laundering in West Africa (GIABA)

• Evaluating AML/CFT compliance among States Parties at

the regional level.

• Encourage them to consider the link between IFFs and

money laundering,

• Trade based money laundering.
• Practical solutions to member States

(d) IFFs d) IFFs thr through Extr

• ugh Extractiv

active e Industries Industries

Global voluntary initiatives

• Extractive Industries Transparency Initiative (EITI)
• Publish What You Pay (PWYP) Coalition
• OECD Guidelines for Multinational Corporations

National Laws

• USA - Dodd-Frank Act in the United States:

conflict minerals, reportingto the Securities Exchange Commission (SEC)

Africa Africa

• The AU Mining Vision (AMV)
• Plan of Action for the AMV
• The NEPAD Natural Resources Charter
• ECOWAS Mining Directive, 2009: only legally

binding on member States and not on MNCs/

• ther persons

Africa (2) Africa (2)

• 1. ‘International Crimes Protocol’ for the African

Court (Malabo, June 2014): Crimes of Corruption, Money Laundering, Illicit Exploitation of Natural Resources; the ‘3 Traffickings’, i.e. Persons, Drugs, (Illegal) Cross- Border Movement of Hazardous Wastes

• 2. Model Law on Universal Jurisdiction, includes

Crimes of Corruption, Money Laundering

• 3. Protocol and Statute of the African Monetary

Fund (Malabo, June 2014), and the rest of the emerging AU financial architecture

Africa Africa - Possibilities

• ssibilities
• AU Advisory Board against Corruption (AU-ABC)

– Needs to be MUCH MORE robust! – Art. 22: Treaty Reporting on MNCs, could already include IFFs

• African Commission on Human and Peoples’

Rights

• Economic, Social and Cultural Council of the

African Union (ECOSOCC-AU) – a work-in- progress!

African Lawy African Lawyer ers: s: cur current ent ef effor

• rts, cur

ts, current thinking ent thinking

2014 Annual Conference: “Illicit Financial Flows from Africa”

• Yaoundé Declaration
• Members’ Committee on Illicit Financial Flows

2015 Annual Conference: “Combatting Corruption: the role of the legal profession in Africa”

• Voluntary standards: Code of Ethics on Anti-Corruption and Compliance in Business
• Relations: -

– Institutional: Bar Associations and Law Societies – Individual: Lawyers, Law Firms, Law Firm Alliances

• Session on Asset Repatriation
• Launch of Members’ (Practice) Committees:
• Committee on Economic Governance

– Anti-Corruption Task Force – Illicit Financial Flows Task Force 2016 Conference: giving a year’s notice, to enable better planning

Cur Current ent ef effor

• rts, cur

ts, current ent thinking ( thinking (2) 2)

• Support to the AU

– Drafted the ‘International Crimes Protocol’ – Input into the Model Law on Universal Jurisdiction – Supported enhanced Protocol for the Pan African Parliament (Malabo, June 2014) – Strong support for African Governance Architecture (AGA) and the African Governance Platform (AGP) – Continue to work with Office of Legal Counsel (OLC), Department of Political Affairs (DPA), African Governance Architecture (AGA)

• Awareness-raising
• Research: at least 2 articles in the upcoming issue of Pan African Yearbook
• f Law (PAYL)
• Beyond ICL Protocol: Pan-African legal instrument on Mutual Legal

Assistance and Extradition?

Going Going forw

• rwar

ard

• 1. Partnerships for research and implementation: HLP,

AU, UNECA, CSOs

• 2. Need for more research into legal issues
• 3. Voluntary Guidelines
• 4. Model Laws, Rules, Regulations
• 5. African Tax Administration Forum (ATAF):

1. An Agreement on Mutual Assistance in Tax Matters

1. Could this be eventually elevated to an AU Treaty?

2. A Model Double Taxation Agreement

• 6. Towards a Continental Convention on Mutual Legal

Assistance and Extradition?

Challenging lawy Challenging lawyer ers/ s/

• urselves …
• Private Criminal Prosecutions, e.g. corruption,

procurement fraud, criminal negligence, abuse

• f office, etc
• Private Civil Actions, e.g. stolen asset recovery,

unjust enrichment, targeting MNCs, etc

www www.lawy .lawyer ersof sofafrica.or africa.org

Pan African Lawyers Union Working with the regional and national lawyers’ associations and individual lawyers to develop the law and legal practice in Africa, and to steer the emerging governance, human rights, peace and security architecture in Africa General Assembly All corporate and individual members Council All 5 regional and 54+ national lawyers’ associations Executive Committee 9 elected officers, CEO as ex officio

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