IFC interviews Dr Manorma Soeknandan, Panel Member of the United Nations Financial Accountability, Transparency and Integrity (FACTI)
IFC: Why was FACTI formed and what does it aim to achieve?
MS: FACTI was convened by the 74th President of the United Nations General Assembly (UNGA) and the 75th President of the United Nations Economic and Social Council (ECOSOC) on 2 March 2020.The objective is to contribute to the overall efforts by Member States to the 2030 Sustainable Development Goals (SDGs). The mandate given to the independent FACTI Panel is to review current challenges and trends related to financial accountability, transparency and integrity and to make evidence-based recommendations to close the financial gap in achieving the 2030 agenda. Additional annual investment needed to achieve just a few of the sustainable development goals is estimated at over US$2.5 trillion by 2030.
IFC: Which methods is FACTI employing to achieve its aims and which other international organisations is it working with?
MS: To conduct its work, the Panel under co-chairmanship of H.E. Ibrahim A. Mayaki, former prime minister of Niger, and H.E. Dalia Grybauskaite, former president of Lithuania, are using the following methods (all meetings have been held virtually):
Besides the internal panel discussions, there were discussions with a wide range of stakeholders such as:
Information was also provided through several background papers and discussions with experts.
The Panel is expected to:
IFC: The panel’s final report is due in February 2021; what has been achieved to date in your assessment of gaps in the global financial architecture?
MS: Some of the issues the Panel has addressed internally, and which are mentioned in the Interim Report include: financial and beneficial ownership; transparency; tax matters; bribery and corruption; confiscation and disposal of the proceeds of crime; money laundering; and the recovery and return of stolen assets. So far, the Panel has been able to propose some recommendations to the benefit of both the developing and the developed countries. One such recommendation is to “strengthen” the existing mechanisms but developing countries must be included in the negotiations. Another option is to have a multilateral mechanism with a much more inclusive approach, meaning a more inclusive and legitimate mechanism. The Panel has been able to involve several stakeholders and have discussions to form its own independent view.
IFC: It has been claimed that the panel is facing sustained pressure from various high-income countries not to recommend UN action, and instead to continue to rely on the OECD and related mechanisms. Can you please comment on this?
MS: The Panel cannot and should not give away, under any circumstances, its independent role. The recommendations must be supported by all the Member States of the UN, or at least the majority of them.
IFC: The Tax Justice network claims that the panel has backtracked on its recommendation of a UN tax convention to mobilise the maximum available revenues, address tax abuse and avoidance, and ensure the necessary fiscal and policy space for an effective recover post-COVID-19. Was this U-turn a result of pressure from certain OECD states? It has also been claimed that there has been a systematic “locking out” of developing countries from tax rule making and governance. Is international tax cooperation achievable and how do you address the needs of differing countries?
MS: Developing countries should be a part of all the negotiations and must be able to give their input, whether we go the route of a UN tax convention or not. When Conventions, Agreements, Treaties were being developed in the 60s, etc. the developing countries were not at the table. The views presented were that of the colonisers, who only negotiated and agreed to obligations and rights for their own benefit. The tides have changed, unfortunately the way of conducting business has not. The Panel strongly proposes a balanced approach, meaning developing and developed countries should be at the table when discussing and agreeing to international operational rights and obligations. The afore-mentioned also applies for international tax cooperation. It is unfortunate that especially the developed countries do want to receive the information but do NOT want to give the information to the sending developing state. But a basic starting point is to publish the statistics on local and foreign account holders. And, of course, there is the “disputed and highly sensitive issue” of publishing the statistics on income generation and this is important for issues such as wealth tax.
IFC: What are your views regarding the proposals to introduce a wealth tax?
MS: To introduce a wealth tax needs political will and commitment. The so called “wealthy” are the ones in governments (or funding political parties), in the financial economic sectors, etc. It has to start at the national level with the question “which definition will one apply for wealth- in the national context?”
IFC: What were the main recommendations in your interim report and what work still needs to be done before presenting your final report?
MS: The main recommendations are to a adopt a balanced approach to include the developing countries; digitisation of tax systems; protection of whistleblowers; capacity building and training in developing countries; and making asset and beneficial ownership information transparent; these recommendations can be found throughout the report and it is for wide dissemination, distribution and discussions. The Panel will vigorously continue with the discussions, for example talking to regional organisations, and is eager to receive feedback from all stakeholders. The Panel aims to have a final report that will be technically feasible and practical.
Manorma Soeknandan PhD
Since February 2014, Manorma Soeknandan has been the Deputy Secretary General of Caricom, based in Georgetown, Guyana. From 2001 – 2013 she was the Ambassador of the Republic of Suriname in Guyana, and also had Jamaica and Cuba in her portfolio. She served as Ambassador to Caricom from 2001 – 2013. A lawyer by profession, she is experienced in international relations and diplomacy, focusing particularly on Caribbean developing issues, including financial, blacklisting, tax cooperation, SDGs, gender, dispute resolution, transparency and integrity in several sectors. Serving in several regional and international bodies enables her to voice and raise the concerns of the developing countries and trying to find suitable solutions / alternatives. She currently also serves as a member of the UNFACTI high level Panel.